AFSPA
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

June 14, 2018


Court stays lawsuit challenging CFPB payday loan rule but not compliance date

A Texas federal court has granted the stay of the lawsuit filed by two trade groups challenging the CFPB's final payday/auto title/high-rate installment loan rule (Payday Rule) requested in a joint motion filed by the trade groups and the CFPB but has denied the stay of the Payday Rule's August 19, 2019 compliance date that was also requested in the joint motion.

The court did not provide the basis for its decision in the order ruling on the joint motion. However, the court also granted the motion filed by four consumer advocacy groups seeking leave to file an amicus memorandum opposing the joint motion.

The joint motion had sought the stay of the compliance date pursuant to Section 10(d) of the Administrative Procedure Act (APA), 5 U.S.C. Section 705. In their amicus brief, the advocacy groups argued that in addition to the parties' failure to satisfy the four-part test used to assess requests for Section 705 stays, a stay of the compliance date while also staying the litigation was inconsistent with the purpose of Section 705 to stay agency action in order to maintain the status quo during judicial review. According to the advocacy groups, the CFPB and trade groups were not seeking to maintain the status quo to protect against litigation uncertainties but rather to address uncertainties created by the CFPB's decision to engage in rulemaking to reconsider the Payday Rule. They described the joint motion as an attempt to "effect an end-run around the [APA's notice-and-comment rulemaking procedures]." (The trade groups filed a response in which they disputed the arguments made by the advocacy groups.) Read more at National Law Review

CFSA
Trump expected to name new CFPB chief next week, Mulvaney says

President Donald Trump will likely name his pick to run the Consumer Financial Protection Bureau next week, according to Mick Mulvaney, the agency's interim leader.

Mulvaney, speaking with reporters Tuesday, said he was recently told by White House Counsel Don McGahn that the Trump administration will adhere to a June 22 deadline for selecting a permanent CFPB director. Trump met with one of the finalists for the job last week, according to Mulvaney, who said he doesn't know who the candidate was.

"I was not involved in the process," Mulvaney said, adding that Treasury Secretary Steve Mnuchin and top White House economic advisers Larry Kudlow and Kevin Hasset have been leading the search. "Once they name a person I look forward to working with him or her to get that person up to speed."

When the U.S. Senate confirms Trump's pick it will bring an end to an unusual situation in which Mulvaney has served as the White House's budget director, while simultaneously running a regulator that's supposed to protect consumers from predatory lending. Mulvaney took over the CFPB in November, and Democrats such as Senator Elizabeth Warren have repeatedly cited his part-time status as evidence of the administration's hostility to the CFPB's mission.

MicroBilt
Rep. Darrell Issa said to be candidate for Trump's new CFPB chief

Rep. Darrell Issa, a California Republican, is among the candidates who have been discussed as President Donald Trump gets closer to naming who will run the Consumer Financial Protection Bureau, Bloomberg reported, citing people familiar with the matter.

In addition to Issa, J. Mark McWatters, a credit union regulator and former congressional staffer, is another top candidate, Bloomberg reported. The White House will likely make an announcement next week, according to Mick Mulvaney, the agency's interim leader. Issa said earlier this year he will not seek re-election to Congress. Read more at MARKETWATCH

National Debt Holdings
Online Lenders Alliance (OLA) Names Mary Jackson as New CEO

WASHINGTON, DC, June 11, 2018 - The Online Lenders Alliance (OLA) today announced that Mary Jackson has been named Chief Executive Officer for the organization, effective June 11, 2018. Jackson will succeed Lisa McGreevy, who will serve in a new role as senior advisor to OLA, following a nine-year tenure of overseeing the phenomenal growth of the organization and the industry.

Jackson, a 10-year OLA board member and financial services veteran, was selected by the board of directors to lead the organization in its mission to ensure all hardworking Americans have access to credit. Bringing together fintech companies committed to using sophisticated technology and smart underwriting, Jackson will use her experience to highlight the need for these products, advocate for customer-centric rules and regulations, and build a better understanding of the important role these solutions play in the broader financial ecosystem.

Jackson brings 25 years of experience as an executive in the financial services industry and regularly serves as a public-policy expert, including leading working groups that brought together industry and consumer organizations to develop fair, balanced solutions for appropriately serving all customers. Jackson also is an accomplished executive and entrepreneur and most recently was the founder of Jackson Vaughn Public Strategies.    Read more at Online Lenders Alliance

MerchantBoost
MINNESOTA: Moorhead officials explore alternatives to payday lending

City and state officials gathered here Monday, June 4, to discuss ways to help Moorhead residents avoid what one nonprofit organization calls the "debt trap" of payday loans.

Exodus Lending, which helped organize Monday's meeting, says many residents in the region who take out payday loans face fees and interest rates upward of 200 percent after they become stuck in a cycle of debt marked by constant renewal of loans and the paying of interest and fees on an ongoing basis.

According to the organization, in 2016 at least 1,156 borrowers in Clay County paid about $303,000 in interest to payday lenders, money Exodus Lending said could go to groceries, children's medications and college savings accounts.

Based in the Twin Cities, Exodus Lending offers help to borrowers by refinancing existing payday loans while charging no interest and no fees, said Sara Nelson-Pallmeyer, executive director of the nonprofit. Read more at DULUTH NEWS TRIBUNE

Employment Skip Tracing
PENNSYLVANIA: Rep. Heffley accused of sneaking payday lending bill through committee

State Rep. Doyle Heffley says House Bill 2429 is not a payday lending bill - if it were, it would be at least the sixth time in as many years that usury groups had lobbied to erode Pennsylvania's protections against predatory loans.

"This isn't payday lending; it's more or less dealing with a language adjustment," the Carbon County Republican said today. "It would just clarify the language so that current lending practices won't be affected by different regulations."

But, as to which lending practices would be impacted - and by which regulations - Heffley couldn't immediately say.

"Anytime you get into this type of banking stuff, it does get complex," he said. "I don't have all the information in front of me now."

Despite that complexity, Heffley and other House Commerce Committee members had initially tried to pass the legislation to the floor of the General Assembly without a public hearing. However, legal aid groups say there's a simple reason for that: HB2429 is, in fact, a payday lending bill - but state reps just don't want to talk about it. Read more at City and State PA

Insight.tm
Businessman gets 10 years in prison for payday loan scam

A businessman who ran a $220 million predatory payday lending operation that cheated over a half million people nationwide while he lived lavishly was sentenced to 10 years in prison by a judge who said he couldn't understand how a once honorable man could go so crooked.

"You were a man of great conviction and honor to age 60," U.S. District Judge Edgardo Ramos told Richard Moseley Sr. on Tuesday as he explained why he imposed the prison term. "How do you, after 60 years, become the person who runs this business?"

Moseley also must forfeit $49 million to make amends for running loan companies that exploited 620,000 of the most financially vulnerable people in the country. His companies had been charging interest rates as high as 700 percent or more using deceptive practices, including charging some people for loans they never requested, while he lived the high life, including a vacation home in Mexico, luxury cars and country club memberships. Read more at THE TELEGRAPH

Dreher Tomkies LLP
CFPB changes office logo, affirming name change amid Mulvaney's crusade to burn it all down

IHOP lit up the internet Monday after announcing it will now offer burgers and changing its name to the much stupider "IHOB" - International House of Burgers, rather than the International House of Pancakes.

There's another name change, though, that's getting less attention. The Consumer Financial Protection Bureau (CFPB) is actually the Bureau of Consumer Financial Protection (BCFP).

CFPB head Mick Mulvaney has grown increasingly frustrated with people calling the agency by the wrong name, but AP Style, which most news outlets follow, hasn't changed its guidance and thus the agency is still consistently referred to in the media as the CFPB. (Political appointees at the bureau have reportedly gone so far as to ask the AP to change its guidelines.)

At any rate, the logo at the CFPB officially was officially changed Monday. The nonprofit Public Citizen tweeted a photo and joked, "Welcome to the... Best Consumer Fraud Place? Or perhaps the Bureau for Corrupt Financial Predators?"

"Bureau of Consumer Financial Protection" was the name used in the 2010 Dodd-Frank statute that established the agency, Mulvaney explained in April. It's merely a scrambling of the same words, but it's enough to mix up people looking for information and confuse consumers - the consumers the CFPB is supposed to protect. Read more at THINKPROGRESS

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How to Improve Rulemaking at the CFPB

When the Consumer Financial Protection Bureau (CFPB) was established in 2010 as part of the Dodd-Frank Act, it was intended to be a "21st century agency" that used hard data and analysis to develop well-crafted regulations. For all the promise, however, the bureau has failed to live up to its commitments.

To date, the Bureau's rulemakings-such as for rules regarding arbitration, prepaid cards, and payday loans-have not been based on robust research or consumer desire for regulation. Instead, they have been driven by the Bureau's ideological hostility to the financial services industry.

Take the payday loan rule. The Bureau began studying the payday lending market in January 2012 in preparation for a rulemaking. This was just six months after the agenvy officially opened, even as it dealt with the enormous task of setting up a new government agency and writing required new rules, and despite no Congressional mandate or consumer complaint data at the time.

Even worse, the consumer complaint database that the Bureau administers reports that payday loans made up 1 percent of all consumer complaints, while auto-title loans, which were also included in the rulemaking, made up 0.1 percent of all complaints. This kind of data theoretically guides the Bureau's rulemaking; it is not persuasive that there was ever a consumer protection problem to begin with. Read more at Competitive Enterprise Institute
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ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION 
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