Indian Country released a story today regarding Internet payday lending and its connection to Indian Sovereign Nations. As CFSA has said in its release, “our Best Practices require that all our member companies that offer payday advances through the Internet must be licensed in the state in which the customer resides and that they comply with all applicable state laws.”

In the opposing corner is the Community Financial Services Association of America (CFSA), based in Alexandria, Virginia. The payday lender trade group, founded in 1999, said on July 7 the tribal/payday lender affiliations “are solely a practice of some Internet-based lenders who choose not to license themselves in the states in which they operate, but rather rely on the law of the sovereign nation.”

CFSA said its “best practices require that all our member companies that offer payday advances through the Internet must be licensed in the state in which the customer resides and that they comply with all applicable state laws.” This “ensures strong consumer protections wile preserving access to short-term credit.”

A study done earlier this year by the Washington, DC-based Center for Public Integrity alleged that Internet-only lender/tribal arrangements were “rent-a-tribe” arrangements to get around state rules and potential lawsuits, an update from earlier “rent-a-bank” arrangements in states that had fewer restrictions on this kind of lending.

Click here to read CFSA’s media statement.

There are ‘No Plans for Bans‘, according to yesterday’s House Committee on Oversight and Government Reform hearing.

As the Wall Street Journal reports, White House adviser Elizabeth Warren said yesterday that the CFPB isn’t seeking to ban certain financial products, addressing Republicans’ questions about the scope of the consumer-watchdog agency set to open its doors this time next week.

Here’s a play-by-play of Warren and and Rep. Dennis Ross:

Ross: “Can you name any product, service, or transaction, not already illegal that is unfair, deceptive, or abusive within the meaning of the Dodd-Frank Act.”

EW: “Congressman, can I start by saying we have not been in effect for a year…”

More commentary about the accuracy of being in effect for a year…

EW: “Congressman, I can recall no product … I have had no discussions with my team about a particular product.”

Ross: “Don’t you think that’s one of the most important things though? It’s a power to ban…”

EW: “…Congressman, I appreciate the advice. But actually, no. I think that what we should be doing is concentrating on places where we can best make changes in the marketplace.”

Ross: “So then it would be okay if we just revoked the power?”

EW: “…We have priorities. And our first priority in rulemaking is around TILA/RESPA forms. We are trying to reduce regulatory burdens at the same time that we’re trying to increase the understanding for consumers so that they can make good product choices.”

Rep. Dennis Ross yields his time to Rep. Trey Gowdy, who then asks Warren about whether or not the CFPB should ban payday lenders:

Gowdy: “Payday lenders have a bad reputation for taking advantage of people, no one should expect to be treated well by them. Do you know who said that?

EW: “Probably me.”

Gowdy: “So that would be one group that should be banned?”

EW: “Congressman, there’s a lot of space between banning a product and making a product clearer to consumers.”

…

Gowdy: “So you do not think payday lenders should be banned?”

EW: “The statue is unambiguous and we have no authority to engage in usury caps.”

Gowdy: “That wasn’t my question. Do you think payday lending should be banned.”

EW: “Congressman, payday lending is one of the areas that will be under our jurisdiction.”

Gowdy: “Do you think it should be banned Professor Warren?”

…

Gowdy: “Should they be banned?”

EW: “Or to make better. We have a whole agency and we have a whole process to work on this. We have a lot of different tools available at the Consumer Financial Protection Bureau. One of the advantages we have is that it’s possible to work on multiple fronts at once.”

Credit.com is calling for it:

 Fewer than half (38%) of branches complied easily with the simple researcher request for fee schedules required by the Truth In Savings Act; only after two or more requests did a total of 55% percent of branches provide fee schedules as requested and as required by the Truth In Savings Act. Nearly one-quarter (23%) of branches surveyed refused to comply at all.

[Consumer Resource: Take the Debt Diet Challenge with Jean Chatzky and Credit.com]

Here are a few of the responses PIRG researchers received when asking for checking account fee schedules:

• Massachusetts: “Fees are “listed on the wall.”
• California: “This bank had the fees in a binder in the back and taped up in each teller stand, they had to take them out of the binder/off wall to copy to give to me.”
• Georgia: This bank didn’t have one, the bank staff said, “I don’t even have a list. Let me see if I can think of some for you off my head….””
• New York: “No copies, come back tomorrow.”

When is the President going to nominate a CFPB chief?  From the story: 

If President Obama does not act by the July 21 deadline, the CFPB will begin its existence under a cloud, operating under ambiguous legal authority that may limit the scope of its actions.

“I think whether they have enough time will depend partly on how much of a lightning rod the nominee is,” said Jo Ann Barefoot, co-chair of Treliant Risk Advisors and a former deputy comptroller at the Office of the Comptroller of the Currency. “If they choose someone who will trigger a strong negative reaction, it could get fought out and they could miss the deadline.”

MarketWatch’s Al Lewis is enamored with Elizabeth Warren. From the story: 

Anybody who says Warren is “controversial” has got to be a lending industry huckster or have a member of Congress in their back pocket. Who else opposes forthright disclosures to borrowers? Who else avoids questions like “What is the price?” “Can a borrower afford it?” or “Can a borrower get a better deal somewhere else?’”

Elizabeth Warren says a single director for the CFPB will do fine.  From the story: 

Elizabeth Warren, the person in charge of preparing the new agency for a July 21 launch, said the notion of it being overseen by a five-person panel of commissioners had been discussed last summer.

“The idea of going back to try and change that piece is just designed to throw sand in the gears,” she said at a community banking conference in Louisville. Critics concerned about regulatory over-reach have called for the agency to be overseen by a bipartisan panel rather than a single director.

Mother Jones pushes back against Republican critics:

Republicans in Congress love to attack Elizabeth Warren, the White House aide overseeing the start-up of the new Consumer Financial Protection Bureau (CFPB). At a March 16 hearing, House GOPers used Warren as a “punching bag,” as one columnist put it, questioning her authority as the CFPB’s for-the-time-being leader and predicting the bureau’s imminent demise. None of those criticisms, however, compares to the pathetic accusation leveled by Reps. Spencer Bachus (R-Ala.) and Shelley Moore Capito (R-WV) in a letter (PDF) sent to Warren on Wednesday.

More coverage of Warren’s speech:

“The lesson seems clear: Rules should be focused, and those that are not useful should be revised or eliminated,” she said, adding that the bureau would not primarily focus on writing new regulations. Ms. Warren said she even agreed with the chamber’s recent proclamation that the bureau should work to “prevent duplicative and inconsistent regulation of Main Street business.”

The Hill newspaper has the recap:

Elizabeth Warren, the architect of the new Consumer Financial Protection Bureau (CFPB), mounted a spirited defense Wednesday for keeping the agency’s budget free of the Congressional appropriations process.

House Republicans are backing legislation that would bring the CFPB’s funding within Congress’s control, but Warren said in a speech to the US Chamber of Commerce that there is no “principled reason” for doing so.

“Not one other banking regulator — not one — is subject to appropriations,” she said at a capital markets summit hosted by the chamber. “Requiring the CFPB to go into every examination against a trillion-dollar company knowing that the company could turn its lobbying force against the agency’s funding is not a prescription for fair and evenhanded enforcement.”

Elizabeth Warren is still courting big business.  CNN preview her prepared remarks to the Chamber of Commerce.  From the story: 

“I know this won’t come as a shock to you, but the Chamber and I have not always seen eye-to-eye on issues,” Warren said in prepared remarks released to the news media. “But I do not consider myself in hostile territory right now because I believe we share a point of principle: competitive markets are good for consumers and for businesses.”