A bill moving through Rhode Island could restrict access to credit for consumers in the state.

Part 1 of a story coming from the WoonSocketPatch.com:

A House bill (H5562) sponsored by Rep. Frank Ferri (D-Warwick) would repeal payday lenders’ special exemption, cap payday loans at a 36 percent annual interest rate …

Evidence shows that states that have seen restrictions, such as interest rate caps, access to short-term credit has all but vanished. Such a prohibition would drive licensed and regulated entities like CFSA members out of the marketplace and drive consumers to higher cost providers, many of which are unregulated and unlicensed.

The best way to protect consumers is to ensure that they understand the actual cost of the loan. And when you take a look at the other short-term products out there, consumers can make an informed decision for themselves. A payday advance compares favorably to many consumer alternatives, even when expressed as an APR for two-week terms:

• $100 payday advance with a $15 fee = 391 percent APR
• $100 bounced check with a $28 overdraft protection fee = 730 percent APR
• $100 credit card balance with a $35 late fee = 913 percent APR
• $100 bounced check with $60.47 Non-sufficient funds and merchant fees = 1,577 percent APR
• $100 utility bill with $46.16 late/reconnect fees = 1,203 percent APR

A very interesting perspective coming from this New York Times article re: the debt collections industry. Tired of being harassed, threatened, and cursed at, the industry’s trade association is going on a “charm offensive” to educate the public and the financial services’ new regulator: ‘Hey, we are people too.’

“There really ought to be a law on how consumers behave towards debt collectors,” said Mr. Neeb, whose employees routinely use aliases on the phone to protect their identity from hostile debtors.

ACA International has beefed up its lobbying operation in Washington to pursue a wish list of laws and regulations that it would like changed, and has even set up a Web site called: Ask Doctor Debt.

A recent study says that banks are expected to lose up to $14 billion from the reduction of interchange fees.

So how are they going to make up for the loss revenue? The likely candidate: Offloading more costs onto consumers.

A CardHub.com analysis finds that large banks will make up for lost revenue by increasing monthly fees and minimum balance requirements and making debit card reward programs less appealing.

Plenty of hoopla went out on the news wire re: using Facebook for debt collection. But what about its uses for process serving?

Courts in New Zealand, Canada and other countries are becoming increasingly comfortable with serving papers over Facebook. In Australia, one lawyer used the Web site to serve a foreclosure notice to one couple who defaulted on their loan. So far, we haven’t seen Facebook used to serve papers in the U.S.

Will we see upcoming consumer protection regulation for use of social media in the business world?

Nearly half the financial regulations required by the Dodd-Frank law are behind schedule, according to the New York Times. Will it be a death by delay?

So far, 28 of the financial overhaul rule-making deadlines have been missed, according to Davis Polk, a law firm that is tracking the rules. Of the 385 new rules to be written, the law firm says, regulators have completed only 24 requirements; they were supposed to have taken 41 such actions by now.

“There’s an attempt to kill this through delay,” said Michael Greenberger, a law professor at the University of Maryland and a former official at the Commodity Futures Trading Commission, which is in charge of writing batches of the rules. “The difference between eight or nine months and 24 months could be cataclysmic here.”

An editorial from today’s Star News (Wilimington, NC) cried foul about the recent small-dollar lending bill that passed the NC House of Representatives last week. In particular, the story accuses the lending industry of using its political contributions to gain influence over state lawmakers. What the editorial does not address, though, is the validity of the legislation itself. We hope that others will take a look at the actual impact of the bill, and not the politics surrounding it.

The heated debate in New York over legislation that would allow licensed check-cashers to make small loans of $300-$2,000 is now centered around an unexpected aspect of the bill: semantics. As critics of the bill have said:

“If this sucker is passed, that just opens the door to payday lenders in New York state,” said Beverly Moore, housing coordinator at Buffalo Urban League. “Our objective is to kill the bill.”

While its proponents have responded:

“These are not payday loans,” said Sen. Hugh T. Farley, R-Niskayuna, the sponsor and former chairman of the Senate Banks Committee, during a May 18 committee hearing at which the bill passed. “They are comparing apples to oranges. It’s being confused here.”

We’ll have to wait and see whether these two sides can even come to an agreement on terminology, let alone the legislation.

With a bill currently waiting for approval in California Senate that would raise the limits for payday loans from $300 to $500, Claudia Buck wrote an article in today’s Sacramento Bee profiling both the industry and the debate over the current legislation. One of the biggest proponents of the bill at hand is its author, Assemblyman Charles Calderon.

The bill’s author, Assemblyman Charles Calderon, D-Whittier, says California’s $300 limit is one of the lowest in the country and inadequate for today’s consumers. It doesn’t help those who need quick financial help, he says, whether “to pay your student fees or keep your phone on because you’re looking for a job.”

We’ve heard plenty from Texas lawmakers and journalists about the payday legislation that passed in the House and Senate, but today we heard from actual industry members about the new rules.

“We’re happy this passed. A lot of legislators told me they wanted to get some regulations on the books,” said Dan Feehan, CEO of Fort Worth-based Cash America International, the nation’s biggest operator of pawnshops and a payday lender.

Probably to the surprise of some critics, industry members seem to be just fine with the new bills.

In an editorial from today’s Houston Chronicle, University of Houston Professor of Law Jim Hawkins provides some interesting perspective on the recent payday lending bills in the Texas legislature. In particular, Hawkins takes note of CFSA’s Best Practices as a model for effective lending guidelines:

These bills actually contain substantially less protection for consumers than the “best practices” created by the payday loan industry itself. That’s right — if payday lenders just follow what their own trade group – the Community Financial Services Association of America (CFSA) – instructs, consumers will be better off than they will under these bills.