Top Stories
CFPB Reaffirms Plan to Overhaul Payday Lending Rule
Credit Union Times, October 19
The CFPB reaffirmed its plan to issue revised payday lending rules “no later than” early next year”—a proposal that critics say could gut the regulations.
CFPB Expected to Cut Payday Repayment Tests in Rule Overhaul
October 19, Bloomberg News
The CFPB released the payday lending rule in October 2017 in one of former Director Richard Cordray’s final acts before resigning from the bureau to run for governor of Ohio. “If the bureau moves to undo that progress, it will harm millions of American families,” Christopher Peterson, the director of the Consumer Federation of America’s financial services program and a former top CFPB official, told Bloomberg Law in an Oct. 18 phone interview. The CFPB said in the unified rulemaking agenda released Oct. 17 that it expects to issue a notice of proposed rulemaking on the rule in early 2019, including a review of both its merits and its implementation date.
MISSISSIPPI DOES NOTHING TO DISCOURAGE PREDATORY LENDING
Hub City Spokes, October 18
When the Obama administration looked as if it was going to rein in the payday loan industry with tougher federal regulations, the Mississippi Legislature created an avenue to bypass them. It authorized, with the urging of small-dollar lenders, a new product for making installment loans of up to $2,500 and charging interest at an annual percentage rate of almost 300 percent. Many states are gravitating toward capping interest rates at 24 percent to 36 percent annually. That range sounds reasonable both for lenders willing to assume the risk they won’t be repaid and for borrowers left with no other option.
How Banks Slid Into the Payday Lending Business
October 18, TalkPoverty
Previously, American’s big financial institutions were discouraged from getting into small-dollar, high-interest lending. When several major American banks rolled out short-term lending products prior to 2013, they were stopped by the Office of the Comptroller of the Currency, which regulates national banks. In October 2017, however, the OCC reversed that ruling. In May 2018, it then actively encouraged national banks to get into the short-term lending business, arguing that it made more sense for banks to compete with other small-dollar lenders.
US Bank’s Simple Loans aren’t so simple
October 18, Seeley Swan Pathfinder
Montana law caps predatory payday loans at 36 percent interest. But federally-insured banks are exempt from state laws and can charge whatever they want. US Bank sells “Simple Loans” with 70-88 percent interest in Montana and people take these loans to buy snow tires, cover a mortgage payment or pay medical bills. These are the kind of bad loans that people never get out of, being offered by one of the biggest national banks. High interest rates trap customers into a cycle of debt: if it looks like a payday loan and charges like a payday loan, it probably is one.
L.A. County Looks for Alternatives to `Payday’ And Other High-Cost Lenders
October 16, MyNewsLA.com
The Los Angeles County Board of Supervisors voted Tuesday to explore alternatives to high-interest loans marketed to low-income consumers with few financial options. Supervisor Hilda Solis authored the unanimously approved motion that calls for staffers to work with financial institutions and community-based organizations to develop alternatives and create a campaign to better educate consumers.
Financial regulations still get avid consumer thumbs-up
October 16, The Philadelphia Tribune
“Ten years after the financial crisis, the public knows what it wants,” noted Lisa Donner, AFR executive director. “But Wall Street and high-cost lenders are constantly pushing for deregulation and spending vast amounts of money to get it.” “Before Mick Mulvaney’s tenure at the agency, the CFPB was a champion for working families – giving back billions of dollars in relief to consumers who were cheated by financial companies,” noted Mike Calhoun, CRL president.
Hoover approves moratorium on vape shops, payday lenders, pawn shops, and title loan shops
October 15, ABC 3340
This proposal will limit pawn shops, payday lending and title loan shops. Council President Gene Smith said existing businesses wouldn’t be affected. “It wouldn’t close them…,” said Smith. “If they currently have a license in Hoover, they could continue to operate. Councilman Middlebrooks said he’s had constituents ask for this moratorium to protect their neighborhood and property values.
Public Interest Groups Oppose Loosening Rules For Fintech Providers
October 11, ValueWalk
Linda Jun, senior policy counsel at Americans for Financial Reform “’Sandbox’ is an innocuous-sounding name that obscures a dangerous precedent for the public interest. The agency would allow companies to stop providing information that people need to help avoid predatory products and decide what works best for themselves.[…] It is one more example of the current leadership at the agency undermining basic consumer protections and doing favors for the industry, rather than carrying out the CFPB mission to actually protect consumers.”
Pentagon, others baffled by CFPB plan to cease military lending exams
October 11, American Banker
The Consumer Financial Protection Bureau’s decision to stop examining financial firms for compliance with the Military Lending Act has sparked pushback not only from lawmakers and consumer advocates but also from the Defense Department and every major group representing military service members.
Fake Comments Are Plaguing Government Agencies And Nobody Much Seems To Care
October 11, Techdirt
You might recall that when the FCC repealed net neutrality, the agency’s open comment period was plagued with all manner of bogus comments and identity fraud. From bots that lifted the identities of dead people to create fake enthusiasm, to the hijacking of legitimate identities to forge bogus support. The FCC not only refused to do anything about it, it actively blocked law enforcement efforts to do so. The agency told me there was nothing they could do when my own identity was lifted in this fashion. A year later and a few brave journalists are still trying to find the culprit. Who benefited should be obvious. Who they paid to do the dirty work, less so.
Attack ad calls out congressional candidate’s D.C. work history
October 10, ABC 57 News
Stephen Simonetti, Republican incumbent U.S. Representative Jackie Walorski’s campaign manager alleged that Democratic challenger Mel Hall “worked for a big D.C. firm that lobbied for a fraudulent pharmaceutical company, predatory payday lenders, and other special interests”.
New administration should focus on consumer protection
October 9, Capitol Weekly
The Trump Administration has made its disinterest in consumer protection clear. CFPB Acting Director Mick Mulvaney has openly expressed that he will move the CFPB less aggressively in enforcement matters and will leave matters to the state regulators and attorneys general. Now more than ever, working families look towards the California state leadership to step in and protect consumers when the federal government can’t or won’t.
BBB Scam of the Week: Payday Lending Schemes
October 5, KNOE 8 News
The Federal Trade Commission, working jointly with the U.S. Department of Justice, is mailing 1,179,803 refund checks totaling more than $505 million to people who were deceived by a massive payday lending scheme operated by AMG Services, Inc. and Scott A. Tucker.
More Coverage:
Over 1.1 Million Refund Checks Mailed to Payday Loan Customers | WHNT News
Center For Responsible Lending Calls For Firing Of CFPB Official Who Used N-Word
October 5, Seattle Medium
“Mr. Blankenstein must be removed from his post and this must be combined with a demonstrable commitment by CFPB head Mick Mulvaney to fair lending,” said Yana Miles, CRL’s Senior Legislative Counsel. “Thus far, the Mulvaney approach has been worse than inaction – it has been an appalling retreat from enforcing anti-discrimination laws…. The enduring legacy and present-day experience of financial discrimination is the key driver of the racial wealth gap. Vigorously addressing this is a legal and moral imperative.”
More Coverage:
Mulvaney backs CFPB official under fire for blog posts dismissing racism | The Hill
Despite racially charged writings, CFPB official wants to stay | MSNBC
Trump Administration Official Who Didn’t Think The N-Word Is Racist Must Be Fired, Staff Says | NEWSONE
Federal Anti-Discrimination Official Under Fire for Racial Comments | New York Times
Senate Dems to Mulvaney: How did embattled aide get CFPB job? | American Banker
CRL Hearing Tackles Lending, Mobile Payments-Style And Beyond
October 3, Payment Week
Scott Astrada, noted that “Using financial technology does not entitle a business to a ‘Get Out of Jail Free’ card. Policy makers must ensure that fintech companies follow the law, including state usury laws, and that consumers are protected from debt trap loan products.”
It’s time to end triple-digit interest rate payday lending
October 5, Denver Post
Colorado legislators granted the payday lenders an exemption from Colorado’s normal interest rate limits, allowing rates above 200 percent to persist today. In 2010, public outcry over payday loan abuses led the Colorado legislature to consider capping rates and fees on payday loans at 36 percent per year, but an army of payday lobbyists opposed the measure, and the rate cap was defeated. Instead, the 2010 law change added some protections but still left Coloradans buried under loans of up to 215 percent interest. Colorado voters should finish the job now. It’s time to stop triple-digit payday loans in Colorado. Let’s vote “Yes” on Proposition 111.
More Coverage:
Colorado election: Why voters are being asked to cap interest rates on payday loans | USATODAY
Guest Column: Taking a closer look at payday loans | The Gazette
Standing with American workers, not Wall Street
October 3, Perry County tribune
According to Senator Sherrod Brown Mick Mulvaney has been dismantling the Consumer Financial Protection Bureau from the inside. He cancelled enforcement actions against payday lenders, and abandoned examinations that protect service members and their families from shady financial institutions.Congress has spent its time handing out tax breaks to the biggest banks, denying Americans their day in court when they’re defrauded by companies like Wells Fargo and Equifax, and passing legislation to water down the Wall Street Reform rules, putting taxpayers at risk of another bailout.
Rep. Waters Introduces House Bill to Require BCFP to Meet Its Statutory Purpose
October 3, InsideArm
Rep. Maxine Waters, D-Calif., unveiled a bill to undo Consumer Financial Protection Bureau policies instituted by acting Director Mick Mulvaney.
More Coverage:
Waters bill would reverse Mulvaney’s deregulatory efforts at CFPB | American Banker
Mulvaney’s Tenure at CFPB Surprises Even This Obama Democrat
October 2, Inside Sources
While there are those of us who wish we still had a progressive-minded leader in charge, I have to give Mick Mulvaney credit where credit is due for keeping his eye on the ball and doing right by the original intent of his agency said Democratic consultant and former Obama for America veteran Brendan Flanagan.
Baptist Church Seeks to Intervene In CFPB Payday Rule Lawsuit
October 2, JD Supra
The Cooperative Baptist Fellowship (the “Fellowship”) filed a motion to intervene as a defendant in a case filed by the Community Financial Services Association of America Ltd. and the Consumer Service Alliance of Texas challenging the CFPB’s Payday Rule. The Fellowship argued that it would vigorously defend the lawsuit, while the CFPB might not – citing the CFPB’s plans to reconsider the Rule as well as its willingness to stay the Rule’s compliance date.