June 12, 2018

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Credit Unions should be exempt from CFPB authority: NAFCU to House panel

NAFCU, ahead of a House Financial Services subcommittee hearing today on ways to improve transparency and accountability at the Bureau of Consumer Financial Protection, reiterated its opposition to the bureau's authority over credit unions out of concern for overregulation, and also encouraged lawmakers to support legislation to reform the bureau's leadership structure.

NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt made the comments in a letter yesterday to House Financial Services Subcommittee on Financial Institutions and Consumer Credit Chairman Blaine Luetkemeyer, R-Mo., and Ranking Member Lacy Clay, D-Mo.

In addition to noting NAFCU's concerns about credit unions' increased regulatory burden under the bureau, Hunt encouraged members of the subcommittee to support a bill introduced by Reps. Dennis Ross, R-Fla., and Kyrsten Sinema, D-Ariz., that would reform the bureau's leadership structure from a single director to a five-person, bipartisan commission.

"Regardless of how qualified one person may be, a commission would allow multiple perspectives and robust discussions of consumer protection issues throughout the decision making process," Hunt wrote. "Credit unions and their 111 million members are greatly impacted by the actions of the Bureau and believe the operating structure of the Bureau should be as fair and transparent as possible." Read more at NAFCU.ORG
Five ways Mulvaney is cracking down on his own agency

The acting director of the Consumer Financial Protection Bureau (CFPB) often says that the only reason he hasn't burned the agency down is because it's illegal.

Mick Mulvaney, the staunchly conservative White House budget director, has taken extensive steps to restrain and reform the CFPB while insisting he would do just enough to meet its legally mandated actions. He has worked to undo years of the bureau's most controversial rules while laying the groundwork for a massive reduction in the CFPB's reach and authority, including calling on Congress to strip its powers.

Just this week, Mulvaney dismissed the members of three CFPB advisory boards, including a consumer-advocate panel he's legally required to meet with twice each year.

Here are five ways that Mulvaney, who fought against the CFPB's creation as a member of the House, has transformed it from within during his six months atop the agency.

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Rent-A-Center decides it's no longer for sale, ending months of speculation

Plano-based Rent-A-Center, one of the largest rent-to-own retailers, has decided it's no longer for sale. The company said Sunday that its board has decided the best route for shareholders is to continue operating under a plan that it says is working.

The board was prepared to pursue a sale of the company, said J.V. Lentell, Rent-A-Center's chairman. But instead unanimously determined that it didn't receive any acquisition proposals meeting its objectives for a sale.

The board called it "a robust review process" that included its largest shareholder Engaged Capital LLC. Rent-A-Center first came under pressure to sell in 2016 from activist shareholder Engaged Capital, which continues to own 17 percent of the company, and holds two board seats.

Mitchell Fadel, who had previously been an executive for many years at Rent-A-Center was named chief executive officer in January. Read more at DALLAS NEWS

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OHIO: Payday-lending bill goes to Senate, where several members rejected past reforms

Legislation seeking tighter payday-lending regulations in Ohio is headed to the state Senate, where President Larry Obhof says the issue is a priority.

But some industry critics worry how the Senate plans to handle the short-term lenders, whose terms often cause low-income borrowers to take out multiple loans before paying off the original amount.

In 2010, the last time payday-lending legislation came up for a vote in the Statehouse, nine current Senate Republicans voted against it; at the time, they were members of the House, which was controlled by a Democratic majority.

The nine include Sen. Matt Huffman, R-Lima, whom Obhof assigned as the point person for Senate Republicans on the issue. Huffman also voted against the 2008 payday-lending legislation that was overwhelmingly upheld by voters, although lenders found ways to avoid the rate cap imposed in that legislation.

"The overall tenor of our caucus is that people shouldn't be trapped in a spiral of debt where 590 percent APRs are not appropriate," said Obhof.

The Senate is trying to determine all the things that add up to equal that annual percentage rate, and how many of them are appropriate, the Medina Republican said.

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NORTH CAROLINA: Banking industry seeks higher fees on North Carolina loans

North Carolina's banking industry wants the power to charge higher lending fees because it says locally based banks are at a disadvantage compared with banks chartered in other states issuing similar consumer loans.

But consumer advocates are worried the marked increases advanced through a General Assembly committee this week could unintentionally invite the kind of out-of-state predatory lending they've beaten back over the years.

The legislation involves loan origination and late payment fees that supporters say have not changed substantially since the early 1990s. The fees apply to state-chartered banks issuing non-real estate loans of up to $300,000. Read more at MIAMI HERALD
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CFPB's Mulvaney Joins Payday Industry to Fight Regulation

Every day, American school children are taught about this country's founding. Untold generations were taught that in a democracy, government is "of, by, and for the people."

Yet when it comes to consumer finance, some who serve in government seem to have forgotten whom they work for.

Mick Mulvaney, the illegally appointed acting director of the Consumer Financial Protection Bureau (CFPB), is a glaring example of one who appears to consistently relegate the financial concerns of America's people in favor of businesses that harm instead of help consumers. His support of the payday and small-dollar lending industry is a prime example.

In January Mulvaney announced it was time to "reconsider" the bureau's payday rule that was announced by his predecessor after five years of public forums, research and more than one million comments. He also encouraged the industry to apply for waivers that would exempt them from the rule's first deadline this April. More recently, he publicly sided again with the payday industry's efforts by joining the leading payday lenders' association in filing a joint motion to delay the compliance date for the CFPB's rule on payday loans for 445 days after the final judgment of litigation challenging the rule. Read more at WASHINGTON INFORMER

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Media Can't Believe Trump Would Try to Help Poor Get Loans

In January, President Trump suspended a rule proposed by the Obama administration that would have all but wiped out consumer loans from payday, title or online lenders by requiring them to "reasonably determine that the consumer has the ability to repay the loan."

It also would have limited the interest rates payday lenders could charge, handcuff its ability to collect on past-due loans and prohibit withdrawing money from a customer's checking account without prior approval, which would allow those trying to escape payment to simply move or withdraw their money.

The final measure, according to the Nation at the time, would have removed two-thirds of the profits from the industry.

In addition, the president has ordered, through the Office of Comptroller of the Currency, a series of steps to encourage traditional banks to re-enter the small-dollar consumer loan sector.

"Banks in the past have tried to offer these loans and found them unprofitable," said Dennis Shaul, CEO of the Community Financial Services Association of America, a bank trade organization, and few expect banks to re-enter the market.

Trump's moves to make credit more available to underserved working-class customers does not please the media, who say the loans create debt traps and it's better to lose your car, home or job than accept one. Read more at ACCURACY IN MEDIA
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Richard Cordray says Ohio payday lending law is worst in nation

Though consumer advocates have long called for changing the payday lending law in Ohio, a criminal investigation has resulted in the resignation of the state House speaker.

Republican Cliff Rosenberger resigned in April as the FBI was investigating his foreign travel sponsored by payday-lending lobbyists. He denied wrongdoing.

Rosenberger's resignation brought votes on legislation screeching to a halt, including a proposed bill to strengthen consumer protections for payday loans. Consumer advocates are collecting signatures to put similar language before voters on the ballot, likely in 2019. The Ohio Consumer Lenders Association, which represents the industry, opposes the measures.

Richard Cordray, the Democrat running for governor against Republican Mike DeWine, has criticized the state law. Read more at POLITIFACT
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