Go for it
October 28, 2010 | alternatives | Comments (0)Two Texas Credit Unions are merging. One of their new ventures will be payday lending.
Comment of the Day
October 27, 2010 | Uncategorized | Comments (0)Regarding yesterday’s post about “crowd sourcing”:
This seems great. It will force all payday lenders to follow the rules, which should benefit those who already do anyway.
A Q&A
October 27, 2010 | Elizabeth Warren, Financial Reform Bill - CFPB, federal legislation | Comments (0)The Los Angeles Times did one with Elizabeth Warren:
Is disclosure your priority?
No, it’s clarity. Disclosure has come to be a dirty word. Disclosure has become like shrubbery, a dense thicket of words that are a good place to hide tricks and traps. Clarity is about emphasizing the key pieces of information that someone needs to know: price, risk, easy comparison of other products.
Many in the financial industry strongly opposed creation of this agency. Should they be afraid of this agency?
It depends on their current business model. If they make money from tricks and traps, they will have a problem. But if they want to provide services to the customer that are valuable in a straight-up, apples-to-apples comparison, they will do great with the new agency.
The top people
October 27, 2010 | Elizabeth Warren, Financial Reform Bill - CFPB, federal legislation | Comments (0)This is the first story that I’ve seen mention the top BCFP staff:
While the new agency already has at least 54 employees, neither it nor the Treasury Department has revealed many of the names of the staff. Among the prominent hires is Patricia A. McCoy, a law professor and director of the Insurance Law Center at the University of Connecticut, who was also active in the debate over the Dodd-Frank Act. An agency official said Ms. McCoy will work part time until joining full-time after the first of the year. Ms. McCoy had testified before Congress about consumer finance issues.
Most members of the fledgling agency’s current staff have come from other agencies. They include Dan Geldon, a senior adviser to Ms. Warren, who worked for her at the Congressional Oversight Panel, which examined the government’s Troubled Asset Relief Program that bailed out banks, insurance and auto makers; Nani Coloretti, a deputy assistant secretary at Treasury; Timothy R. Burniston, a senior associate director for the Federal Reserve’s consumer affairs division; Peggy L. Twohig, director of the office of consumer protection at Treasury; and Alice Hrdy and Lucy Morris from the Federal Trade Commission’s consumer protection division.
Common sense in Virginia
October 27, 2010 | Virginia, local issues | Comments (0)Never thought I’d say that. From the Lynchburg News & Advance:
On a split decision, council did not include a proposal for additional restrictions on payday lending, which is often criticized as predatory.
Council had supported previous efforts to clamp down on that industry in 2008, but this year a majority concluded it was an unnecessary addition that would water down their agenda.
The debate in the U.K.
October 27, 2010 | international | Comments (0)There are stories every day about this. From the Left-wing Guardian newspaper:
Furthermore, in the bonfire of quangos two organisations that championed the rights of the financially excluded are to be scrapped. These are Consumer Focus, which recently highlighted the rapid growth of payday lending in the UK and launched a super-complaint against the doorstep lending industry; and the Office of Fair Trading, which revealed that the poor were being overcharged by £500m in excessive interest by doorstep lenders due to a lack of competition.
I thought I had a good grasp of English, but I’m having trouble with this paragraph. In any case, it seems payday lending is booming in Britain.
An “alternative” to what?
October 27, 2010 | Georgia, alternatives | Comments (0)The American Banker discusses a payday lending “alternative” offered by the Citizens Trust Bank of Atlana. Of course, there’s no payay lending in Georgia. And there’s no discussion of the fees and costs of this loan.
“Crowd sourcing”
October 26, 2010 | Elizabeth Warren, federal legislation | Comments (1)A tool of the BCFP according to Warren. From National Journal:
Elizabeth Warren, the architect of the new Bureau of Consumer Financial Protection, spelled out a sweeping new strategy today to use the latest in “crowd-sourcing” technology to collect tips from millions of consumers about deceptive new financial practices, from misleading mortgages and improper “gotcha’’ fees on credit cards to outright fraud.
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Under her vision, Warren imagines a subset of Americans reporting on a specific problem, such as extraneous fine print included in a bank’s checking account statement, documenting it through use of a camera phone, and then emailing it to the bureau within seconds. The bureau would use such data to target its enforcement.
Warren’s role in not limited
October 26, 2010 | Elizabeth Warren, Financial Reform Bill - CFPB, federal legislation | Comments (0)There’s been a little debate going on about what a “special advisor” to the President can actually do. From the story:
Bankers and many lawmakers argue that, because Warren is not agency director, her powers are limited to hiring and she cannot promulgate proposals or rules.
“You can build a house; you just can’t turn on the lights in the house yet,” said Wayne Abernathy, the executive director of financial institutions policy at the American Bankers Association. “The authority is very clear. The authority to do rule writing is expressly given to the director of the CFPB, and she isn’t right now.”
But consumer advocates and other observers said bankers are just splitting hairs in an attempt to diminish Warren’s stature and that she has wide latitude to act.
“I think she will have full authority,” said John Taylor, the president of the National Community Reinvestment Coalition. “Eventually there will be a director, but it’s wishful thinking on the behalf of people who don’t want the bureau to be effective that she won’t have this authority.”
Bureau staffs up
October 26, 2010 | Financial Reform Bill - CFPB, federal legislation | Comments (0)From the story:
On a conference call, Warren outlined the new developments at the bureau, which last week moved into new offices in Northwest Washington. Warren expects the staff to quickly outgrow the 30,000 square feet of office space there, and have to transition to a more permanent office location. Previously, consumer protection regulators were spread across multiple agencies and never housed under the same roof.
Over 50 employees staff the embryonic CFPB at this point, with that number expected to double over the next two months. “We have already received more than 1,500 resumes,” Warren said. Many of the current staff members are detailees from agencies which previously had consumer protection responsibilities. Total employees should reach into four digits by the time the agency is fully functioning. It will transfer into the Federal Reserve by July 21, 2011.
