February 13, 2018

ALABAMA: Payday loan companies oppose change to 30-day loans

Payday loan companies are fighting a bill that would set the terms of loans at 30 days, instead of 10 to 31 days allowed under Alabama law now.

Supporters of the change say it would cut unreasonably high fees that can keep credit-shaky borrowers stuck in debt for months.

Payday lenders say the change would slash their revenues and could drive them out of business, sending borrowers to online lenders who don't follow state regulations.

The Senate Banking and Insurance Committee held a public hearing today on the bill by Sen. Arthur Orr, R-Decatur. Four supporters and three opponents of the bill spoke.

Two senators on the committee -- Linda Coleman-Madison, D-Birmingham and Bill Holtzclaw, R-Madison -- expressed support for the bill during today's hearing.

Efforts to roll back the cost of payday loans come and go every year at the State House, but not much changes. Orr has tried before but his latest bill is probably the simplest approach. It would change only the length of the loans. Read more at AL.COM


White House budget plan proposes cutting CFPB budget, restricting enforcement powers

The White House on Monday proposed a major restructuring the Consumer Financial Protection Bureau that would significantly cut the watchdog agency's budget and limit its enforcement power.

Under the proposal, included in President Trump's 2019 budget plan, the CFPB would be funded through Congress rather than the Federal Reserve, giving lawmakers more influence over the agency's priorities. The CFPB's 2019 budget would also be capped at its 2015 level, $485 million, compared with a projected $630 million this year. The plan, which would take two years to implement, also calls for putting restrictions on the CFPB's enforcement authority.

"The proposed reforms would impose financial discipline, reduce wasteful spending, and ensure appropriate congressional oversight," according to a strategic statement released Monday. ". . . To prevent actions that unduly burden the financial industry and limit consumer choice, the proposal restricts CFPB's broad enforcement authority over Federal consumer law."

The proposal is the latest illustration of the Trump administration's intention to drastically revamp an agency it says has acted too aggressively and wields too much power. The CFPB is an "unaccountable bureaucracy with unchecked regulatory authority," the White House said in its proposal.

Trump appointed one of the agency's most vocal crisis, White House budget director Mick Mulvaney, to be the CFPB's acting director in late November, and Mulvaney has taken several steps to revamp the agency. He has ended lawsuits and paused investigations. The CFPB office in charge of overseeing fair-lending cases has also been stripped of its enforcement powers.

WASHINGTON, D.C. - The Consumer Financial Protection Bureau (Bureau) today released its five-year Strategic Plan that establishes its mission, strategic goals, and strategic objectives.

"If there is one way to summarize the strategic changes occurring at the Bureau, it is this: we have committed to fulfill the Bureau's statutory responsibilities, but go no further," said Acting Director Mick Mulvaney. "By hewing to the statute, this Strategic Plan provides the Bureau a ready roadmap, a touchstone with a fixed meaning that should serve as a bulwark against the misuse of our unparalleled powers."

The plan draws directly from the Dodd-Frank Wall Street Reform and Consumer Protection Act and refocuses the Bureau's mission on regulating consumer financial products or services under existing federal consumer financial laws, enforcing those laws judiciously, and educating and empowering consumers to make better informed financial decisions. Among changes from the prior Strategic Plan, the Bureau will now focus on equally protecting the legal rights of all, including those regulated by the Bureau, and will engage in rulemaking where appropriate to address unwarranted regulatory burdens and to implement federal consumer financial law and will operate more efficiently, effectively, and transparently. 

Today's plan is a revision of the draft released in October 2017.

Trump administration's consumer protection bureau drops lawsuit into lender alleged to charge 950% interest

The federal consumer watchdog has dropped a lawsuit against a lender that allegedly charged people up to 950 percent interest rates.

It's part of a move away from aggressive enforcement under interim director Mick Mulvaney that has angered career staff, NPR reported.

The Consumer Financial Protection Bureau confirmed to CNBC on Monday that it scrapped the suit against Golden Valley Lending in January. Mulvaney, who also heads the administration's Office of Management and Budget,was appointed by President Donald Trump to lead the CFPB after Democrat Richard Cordray resigned.

Mulvaney - a harsh critic of the CFPB while serving in Congress - decided to scrap the legal action even though career officials wanted to move ahead with it, several CFPB staff members told NPR.

The move is one of several Mulvaney has taken to scale back the CFPB, which was created during the Obama administration after the global financial crisis to protect consumers from malpractice in the financial industry. Read more at CNBC

CFSA Conference

INDIANA: High-interest loan bill hits Senate

Debate is whether poor are helped or harmed

INDIANAPOLIS - Morality and capitalism are on a collision course as Indiana lawmakers look to legalize a new short-term loan option with rates that could venture into loan-sharking territory.

House Republicans narrowly paved the way for the debate with a 53-41 vote last month. The proposed legislation now moves to the Senate where leadership is unsure of its fate.

"Are you really helping someone by giving someone access to loans at these rates?" asked Rep. Matt Pierce, D-Bloomington.

Acknowledging people might be desperate and need money, he questioned "are we helping them by giving them a loan they probably can't pay back and just get into a debt spiral. This kind of debt level would even make Congress blush."

Senate President Pro Tem David Long, R-Fort Wayne, said his members are concerned about the upfront money - including a high origination fee - that's being taken under House Bill 1319.
A_S Management
  1. Approximately 20 percent of American households are underbanked, (FDIC)
  2. The average loan amount borrowed trends upwards with age until it peaks at age 45.
  3. Of the top 10 largest US employers in the FactorTrust database, one is a top three telecom company, with a default rate of 29 percent.
  4. Forty-five percent have an unsecured loan.
  5. The average open balance on an unsecured loan is $9,413
Dreher Tomkies LLP

Mulvaney Says CFPB Under His Direction Is 'Not Being Aggressive'

Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, said the agency under his leadership is enforcing the law but "not being aggressive" about its mission.

"We're not pushing the envelope," Mulvaney said Sunday on CBS's "Face the Nation." "We're taking a different attitude toward the job, but the priorities have not changed."

Mulvaney, who also serves as White House budget director, said he has favored a different approach because the agency, created after the 2008 financial crisis to police mortgages, credit cards and other consumer products, is "perhaps the most unaccountable bureau or agency there is."

"We want to run that place with a good deal of humility and prudence," he said. "This bureau is unlike any other federal bureaucracy. It's run by one person. Right now me."

President Donald Trump tapped Mulvaney to run the CFPB after its first director, Richard Cordray, who was appointed by former President Barack Obama, resigned in November. Cordray is now running for governor in his home state of Ohio.

The bureau will continue to protect consumers from fraud and "things that are illegal," said Mulvaney, contrasting the approach with what he described as the willingness of the office under Cordray to make "stuff up as we go." Read more at BLOOMBERG


U.S. Consumer Financial Protection Bureau aims for more restraint: memo

WASHINGTON (Reuters) - The U.S. Consumer Financial Protection Bureau will pull back its activities and seek to promote a free market for financial services, according to a memo obtained by Reuters on Monday.

The office, created in the 2010 Dodd-Frank Wall Street reform law to protect individuals from predatory lending, will release a strategic plan this week that will detail changes under the bureau's acting head, White House Budget Director Mick Mulvaney, according to the memo.

Appointed by President Donald Trump, Mulvaney has been expected to greatly reduce the reach of an agency that has attracted the ire of many of his fellow Republicans.

"If there is one way to summarize the strategic changes occurring at the Bureau, it is this: we have committed to fulfill the Bureau's statutory responsibilities, but go no further," wrote the new CFPB Chief of Staff Kirsten Sutton in a memo sent on Friday to the entire CFPB staff, first reported by National Public Radio.

The memo did not give an example of an enforcement activity that the bureau had carried out that went further than its statutory responsibility. Read more at REUTERS

Community Involvement

Nashville-based financial services company Advance Financial cut the ribbon today at the company's newest store in Smithville. To mark the occasion, the Advance Financial Foundation donated $1,000 to the DeKalb County 4-H. "The communities surrounding all of our locations are extremely important to us," said Shantrelle Johnson, VP of corporate citizenship for Advance Financial. "Through the Advance Financial Foundation, we are able to provide extra support to those organizations working to make a difference in these regions. We are thrilled to make a contribution to the DeKalb County 4-H and help fund the educational programs they offer."

Senators demand answers from CFPB on Equifax probe

More than 30 senators are asking the Consumer Financial Protection Bureau (CFPB) for details about their investigation into last year's massive Equifax data breach following reports the agency has been dragging its feet on the probe.

The group, led by Sen. Brian Schatz (D-Hawaii), sent a letter to the CFPB, dated Feb. 7, which cites a Reuters report that Acting Director Mick Mulvaney has not approved a number of preliminary steps in the investigation.

"The CFPB has a statutory mandate to participate in this process by conducting an investigation," the senators wrote. "If that investigation exposes wrongdoing or consumer harm, the CFPB has the authority, and indeed a duty, to bring appropriate enforcement actions."

The CFPB said it received the letter but declined to comment on it. A spokesperson pointed to a statement put out earlier this week by Mulvaney's senior advisor John Czwartacki.

"Acting Director Mulvaney takes data security issues very seriously," Czwartacki said. "Under his direction, the CFPB is working with our partners across government on Equifax's data breach and response. We are committed to enforcing the law. As policy, we do not confirm or deny enforcement or supervisory matters." Read more at THE HILL

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