Legislative and Regulatory Comment Letters
This letter commends the CFPB for releasing its Safe Student Accounts Scorecard, a voluntary tool to help colleges select banking partners that will benefit students. The letter recommends that the CFPB expand the list of Safe Student Account features to include low minimum balance and opening deposit requirements, rapid funds availability, a prohibition on deposit advance products, and more; ask prospective bank partners about other products they will market to students; and document the impact of the Safe Student Account scorecard. The letter also recommends that institutions of higher education select banking partners that meet a certain set of requirements, not simply the most competitively priced account.
Woodstock Instituted submitted comments to the Consumer Financial Protection Bureau (CFPB) regarding its proposed rule to regulate the prepaid card market. Despite being one of the fastest growing payment types in the country, the industry remains largely unregulated. Woodstock commends the CFPB for proposing strong rules to ensure consumers have access to safe and affordable financial products. Though we support the CFPB’s work and believe that the proposed rules are a strong start, Woodstock encourages the CFPB to further strengthen them by: banning overdraft on prepaid cards; mandating that any credit on, or linked to, a prepaid card be fully covered by credit card laws; strengthening disclosure requirements to ensure a consumer has access to all fees in advance; increase protections for specific prepaid cards, including payroll, student loan, prison, and all government benefit cards; and, requiring that all prepaid cards have FDIC or NCUA insurance.
This letter to the Federal Reserve and the Office of the Comptroller of the Currency comments on the proposed merger between CIT Group and OneWest Bank. The merger highlights several issues that should be addressed before completed. The first issue is that the merger would create a Systematically Important Financial Institution. The second issue is that both banks lack a strong history in community reinvestment. OneWest Bank received a “low satisfactory” rating from the Community Reinvestment Act and CIT Group invests primarily in communities near its headquarters. This letter recommends against the merger of these two banks. The merger would turn CIT Group and OneWest Bank into a major financial institution, but with a poor record of investing in communities.
This letter to prudential financial regulators urges them to strengthen their proposed revisions to the Community Reinvestment Act (CRA) Questions and Answers (Q&As) regarding retail banking and community development in order to ensure that financial institutions adequately meet the needs of low- and moderate-income (LMI) people. The letter asks the regulators to incorporate principles about the retail financial services needs of LMI consumers into the retail CRA Q&As, assess the extent to which retail products and services offered by financial institutions are actually adopted by a broad range of LMI consumers, recognize the importance of full-service branches in meeting LMI community needs, banks to offer safe and affordable small dollar loan products or secured credit cards to meet LMI consumers’ need for emergency credit, penalize banks for undermining LMI people’s access to the banking system, and allow CRA credit only for products and services adopted by LMI people in the bank’s assessment area
This letter urges the Department of Education to strengthen the debt-to-earnings test that assesses whether for-profit colleges are adequately preparing graduates for gainful employment. It recommends that the Department revise the debt-to-earnings metrics so that they accurately depict graduates’ debt burdens, clarify how performance will be measured, and limit opportunities for exploiting loopholes.
This letter urges the Office of the Comptroller of the Currency (OCC) to consider how the proposed acquisition of Chicago Charter One branches by U.S. Bank would create a public benefit, especially to traditionally underserved low- and moderate-income communities and communities of color. The letter asks the OCC to approve the acquisition on the condition that U.S. Bank increase home mortgage lending in traditionally underserved areas to meet or exceed peer lending levels, maintain or increase the combined levels of community development investments and grants currently made by both financial institutions, and maintain or increase the number of branch locations in LMI and minority census tracts. The letter commends both institutions for strong track records of lending to small businesses.
This letter urges the Federal Reserve Bank of St. Louis to carefully consider how the proposed acquisition of Midland States Bancorp, Inc. to acquire Heartland Bank would create a public benefit, especially for low- and moderate-income (LMI) communities and communities of color that historically have been denied access to financial services. The letter raises concerns that Midland States Bank is not currently meeting the needs of LMI communities and communities of color and requests that the Federal Reserve Bank of St. Louis delay approval of the acquisition until a clear public benefit can be shown and the fair lending complaint filed against the bank by the Metropolitan St. Louis Housing Opportunity Council is resolved by the Department of Housing and Urban Development.
This comment letter supports the proposed improvements to regulations that carry out the Fair Housing Act’s requirement to ensure that all federal agencies administer their programs relating to housing and community development in a manner that affirmatively furthers fair housing. It urges HUD to strengthen the rule by creating an appeals process for Assessments of Fair Housing, requiring program participants to consider regional fair housing needs, and improving transparency of fair housing goals.
This comment letter encourages the Department of Defense to expand the Military Lending Act (MLA) to ensure that service members and their families are protected from all forms of high-cost credit. Passed in 2007, the MLA instituted a 36 percent annual percentage rate (APR) cap for certain kinds of payday loans and auto title loans. A number of states, including Illinois, have high-cost loan products that fall outside the boundaries of the MLA. This means the 18,000 active duty service members in Illinois are still being marketed products with triple digit interest rates. We encourage the DoD to expand the military APR cap to all consumer credit products covered by the Truth in Lending Act as well as overdraft programs and rent-to-own transactions.
Sign on letter urging Sen. Mark Kirk to vote for Richard Cordray's nomination as head of the Consumer Financial Protection Bureau. Sen. Kirk previously voted against moving Cordray's nomination forward and has signed a letter indicating he will oppose the confirmation. A vote against Cordray is a vote for fewer protections for Illinois consumers. Without a director the CFPB will not have the authority to rein in some of the worst actors in the financial industry.
This comment letter supports proposed guidance from the OCC and FDIC regarding bank deposit advance products, which are functionally equivalent to payday loans. The letter also recommends that the OCC and FDIC institute an annual percentage rate cap, require APR disclosure, prevent mandatory automatic repayment, and strongly enforce the guidance. Eighteen organizations signed on to the letter.
This letter to the Federal Reserve, OCC, and FDIC supports several provisions of the Interagency Q&A Regarding Community Investment, including additional ways to determine low- and moderate-income status of community development recipients, recognition of nonprofit board service, and clarifications on qualified investments and community development lending. The letter notes concerns about the Q&A's proposed changes to the weights on community development lending. The letter also identifies several areas where CRA needs to be updated, including expanding assessment areas to where an institution has market share, creating a community development test, and making the services test more rigorous.
Woodstock Institute's response to the Consumer Financial Protection Bureau's request for information on promoting affordability in the private student loan market. The letter describes the growing need for better options to help private student loan borrowers avoid defaulting on their loans and summarizes key principles that should be included in any affordability program, drawing upon lessons learned from mortgage modification programs.
Sign-on letter Sen. Mark Kirk asking him to confirm Richard Cordray as Director of the Consumer Financial Protection Bureau. Delaying his confirmation because of political brinksmanship would harm consumers, introduce destructive uncertainty into the financial system, and allow predatory financial practices to flourish.
Woodstock Institute response to the Consumer Financial Protection Bureau’s Advanced Notice of Proposed Rulemaking on general purpose reloadable cards. Comments address three main areas of consumer protection that the Consumer Financial Protection Bureau should address as part of its rulemaking process: the regulatory coverage of products; product fees and disclosures; and, product features. Woodstock requests that Regulation E be extended to all GPR cards and the FDIC insurance be required. Woodstock also recommends that credit products, such as overdraft or deposit advance products, be prohibited.
Woodstock Institute response to the Consumer Financial Protection Bureau's request for information on overdraft protection programs describing challenges to developing low-cost alternatives to overdraft programs, the need to develop an overdraft guidance specific to the payment channel used to overdraft, and the importance of placing regulatory limitations on repeat usage of overdraft programs.
Woodstock Institute comments submitted to the OCC opposing the application and requesting an extensions of the comment period by 60-days. The letter also requests that the OCC hold five public hearings to permit the public adequate opportunity to discuss serious concerns about this transaction.
Comments submitted by Woodstock president Dory Rand to the Federal Reserve Board in response to a proposed rule for a Qualified Mortgage or QM. The comments support an obligation to verify, not just consider, the additional criteria. In addition, the comments request that underwriting be based on the maximum interest rate for the entire loan, not just the first five years.
This comment letter describes Woodstock Institute concerns with the application of automated overdraft consumer protections to deposit advance loan products or "bank-based payday loans." Woodstock argues that these types of product are fundamentally different from automated overdraft, has associated payment and reputational risks that exceed the scope of the proposed guidance, and requires substantially different consumer protections.