Confession from a credit union official
March 14, 2010 | alternatives, industry | Comments (0)I think he’s saying the credit union can’t make any money:
“We’re an alternative to payday lending,” Bowman said. “It’s a really tough business model to crack. You saw our net worth ratio. It’s a near-death experience.”
Taking the Hill
March 13, 2010 | alternatives, federal legislation, industry | Comments (0)Capitol Hill that is. The Bankers have fixed bayonets and are ready to charge according to this story:
About 900 bankers will converge on Capitol Hill next week for a conference that lobbyists say will give them a chance to speak out against a proposed consumer protection agency as Senate Banking Committee Chairman Christopher Dodd unveils financial regulation legislation.
The American Bankers Association’s annual government- relations conference in Washington begins March 16, a day after Dodd plans to release a draft of his proposals for overhauling financial-industry governance.
If you’re heading to Vegas
March 11, 2010 | alternatives, industry | Comments (1)There’s a new tourist attraction.
Wow
March 9, 2010 | alternatives, federal legislation, industry | Comments (0)BOA drops overdraft protection on debit cards. From the story:
In a move that could bring an end to the accidental $40 cup of coffee, Bank of America said Tuesday that it was doing away with overdraft fees on purchases made with debit cards, a decision that could cost the bank tens of millions a year in revenue and put pressure on other banks to do the same.
Pawnshop 101
March 8, 2010 | alternatives | Comments (0)Bankrate.com has a great article on the basics of using pawnshops.
Short-term credit crunch
March 4, 2010 | alternatives, industry | Comments (0)Bretton Woods Inc released its annual report on overdraft and non-sufficient fund fees today. The report found that banks made $38 billion from OD and NSF fees in 2009, but more importantly, it also recognized that Regulation E will eliminate a big chunk of that revenue…and $6.3 billion in short term credit for consumers.
The highlights are here. Full study here.
Payday Pundit is angry
March 3, 2010 | alternatives, federal legislation, industry | Comments (1)There’s has been a lot of commentary on the Internet about the Huffington Post story which–shockingly–revealed that the payday lending industry participates in the democratic process by lobbying and making campaign contributions. A know-nothing at Seeking Alpha by the name of Felix Salmon decided to personally attack CFSA’s spokesperson Steven Schlein:
One of the biggest payday-lender lobbyists calls itself the Community Financial Services Association; it increased its spending by 74 percent over the past year, to $2.56 million. That helps pay for people like Steven Schlein, who goes around saying things like “Who’s going to make that kind of credit available to working people besides us?”. (Answer: banks, community development credit unions, non-profit lenders, etc. And if “that kind of credit” is being extended at 650% APRs, then maybe it shouldn’t be made available at all.)
Of course, we know that banks and credit unions don’t make these kinds of loans, which is why the payday lending industry exists. Steven Schlein, no shrinking violet, personally told me that Felix Salmon can go (expletive deleted) and then (expletive deleted).
More on the CFPA deal
March 2, 2010 | alternatives, federal legislation, industry | Comments (0)From today’s Washington Post:
The chairman of the Senate banking committee is seeking Democratic support for a Republican proposal to house a new consumer-protection regulator inside the Federal Reserve, a compromise that could clear the way for bipartisan legislation on financial reform, according to sources familiar with the negotiations.
Embracing the proposal marks a turnaround for Sen. Christopher J. Dodd (D-Conn.), who has lambasted the Fed repeatedly over the past year for not protecting borrowers from lender abuse. It is unclear whether other Fed critics, both Democrats and Republicans, will follow suit. The Fed already is responsible for writing consumer-protection rules, but it did not prohibit some of the most abusive mortgage and credit card lending practices during the housing boom.
The proposal by Sen. Bob Corker (R-Tenn.) would place a presidential appointee inside the Fed with an independent budget and a mandate to write rules protecting consumers. Those rules, however, would be enforced by existing banking regulators.
Key issues remain, including whether the new regulator could impose rules over the objections of banking regulators. Dodd and Corker also are negotiating how broadly the rules would apply to financial institutions other than banks.
This will be the story of the day
March 1, 2010 | alternatives, federal legislation, industry | Comments (0)We posted the leaked story in Washington Post yesterday, but now it’s everywhere:
Senate Banking Committee negotiators, working through the weekend, agreed to drop the stand-alone consumer agency sought by the Obama administration and opposed by the banking industry, removing an obstacle that has stalled new U.S. financial rules.
Banks must need overdraft revenue
February 28, 2010 | alternatives, industry | Comments (1)From the Toledo Blade:
STANDING to lose $15 billion to $20 billion in annual revenue from overdraft fees, banks nationwide are embarking on campaigns to preserve or replace that money. One avenue is to urge customers to give the required “opt-in” approval to keep charging overdraft fees and another is to push short-term products similar to “payday” loans. In recent weeks, Chase bank, a part of JPMorgan Chase Co., has been sending letters to consumers with an offer that it urges them not to refuse.
