Their feelings are hurt
December 28, 2010 | alternatives, federal legislation, Financial Reform Bill - CFPB, Uncategorized | Comments (0)Wall Street execs whine to Politico:
On the mental list of slights and outrages that just about every major figure on Wall Street is believed to keep on President Barack Obama, add this one: When he met recently with a group of CEOs at Blair House, there was no representative from any of the six biggest banks in America.
Not one!
“If they don’t hate us anymore, why weren’t any of us there?” a senior executive at one of the Big Six banks said recently in trying to explain his hostility toward the president.
“It’s not so much just this one thing,” he said. “Who cares about one event? It’s just the pattern where they tell you things are going to change, that they appreciate what we do, that capital markets are important, but then the actions are different and they continue to want to score political points on us.”
The Payday Pundit wasn’t invited either.
Piggy Bank Awards
December 28, 2010 | alternatives, Michigan | Comments (0)A Detroit News columnist rails at banks. From the story:
When can I buy pig protection? The newest credit-card racket being foisted on the American consumer? Payment-protection-insurance programs. These policies, added to your monthly credit card bill, promise to suspend interest and minimum payment requirements if you get sick or lose a job. According to The Wall Street Journal, policies cost 80cents to 90 cents per every $100 of debt, so a $5,000 balance means a protection premium of up to $45 per month. It’s a bad deal and the money is better spent paying down your balance, or paying for a balance transfer to a card with a lower interest rate. But just because you don’t sign up for it doesn’t mean you aren’t getting charged. Media reports find that just as in the past, the new fee is sneaking onto bills without consumers even requesting them. David Paris, an attorney based in New York, sued Discover Card in federal court, saying thousands of people had been pushed into the program without their knowledge. A class action suit over similar problems has been filed against HSBC in Illinois.
The year in financial reform
December 28, 2010 | CFPB | Comments (0)The Left-wing American Prospect sums it up.
Diversifying
December 27, 2010 | alternatives, Arizona, industry | Comments (1)One company responds to Arizona law:
A Scottsdale-based chain of consumer-finance kiosks inside national furniture and appliance retail stores has been sold to Rent-A-Center Inc. for $75.5 million in cash.
Privately held The Rental Store Inc. provides in-store financing for big-ticket items purchased at stores such Mor Furniture for Less, Ashley Furniture and others.
Analysts split on CFPB
December 27, 2010 | CFPB | Comments (0)From Insurance Networking News:
Douglas Landy, a partner in Allen & Overy LLP and formerly a lawyer at the New York Fed, agreed.
“Before two or three years ago no one would have believed you if you had said the consumer finance industry can cause a systemic threat. … It was viewed as individual issues, not a collective problem,” he said. “The events of the last three years have disproved that. Fundamentally the banks lost the argument that there was no issue that needed to be addressed here.”
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“The CFPB represents an unprecedented grant of authority with a regulator with very few checks on its power,” said Jaret Seiberg, financial services policy analyst for MF Global’s Washington Research Group. “That’s why it was a lightening rod.”
Auld Lang finery
December 27, 2010 | Elizabeth Warren | Comments (0)The New York Post gets a kick out of Elizabeth Warren posing for Vogue.
Hope for New Year
December 27, 2010 | Elizabeth Warren | Comments (0)For this Washington Post economics writer it comes down to Elizabeth Warren:
My only hope for real change is the consumer-protection operation, run by Harvard bankruptcy professor Elizabeth Warren. I’ve stayed away from that topic because so much has been written about it, and I think so highly of Warren, whom I’ve known for many years, that I’m not sure I can summon up the requisite skepticism about her operation.
If she can, in fact, create and require institutions to use a brief, readable-type disclosure statement that a high school graduate can understand in 15 minutes, she’ll be doing God’s work. She’ll also be doing Mammon’s, because we ultimately won’t have capitalism in this country if we don’t have fairness.
“Here, I feel respected”
December 23, 2010 | positive media coverage | Comments (1)Payday loan customer quoted to a Wall Street Journal Reporter. From the story:
About two weeks before Christmas, Greg Dueno sipped free coffee and absentmindedly played with a fake poinsettia plant while his application for a $500 loan was being processed. The 53-year-old helicopter painter told a branch manager that he wanted the loan for Christmas presents, including a purse to surprise his wife.
Mr. Dueno wasn’t at the J.P. Morgan Chase & Co. branch where he keeps a checking account. The loan came from payday lender Advance America, Cash Advance Centers Inc., which last month opened its fourth office in West Palm Beach and wants to expand even more across the U.S.
“Here, I feel respected,” Mr. Dueno said in the airy lobby scattered with overstuffed leather chairs. He promised to repay the loan, charging an annual interest rate of 287%, within two weeks. At J.P. Morgan, “when I walk in, I feel very small, and not particularly important.” He walked out the door with the money 10 minutes later.
Q&A with EW
December 23, 2010 | CFPB, Elizabeth Warren | Comments (0)All this implies that you want regulation to mandate clarity.
If the role of regulation is to make the price clear, to make the risk clear, and to make it easy to compare one product with another, then it’s possible to have regulation with a much lighter touch than [we’ve had] before. Twenty years ago, consumer credit markets had products that were pretty easy to understand, and the business model was built around making the right decisions about to whom to lend. If the lender was too reckless, the lender went broke because people couldn’t repay the loans. What began to change in the 1990s is that lenders began to realize that it was possible to create ever-more-complex products that appeared on the front end to be cheaper, but on the back end were more expensive [and more profitable]. So 3.99 percent financing is highly advertised out front. But the plan has a lot of fees and penalties and accelerated interest so that something that appears to cost 3.99 percent could cost 15, 18, 25 percent. The consumer says, “I can tell this card is cheaper because it’s 3.99 percent and that one’s 4.99 percent.” But you don’t know which one is cheaper, because the real price isn’t the price you see.
Interesting
December 23, 2010 | Uncategorized | Comments (1)
