“This Office will connect seniors with what they need to guide themselves through their financial lives. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires this Office to be active by January 21, 2012. We are building it right alongside the rest of the consumer bureau, and in the coming weeks and months you’ll hear more from us about financial issues for seniors.”
At a House hearing today, the Federal Deposit Insurance Corporation’s Sheila Bair said there were advantages to having the soon-to-be-appointed consumer director sit on the FDIC board.
“It might help sensitize that person to some of the safety and soundness issues associated with deposit insurance,” she said.
She added that if the leadership of the consumer agency is changed to a commission structure, an idea being pushed by Republicans on Capitol Hill, she would like to see the FDIC have a role in the consumer agency’s governance. “I think we’d like some reciprocity if we go to a commission structure with the CFPB,” Bair said.
GOP senators are reaching out to House Speaker John Boehner to stop President Obama from appointing Elizabeth Warren as head of the CFPB.
“Given President Obama’s indifference to the Senate’s constitutional authority, and the American people’s right to scrutinize his appointees through regular order of advise and consent, we urge you to refuse to pass any resolution to allow the Senate to recess or adjourn for more than three days for the remainder of the president’s term,” the senators said in a letter to House Speaker John Boehner (R., Ohio).
A day after passing through the Texas Senate, the House has followed suit and approved of the Senate version of House Bill 2592. If passed, the bill that now just awaits the signature of Governor Rick Perry will require more extensive disclosure from payday lenders in Texas. House Bill 2594, which requires payday lenders to be licensed by the state, still awaits final House approval.
Payday lending could soon become more transparent for borrowers looking for money fast — the House today concurred with the Senate version of a bill that would require payday lenders to disclose interest rates and fees associated with the loans.
Matt Lauer talks with Today’s Jean Chatzky about the recent research that came out reporting that nearly half of Americans say that they definitely or probably couldn’t come up with $2,000 in 30 days.
If you didn’t get a chance to see the second part of the CFPB hearing on Tuesday, the House Subcommittee recently posted the video on YouTube.
One great point from Zywicki in his prepared remarks:
… economics and history teach that reducing access to credit does not reduce consumer need for credit. Washington bureaucrats cannot wish away the need of American families for credit. If you need $500 to repair your transmission to get to work on Monday, you need that $500—regardless of whether you have a bank account or credit card. If you need $300 to pay your rent or electric bill, then you need that money regardless of whether you have it saved up or not. And if you can’t get a credit card because a paternalistic Washington bureaucrat doesn’t think you deserve one, then you are simply going to go to a payday lender. And if payday loans are regulated out of existence, you are going to turn to a pawn shop. History teaches the unfortunate lesson that if all else fails, illegal loan sharks stand ready to meet your needs.
DOWNLOAD THE PREPARED REMARKS FROM WITNESSES FROM BOTH PANELS: Click here to read Warren’s prepared testimony. Click here to read Todd Zywicki’s prepared remarks. Click here to read Adam Levitin’s prepared remarks. Click here to read Andrew Pincus’ prepared remarks. Click here to read David Evans’ prepared remarks.
The Financial Services Roundtable’s President and CEO Steve Bartlett says he expects Congress to soon roll back the “hotly contested provision that curbs the fees banks charge for debit-card transactions.”
“My belief is at the end of the day, Congress will reverse debit-card price controls, but I don’t know when,” he said, according to a copy of his prepared remarks.
Moreover, Bartlett predicts a continued heated political debate over the CFPB, but eventually a bridge between the divide.
“Things might get testy this summer, but I do believe leadership of both the House and the Senate and the President will reach an agreement,” he said.
“Reputable banks and reputable business people have absolutely nothing to fear from this agency,” says Ellen Bloom with Consumers Union,the publisher of Consumer Reports. “We just want to give the consumer an even shot and get back to clarity and simplicity and make things less confusing for them.”
CFSA member companies adhere to a set of Best Practices that ensure strong consumer protections including a simple, straightforward application process for credit which provides full disclosure of all fees and terms of their products.
Nothing really new on the topic of Elizabeth Warren heading up the CFPB. The big question that many on the Hill are talking about is whether the president will circumvent a Senate confirmation and appoint her during recess? According to the Washington Post, liberal activists are rallying behind Senator Al Franken’s proposed strategy yesterday.
Obama has worked hard since Election Day to reduce partisan tensions in Washington and appointing Warren would inflame conservatives while reassuring liberals who will most certainly vote for Obama in 2012 anyway.
Click here to see Darrin Andersen’s remarks before the Federal Reserve Bank of Kansas City yesterday. One quick highlight is the number of complaints filed against our industry … an astoundingly low number, I’m sure not as much as our critics would hope:
Consistent with our excellent customer satisfaction scores is a lack of complaints about our product. The state of Missouri logged just 29 complaints in 2.8 million payday loan transactions in 2009. Nationally, only 1,000 complaints were generated by more than 100 million transactions, according to a survey of state regulators.
