June 21, 2018

Elizabeth Warren Putting Hold on Trump CFPB Nominee

BOSTON (AP) - U.S. Sen. Elizabeth Warren is putting a hold on President Donald Trump's pick to head the government's consumer watchdog agency.

Warren said Tuesday she's moving to block the nomination until she can learn more about Kathy Kraninger, tapped to head the Consumer Financial Protection Bureau, which Warren helped create.

Specifically, Warren said she wants to know whether Kraninger, currently an associate director at the Office of Management and Budget, had any role in the policy to separate children from their parents coming across the U.S.-Mexico border.

Warren said Kraninger's job included overseeing Trump administration budget requests for the Department of Homeland Security and the Department of Justice.

The Senate must confirm Kraninger's nomination. She would replace acting director Mick Mulvaney.

Warren made the comments in a fundraising email to supporters

Mulvaney's Advice to Warren: Anyone's Better Than Me

Mick Mulvaney is using a curious tactic to encourage Senator Elizabeth Warren to drop her opposition to the Trump administration's pick to run the Consumer Financial Protection Bureau.

"Anybody has to be better than me," Mulvaney, who has been leading the financial regulator part-time on an acting basis since November, said Wednesday.

President Donald Trump this week nominated Kathy Kraninger, one of Mulvaney's deputies at the White House Budget Office. Warren, a relentless Wall Street critic, quickly made clear that she would rather see someone else in charge of the CFPB.

Still, conservative lawmakers and groups including the Heritage Foundation have expressed their support for the little-known Office of Management and Budget official, bolstering the odds that Kraninger will be confirmed by the Republican-led Senate.

"Those who've worked with Ms. Kraninger in the executive branch, here on Capitol Hill, or most recently at the Office of Management and Budget praise her expertise, leadership, and approach to public service," Senate Majority Leader Mitch McConnell said in a statement Wednesday after meeting with Kraninger. "I look forward to supporting her no mination."

Dreher Tomkies LLP

Dennis Shaul, CEO of the Community Financial Services Association of America (CFSA)released the below statement following the nomination of Kathy Kraninger as Consumer Financial Protection Bureau (CFPB) Director:
"CFSA congratulates Kathy Kraninger on her nomination to serve as CFPB Director. The CFPB needs a Director who will listen to consumers and rely on unbiased data and research to guide its work. Ms. Kraninger is a longtime public servant and we hope that under her leadership the Bureau fulfills its intended mission as a truly independent, non-partisan agency that serves American consumers.

"Since its creation, the Bureau's agenda has been guided by partisan politics, which has led to harmful, biased rulemaking - notably its rulemaking that led to the Bureau's seriously flawed small-dollar lending rule. CFSA looks forward to working with Ms. Kraninger as the Bureau reconsiders - and hopefully repeals - this severely flawed rule, and to craft commonsense regulations that appropriately balance consumer protection with access to credit moving forward."

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CALIFORNIA: Bills headed for state Senate would put limits on payday, auto-title lending

State legislators killed a bill that would have reshaped much of California's consumer lending market, but two more-modest bills made it through the state Assembly and now move on to the Senate.

One would stop borrowers from taking out more than one payday loan at a time; another would cap interest rates on auto-title loans. Both will be taken up Wednesday by the Senate banking committee.

Lenders say the bills would make it harder for Californians to get emergency loans or would push those borrowers to unregulated lenders - arguments that have helped scuttle other bills, including ones that died in the Assembly last year and again last month.

The new bills' author, Assemblywoman Monique Limón (D-Santa Barbara), said she hopes her proposals will succeed where those failed in part because they are more limited in scope.

"There are those bills that aimed to, overnight, completely do a shift to the market and shut down parts of the industry all at once, and then there are bills that aim to look at the problem in increments," she said. Read more at LOS ANGELES TIMES
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OHIO: House sponsor worried Senate will gut Ohio payday lending revamp

Rep. Kyle Koehler agrees with those who say the 2008 payday lending law passed by lawmakers and upheld by voters was not a good one - a too-low rate cap that short-term lenders simply avoided anyway.

"In the last minute, they substituted language for a whole new bill," the Springfield Republican told a Senate committee Tuesday, describing the process that led to passage of the bill 10 years ago. "I'm terrified that's going to happen again - we're going to substitute something at the last minute and it's not going to do what we need it to do."

Koehler is worried that Senate Republicans plan to do a major rewrite of House Bill 123, a bill aimed at altering Ohio's short-term, high-cost loan industry so low-income, desperate borrowers can avoid being caught in a debt cycle.

Koehler isn't sure exactly what Sen. Matt Huffman, R-Lima, the Senate GOP point person on the payday issue, is planning. But when the two met last week, Koehler didn't come away encouraged.

A $500 loan for six months under the changes Huffman was considering would cost the borrower $815 in interest and fees, Koehler said, while that same loan under House Bill 123 would cost $160.

"Right off the bat, that was a non-starter for me," Koehler said.

Payday loans not just a poor person's issue

A team of researchers led by faculty at the University of Georgia found that payday loan borrowers often come from middle- and higher-income households, not just poor or lower-earning populations.

Mary Caplan, an assistant professor in the School of Social Work at UGA, led a study that analyzed a nationally representative dataset from the Federal Reserve Board's 2013 Survey of Consumer Finances.

The survey was administered among 6,015 U.S. households, and it includes information about income, pension, spending, debt and the use of financial services.

Borrowers can take out these loans online or in person with companies advertising small dollar and quick cash loans, but the interest rates tend to be high.

"There's this idea that payday loans are specifically used by people who are poor," Caplan said. "I wanted to find out whether or not that's true."

The study grouped borrowers into five income-based groups and found that there are payday loan borrowers in low-, middle- and high-income households.

The researchers found that payday loan borrowers are more likely to be African-American, lack a college degree, live in a home that they don't own and receive assistance such as SNAP or TANF.

The researchers also looked at social support and its relation to payday loan borrowing and found that more than 38 percent of borrowers couldn't ask family and friends for $3,000 in a financial emergency. Read more at ONLINE ATHENS

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MINNESOTA: Banking program aims to provide lower-cost alternative to payday lenders

Twin Cities-based nonprofit Prepare + Prosper and Sunrise Banks will announce Wednesday a multiyear plan to provide thousands of low-income families with an alternative to payday lenders and check-cashing operators.

The Financial Access in Reach (FAIR) plan is aimed at providing "financially underserved" people with access to a checking, savings and small-loan program at a modest cost.

"The financial inclusion gap is a big problem," said Tracy Fischman, executive director of St. Paul-based Prepare + Prosper, which helps thousands annually with free tax preparation and financial counseling. "It negatively impacts people's economic footing, well-being, health, and more. People need financial products and a system that work for them and not against them as they strive to be financially successful." Read more at STAR TRIBUNE
Your neighborhood bank may now offer short-term, small dollar loans

Consumers who rely on payday loans to fill their budget gaps may have a new option to turn to: traditional banks.

National banks just received the go-ahead to serve that market from their regulator, the Office of the Comptroller of the Currency.

On Wednesday, Comptroller of the Currency Joseph Otting called for national banks and federal savings associations to step into the short-term, small-dollar installment loan market.

These loans typically range from $300 to $5,000, and that adds up to about $90 billion in loans taken out every year by millions of U.S. consumers.

"Consumers should have more choices that are safe and affordable, and banks should be part of that solution," Otting said in a statement.

Letting banks offer these kinds of loans will give more choice to consumers, who often turn to payday loans to make up for personal money shortages. Read more at CNBC

Consumer watchdog agency needs to get back to doing its job

In the seven years since opening its doors, the Consumer Financial Protection Bureau (CFPB) has played a vital role in promoting and defending fairness in the American consumer marketplace.

The results speak for themselves: The CFPB has returned $12 billion to nearly 30 million consumers who were cheated by financial companies, helped resolve more than a million consumer complaints and put a stop to a raft of harmful banking, credit card, mortgage and student loan practices.

But the bureau's future now hangs in the balance. Recently, the president nominated a CFPB director: Kathy Kraninger, an ally of the current acting director who has no previous consumer protection experience.

The Senate now must determine whether to confirm Kraninger to a five-year term. The work of the Senate in the coming months will determine whether the bureau stays true to its mission to protect consumers against harmful financial practices, or it continues to back away from its mission.
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