We’re stunned
November 10, 2008 | Center for Responsible Lending, Consumer Federation of America, customers, employees, industry, industry critics, media coverage | Comments (0)An in depth and balanced piece in Sunday’ New York Times Magazine. It looks at the checking cashing/payday lending phenomenon through the eyes on one businessman, Tom Nix, of Southern California. From the piece:
Today’s financial crisis has many origins. But here’s one cause that is often overlooked: Traditional bankers badly misread the market for financial services in low-to-moderate-income communities. “Banks have been approaching these customers purely from a short-term-gain perspective, and they’ve missed opportunities,” Matt Fellowes, director of the Pew Safe Banking Opportunities Project, told me. Banks declined to offer small, simple lines of credit to poor and blue-collar customers, leaving them to payday lenders, while they pushed high-limit, high-interest credit cards on everyone and acquired hundreds of billions in subprime debt.
It’s long, but well worth the read.
Online lenders under the gun
October 22, 2008 | CBS, Consumer Federation of America, industry | Comments (0)This CBS News story highlights the rising number of complaints against online lenders. It’s harder to regulate online lenders so if you ban storefronts, the result is consumers going online for loans. The smartest thing legislatures can do for consumers is to impose a reasonable regulatory scheme that keeps storefront lenders open.
Consumer groups get an “F”
September 5, 2008 | Consumer Federation of America, industry, industry critics | Comments (1)The Community Financial Services Association of America has hit back at a phony “consumer” group scorecard which grades states on their lending rules. From the CFSA news release:
The Consumer Federation of America (CFA) and the National Consumer Law Center (NCLC), two out-of-touch “consumer” groups which feel they have the authority to grade state lending laws, were given an “F” today by the Community Financial Services Association of America (CFSA) for deceiving media with a phony scorecard of state laws.“These so-called ‘consumer’ groups have neither the knowledge nor authority to judge states’ regulation of lending practices,” said Tommy Moore, CFSA Executive Vice President. “Grading states based on an arbitrary interest rate cap may be a simple way to generate media attention, but it’s a terrible way to protect consumers and regulate lending practices.”
Bad journalism of the day award
September 3, 2008 | Consumer Federation of America, Michigan, customers, industry, industry critics, media coverage, personal finance, states | Comments (0)Goes to Susan Tompor at the Detroit Free Press. Below are some statements she makes in her piece with the Payday Pundit’s comments in bold:
Debt traps — including high-cost advances on a paycheck — are crushing many Michigan consumers.
PP: She provides absolutely NO evidence of this, not even the usual anecdotal nonsense we’ve come to expect.
As many consumers scramble to pay bills, it’s wise to pay attention to just how costly quick-fix loans can be compared with other credit.
PP: She makes NO comparisons to other credit.
No passing grades for states with financial choices
August 29, 2008 | Consumer Federation of America, Illinois, Missouri, industry critics, regulation | Comments (0)Consumer Federation of America, Consumers Union and the National Consumer Law Center have given two more states failing grades for offering choices to consumers. Illinois and Missouri received straight F’s for having a multitude of short term credit options available to consumers.
Failing to give choices returns a passing grade
August 28, 2008 | Consumer Federation of America, Massachusetts, regulation, research | Comments (0)Boston’s National Consumer Law Center and Washington’s Consumer Federation of America give the Bay State two F’s for giving their citizenry financial choices. There is something very wrong with this picture.
The double standard of consumer groups
August 15, 2008 | Center for Responsible Lending, Consumer Federation of America, alternatives, industry | Comments (4)CNN reports: Automatic overdraft loans can look like a consumer’s best friend, but they can come at a steep cost.
Our friends at the Consumer Federation of America had this to say: “Banks should have to get their customers’ affirmative consent before signing them up for their most expensive loans.” And the Center for Responsible Lending added, “most debit overdrafts are small, averaging less than the overdraft fee.”
Payday Pundit wonders why consumer groups only ask for “customers’ affirmative consent” when it comes to overdraft protection–but want to ban payday loans. Don’t they realize payday loans are fully transparent and require much more than a “customers’ affirmative consent.” Why the double standard?
