According to the American Banker, payday lenders have a ‘few friends in high places,’ at least as it relates to the recent KC Fed discussion.

In particular, KC Fed economist Kelly D. Edmiston found evidence that, in states that ban or restrict payday loans, consumers have lower credit scores and make less use of traditional credit.

“I’m arguing that they either lose access to credit, or are using less healthy forms” of short-term borrowing, such as bounced checks, overdraft loans or even illegal loan sharks, says Edmiston.

…

Sharing the debate panel with Frank and with Darrin Anderson, an executive from payday lender QC Holdings, Edmiston defended his research, pointing out that the results were not intended as an argument against bans but as a starting point for discussions on payday loan restrictions, which he says haven’t been examined enough. “The evidence is mixed,” he says with a shrug.

Miss seeing Darrin Andersen late last month before the Kansas City Fed? Not to worry, the Federal Reserve bank uploaded the following videos:

• Payday Lending Seminar
• Payday Lending Panel Discussion

The Consumer Bankers Association’s President Richard Hunt talks to Fox about on why there is no nominee to head the Consumer Financial Protection Bureau.

The Center for Responsible Lending has cut its first quarter lobbying fees (only $96,000 in the first quarter),  according to a disclosure report. That’s down from the $130,000 spent in the first quarter of last year, and $102,000 spend in the fourth quarter of 2010.

In the January-to-March period, CRL lobbied Congress, Treasury, the White House, the Department of Housing and Urban Development, the Federal Trade Commission and banking regulators such as the Federal Reserve, according to the report filed with the Secretary of the Senate.

With the CFPB’s latest announcement re: larger nonbank financial institutions, the new consumer agency put out a blog post responding to questions that have called for an exact definition.

What’s a “larger participant”? Our nonbank supervision program may look at all sizes of nonbank mortgage companies, payday lenders, and private student lenders. But Dodd-Frank says that in other markets, the Bureau’s supervision program generally covers only institutions that are “larger participant[s] of a market for other consumer financial products or services.”

“Larger”? Larger than what? Well, that’s what the CFPB has to figure out. Congress did not set the thresholds for inclusion in this supervision program for these other markets. Congress required that we define what these size thresholds should be, so we can lay the foundation to start this part of our nonbank supervision program. In other words, it’s our job to figure out exactly how large “larger” really is.

Click here to find the available conference speaker presentations in downloadable Adobe PDF format. Only presentations that are released by speakers are listed.

The CFPB has focused its attention on the supervision of nonbank financial institutions.

“Consumers deserve the peace of mind that financial companies — both banks and nonbanks — are following the rules,” said Elizabeth Warren, Special Advisor to the Secretary of the Treasury on the CFPB. “The CFPB will be able to examine companies that have never been subject to federal oversight to ensure that no one is gaining an unfair advantage by breaking the law.  This will ultimately create fair competition, better product offerings, and more transparent markets for consumers.”

Six consumer credit markets is where the CFPB will consider supervision, leading to onsite examinations and registration requirements:

1. Debt Collection
2. Consumer Reporting
3. Consumer Credit and Related Activities
4. Money Transmitting, Check Cashing, and Related Activities
5. Prepaid Cards
6. Debt Relief Services

The public may comment on the rule for 45 days once it has been published in the Federal Register.

The CFPB seeks public comment on the following:

• What consumer financial product or service markets should be included in the initial rule?
• How should the financial product or service markets included in the initial rule be defined? In addition to considerations relating to how to define the relevant product markets, should all markets be national in scope, or should the CFPB consider regional or other geographic markets in certain instances? If regional or other geographic markets should be considered, describe with specificity how they could be defined.
• What specific criteria should be measured, and threshold levels set, to define a larger participant in the markets identified above, and in any other markets that should be included in an initial rule? What data should be used to assess whether the thresholds have been met?

Following a report from the group Judicial Watch, House Republicans are requesting copies of all communications between Elizabeth Warren and state attorneys general concerning the settling of improperly processed foreclosures.

“It appears the CFPB has been deeply involved in the mortgage-servicing settlement negotiations and that role goes far beyond the mere offering of ‘advice’ under the Merriam- Webster’s definition or any other reasonable interpretation of that term,” according to a draft of the letter to Treasury Secretary Timothy Geithner, circulated today in Washington and obtained by Bloomberg News.

Last week, 77 freshmen in the House of Representatives wrote a letter to Speaker John Boehner offering their assistance “in ensuring that there are always sufficient members to cover the necessary pro forma sessions” in order to block  any potential recess appointment by President Obama (Elizabeth Warren in particular). It appeared that if the Republicans kept up these pro forma sessions, there would be no way to get Warren through the Senate confirmation process as the Director of the CFPB.

But today, David Arkush, the Director of Public Citizen’s Congress Watch, submitted a letter to President Obama arguing that it is within his constitutional rights to exercise his adjournment power and force both branches of congress to adjourn for the time necessary to make a recess appointment. This does appear to be the way it is written in the Constitution, but will President Obama be willing to go to such great lengths to put Warren in that position?

According to this article, payday loans (a viable credit option that’s being used by millions of working Americans in 19 million households) “‘stink up’ the lending landscape”. And what option are they promoting? None other than the credit unions’ alternative. Like we said before:

Last September, the NCUA voted to allow credit union members to raise the annual interest rate for short-term loans to 28 percent. What the NCUA doesn’t discuss is that the fees credit unions tack on to a loan, drive the true cost up to, yes, triple-digits. For example, a two-week (typical payday loan) $400 loan at Kinecta Federal Credit Union costs $42.25, that’s an annual percentage rate (APR) of 275 percent. Or when considering a two-week loan at Mountain America Federal Credit Union, this short-term alternative has an APR at 876 percent.

Like it or not, short-term, unsecured credit is expensive and no one, including banks and credit unions can afford to make loans at the rates of traditional, secured loans. Is the cost worth it to consumers? We think that payday lenders, banks, and credit unions should clearly disclose loan fees and terms and at the end of the day, only the consumer can decide whether the loan is appropriate for their needs.”

Our Board Chair D. Lynn DeVault goes on to say:

“Like it or not, short-term, unsecured credit is expensive and no one, including banks and credit unions can afford to make loans at the rates of traditional, secured loans. Is the cost worth it to consumers? We think that payday lenders, banks, and credit unions should clearly disclose loan fees and terms and at the end of the day, only the consumer can decide whether the loan is appropriate for their needs.”