NEWS: July 27

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CFPB Says Payday Lending, Debt Collection Rules Coming

Law360, New York (July 21, 2017, 4:19 PM EDT) -- The Consumer Financial Protection Bureau on Thursday said it intends to move forward with rules for the payday loan and debt collection markets even as rumors swirl about the future of the bureau's director and Republicans look to nullify a recently released major regulation.

The CFPB said in its mid-year rulemaking agenda that it was reviewing comments and planned to move forward with two of the biggest regulations remaining on its regulatory docket - one governing the payday lending industry and another the market for debt collection. While the bureau did not provide a firm date for those rulemakings, both rules appear to be on track for release later this year.

"We are considering rules to address consumer harms where markets do not operate efficiently and fairly, making it difficult for consumers to make informed decisions and otherwise protect their own interests," Kelly Cochran, the CFPB's assistant director for regulations, said in a blog post on the bureau's website.

While many observers had expected the CFPB to lay low following the inauguration of President Donald Trump, the bureau has moved forward with a host of enforcement actions and finalized its hot-button rule eliminating class action bans in arbitration agreements on July 10.

The CFPB is already facing an effort among Republicans in both houses of Congress to nullify the arbitration rule through the Congressional Review Act, which allows simple-majority votes and a presidential signature to eliminate the regulation and bar the CFPB from creating a substantially similar rule.

Those votes could happen before the August recess, and backers of the CFPB fear that any other rule the bureau puts out could suffer a similar fate.

Undeterred by the potential reversal of its arbitration rulemaking, the CFPB said it plans to continue work on its payday lending rule. The bureau is currently reviewing more than 1 million comments it received on its initial June 2016 proposal for payday loans, which are short-term, small dollar loans that often carry high interest rates; auto title; and other short-term loans.

The payday proposal called on lenders to review whether borrowers had the ability to repay the loans they take out and limit the number of loans a borrower could take out in quick succession.

The proposal has received a great deal of pushback from the industry, and consumer advocates had hoped for more from the bureau.

"We continue to believe that the concerns articulated in the [proposal] are substantial, and are carefully considering more than one million comments received in response to the proposal with respect to how best to address those concerns in a manner consistent with our objectives under the Dodd-Frank Act," Cochran said in the blog post. Read more at LAW 360


CFPB Identifies Regulatory Action Plans in Spring 2017
Update to the Unified Agenda of Federal Regulatory and Deregulatory Actions.
Tuesday, July 25, 2017

"Nine CFPB regulatory actions are in the proposed rule stage. Most notably, the CFPB's agenda indicates that its initial review of comments on the proposed Payday, Vehicle Title, and Certain High-Cost Installment Loans rule (the "Payday Loan Rule") was scheduled for completion in June 2017, but gives no estimated date for issuance of a final rule.

Having received "more than one million comments" in response to the proposed rule, the CFPB may be hard-pressed to justify the issuance of a final Payday Loan Rule within a few months after completing its initial review of the comments if it is, in fact, "carefully considering" the extraordinary number of comments.

Other estimated dates include the issuance of both a proposed Debt Collection Rule and a proposed rule for the Supervision of Larger Participants in Markets for Personal Loans by September 2017. Estimated dates included in the Unified Agenda, however, tend to slip."
Incite Business

House GOP spending bill would rein in the CFPB

A new House Republican bill to fund the government includes key parts of the GOP Dodd-Frank replacement package the House passed this month, giving lawmakers another opportunity to try to put deregulatory legislation on President Trump's desk.

The fiscal 2018 financial services appropriations bill introduced by the House Appropriations Committee Wednesday would extend Congress' control of the Consumer Financial Protection Bureau and prevent it from regulating payday lenders, among other measures.

The bill also would repeal the Volcker Rule that prevents banks from speculating with insured deposits and eliminate regulators' new power to regulate non-banks that they think could pose a threat to the financial system.

In releasing the bill, Rep. Tom Graves of Georgia, the chairman of the financial services subcommittee, said he was "particularly excited about the financial reforms, which slash harmful regulations, streamline outdated agency processes, and rein in the rogue Consumer Financial Protection Bureau."

While the bill would accomplish some of the big goals that the GOP has set out to achieve in terms of rolling back the financial rules enacted under former President Barack Obama, it is far from becoming law. Congress has not determined how it is likely to fund the government for fiscal 2018, and government funding legislation would require the sign-off of Senate Democrats, many of whom oppose most changes to the 2010 Dodd-Frank law. Read more at WASHINGTON EXAMINER

Report: Cordray to Quit CFPB for Ohio Governor Race

Richard Cordray is planning to leave the Consumer Financial Protection Bureau (CFPB) and seek the 2018 Democratic nomination for governor of Ohio, according to a statement by Ohio Supreme Court Justice Bill O'Neill reported by

O'Neill said that an unnamed mutual friend "openly stated" that Cordray will seek statewide office in Ohio, where he served as Attorney General before coming to the CFPB. "The person I was talking to last week was saying that [Cordray] is basically trying to get as many projects done in Washington as he can before he leaves," said O'Neill, also a Democrat and the only member of his part on that state's high court. "But they left me with the clear impression that he is leaving."

O'Neill added that he would not seek the governor's office if Cordray enters the race. Cordray's CFPB term ends in July 2018, and the Democratic primary for Ohio's statewide races is May 8, 2018. Cordray refused to comment on the story in a Wednesday press call that he held with Sen. Sherrod Brown (D-OH).

The CFPB's structure has been a target of President Trump for quite some time, as the President cited the constitutionality of the leadership structure of the CFPB. Back in December, Cordray, in a Wall Street Journal article, stated that he had no plans to resign once Donald Trump became President. Read more at NMP.COM

Dreher Tomkies LLP

Democrats: CFPB has saved $12 billion for consumers, mostly through controversial power

The bulk of the nearly $12 billion that the Consumer Financial Protection Bureau has returned to financial customers is attributable to one of the agency's powers that Republicans most want to rein in, according to a new report from House Democrats Monday.

Since opening in 2011, the bureau has won $10.8 billion in consumer relief through enforcements undertaken under its broad authority to police "abusive" conduct in the financial industry, according to the report released by the Democratic staff of the House Financial Services Committee. The bureau verified the statistic.

Under the Dodd-Frank law that created it, the bureau has broad authority to crack down on "unfair, deceptive or abusive acts and practices."

Monday's report makes clear how central that power is to the controversy over the bureau. Republicans have charged that the authority gives the agency free rein to punish businesses for whatever reasons it choose, and they have targeted the power for elimination in legislation that would overhaul the bureau and dramatically scale back its powers.

House Democrats released the report Monday detailing the bureau's accomplishments in an effort to defend it from Republicans.

According to them, the bureau has carried out 129 enforcement actions under its authority to police deceptive or abusive practices. Those include instances such as banks tricking customers into incurring overdraft fees, mortgage lenders engaging in false advertising, and similar complaints against credit score companies, payday lenders and other financial institutions.

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U.S. House votes to overturn Consumer Financial Protection Bureau measure that enables lawsuits against banks

WASHINGTON, D.C. - The Republican-led House of Representatives voted 231 to 190 on Tuesday to reject a Consumer Financial Protection Bureau regulation that would allow consumers to file class action lawsuits against their banks and credit card companies.

The rule that CFPB Director Richard Cordray announced July 10 would prevent major financial institutions from imposing contractual fine print that blocks their customers from filing class action lawsuits.

Cordray, a former Ohio attorney general rumored to be pondering a run for Ohio governor, said mandatory arbitration clauses force consumers to either give up their complaints of wrongdoing "or go it alone, usually over relatively small amounts that may not be worth pursuing on one's own."

But Republicans in the House of Representatives said the new rule would enrich trial lawyers, not protect consumers. They argued that class actions typically result in small payments for consumers and big payouts for lawyers.

"Washington should be focused on creating more jobs, not more class-action lawsuits," said House Financial Services committee Chairman Jeb Hensarling, who accused Cordray of acting "unilaterally" to dictate financial industry contract terms while he's "on the way out the door" to seek higher office in Ohio.

Democrats said the arbitration process is stacked in banks' favor, and accused Republicans of siding with big business against consumers. The top Financial Services Committee Democrat, California's Maxine Waters, said Republicans "hate" Cordray because he's effective.

Toledo Democratic Rep. Marcy Kaptur said the GOP measure would keep customers from seeking legal redress against "megabanks that took them to the cleaners."   Read more at CLEVELAND.COM

Community Involvement  
Advance Financial
Advance Financial in Alcoa gives $500 to Blount County 4-H
Read more at THE DAILY TIMES

What 71% of adults think is in their credit history

Here is more evidence as to why customers sitting across the desk from you might be frustrated the rate attached to their installment contract isn't as favorable as they expect. A new survey from FactorTrust indicated most U.S. adults do not understand what is and what is not included in their credit history, and therefore impacting their credit scores.

Out of 2,279 U.S. adults surveyed, the results showed 71 percent assumed that major credit bureaus are including all consumer credit history, including non-traditional payments like short-term loans, online, rent-to-own and more. This survey, conducted by Radius Global Market Research in June and commissioned by FactorTrust, showcased the disconnection between consumers and their own credit data.

"Consumers and lenders are facing realities when it comes to credit histories generated by the Big 3 bureaus," FactorTrust chief executive offier Greg Rable said. "The true nature of their payment habits is not accurately being reflected in their credit profiles, because the alternative loans they are taking out and repaying on time are not included.

"It's no surprise there are so many misperceptions around what constitutes a consumer's credit profile and why lenders are seeking new and progressive methods to develop better ways to learn about the consumers they serve, or could be serving," Rable continued.

FactorTrust asserted the omission of certain types of alternative data, like short-term loans and rent-to-own payments, means that consumers who successfully repay these non-traditional loans do not receive the credit they deserve. But, 72 percent of U.S. adults believe finance companies and other lenders would be more likely to consider a consumer for a loan with information about all of their loans, including alternative credit data.

In addition, 68 percent of U.S. adults who participated say their credit history would improve if it incorporated all of their payments including non-traditional loans (short-term, personal, online, rent-to-own). Read more at AUTO REMARKETING


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