Consumer Lending Reform - Blog Posts
A recent report from the UK-based Community Finance Solutions at the University of Salford and Woodstock Institute calls for the United Kingdom (UK) to adopt a banking disclosure act similar to laws in the United States (US).
I recently read an eye-opening book entitled “Scarcity: Why Having So Little Matters So Much,” by Sendhil Mullainathan and Eldar Shafir. It’s about how scarcity of time, money, food, and sleep affects our brains, creating a tunnel vision.
The Consumer Financial Protection Bureau (CFPB) announced last week that it will begin collecting consumer complaints on payday loans.
Chicagoans had an opportunity last week to voice their concerns about different types of consumer credit to the director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray.
We have a unique opportunity to tell the Consumer Financial Protection Bureau (CFPB) our concerns at a hearing CFPB will hold in Chicago on October 2.
In the early 1970s, Aaron and Sylvia Scheinfeld were unhappy with the state of things in the Chicago region. Redlining, predatory lending, and inequality plagued the area.
Senate Majority Leader Harry Reid announced plans to hold a vote on Consumer Financial Protection Bureau (CFPB) director Richard Cordray’s confirmation. It’s no surprise that some Senators—including Illinois’ Mark Kirk—are threatening to filibuster the vote. The vote to overcome the filibuster will happen tomorrow.
The Consumer Financial Protection Bureau (CFPB) recently released information that makes it easier for the public to detect worrisome practices in financial services and assess whether financial institutions are adequately serving consumers.
CHICAGO—Proposed new guidance released today by two of the federal banking regulators could put an end to the worst practices of payday lending by banks. The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) proposed standards that the banks they regulate would have to comply with regarding what they call “deposit advance” features on bank accounts and reloadable prepaid cards.
One of the exciting aspects of the Consumer Financial Protection Bureau (CFPB), which opened its doors on July 21, is that we finally have a federal regulator for non-bank financial institutions, like independent mortgage lenders and payday lenders. But the CFPB will not have the authority the regulate other non-bank financial institutions, like consumer finance companies, debt settlement companies or prepaid card providers unless it finds that they are larger participants in the market. It’s heartening to see that one of the CFPB’s first orders of business is to define the scope of non-bank financial institutions it will regulate so it can get to work protecting consumers regardless of where they conduct their financial business.
We’ve been pushing for stronger protections on overdraft protection loans for years, and the Office of the Comptroller of the Currency (OCC), a federal bank regulator, recently released a proposed guidance that would eliminate some of the worst features of overdraft programs-such as ordering transactions to maximize fee income. However, the proposed rule has a glaring flaw—it puts bank-based payday loans, also known as deposit advance loans, in the same category as overdraft loans. Bank payday loans and overdraft loans are entirely different beasts—they’re structured differently, used for different purposes, and have different risks. The two products need regulations tailored to their unique characteristics. We recently submitted our comments on these rules; you can send regulators your thoughts until August 8, 2011.
Debt protection and credit insurance are high-cost, low-value products that are poorly understood by consumers and inadequately monitored by regulators. The new Consumer Financial Protection Bureau created by the Dodd Frank Wall Street Reform and Consumer Protection Act should shed some light on these often shady products.
On Friday, March 18th, Circuit Court Judge Carolyn Quinn ruled that Illinois Lending Corporation (plaintiff) did not meet the standards for issuing a Temporary Restraining Order (TRO).
This week, the payday lender Illinois Lending Corp. filed a lawsuit challenging portions of a new law that enacts many necessary consumer protections for small consumer loan borrowers. Specifically, the suit challenges provisions of the law that prevent lenders from holding a license for shorter-term payday loans in addition to a license for longer-term consumer installment loans. The lawsuit coincides with the introduction of a bill authored by Rep. Daniel Burke that would remove the dual license restriction, scheduled for a hearing in front of the Illinois House Executive Committee tomorrow.
2010 was a heartening year for consumer advocates working to eliminate income tax refund anticipation loans (RALs), the high-cost loans that strip assets from low-wealth tax filers. First, the Office of the Comptroller of the Currency (OCC), the federal regulator of national banks, issued a policy statement regulating the provision of RALs that strengthened its hand compared to previously unenforced policies. On the heels of that announcement, Chase announced it was leaving the RAL business. Chase was the second of the three major banks who provided RALs to withdraw, following Santa Barbara Bank & Trust’s forced exit in 2009. In August, the IRS announced it would stop facilitating the preparation of RALs by providing information on a borrower’s debts to tax preparers. Finally, the year ended with more happy news: the OCC ordered the third main RAL provider, HSBC, to stop providing RALs, leaving H&R Block without a bank partner for the upcoming tax season. Republic Bank and Trust, an FDIC-regulated bank that is currently the last bank around to provide RAL financing, is even limiting the amount of funding available to its RALs, including those arranged by Jackson Hewitt. With few financing options left for tax preparers who want to make wealth-stripping loans to working families, this could be the beginning of the end for RALs as a meaningful market.