Payday Pundit » 2009

For the CFPA

October 30, 2009 | federal legislation, industry | Comments (1)

Not surprising the newspaper editorial boards are generally supporting the CFPA. Editorial writers have never been in business, don’t meet payrolls, don’t negotiate contracts, and don’t worry about profits. They think that’s the job of other people at a paper. From the Sun Sentinel:

The agency would force lenders to offer products with simpler terms and greater disclosure. It would regulate consumer credit in the interest of borrowers, not lenders. This agency, Warren’s brainchild, would address directly the weakened lending standards that Wall Street exploited, and which led to the financial crisis.

“This is trying to move that to a world where there is light. One of the necessary ingredients is light, that people can track the terms of a deal, make comparisons among products, and not take on crazy risks,” she said. “We’ve learned the consequence of too much risk aggregated in the system it’s brought us to our knees. The CFPA isn’t about playing the ‘nanny state’; it’s giving customers the tools to protect themselves.”

Should the CFPA be created?

October 30, 2009 | federal legislation, industry | Comments (0)

Senate leaders are haggling. From Politico:

The fate of financial reform has always hinged on whether Senate Banking Committee Chairman Chris Dodd and Republican Richard Shelby could cut a deal.

But now the two can’t agree on whether a consumer financial protection agency — a linchpin of reform — should be created at all. They can’t even agree on how to define “systemic risk authority,” much less figure out how to regulate it. And Republicans are starting to express frustration that Dodd, who faces a tough reelection next year, wants to rush a bill through committee next month.

Shelby signaled trouble earlier this week when he rejected creation of the CFPA, one of President Barack Obama’s top priorities in financial reform.

“A free-standing consumer products [agency] outside the prudential regulator — the regulator that deals with safety and soundness — I think is folly and dangerous,” Shelby told POLITICO, saying he would not support legislation creating such an agency.

But the tensions go deeper than a disagreement over creation of a new agency.

Shelby also isn’t ready to make any agreement on the monitoring of financial institutions that could cause widespread economic meltdown because Democrats and Republicans haven’t been able to define the authority of such a systemic risk regulator, two top Republican aides said.

“He believes that tasking a regulator with undefined responsibility creates more, not less, risk,” one aide said.

Comment of the Day

October 30, 2009 | Uncategorized | Comments (0)

A “traditional lending institution” is any lending company that pads anyone in the gov’t ’s pockets. Unfortunantly our industry isn’t traditional because we help pad the pockets of the ones that really need it, short term, OUR CUSTOMERS.

House Energy & Commerce markup

October 30, 2009 | federal legislation, industry | Comments (0)

Was uneventful. So far, so good for the industry during these CFPA markups.

Consumer spending splurges

October 30, 2009 | industry, personal finance | Comments (0)

I think tight credit has a lot to do with this. From the story:

Spending adjusted for inflation fell 0.6 percent in September, also the largest decline since December, after rising 1 percent the prior month, the Commerce Department said.

Personal income was flat last month after rising 0.1 percent in August. That was also in line with market expectations.

Real disposable income fell 0.1 percent in September. Despite the fall in income, Americans saved more money last month. Savings increased to an annual rate of $355.6 billion, lifting the saving rate to 3.3 percent from 2.8 percent in August.

Aggressive collection practices get scrutiny

October 29, 2009 | federal legislation, industry | Comments (0)

New GAO Report out. From the story:

There are many scrupulous debt collectors that compassionately work with borrowers to get them to repay what they owe. But there are also bottom-feeders in the industry that resort to any means necessary, harassing and intimidating consumers to pay up on accounts for which the collectors have paid pennies on the dollar.

The reform can’t come soon enough. Debt defaults are at the highest level in 18 years. About 6.6 percent of credit card holders were 30 days or more past due in the first quarter of 2009. In 2008, credit issuers had more than $23 billion in unsecured debt that was between 30 and 180 days delinquent.

A new report from the Government Accountability Office calls for major reform to the law that governs how companies collect old debt from consumers.