July 3, 2018

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MINNESOTA: Payday lenders may soon be able to charge interest rates illegal in Minnesota

Two measures have been introduced in Congress that would help payday lenders and other non-banks charge interest rates well over the state limit.

Every state has different caps on rates their banks are allowed to charge. If we happen to be talking about a national bank - like Wells Fargo or Citibank -- the cap would be whatever it is in the bank's home state, no matter where the borrower lives.

Sometimes, payday lenders and other non-bank lenders will contract with national banks. The lenders take care of all the marketing, underwriting and servicing of the loans, as well as the risk if a borrower can't pay. In return for a small fee, the lenders also get to use the national bank's name on loan documents.

Under the proposed measures (one sponsored by North Carolina Republican Patrick McHenry and one by Indiana Republican Trey Hollingsworth), these lenders would also get to use the national banks' interest rate caps. Even if the lender is in Minnesota, they can charge Utah-level interest rates, as long as that's where the national bank they're working with is.

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OHIO: Senate Republicans cave in to payday-lending industry

Any way you look at it, the decision by Republican leaders in the Ohio Senate to postpone a vote on a payday-lending regulation bill is a huge victory for predatory lenders.

Of course, the industry would like the legislation to simply disappear into the political ether, but they will settle for the next best thing: Delay.

The longer the bill languishes in the Senate, the greater the chances that it will be watered down to such an extent that it will be meaningless.

Indeed, before Tuesday's announcement of the delay by GOP Senate President Larry Obhof of Medina, there were indications that pro-industry senators were succeeding in pushing back against provisions that lenders find objectionable.

Sen. Bill Coley, R-West Chester, a member of the Senate Finance Committee that is marking up the bill, said the measure in its current form would put lenders out of business.

It is important to note that the Republican leadership in the Senate is balking at a bill passed by the Republican-controlled House earlier this month.

The vote wasn't even close: 69 for, 14 against.

The legislation had languished in the House for 15 months, but things changed a couple of months ago when it became known publicly that the FBI is investigating former Speaker Cliff Rosenberger's travel overseas with payday-lending industry lobbyists. Read more at THE VINDICATOR

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CFPB responds to request of consumer advocacy groups to participate as amicus to oppose motion for reconsideration in industry lawsuit challenging CFPB payday loan rule. Monday, July 2, 2018

The CFPB has filed a response to the motion filed by four consumer advocacy group seeking leave to file an amicus brief opposing the motion of two trade groups for reconsideration of the Texas federal court's June 12 order denying a stay of the compliance date for the CFPB's final payday/auto title/high-rate installment loan rule (Payday Rule). The CFPB previously filed a response in support of the trade groups' motion for reconsideration. The same advocacy groups had filed an amicus brief opposing the joint motion filed by the CFPB and two trade groups seeking a stay of the compliance date.

The joint motion sought the stay of the compliance date pursuant to Section 10(d) of the Administrative Procedure Act, 5 U.S.C. Section 705. In their initial amicus brief, the advocacy groups argued that 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. In its response in support of the motion for reconsideration, the CFPB has argued that the court can properly use its authority under Section 705 to stay the Payday Rule's compliance date while also staying the litigation because Section 705 contains no "'active litigation' requirement."

In addition to renewing their argument that the trade groups have not satisfied the four factors used to assess requests for Section 705 stays, the advocacy groups devoted most of their proposed new amicus brief to their argument that a stay of the compliance date under Section 705 is not appropriate where the litigation is stayed. Section 705 allows a court reviewing an agency's action to postpone the effective date of such action "to the extent necessary to prevent irreparable injury... pending conclusion of the review proceedings." Read more at THE NATIONAL LAW REVIEW

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Joel Tucker indicted in fake payday loan scheme, accused of lying to bankruptcy judge

Johnson County businessman Joel Jerome Tucker - already facing a $4 million judgment from the Federal Trade Commission - has been indicted on 15 felony counts tied to his payday loan industry activities.

The indictment also calls for Tucker to forfeit $7.3 million of ill-gotten gains. A federal grand jury in Kansas City indicted Tucker on June 5. The document was made public Friday in U.S. District Court in Kansas City.

Tucker did not make payday loans. Instead, he sold leads to payday lenders.

In 18 pages, the indictment described two schemes in which Tucker allegedly created portfolios of fake payday loans to sell to bill collectors. The collectors hounded consumers named in the fake loans so much that some paid them off. Read more at THE KANSAS CITY STAR

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FLORIDA: Interim Chief Tapped for Financial Regulation Agency

An interim commissioner was named Wednesday to lead the state Office of Financial Regulation, as Gov. Rick Scott and the Cabinet agreed to continue reviewing five applicants to replace outgoing Commissioner Drew Breakspear.

Pam Epting, deputy commissioner of the Office of Financial Regulation, will temporarily replace Breakspear, who resigned under pressure from state Chief Financial Officer Jimmy Patronis. Scott and the Cabinet, which includes Patronis, agreed to boost Epting's pay by $10,000 and to potentially consider additional applicants for the commissioner's job.

Scott and Attorney General Pam Bondi expressed support for the five applicants, who were briefly interviewed by phone Wednesday. The regulatory agency employs about 360 people.

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Is a Bank Regulation Rollback in Consumers' Best Interest?

Idaho Senator Mike Crapo's Economic Growth, Regulatory Relief and Consumer Protection Act, a bipartisan bill that was signed into law on May 24, brings big relief for large banks and community banks. The act raised the threshold for banks that are required to undergo stress tests from $50 billion to $250 billion, thereby reducing the number of big banks that are considered too big to fail. It could also expand access to finance for small and medium-sized enterprises by freeing controls on small and local community banks with assets of under $10 billion.

However, experts are worried about the likelihood of unpleasant outcomes. If reduced oversight results in consolidation within the community banking industry, small banks could become less sensitive to the needs of their regional economies and communities that are typically underserved by the larger banks, they said. Loosening the so-called Volcker Rule (named after former Federal Reserve chairman Paul Volcker) could also expose bank customers to risks, they added. The rule prevented banks from risky activities such as proprietary trading in securities and investing in certain types of hedge funds and private equity firms. Read more at KNOWLEDGE@WHARTON

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NEVADA: Audit: Nearly A Third Of NV Payday Lenders Broke Rules In The Last 5 Years

Short-term loan businesses, colloquially known as payday lenders, are everywhere you look. They offer a quick fix if you're in a pinch between paydays.

However, the Nevada Financial Institutions Division within the Department of Business and Industry released an audit in May that found that almost a third of payday lenders have violated state rules over the last 5 years.

George Burns is the commissioner for the Financial Institutions Division. He said the biggest problems reported in the audit were lenders not following the 25 percent rule, which doesn't allow lenders to loan an individual an amount that requires a payment that is greater than 25 percent of his or her gross income.

The other problem is lenders who give out loans greater than the fair market value of a vehicle in a title loan. Read more at NEVADA PUBLIC RADIO
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Credit unions urge bill regulatory modifications

The Credit Union National Association (CUNA) is encouraging the Bureau of Consumer Financial Protection (BCFP) to focus on regulatory changes required under the Economic Growth, Regulatory Relief and Consumer Protection Act in order for credit unions to better serve their members.

CUNA officials sent a letter on June 27 to BCFP Acting Director Mick Mulvaney as a means of emphasizing  relief will not be realized until the provisions are implemented by the Bureau while also requesting  consideration of utilizing interim final rules to expedite the process of promulgating changes.

"We point to the quick work by the National Credit Union Administration (NCUA) to amend its Member Business Loan rule to implement S. 2155 changes to exclude certain loans from a credit union's member business loan cap," the letter said. "We ask the Bureau to follow the NCUA's lead and implement statutorily required regulatory changes that will alleviate some of the regulatory compliance burden on credit unions. Some of these changes, such as those under Section 104 that will roll back onerous Home Mortgage Disclosure Act (HMDA) data points imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act, will provide meaningful relief to many of our nation's credit unions and other covered lenders."

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A new data breach may have exposed personal information of almost every American adult

Exactis data leak reportedly contained detailed information on 230 million consumers

A little-known Florida company may have exposed the personal data of nearly every American adult, according to a new report.

Wired reported Wednesday that Exactis, a Palm Coast, Fla.-based marketing and data-aggregation company, had exposed a database containing almost 2 terabytes of data, containing nearly 340 million individual records, on a public server. That included records of 230 million consumers and 110 million businesses.

"It seems like this is a database with pretty much every U.S. citizen in it," security researcher Vinny Troia, who discovered the breach earlier this month, told Wired. "I don't know where the data is coming from, but it's one of the most comprehensive collections I've ever seen," he said.
Navigating the Changing Financial Regulatory Landscape

On June 12, nearly 40 listed companies from the U.S. and investors from across Europe convened in London for the 38 th Nasdaq Investor Conference. During the course of the day, we discussed developments and issues affecting business leaders, investors and investor relations professionals, ranging from upcoming regulatory developments under MiFID II to significant changes to the fundamental structure of our markets. We also had the opportunity to learn about the substantial progress made by dozens of innovative Nasdaq-listed companies throughout the past year.

Political uncertainties and financial regulatory changes remained top-of-mind among investors and business leaders in Europe and beyond. Amid the current climate, a major focus of discussion among the attendees was the impact of MiFID II. Since the landmark regulation went into effect in January, asset managers, sell-side institutions and investor relations officers have been undergoing a fundamental change in how they operate together in the global marketplace.

So far the broad implementation of MiFID II has generally been smooth across Europe with the anticipated positive impacts on transparency, market quality and investor protection, but its impact on how issuers and their investor relations professionals attract interest from, and communicate with buy-side institutions is beginning to be felt. Read more at NASDAQ
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