Raj Date, the acting head of the Consumer Financial Protection Bureau (CFPB), weighed in on the BofA $5 debit card fee controversy for the first time yesterday, according to an LA Times blogpost. Though he did not directly mention Bank of America’s new $5 monthly debit-card fee, Date said that banks often are murky about how much they charge customers and suggested the agency might move to simplify checking account disclosures.

“Different banks charge different fees. Different fees are applied under different terms and conditions. Different banks give different names to the very same fee,” Date said. “Ideally, consumers would have a simple way to evaluate checking account costs.”

In a recent LA Times article, Kathy Kristof presents an argument from California Director of the Center for Responsible Lending, Paul Leonard, explaining why payday loans are “bad option”. In making this argument, Kristof and Leonard use comparisons such as food stamps, tax breaks, and credit cards among, others, as more desirable resources for short-term cash.

What Kristof and Leonard do not take the time to explain is that these resources are often difficult to come by for people in need, so payday loans are often used as alternatives to more expensive options, like bounced checks, overdraft fees, and non-sufficient funds charges. In order to really put payday loans in context, all market options must be taken into account.

The LA Times is against updating payday lending laws in California. Big shocker. This newspaper hasn’t exactly been a bastion for consumer choice.

Proponents argue that the limit, which hasn’t changed since the loans were legalized 15 years ago, is too low to meet many of the emergency needs that can lead someone to take out a payday loan.

The Times thinks it knows what consumers should be able to borrow, what lenders should be able to charge, etc. If the state had capped the cost of newspapers at a quarter it would be a different tune.

When the media is writing about campaign contributions to politicians, it is illuminating nothing.  Politicians take contributions.  They take them from industries who are regulated.  That’s they way democracy works.   From today’s LA Times:

Reporting from Hartford, Conn. — Sen. Christopher J. Dodd (D-Conn.), who has won praise from consumer groups for taking on credit card providers over predatory lending practices, has collected thousands of dollars in donations from people affiliated with the so-called payday loan industry.

The lawmaker raised more than $44,000 from pawnshop owners and other businesses that provide high-interest loans, often to people with bad credit ratings, according to campaign finance reports.

And $44,000 is a pittance compared to the total Dodd will raise for his re-election.

The Los Angeles Times editorializes about online lenders who partner with Indian tribes.  We don’t like the name calling.

The LA Times reports that regulators in California are having a difficult time regulating some online lenders, many which are located offshore.  The article really speaks to the need for consumers to have access to regulated, storefront lenders.

The media is finally catching on.  We missed this from last friday’s Los Angeles Times:

“They [banks] say they’re covering your transaction as a courtesy,” said Wright, a self-employed businessman from Dayton, Ohio. “But they’re making a killing. I don’t want them to approve a debit when I don’t have enough to cover it in my account. This is a complete fraud.”

The Federal Reserve, which sets some banking rules, has been weighing new regulations for overdrafts for more than a year. They’re giving consumers the ability to comment until the end of March, with the anticipation that they’ll come out with final rules by this summer.

The rules are necessary, experts contend, because most banks now automatically enroll checking account customers in overdraft plans — and some banks won’t let them out. Bank of America, for example, doesn’t give consumers the option of dropping overdraft protection, a company spokeswoman says. If you have a checking account with the bank, you have it. Period.

Payday lending customers are banked!   This Los Angeles Times story would take all to rebut, but so decided to just point out the obvious.

Those are the payday lending customers discussed in this this four-page story in the Los Angeles Times headlined:  “More in middle class using payday lenders”: 

With tidy lobbies that resemble bank branches, many outlets are in shopping centers anchored by Wal-Marts, grocery stores or other big retailers. Lenders say their typical customers include homemakers, firefighters and teachers, whose steady jobs qualify them for loans.

Yes, the typical customer is the typical American. 

Here’s the side bar to the article:  “How payday loans work.” 

Short of cash to fix her ailing BMW this year, Lunetta Blanks could have paid the bill with plastic. Instead, the federal investigator opted for a payday loan, shelling out $300 to pay off a $255 loan from the Advance America branch in her Silver Lake neighborhood.

The Fed announcement of new credit card rules was covered in more than 1,000 newspapers.  The Los Angeles Times piece is typical:   

Responding to rising consumer complaints, federal regulators Thursday adopted the most sweeping new rules for the credit card industry in three decades, including tougher restrictions on interest rate hikes and late fees.

The regulations, which take effect in July 2010, would block card companies from applying higher interest rates on existing balances. Late fees could not be charged without giving consumers at least 21 days to make a payment.