We don’t wish you luck
May 27, 2010 | Virginia, industry, regulation | Comments (1)The Staunton, VA City Council has big ambitions:
Council will discuss adopting a resolution today to ask the state to impose an interest rate cap of 36 percent, calculated as an effective annual percentage rate, that includes fees and charges that payday lenders require.
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Jamie Fulmer, director of public affairs for Advance America, one of the larger payday lenders, said the charges by critics of the industry are based on fundamental misunderstandings of the services they provide. He said claims, such as there are viable alternatives to borrow money in a pinch, are not true, adding using a payday lender is often less expensive than having to bounce a check.
No “bulldozing” reform
May 27, 2010 | Ohio, industry, regulation | Comments (0)I don’t understand the headline of this editorial from Ohio, but I get the drift of what they want:
The intent of the reforms, however, is not to shutter all of the corner-store, fast-cash businesses. Clearly there is a need for quick short-term loan services, or payday lending would not have mushroomed into a growth industry in the state and the nation.
Intent aside, if the result is that payday lending stores close, then it’s not “reform,” it’s a ban.
Who’s gloating?
May 27, 2010 | federal legislation, industry | Comments (0)Not us. From the Washington Independent:
One might think this would have consumer advocates incensed about the House and Senate bills’ ability to stop the worst practices in the payday lending industry. But, in fact, they argue that payday lenders spent millions to win numerous battles before ultimately losing the war.
Why? Payday lenders in both bills still come entirely under the rule-making authority and oversight of the new Consumer Financial Protection Agency, which consumer advocates are confident will consider tamping down on annualized percentage rates of interest and establishing rollover limits. There has been considerable confusion over the Senate’s payday lending language and possible loopholes. It ensures the Consumer Financial Protection Agency has oversight and rule-making authority over all payday lenders, with the CFPA enforcing rules against bigger lenders and the Federal Trade Commission enforcing rules against smaller lenders, Kirstin Brost of the Senate Banking Committee said. And the House language, simply having the CFPA have total authority over all payday businesses, as supported by the White House and Treasury, is likely to win out.
Illinois action
May 26, 2010 | Illinois, industry, regulation | Comments (2)Reform bill heads to Governor. From the story:
In action Wednesday, the Illinois House signed off on changes aimed at closing loopholes in the state’s lending laws that have allowed some companies to charge rates as high as 700 percent.
The measure is a compromise between consumer groups and lenders and would impose a cap of 99 percent on loans under $4,000 and 36 percent for those above that level.
Other changes include allow lenders to increase the term of loans from four to six months.
Financial reform conference schedule
May 26, 2010 | Uncategorized | Comments (0)Wednesday, June 9th-first open meeting of the conference; organizational matters and opening statements only
Tuesday, June 15th, Wednesday, June 16th, Thursday, June 17th-conference meets on substantive issues
Tuesday, June 22nd, Wednesday, June 23rd-conference meets on substantive issues
Thursday, June 24th-conference concludes with formal signing ceremony; conference report filed shortly thereafter
Monday, June 28th-Rules Committee meets to grant rule
Tuesday, June 29th-House passes conference report; this gives the Senate three days to pass it before the beginning of the July 4th recess.
Conference drama?
May 26, 2010 | federal legislation, industry | Comments (1)There are some significant differences between the two bills and those differences are going to be the focus of a huge lobbying effort as Wall Street tries to shape the final outcome. The stakes are very big.
For the payday advance industry, the issue is whether there will be a Consumer Financial Protection Bureau housed in the Fed as the Senate proposes or an independent agency as the House proposes.
The key players
May 26, 2010 | Uncategorized | Comments (0)For the policy wonks Reuters describes the key players on financial reform.
More details on Colorado
May 26, 2010 | Colorado, industry, regulation | Comments (0)This story has a little more depth:
House Bill 1351 replaces payday loans with a new type of loan with a six- to 12-month term and lower interest rates.
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Half the payday lending companies in Colorado might close because of the bill, said Ron Rockvam, president of the Colorado Financial Service Centers Association.
“I know of six of them that closed over the weekend,” all in the Denver area, Rockvam said.
Rockvam runs a payday lending business in Fort Collins, and he does not know whether he will be able to stay open. The changes in HB 1351 require payday businesses to offer a new product, and they will need a higher cash flow because of the extended repayment schedule, Rockvam said.
Colorado
May 25, 2010 | federal legislation, industry | Comments (0)Governor signs payday lending bill.
What kind of Nielson rating’s will it get?
May 25, 2010 | federal legislation, industry | Comments (0)Looks like the financial reform conference might be broadcast live on C-Span.
