ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

Trump Signs CFPB Arbitration Rule Override

Wednesday, November 1, 2017 - Today, President Trump signed H.J. Res. 111, the joint resolution passed by the House and Senate disapproving the CFPB arbitration rule.

Payday-loan borrowers need protection from the poorly-named Consumer Financial Protection Bureau

In an epic, down to the wire vote last week Congressional Republicans narrowly overturned a regulation that would have enriched lawyers at the expense of consumers. But now lawmakers must intervene once again against another consumer-busting rule: the rule put forward by the Consumer Financial Protection Bureau against payday loans.

Unlike the defeated CFPB anti-arbitration rule, which unfairly targeted people who already have access to the traditional financial system, the CFPB small-dollar loan rule unfairly targets people who don't enjoy that access. Payday loans are used by about 12 million people each year who find themselves in dire need of funds to cover urgent expenses, perhaps to pay an unexpected medical bill, fix a broken car, or just to keep the lights on at home.

Payday loans work for a lot of people because, so long as a borrower has an income, a checking account, and an ID, a short-term loan can provide between $100-500 with a 15 percent fee. The truth is that such loans help millions of people bridge a gap during hard times.

Many borrowers prefer payday loans, as revealed by both academic studies and surveys of payday loan customers. Customers prefer payday lenders to traditional banks because they're more affordable, transparent, and have better customer service. And the overwhelming majority of such borrowers (95 percent) say they value having the option to take out a payday loan, because they provide a financial safety net. Read more at WASHINGTON EXAMINER

Trump Continues Successful Deregulatory Blitz With Repeal Of CFPB Rule

The stock market is booming. Unemployment beneficiary numbers have fallen to a 43-year low. Even the New York Times is acknowledging that the American economy "blooms." These improvements do not happen organically, so President Donald J. Trump deserves some credit for helping boost the American economic engine out of eight-years of quagmire.

One of the leading reasons for the sudden boost in economic activity comes from the president's willingness to reduce, cut, and eliminate job-killing regulations that shackled job creation during the Obama-years.

During the Obama presidency, the government pumped our regulations faster than a train bellows smoke. Read more at the DAILY CALLER

The Consumer Financial Protection Bureau (Bureau) has issued a final rule governing the underwriting of certain personal loans with short term or balloon-payment structures, as well as lenders' payment withdrawal practices for those loans and certain additional installment loan products (Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule or Rule).

CFPB Payday Loan Limits Drawing Quieter Response Compared to Its Arbitration Rule

Republican leaders giving mixed signals on whether they will block the small-dollar lending regulation

Over three weeks have passed since the Consumer Financial Protection Bureau finalized a rule that places new limits on small-dollar lending, but leading GOP lawmakers are giving mixed signals about whether members of Congress will aid the financial companies that oppose the regulation - unlike the months-long battle they waged to block a separate CFPB provision on mandatory arbitration clauses.

Despite a flurry of skepticism from lawmakers and financial firms about the small-dollar lending rule while it was pending, the final version, released on Oct. 5, was met with a divided response from the financial services industry. In general, big banks stopped short of criticizing the rule after the CFPB decided to ease restrictions on small lenders such as credit unions, while the Consumer Bankers Association and the payday lending industry cried foul. Read more at MORNING CONSULT

Trump reportedly discussed firing Cordray while signing bill to kill CFPB arbitration rule

Broached subject in Oval Office meeting with House Reps., others

President Donald Trump openly discussed firing Consumer Financial Protection Bureau Director Richard Cordray with members of Congress this week while signing the resolution to repeal the CFPB's controversial arbitration rule, CNBC's Kayla Tausche reported Friday.

On Wednesday, Trump signed H.J. Res. 111, which overturned the arbitration rule, under a provision of the Congressional Review Act, which allows Congress to overturn certain regulatory rules issued by federal agencies by within 60 days of the rules being announced.

The meeting was not open to the media, but the signing was attended by several top Congressional Republicans, including House Financial Services Committee Chairman Jeb Hensarling, R-Texas, who recently announced that he would not be running for re-election.

During the session, Trump, Hensarling, Rep. Sean Duffy, R-Wisc., and others discussed firing Cordray from his position at the CFPB, something that Hensarling has repeatedly called for in recent years.

According to Tausche's report, Hensarling told Trump that he would "expend less energy undoing the CFPB's actions" if he fired Cordray, which led to a lively, but-short-lived discussion about firing Cordray. Read more at HOUSING WIRE

After win on U.S. class actions, finance firms aim to kill payday loan rules

WASHINGTON (Reuters) - After the U.S. Congress killed a rule allowing customers to band together to sue financial firms over disputes, the door may open for a similar attempt to push back a new rule curbing payday lenders, said lawyers and lobbyists on Wednesday.

The Senate on Tuesday killed a rule banning banks, credit card issuers and other financial companies from using "forced arbitration" clauses in account contracts, the most significant roll-back of Obama-era financial policy since President Donald Trump took office.

The decision, passed by a narrow majority of 51 to 50, could set the stage for further attacks on rules enacted by the Consumer Financial Protection Bureau, a regulator created after the financial crisis of 2007-09. Consumer advocates say it plays a critical role in protecting Americans against financial abuse.

New restrictions on payday lenders - also known as "small-dollar" lending - are seen as the potential next target.

"I think payday lending is the next big fight," said Gynnie Robnett, campaign director for Americans for Financial Reform. "The payday lending industry, they are tenacious. This will be a fight and a long fight, for sure."     Read more at REUTERS

Are you MLA compliant? by Noah Fitzgerald, CPP and Jesse Berger, JD

The Military Lending Act (MLA) was passed by Congress in 2006 to protect active duty U.S. service members and their families from excessive interest rates. There are currently about 4.5 million active and reserve military personnel and dependents, with about 87% of those residing in the U.S. or U.S. territories. If you operate within the U.S., you must be aware of what the MLA means for you.

As originally passed, it enacted change along three lines: It capped the APR for covered products to 36%, it required military-specific loan disclosures, and it kept creditors from forcing those covered by the law to submit to arbitration in the event of a dispute. The original version of the law covered only three closed-end loan products: 1) payday loans, 2) auto title loans, and 3) tax refund anticipation loans.

Lenders must now check each applicant's military status

The rule requires lenders to check credit applicants and confirm that they are not a service member or dependent of a service member. Merchant Boost has built the most accurate and cost-effective MLA Validation product available. MLA Validation has built in redundancy to make sure that lenders always have immediate access needed at the time of consumer application. MLA Validation can be used standalone through our Decision Boost platform or can be packaged with our revolutionary Pre-Boost suite.

At Merchant Boost, we specialize in helping you run an efficient, compliant business. We are a leading provider of business information and financial technology solutions. We can help you improve both customer acquisition and payment strategies. Read more at MerchantBoost

Trump wants to sack consumer protection chief but is afraid of turning him into hero for the left

An Oval Office bill signing attended by lawmakers and financial services interest groups devolved into a venting session about Richard Cordray, the embattled director of the Consumer Financial Protection Bureau, according to six people in the room and two people briefed on the conversation.

The bill signed into law Wednesday rolls back a CFPB rule banning language in financial services contracts that keeps customers from banding together in class-action lawsuits. The undoing of the CFPB's proposal, called the "arbitration rule," represents the latest usage by the White House and Congress of their ability to reverse new regulations before they are put into practice.

Rep. Jeb Hensarling, who chairs the House Financial Services Committee and will retire at the end of his term in 2018, remarked that President Donald Trump would expend less energy undoing the CFPB's actions if he removed Cordray. Republicans view Cordray's position as the sole figurehead atop an enforcement agency created by the Dodd-Frank Act as the symbol of postrecession regulatory overreach under President Barack Obama. Read more at CNBC

Consumer bureau harms Americans when it picks the winners and losers

The Consumer Financial Protection Bureau states its mission is to "make consumer financial markets work for consumers, responsible providers, and the economy as a whole." However, the reality is the bureau does not regard all consumers in the market equally. In the interest of political expediency, it seems to treat consumers who deal with some institutions different than those who deal with others.

These exemptions create a disturbing trend where the government picks winners and losers. Moreover, these exemptions limit consumer choices for Americans based on which bank they use. Just a few weeks ago, the CFPB issued its regulation restricting short-term, small-dollar loans. The final rule was designed to target payday lenders, but it also seriously curtails options for families wishing to turn to their bank during times of financial hardship.

Among the many exemptions in the rule, the CFPB will allow banks to make up to 2,500 short-term, small-dollar loans every year. From my perspective, things are either fish or fowl. If the CFPB says something is good for the first 2,499 people that walk into a bank, why does the CFPB think it is bad for everyone that walks in after that?    Read more at THE HILL

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