From the story:

The Henry County Board of Supervisors will consider a proposed resolution that calls for state legislators to impose stricter guidelines on payday lending institutions.

 The proposed resolution urges state legislators to enact laws during the 2011 General Assembly session that would strictly prohibit and deter predatory lending practices, including imposing an annual 36 percent interest rate cap for any consumer credit extended in Virginia.

I remember when city councils worried about funding the fire department and putting up traffic lights.

Senator Franken wants them.

Regarding our post about the New Mexico governor’s race the other day:

How can a candidate say that they are not trying to eliminate and industry, but make a promise to make it a crime if elected governor?

From Credit Union Times: 

If your credit union’s alarm bells are not clanging and the sirens aren’t wailing, then you must not be paying attention – your credit union is about to be robbed of the freedom to set its own direction.  In recent days, President Barack Obama designated the liberal blogosphere-championed Harvard bankruptcy law professor Elizabeth Warren to launch the new Consumer Financial Protection Bureau.  Rather than appoint controversial activist Warren as the statutorily-defined director of the bureau, the President side-stepped the U.S. Senate confirmation process by designating her as Assistant to the President and Special Advisor to the Secretary of the Treasury on the CFPB.  Reportedly, in her new role Warren will recruit staff for the agency, set the policy mission, and serve as the public face for the CFPB. 

U.S. Treasury Secretary Timothy Geithner, who under the Dodd-Frank regulatory reform law runs the powerful new agency until an official director is appointed and confirmed, has set July 21, 2011 as the day the CFPB takes over consumer compliance rulemaking and enforcement for credit unions, banks, and non-banks.  However, the President has left no doubt that confrontational ideologue Warren is the one in charge. 

Putting aside her unorthodox selection process, having Warren molding the powerful new agency that has the authority to prohibit financial product offerings and control prices confirms my worst big government nightmares.  Like many other financial services industry executives who have been following the CFPB saga, I had hoped that the unwanted agency’s leader would not be a partisan activist, but rather someone who would work effectively with all constituencies – including the industry and the other regulatory agencies.  With her frequent accusations of financial services providers’ “tricks and traps” and her punitive crusade against traditional banking “bullies,” she is expected to act more like a rogue cop with a chip on her shoulder than as an even-handed and fair referee in a complicated marketplace. 

Credit unions will not be immune from the soon-to-be-expanded onerous CFPB-driven consumer regulatory compliance and enforcement burden.  The CFPB has the power to oversee consumer products like mortgages, credit cards, deposit-taking and many other activities typically associated with credit unions.  This includes broad authority to prohibit “unfair, deceptive or abusive” acts and practices as defined by those in power at the CFPB. 

He understands free markets.  From his column today in The Washington Times:

It may surprise you that these non-bank financial service providers include pawnshops, payday lenders and short-term lenders. They also provide invaluable products such as reloadable debit cards and installment loans. Yet most people’s knee-jerk reaction when they hear the words “payday lender” is to accuse these businesses of predatory lending practices because of the “excessively” high interest rates.

But are they really excessive? One of the most fundamental financial principles states that the greater the risk, the greater the return. In other words, these lenders need to charge interest rates that compensate them for giving money to high-risk consumers — those who have histories of abysmal financial management, not paying their bills or leaving others holding the bag. The default rates are, in fact, excessively high for these businesses.

I feel like I’m living in the past reading this:

In a bipartisan May vote, Ohio’s House passed a bill closing loopholes in the state’s payday-loan law. In contrast, state Senate Republicans, plainly defying 3.4 million voters, are ignoring the House plan. Before the Nov. 2 election, Ohioans should ask Republican state Senate candidates if they’ll let their caucus keep siding with lenders, rather than with voters. And after the Nov. 2 election, assuming there’s a traditional lame-duck legislative session, the Senate must pass the House bill.

In November 2008, of those Ohioans voting on a statewide ballot issue, 64 percent approved a payday reform law legislators had passed earlier. Previously, annual percentage rates (APRs) on Ohio payday loans had been as steep as 391 percent. The 2008 law capped payday-loan APRs at 28 percent.

In other Ohio news, Browns looked pretty good in losing to the Ravens yesterday.

To paraphrase the late, great Johnny Carson, this writer has lurched uncontrollably into the truth.  From a Huffington Post columnist puffing up the virtues of Elizabeth Warren: 

Yet the banks and other financial institutions are virtually bursting at the seams with profits, which they will not pump into loans to get the economy back on track. Loans equals jobs, people!

Payday advance stores are issuing credit to 19 million Americans every year.   Loans equals jobs.

Wow.  Warren is such an icon that the head of Wisconsin’s Department of Financial Institutions is compared to her.  Why?  From Wisconsin’s Cap Times: 

… Heinemann is requesting roughly $1 million to purchase a database that would allow her agency to track payday loans and enforce new rules on payday lending.

She also wants to hire an examiner to monitor credit unions — which are becoming increasingly significant players in many regions of the state — and another staffer to help expand oversight of investment advisers.

The most profound of questions.  Asked by Rightsidenews.com: 

The whole idea of yet another agency – another watchdog – to make sure the average consumer is not taken advantage of is absurd in the context of what is taking place in America and throughout the West, in fact. It is of course central banking that creates the tremendous booms and busts that the West suffers from. The Great Recession of the late 2000s is the end result of a century’s worth of the over-printing of currency. And yet the same power elite that runs the printing presses is now demanding “austerity” from the communities and societies that were fooled by the mountains of paper money thrust into the economy.

Legislators don’t like chief executives to go around them.  From the story: 

“I am writing to express my concern over reports that you plan to appoint an interim head of the new Consumer Financial Protection Bureau, circumventing the intent of the legislation passed over the summer which established a confirmation process,” {Senator} Corker wrote. “It is a key responsibility of the U.S. Senate and its committees of jurisdiction to advise and consent and one that I believe was not meant to be abdicated by the Executive Branch’s use of appointments.”

————————————–

{Senator} Alexander was outraged by Obama’s extra-constitutional activity. “Appointing Elizabeth Warren to oversee this agency, even though she’s not confirmed by the Senate, is just another disturbing trend in this administration of creating unaccountable czars and czarinas,” Alexander said in a statement. “Every administration has had a few, but none at this level, and one of the great complaints of the American people is the lack of checks and balances.”