ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

REGISTRATION is NOW OPEN!

February 28 - March 2, 2017

Meeting the Challenge

With significant changes coming in the small dollar lending industry, it's more important than ever to keep up with marketplace developments. CFSA is committed to advancing our industry towards responsible and innovative credit options for consumers. The 2017 CFSA Conference & Expo is the premiere event in the small dollar lending industry!

Registration for this important Conference is now open. Discover the innovation that's happening today and take part in the industry's only event that's advancing critical business strategies and solutions for tomorrow's consumer credit marketplace.

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CFPB Operations Could Shift After Court Ruling

A federal court's decision last week to make the director of the Consumer Financial Protection Bureau report to the president sounded alarm bells in Washington, D.C.'s business and legal community. The change could have an effect, both politically and practically, on the young agency's operations.

Financial professionals say the decision will likely have two major effects on CFPB operations. First, the agency's prioritization of rules and enforcement actions could change because they fear a court's reprisal. Second, the next president could opt to terminate the current director, Richard Cordray.

Whether either of these things will substantially change the agency is up for debate.

"It could, in a million small ways, affect the bureau's operations," said Benjamin Olson, an attorney at the law firm BuckleySandler LLP.

Separately, Lisa Gilbert of the consumer advocacy group Public Citizen said the ruling "is not going to change anything day to day" for the agency.

A panel of three judges on the U.S. Court of Appeals for the District of Columbia circuit ruled in PHH Corp. vs. CFPB that the 2010 Dodd-Frank Act crafted the director's position in a manner that consolidated too much power at the top. Judge Brett Kavanaugh, who authored the majority opinion, argued that the CFPB's director has more power than virtually any other government official, save the president.

To remedy this, Kavanaugh ruled that the director must report to the president. The agency's Republican opponents viewed the ruling as a victory for their efforts to overhaul the CFPB, and Democrats largely brushed off the decision as a minor setback. The decision is at least a small loss for President Obama, who championed Dodd-Frank and counts the creation of the CFPB, with its political independence, as a hallmark achievement of his presidency.

Future Democratic administrations might also want the CFPB to remain politically insulated, but if the D.C. circuit's decision stands that might be more difficult. "Now, it's going to be harder for an administration to disown actions taken by the CFPB," Olson said.        Read the entire article at MORNING CONSULT

NCUA to CFPB: Butt Out on Payday Loans

The NCUA-and not the CFPB-should regulate small-dollar lending by federal credit unions, NCUA Chairman Rick Metsger said Tuesday.

Commenting on the CFPB's proposed rules regulating payday loans, Metsger said that his agency developed the payday loan alternative (PAL) program and has ensured that members are well-protected. And so, he said, the CFPB's oversight is not needed.

The CFPB issued the proposed rules in June and comments on them are due by Friday. So far, more than 188,000 comments have been filed with the CFPB. The payday loan industry has encouraged borrowers to file comments opposing the rules.

CUNA has filed its comments, while NAFCU has not yet done so.

In his letter, Metsger said that the NCUA protects members of federal credit unions.

"As the prudential regulator for federal credit unions, NCUA already ensures that members receive the type of protections the Bureau is seeking to address," he wrote.

He added that while the CFPB has said the proposed rules would exempt the PAL program, in reality, the rules would impose new requirements on credit unions offering the loans. They also would eliminate the flexibility the NCUA has in altering the program.

"The Bureau should therefore defer to determinations of the FCU prudential regulator about this product," Metsger wrote.   Read more at CREDIT UNION TIMES

No, L.A. County, payday loans aren't the enemy: Guest commentary

The Los Angeles Board of Supervisors recently voiced unanimous support for the Consumer Financial Protection Bureau, a federal agency regulating the payday loan industry since its inception in 2010. "We believe protecting families and their pocketbooks is good public policy," Supervisor Hilda Solis argued.

Considering the CFPB's corrupt administration, the affirmation is rich in irony. Congressman Sean Duffy, R-Wis., is on-record stating that "the CFPB has been riddled with allegations of discrimination based on an employee's race, their age gender, and now sexual orientation."

But that didn't stop Sen. Elizabeth Warren, D-Mass., and other big-government Democrats from adding their voices to the chorus supporting the CFPB's efforts to "level the playing field." The agency now transcends consumer protection to inundate lenders with crippling and counterproductive regulations. The government agency - created out of fear after the 2008 financial crisis - has gone rogue, inadvertently barring individuals and families from the short-term loans often needed to survive and thrive.

Solis suggests that those who rely on payday loans "are trapped in cycles of high-cost debt." It's a talking point regurgitated to justify the CFPB's existence, but ultimately one with little factual standing.

A 2009 study from Clemson University found that neither the legality of payday lending nor an increase in the number of loan stores led to higher rates of bankruptcies - corroborating earlier research from Dartmouth College and the Federal Reserve Bank of New York. Professor Michael Maloney, who co-authored the study, wrote that payday loans "appear to increase the welfare of consumers by enabling them to survive unexpected expenses or interruptions in income." In his words, payday loans "are not harmful to their users." Read the entire story at LOS ANGELES DAILY NEWS

For Trump, the real dirty word is 'CFPB'

In case you haven't realized it, Republican presidential candidate Donald Trump wants to grab you by the p-word.

And by that I mean "purse."

Leaving aside other things that might be snatched away if the Raging Pumpkin of Doom becomes the country's groper-in-chief, let's turn our attention to the Consumer Finance Protection Bureau. The CFPB is the cop on the personal finance beat that just busted Wells Fargo for bilking customers holding nearly 1 million accounts out of at least $2.5 million.

John Stumpf, the CEO of Well Fargo, got a good and thorough scolding from the senator representing the state of Righteous Indignation, Sen. Elizabeth Warren (D-Mass.). Then Stumpf suddenly remembered he wanted to "retire" in such a hurry that he gave up $41 million in unvested stock plus his salary.

This isn't because Stumpf and the board of Wells Fargo suddenly found themselves conscience-stricken. Blaming the entire years-long scam on thousands of low-level employees pretty much proves they're shameless in expecting us to believe that 5,300 bad apples in offices across the country all spontanesouly contrived the exact same grift. I think we safely can assume the board decided Stumpf had a pressing need to spend his golden years fishing in much the same way that Michael Corleone decided in "The Godfather" that Fredo likewise needed to go chase some trout. It's not personal, it's strictly business.

And business at Wells Fargo is hurting. The scandal prompted California to suspend Wells Fargo from handling any state business for a year, while Illinois yanked $30 billion worth of business out of the bank and the city of Chicago took away another $25 million in investments.

In addition to handing our nation's bankers a $41 million warning that they maybe should knock off the stealing from their own customers, the CFPB has slapped financial services firms hard enough that to make them cough up $11 billion to more than 25 million cheated consumers. But the CFPB -- founded and now fairy godmothered by Sen. Warren -- would be wiped out under Trump's stated plan to repeal the Dodd-Frank financial overhaul rules passed by Congress.

So, does that mean any big fan of financial fairness should automatically vote for She Who Must Be Obeyed? Not necessarily so.

Despite the fact that Sen. Warren is strongly backing Democratic presidential candidate Hillary Clinton, consumer advocates are wary about what Clinton might do in the White House. In a 2003 book, Warren herself charged that after opposing the truly awful bankruptcy "reform" bill as first lady in 1998, Clinton reversed her stand and voted for the bill as a freshman Senator in 2001, after getting $140,000 in contributions from banking executives.     Read the entire article at CHICAGO TRIBUNE

CFSA Projects More Than One Million Customers Voice Opposition to CFPB's Restrictive Payday Lending Rule

CFPB Must Clear Massive Backlog

CFSA Announces CommentWatch Portal  to Track Progress

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Killer New Regulations On Loans Hurt Women, Blacks The Most

A new report Monday shows many Americans will be negatively effected by new regulations imposed on lending by the Consumer Financial Protection Bureau (CFPB).

The financial area most effected by these new rules is payday lending, according to the Competitive Enterprise Institute (CEI). Payday loans are short-term loans made to individuals through banks, lending businesses, and online stores. They usually carry a high interest rate and require the individual to write a post-dated check for the amount they wish to borrow.

The average payday loan is just $375, and typically range from $100-500. The average maturity on these loans is just two weeks, and interest accrued ranges between $15-100.

Frequently used by consumers who have experienced some sort of exogenous shock, like an emergency or unexpected financial liability, these loans can be the lender of last resort for those who find themselves in a serious pickle. The report estimates that around 12,000,000 Americans received a payday loan in 2015.

"Federal regulators want more restrictions on payday loans, but that will hurt people who urgently need a short term loan but lack rainy-day savings or credit cards," Harry B. Miller, author of the CEI report, tells The Daily Caller News Foundation.

In situations where consumers are in need of quick cash, payday loans can be a much more preferable option to either forgoing necessary goods and services or failing to meet other financial obligations.

Those seeking payday loans tend to be "younger, lower-to middle-income consumers, with incomes averaging about $35,000," the report says. Payday borrowers are also far more likely to be "female, African American, or both."

The report notes that the impact of the new CFPB regulations result in nearly a three-fourths revenue reduction in the payday lending industry. The results of that reduction, experts say, will be that many of the some 20,000 payday lending fronts in the U.S. will be rendered unprofitable and will be forced to close up shop.      Read the story at DAILY CALLER

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