Hadn’t thought of this
September 29, 2009 | alternatives, industry | Comments (0)“Without overdraft frees, why would banks offer checking accounts?” A different perspective at Daily Finance:
Here’s the problem with eliminating overdraft fees: It will encourage banks to turn away many low-income, low-asset customers, forcing them into the shadowy market of check cashing services, Western Union money orders, and payday lenders.
That settles that
September 29, 2009 | South Carolina, industry, regulation | Comments (0)The protest against the awarding of a South Carolina government contract to an out-of-state data collection firm has been denied. The winning firm, Veritec, will establish a payday lending data base for the state.
Higher than what?
September 29, 2009 | Ohio, industry | Comments (0)Stop the presses! This story out of Ohio says the payday loans rates are “high”. Doesn’t compare these rates to overdraft protection, bounced check fees or other services, though.
Credit Unions leaving “underserved” areas
September 29, 2009 | alternatives, industry | Comments (0)The economy has taken its toll on credit unions. From Credit Union Times:
First the bad news. The immediate impacts of the economic downturn and the NCUA assessments for the corporate stabilization plan have resulted in some credit unions pulling back on their out reach efforts to lower income areas, according to according to Cliff Rosenthal, CEO of the National Federation of Community Development Credit Unions.
“Right now what we have noticed is a general cutting back on budgets in this area,” Rosenthal said. “Even among some of our community development partner credit unions, there has been a marked shifting of focus,” Rosenthal said. He added that the retreats have been more pronounced in states where the downturn has been worst, but have hit CUs in every state.
This sums it up
September 29, 2009 | federal legislation, industry, regulation | Comments (0)Today’s Washington Post has a take on Barney Frank’s changes to the CFPA:
But in a clear indication of trouble ahead, Frank signaled his intention last week to scale back the proposed Consumer Financial Protection Agency, one of the pillars of the administration’s reform proposals. This new version of the CFPA would exempt many businesses that are not ordinarily thought of as financial institutions but that may offer some type of financial service to customers, such as telecommunications and other utility companies, law offices and real estate brokerages. In addition, it would not be able to require financial institutions to offer “plain vanilla” versions of certain products, such as a 30-year, fixed-rate mortgage.
Frank may have made these changes because he thinks they would improve the CFPA or because he thinks they improve its chances of passage. In any case, it is another reminder that in Washington — under this administration, at least — legislation is shaped not by the White House but by Congress. But does it have to be this way? Just because legislation has to be passed by Congress doesn’t mean that the White House can’t play a major role in writing that legislation; just see the last administration.
CFPA losing steam?
September 29, 2009 | federal legislation, industry, regulation | Comments (0)According to this article it is:
That the financial industry could successfully push back against such a plan would have been unthinkable a year ago, when the markets teetered on the brink of collapse.
“The sense is that people are taking a more deliberative approach, and I think that is very beneficial,” said Wayne Abernathy, executive vice president of the American Bankers Association.
But it will still pass according to several lobbyists I know.
Gearing up in Wisconsin
September 29, 2009 | Wisconsin | Comments (0)Yes, of course the industry is going to fight at 36% rate cap.
Anger at overdraft grows
September 29, 2009 | USA Today, alternatives, industry, positive media coverage | Comments (0)USA Today story today points out that payday loans can be a cheaper alternative:
G. Michael Flores, founder of Bretton Woods consulting firm, says younger consumers with low to moderate income are the ones using both payday loans and bank overdraft coverage.
“We’ve been saying it for a long time, that (with) virtually any comparison of the cost of what we do and the cost of a (bank automatic overdraft), the payday product is much cheaper,” says Billy Webster, board chair of Advance America.
d.
FDIC chief wants overdraft fees restricted
September 28, 2009 | alternatives, federal legislation | Comments (0)From USA Today:
Bair said that any major restriction to bank policies “needs to be done very carefully, given the state of the industry.”
She supports regulation to require banks to get consumers’ permission to approve transactions that overdraw their accounts and charge a fee. She also believes overdraft coverage should be treated as a loan, which would require banks to calculate and disclose the average APR to consumers. In the past, banking regulators have said that overdraft coverage is a credit product, but have stopped short of regulating it as a loan.
