Payday Pundit » 2009

Warren and her critics

November 19, 2009 | federal legislation, industry | Comments (0)

Bloomberg has a great profile of CFPA mastermind Elizabeth Warren. I liked this passage:

Warren won’t discuss whether she may be a candidate to lead the authority, which would have the power to regulate $13.7 trillion of debt products. A Warren nomination would tell banks that Obama is determined to force reduced checking-account fees and limit lender claims in mortgage advertising, among other measures the industry opposes, said Thomas Cooley, dean of New York University’s Stern School of Business.

“She is an ideological crusader,” Cooley said in an interview. “She is a person who will stir up a lot of trouble.” In a column in Forbes magazine, Cooley accused her of “waging a self-righteous holy war.”

For the CFPA

November 19, 2009 | Ohio, federal legislation, industry | Comments (0)

A “consumer” group letter in today’s Newark (Ohio) Advocate:

Finally, there may be some relief on the way — H.R. 3126, the Consumer Financial Protection Agency Act of 2009. This bill would create an agency whose sole job would be to look out for consumers as they take out a mortgage, accept an offer for a new credit card or pay off a loan from a bank or check-cashing company. The agency would be empowered to ensure that credit and payment products do not include features that harm consumers like pre-payment penalties, unjustified fees or hair-trigger interest rate increases.

One of the biggest fears of critics of the CFPA is that people like this letter writer will end up staffing the agency.

CFPA in the Senate

November 19, 2009 | federal legislation, industry | Comments (0)

I think it’s fair to say there is a general lack of enthusiasm for financial regulatory reform among Senate Republicans. From the article:

Senate Republicans said Tuesday there is no support within the GOP for the financial overhaul plan outlined last week by Democrats, putting on shaky ground a top priority for President Barack Obama.

Sen. Chris Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee, has outlined an 1,136-page draft bill that would create three new federal agencies to police banks, protect consumers and dismantle failing financial institutions that threaten the broader economy.

But Republicans have said they think the plan goes too far by putting onerous restrictions on Wall Street that could limit the availability of credit.

“My understanding is that it’s not acceptable to any of the Republicans on the committee as it now stands,” Senate Republican leader Mitch McConnell of Kentucky told reporters.

Tension building in Columbia

November 19, 2009 | Missouri, industry | Comments (0)

The City Council there has postponed its vote on payday lending/check cashing restrictions until Dec. 2.

Speaking of elites

November 19, 2009 | Daily Press, Virginia, industry | Comments (0)

The Center for Responsible Lending has a letter-to-the-editor today in Virginia’s Daily Press. Same old blather:

At a time when dollars are so dear — especially to average working people — every member of the Virginia legislature must take a stronger stand against predatory lending than was expressed last year. In these dire financial times, broadly calling for change is simply not enough. Virginia’s families are waiting for its leaders to bring needed changes to their daily lives. The question for the Virginia legislature is, “Who among our elected state officials will support this much-needed reform?”

Typical deception. When the writer says “reform” she means “ban.”

Elites debate payday loans

November 19, 2009 | alternatives, industry | Comments (0)

The Atlantic magazine online is having a vigorous discussion. Weigh in if you have time. We liked this response to some of the elitist trope of other commenters:

If risky, high-interest loans are made illegal, only illegal operators will make risky, high-interest loans. And historically, they have done a lot worse to defaulting borrowers than collect too much interest. Just pointing out that there are worse things than financial stress.

“Payday loans help millions”

November 19, 2009 | Missouri, customers, industry, positive media coverage | Comments (0)

So says CFSA’s Tommy Moore in today’s Southeast Missourian:

Payday advance customers are educated, hard-working, middle-class Americans who face unbudgeted or unexpected expenses between paychecks and want and need access to short-term credit.

Millions of customers across the country have used payday advance responsibly and appreciate having somewhere to turn when they need quick access to credit. Analysts estimate payday advances were used by 19 million households in 2008.

A good sign?

November 18, 2009 | alternatives, federal legislation, industry | Comments (0)

From an article in the Boston Globe:

Efforts in Congress to cap credit-card interest rates are faltering because of opposition from Democrats and a lack of specific support from the White House, despite growing consumer outrage over a rush by banks to impose rates as high as 30 percent.

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The Senate soundly defeated legislation in May that was introduced by Senator Bernard Sanders, the Vermont Independent, to cap most credit-card interest rates at 15 percent. Nearly half of the Democratic senators joined Republicans in defeating the measure, 60 to 33.

Consumer groups say the problem of skyrocketing interest rates has only worsened since that vote, as banks scramble to boost rates in advance of a new rule scheduled to take effect in February, requiring banks to give consumers a 45-day advance notice of rate increases.