May 3, 2018

CFPB Public Complaint Database Likely To Be Shut Down

Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau (CFPB), said that the agency will likely shut down its public complaint database.

As The New York Times explained, the database has been in effect since 2011, with the bureau keeping a searchable record of more than one million consumer reports about inaccurate debt collections, illegal fees, improper overdraft charges, mistakes on loans and other issues.

While the agency must collect those complaints, it is not legally required to share them online.

"I don't see anything in here that says I have to run a Yelp for financial services sponsored by the federal government," said Mulvaney at a banking industry conference in Washington. "I don't see anything in here that says that I have to make all of those public."

But consumer groups argue that shutting down the database would take away one of its most important purposes: pushing companies to take complaints more seriously. The move would also prevent others, including academic researchers, from using its data.

"Making complaints public gives companies a stronger incentive to treat people right," said Lauren Sanders, associate director of the National Consumer Law Center. "It also helps people stay away from companies with bad track records. It lets the free market help steer us in the direction of consumer protection." Read more at PYMNTS.COM
Mulvaney Seeks Good Reforms But America Does Not Need The CFPB

The Consumer Financial Protection Bureau (CFPB) has released its first semi-annual report to Congress under Acting Director Mick Mulvaney. Just like the Spring 2017 semi-annual report, issued under Richard Cordray, it opens with a message from the director. And that's pretty much where the similarities end.

Mulvaney's message is that "the Bureau will continue to execute the law, but will no longer go beyond its statutory mandate." Consistent with Section 1012(c)(4) of Dodd-Frank, Mulvaney asks Congress to "establish meaningful accountability for the Bureau" by making four changes to the law:
  • Fund the Bureau through Congressional appropriations;
  • Require legislative approval of major Bureau rules;
  • Ensure that the Director answers to the President in the exercise of executive authority; and,
  • Create an independent Inspector General for the Bureau.

Any fan of limited government and free markets should be on board with these types of changes, and anyone interested in holding Congress and the president accountable for the regulations they impose and enforce should be thrilled.

The CFPB has been one of the most controversial components of the 2010 Dodd-Frank Act. During Richard Cordray's tenure, it issued contentious rules, tortured data to make other rules, engaged in an extravagant spending spree, and even found itself blasted by the Government Accountability Office for employment discrimination. Read more at FORBES
Dreher Tomkies LLP
Lisa Servon Elucidates Modern Consumer Finance In "The Unbanking Of America"

When it comes to getting cash to make ends meet, many Americans don't take their business to the local bank. Instead, they rely on alternative financial systems such as check cashing stores and payday lenders. Despite high interest rates and sometimes exorbitant fees, these services fill a vital need for those living paycheck to paycheck, and who, for a variety of reasons, distrust banks.

In The Unbanking of America: How the New Middle Class Survives, Lisa Servon offers an eye-opening look at how our mainstream banking and credit systems have failed to meet the needs of many lower and middle income Americans -- and how alternative services such as payday lenders are now filling the void. Along with researching the issues, Dr. Servon worked as a teller at a check cashing store and as a loan collector for a payday lender, and she introduces us to customers from a variety of backgrounds who rely on these services to survive. The Unbanking of America is now out in paperback.

Dr. Servon is a professor of city planning at the University of Pennsylvania and a former dean at The New School in New York City. She is the author of several other books, including Bridging the Digital Divide, and her work on consumer financial services has been published in the Wall Street Journal, the Atlantic, The New Yorker, among many others. Read more at BOISE PUBLIC RADIO
U.S. House may vote on Dodd-Frank changes in May -majority leader

BEVERLY HILLS, Calif./WASHINGTON, April 30 (Reuters) - The U.S. House of Representatives could vote in May on a bill easing bank rules adopted after the 2007-2009 global financial crisis, a leading Republican lawmaker said on Monday.

The comments by Representative Kevin McCarthy, the House majority leader, marked the strongest sign yet a deal could soon be reached between the House and Senate to pass the first rewrite of the 2010 Dodd-Frank financial reform law.

House Republicans have stalled voting on the Senate bill on the grounds that additional provisions should be included to further lower the regulatory burden on banks and make it easier for small companies to raise capital.

Many Democrats say Dodd-Frank provides critical protections for consumers and taxpayers. While the Senate bill passed with the support of 17 moderate Democrats, key members of the party, including Senator Mark Warner, have said they would withdraw support if any further changes were made.

That has raised fears among bank lobbyists that the House could sink the bill if it refused to approve the Senate version.

But McCarthy said there was a willingness on both sides to pass the bill, which said would reform, rather than repeal, Dodd-Frank. Read more at NASDAQ
National Debt Holdings
Post offices that are also banks? Genius idea. But don't hold your breath

File this under Excellent Ideas That Should Definitely Happen But Probably Won't.

Last week, Sen. Kirsten Gillibrand, a New York Democrat, introduced legislation to create a Postal Bank, empowering the nation's vast network of post offices to offer checking and savings accounts, and to provide low-interest short-term loans.

There are three things to really like here:
  • It would be cool having an alternative to private banks that all too often prove themselves no friend of customers (hi, Wells Fargo!).
  • Banking services would be a financial lifeline for the U.S. Postal Service, which has been defenestrated by email and digital communications.
  • This could spell doom for bottom-feeding payday lenders.
"I think this is such an elegant fix for complex problems," Gillibrand told me, "particularly payday lending."

She said millions of Americans become trapped every year in never-ending debt cycles by lenders charging annual interest rates of as much as 400%.

"Congress has the ability to wipe out these predatory practices right now by creating a Postal Bank that would be accessible to everyone," Gillibrand said.

One reason I embrace this idea is because I had a postal savings account when I lived in Tokyo in the 1990s. It was an eye-opening and incredibly convenient experience, allowing me to access my money nationwide and perform basic financial tasks without facing a slew of fees.
Employment Blog April 2018. by Stephen Singer

This employment blog is from the United States Department of Labor, Bureau of Labor Statistics. Nonfarm payroll employment edged up by 103,000 in March, following a large gain in February (+326,000). The unemployment rate remained unchanged at 4.1 percent in March. Over the month, job gains occurred in manufacturing, health care, and mining. Incorporating revisions for January and February, which decreased nonfarm payroll employment by 50,000 on net, monthly job gains have averaged 202,000 over the past 3 months. This information is detailed in Charts 1 and 2 below.

Manufacturing employment rose by 22,000 in March. All of the increase occurred in the durable goods component, including a gain of 9,000 in fabricated metal products. Over the past 12 months, manufacturing has added 232,000 jobs; the durable goods component accounted for about three-fourths of the jobs added.

Employment in health care increased by 22,000 in March and has grown by 304,000 over the year. Within the industry, employment continued to trend up over the month in ambulatory health care services (+16,000) and hospitals (+10,000).

Mining employment rose by 9,000 in March, with gains occurring in support activities for mining (+6,000) and in oil and gas extraction (+2,000). Employment in mining has expanded by 78,000 since a recent low point in October 2016. Read more at EMPLOYMENT SKIP TRACING
A_S Management
How to Encourage Tech Competition: Deregulate Finance. by Iain Murray

It's May Day, and in the pages of The New York Times appears a paean to the halcyon days of the 1930s, urging a return to the "trust-busting" of that era. The new targets of interventionist ire are not "Robber Barons," but the "Tech Titans" like Facebook, Google (and its parent, Alphabet), and Apple. As in the past, however, the real solution to dominant companies has been insurgent innovative companies. Facebook displaced MySpace, Apple appears to have displaced Microsoft, and Google knocked off Yahoo after being founded by two immigrants maxing out their credit cards.

Yet there may be something different today-young, innovative companies are often bought up by the big players rather than going on to be big firms in their own right-Waymo, Oculus Rift, and WhatsApp have all cashed in their rewards by sale rather than by IPO. Those smaller companies that have gone public, moreover, have struggled, like Snap and Blue Apron, which are trading at well below their initial price listings. Even successful companies like Uber, Airbnb, and Spotify have delayed IPOs. Mergers and acquisitions are at an all-time high worldwide, finally eclipsing the M&A frenzy of the boom.

Moreover, there are fewer starts-up now than in previous years, with-for the first time-business closings outnumbering new business openings, according to the U.S. Census Bureau. This suggests that businesses are finding it harder to get off the ground. If entrepreneurs cannot start businesses, the next Google may not get founded. Other figures back this up. In 2010, startups accounted for only 8% of companies in the U.S., compared to 13% in the 1980s at a similar stage in recovery from recession. Read more at Competitive Enterprise Institute
Employment Skip Tracing
Mulvaney's CFPB Considers Moving Staff to the Basement, or Dallas

Mick Mulvaney says he's legally barred from shutting down the Consumer Financial Protection Bureau, a regulator he once called a "sick" joke.

But the agency's acting director could move dozens of employees to the basement of its Washington headquarters. And he might try to relocate other staff members to Dallas.

Such options are being proposed by his top aides as Mulvaney seeks to cut spending at the Republican-loathed watchdog by tens of millions of dollars, according to an internal cost-savings analysis that was obtained by Bloomberg News. Another budget-trimming idea: making employees share desks.

"All options are on the table as we work to make the bureau more efficient and effective," said John Czwartacki, the CFPB's chief communications officer. He said he wasn't certain whether Mulvaney had reviewed the recommendations and that no final decisions have been made.
CFPB Investigative Demand Letters Too Invasive & Unfair: CU Trades

The CFPB's process of issuing Civil Investigative Demand letters does not allow targets with sufficient time to respond to what many see as fishing expeditions by the agency," credit union trade groups say.

"CUNA has observed indicators that broad Bureau CIDs are leading to multi-year fishing expeditions that are both burdensome to recipients and an inefficient use of government resources," Elizabeth A. Eurgubian, CUNA's deputy chief advocacy officer and senior counsel, said in a comment letter filed with the CFPB.

The CID process act "carries substantial consequences and is considered one of the most invasive forms of government involvement in the public sphere," said Alexander Monterrubio , NAFCU's director of regulatory affairs said.

The comments came in response to the first of the agency requests for information about how the bureau operates. Acting Director Mick Mulvaney issued the requests following the resignation of Director Richard Cordray.

A coalition of consumer groups is questioning the need for the request for information process and is charging that the agency has skewed it in favor of regulated companies.
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