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CFPB Director Cordray Issues Warning to Bankers

Posted in CFPB General, Richard Cordray

Director Cordray’s remarks to the Clearing House yesterday should unsettle bankers and payday lenders alike. In his talk, Director Cordray challenged bankers to bow to the inevitable. He suggested that sooner, rather than later, the industry should invest the billions of dollars required to build a payment system with “faster and even real-time payments” where “the interests of consumers remain at the top of [bankers'] minds.” The system envisioned by Director Cordray would be guided by four principles:

First, faster payments should bring with them faster access to the funds that a consumer deposits…. Second, a faster payment system should include real-time access to information about the status of an account as well as protections from hair-trigger assessments of fees…. [Director Cordray does not favor a "model based on 'bounced check' fees." Get ready for a tough overdraft fee rule.] Third, faster payments must be accompanied by robust consumer protections with respect to fraudulent or otherwise unauthorized transactions and erroneous debits…. Fourth, and finally, a faster payment system should be accessible to all consumers and not just to the most privileged.

Director Cordray admonished banks that accept as customers for payment services “unscrupulous lenders and their payment processors.” Also, he criticized banks on the other side of payment transactions, observing that “consumers expect their own bank or credit union to be on their side.” All too often, he said, these institutions fail to honor stop payment orders, revocation orders and requests to close accounts to halt the abuse.

So who are the “unscrupulous lenders” of concern to Director Cordray? First, of course, are out-and-out fraudsters. Citing a case of a consumer who was cheated by an online payday lender that bilked consumers for over $100 million, Director Cordray noted that electronic payment systems “can be misused to victimize consumers unless banks and the system administrators work to police and enforce safeguards.”

But non-fraudulent payday lenders also came in for criticism. Director Cordray pointedly contrasted ACH return rates for credit cards, mortgage loans, and auto loans, pegged by JP Morgan Chase at less than 1 percent on average, to a “staggering” 25 percent return rate on payments for payday loans. He went on to criticize “fishing expeditions” to collect payments and the “particularly common and troublesome … practice of some online lenders [of] repeatedly sending automatic debits to collect payments.” Citing a few egregious examples, he added that, surely, “the financial institutions that accept these unscrupulous lenders and their payment processors as clients need to do a better job of ensuring that they are honoring the protections afforded consumers under the Electronic Fund Transfer Act.”

Director Cordray noted that the EFTA, TILA and NACHA rules are designed to protect consumers and merchants alike. “But even if these rules were all that they should be, merely having rules and safeguards is not enough – they need to be policed and enforced aggressively if they are to have their intended effect of actually protecting consumers.” Payday lenders should take heed of the continuing pressure on their banks: Steps need to be taken to taken to reduce return rates, potentially including new limits on repeat submissions of rejected payments. Director Cordray does not sound like a regulator who thinks Operation Choke Point has gone too far.

CFPB gives guidance and answers FAQ on the new Closing Disclosure

Posted in CFPB General, CFPB Rulemaking, TILA / RESPA

On November 18, 2014, the CFPB staff and Federal Reserve Board co-hosted a webinar that addressed questions about the Final TILA-RESPA Integrated Disclosure Rule that will be effective for applications received by creditors or mortgage brokers on or after August 1, 2015.  The webinar focused on the Closing Disclosure and addressed specific questions regarding the content of the Closing Disclosure.

The webinar is the fourth in a series to address implementation of the new rule.  Topics covered in the past include an overview of the final rule, frequently asked questions, and the loan estimate form.  Many of the issues covered were in response to questions received by the CFPB from mortgage industry stakeholders and technology vendors who need additional information in order to facilitate the development of compliance and quality control procedures and software.

During the webinar the CFPB staff provided a high-level walk through of the Closing Disclosure Form and addressed several issues, including the following:

•     For transactions with a seller, the staff advised that the sales price should be disclosed at the top of page 1, and that for transactions without a seller, such as a refinance, a creditor should disclose the appraised value and label it “appraised prop value” (assuming there is an appraisal).  In addition, the CFPB staff referred to comment § 1026.38(a)(3)(vii)-1 and said that in cases where the creditor has not yet obtained an appraisal, the rule provides some degree of flexibility and allows creditors to disclose an estimated value as long as it is labeled “estimated prop value.”

•    The staff also said that although the categories identified on page two of the Closing Disclosure are the same as those on the Loan Estimate, the Closing Disclosure allows greater flexibility for revisions to the spacing.  For example, the number of rows can be reduced or added by the creditor for each category based on need.  According to the CFPB staff, if the rows provided are not sufficient to disclose all the items, page two may be broken into two pages – page 2(a) and page 2(b), with loan costs listed on 2(a) and other costs on 2(b).  The CFPB staff noted that Form H-25(h) in Appendix H is an example of how to divide page two into separate pages.  The staff referred to the CFPB’s TILA/RESPA Integrated Disclosure—Guide to the Loan Estimate and Closing Disclosure form  that is available on its regulatory implementation website, along with sample forms, for additional guidance.

•     The staff advised that charges disclosed in one category of the Loan Costs section in the Loan Estimate may need to be disclosed in a different category of the section in the Closing Disclosure.  For example, if title charges were disclosed in the Services You Can Shop For category of the Loan Costs section in the Loan Estimate and the borrower selected the title company identified by the creditor on the written list of providers, the title charges would have to be disclosed in the Services Borrower Did Not Shop For category of the Loan Costs section the Closing Disclosure (because the borrower would not have actually shopped for a provider under the rule).

•     The staff said that under “Other Costs” on page two of the Closing Disclosure, general lender credits not associated with any particular item must be listed at the bottom of the page as a negative number.  The lender credit must be listed along with a narrative description if any refund is being provided by the creditor pursuant to the good faith analysis of charges.  Notably, the CFPB staff said that lender credits associated with specific closing costs must be disclosed as paid by others and have an “L” for lender designation.

•     The CFPB staff pointed out that the Loan Estimate contains less detail with regard to transfer taxes than the Closing Disclosure.  The main difference between the two forms in this respect is that transfer taxes are itemized on the Closing Disclosure as opposed to aggregated into a single sum on the Loan Estimate.  The itemization is for each tax and for each government entity because multiple taxes may be assessed by each government entity.

In addition to giving a detailed walkthrough of the Closing Disclosure Form, the CFPB staff used the webinar as an opportunity answer a variety of questions posed by the industry.  We have prepared below an unofficial summary of the questions addressed by the CFPB staff. More >

CFPB issues FY 2014 financial report; GAO finds material weakness in CFPB reporting controls

Posted in CFPB General

The CFPB has issued its financial report for its 2014 fiscal year, which ended on September 30, 2014.  Perhaps most illustrative of the CFPB’s growth are the report’s statistics on the CFPB’s employees and funding.  The report indicates that the number of CFPB employees grew from 663 in FY 2011 to 1,443 in FY 2014.  Transfers to the CFPB from the Fed (which are capped by Dodd-Frank at a pre-set percentage of the Fed’s total 2009 operating expenses, subject to an annual adjustment) increased from $162 million in FY 2011 to $534 million in FY 2014.   The report also indicates that as of the end of FY 2014, 45% of the CFPB’s employees were in its Supervision, Enforcement and Fair Lending Division.

The report includes the CFPB’s annual report on its civil penalty fund (CPF).  It states that as of September 30, 2014, the CPF had $112.8 million in funds available for future allocation to harmed consumers and/or financial education.  Curiously, the report indicates that $13.38 million of the CPF was allocated for financial education in FY 2013 but there was no allocation in FY 2014. The report includes information on civil penalties collected by the CFPB in FYs 2013 and 2014, which amounted to, respectively, $49.5 million and $77.5 million. It also provides information on allocations made to consumers from the CPF during FYs 2013 and 2014.

The report contains an independent auditor’s report from the U.S. Government Accountability (GAO).  In the audit report, the GAO states that during its FY 2014 audit, it found “serious control deficiencies that affected CFPB’s determination and reporting of accounts payable accruals.  Specifically, we found that CFPB did not have effective procedures in place to determine and record an appropriate amount for goods and services received but not yet paid as of September 30, 2014.  Additionally, CFPB did not have effective review procedures to timely detect and correct inaccuracies in the accrual amounts.”

The GAO concluded that these deficiencies “represent a material weakness” in the CFPB’s internal controls.  The GAO notes that it had reported a significant deficiency in the CFPB’s reporting of accounts payable in its FY 2013 audit opinion but the corrective actions taken by the CFPB were insufficient to remedy the deficiency.  (According to the GAO, a “significant deficiency is a deficiency in internal controls “that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.”)  The GAO’s report outlines the steps the CFPB needs to take to remedy the deficiencies and warns that “because CFPB continues to grow as an agency, which has resulted in higher volumes of transactions each year, it is imperative that it address these issues in an effective and timely manner.”  The GAO also found a significant deficiency in the CFPB’s internal controls over accounting for property and equipment.

In a letter responding to the GAO’s audit report, Director Cordray outlines various corrective steps the CFPB plans to take in FY 2015 to remediate the deficiencies found by the GAO.

 

OIG updated work plan includes evaluations of CFPB enforcement-related processes and procedures

Posted in CFPB General

The Office of Inspector General’s (OIG) work plan, updated as of November 7, 2014, indicates that the OIG’s ongoing projects include audits of the CFPB’s information security program, pay and compensation program, distribution of civil penalty funds, public consumer complaint database and headquarters renovation costs.  Such projects also include an evaluation of the CFPB’s hiring process.

Among the OIG’s planned projects are an evaluation of the processes used by the CFPB’s enforcement office for protecting confidential information and an evaluation of the CFPB’s compliance with Dodd-Frank Act requirements for issuing civil investigative demands.  The OIG also plans to conduct an audit of the CFPB’s pay and compensation system, which will include an assessment of the controls around setting employees’ pay.

CFPB highlights alleged credit reporting errors relating to discharged student loans of disabled veterans

Posted in Credit Reports, Military Issues, Student Loans

In a new blog post, the CFPB provides credit reporting advice to service-disabled veterans who take advantage of federal student loan forgiveness available from the Department of Education for veterans who receive a 100 percent disability rating from the Department of Veterans Affairs.  The CFPB encourages veterans who use this benefit to confirm that their student loan servicer is providing correct information about their loan discharge to credit bureaus.  The blog post appears to have been triggered by complaints or reports of alleged credit reporting errors the CFPB has received from service-disabled veterans.

While framed as advice for veterans, the blog post also appears intended to serve as a warning to servicers.  Without providing any information as to the nature of the alleged errors, the CFPB stresses how such errors can negatively impact veterans.  It cites the complaint of a veteran whose credit score allegedly “fell by 150 points as a result of this type of error” and, as an “example of what could happen if a veteran tried to buy a home after a credit reporting error caused similar damage to her credit profile and score,” indicates such veteran could pay $45,000 in additional interest over the life of her mortgage loan.  The CFPB also reminds servicers that, in a bulletin issued earlier this year, companies who furnish information to credit bureaus were put “on notice” of their obligation to investigate disputed information.  The CFPB comments that it “will take appropriate action, as needed” and “will also continue to closely monitor complaints from veterans and other disabled student loan borrowers to make sure student loan servicers are furnishing correct information to the credit bureaus about disability discharges.”

Given the comments made by the CFPB in its blog post, we’re left wondering if the loans in question weren’t simply reported in accordance with the current contractually required standards for reporting discharged Title IV loans, and, if so, if the CFPB isn’t really taking issue with those standards.  In circumstances like this, it would be helpful if the CFPB would discuss its concerns with industry members, perhaps involve the Department of Education in those discussions, and then provide industry members with an opportunity to make changes in their reporting, rather than just asserting that the reporting is incorrect or inaccurate.

CFPB issues bulletin on consideration of public assistance income in credit decisions

Posted in Fair Credit, Mortgages

The CFPB has issued a new bulletin (Bulletin 2014-03) that is intended “to remind creditors” of their ECOA/Regulation B obligations with respect to consideration of public assistance income and relevant standards and guidelines regarding verification of  Social Security Disability Insurance and Supplemental Security Income (together, Social Security disability income).

Based on an accompanying CFPB blog post, the bulletin appears to have been triggered by reports to the CFPB from consumers alleging that lenders were not complying with applicable rules.  While the CFPB’s blog post and bulletin are focused on mortgage lending, it is important to note that similar fair lending concerns apply to non-mortgage consumer credit.

The bulletin recites the ECOA and Reg B ‎rule that prohibits creditors from discriminating in any aspect of a credit transaction because all or part of an applicant’s income derives from a public assistance program, such as Social Security income.  The bulletin also notes that Reg B permits creditors, in a judgmental system of evaluating credit, to consider whether an applicant derives income from public assistance for purposes of determining a pertinent element of creditworthiness.  Accordingly, a creditor can consider how long an applicant will likely remain eligible to receive public assistance income.

The bulletin warns that fair lending concerns may arise if a creditor requires documentation beyond that required by applicable agency or secondary market standards and guidelines to demonstrate that Social Security disability income is likely to continue, such as the nature of an applicant’s disability or a letter from the applicant’s physician.  According to the CFPB, prohibited disparate treatment can exist if a creditor imposes documentation requirements on public assistance recipients beyond those it imposes on other applicants.  The CFPB further comments that disparate impact liability can arise if an income verification standard has a disproportionately negative impact on applicants receiving public assistance income.

The bulletin discusses the consideration of Social Security disability income for purposes of the Regulation Z ability-to- repay/qualified mortgage rule.  It references Appendix Q which allows for verification of such income by means of a Social Security Administration benefit  verification letter and states that a creditor can consider such income as “effective and likely to continue” if the letter does not give a defined expiration date within three years of loan origination.

The bulletin also discusses relevant HUD and VA standards for, respectively, FHA-insured and VA-guaranteed mortgage loans, and Fannie Mae and Freddie Mac guidelines for mortgage loans eligible for purchase.

 

Further Thoughts on the St. John’s Consumer Arbitration Study

Posted in Arbitration

Jeff Sovern, through his Consumer Law & Policy Blog, recently responded to our criticism that the St. John’s study didn’t include arbitration provisions with opt-out features. Jeff makes the point that since consumers don’t understand the significance of arbitration provisions, they would not understand what they are opting out of.

While we (and the more than 20 courts that have found opt-out procedures to be understandable and fair) challenge the premise of their argument, we would urge consumer advocates to strive to increase consumer knowledge about arbitration rather than reflexively criticizing it.

Jeff readily acknowledges that his study did not attempt to weigh the relative merits of arbitration and class actions. That is unfortunate, since that is an area that is critically underserved by empirical analysis. A step in filling that void was a lengthy report released last December by an affiliate of the U.S. Chamber of Commerce that set forth “strong evidence that class actions provide far less benefit to individual class members than proponents of class actions assert.” It concluded that the vast majority of the class actions it studied “produced no benefits to most members of the putative class” but did enrich the attorneys.

Do consumers understand what they may (or more likely, may not) achieve if they resolve their disputes as members of a class and decline to opt out of the class? What is the Flesch-Kincaid score of the typical class action opt-out notice or settlement agreement? Studying questions such as these would help shed light on how consumer arbitration compares to class action litigation in the real world and would provide a more meaningful context for evaluating the results of the St. John’s study.

Finally, Jeff’s co-author, Paul Kirgis, has written separately to make the point that our comments on the study “don’t actually address the core problem we address in our article–that citizens are being unwittingly and unwillingly forced to give up important (and constitutionally guaranteed) procedural rights.” But we did address that point, in stating that: “Typically, if an individual agrees to a contract and receives its benefit, he or she will not be heard to complain that the contract is unenforceable because it could not be understood. If a contract is understandable enough to bind a consumer to its business terms, it should be understandable enough to bind the consumer to the contract’s dispute resolution provision. Contracts as a whole are legal documents that affect the parties’ rights. Taking the arbitration clause out of context ignores that the entire contract is supposed to be based upon consent, a meeting of the minds.”

Congress passed the Federal Arbitration Act in 1925 precisely because arbitration had been treated differently than other contract terms and arbitration agreements were rarely enforced because they were singled out for special treatment.  Paul appears to be advocating a return to those “good old days” when arbitration agreements were routinely discriminated against, even though he acknowledges in his blog comments that it “may very well be true, at least some of the time” that arbitration is better for consumers than litigation.  Given his acknowledgement that arbitration can benefit consumers, we again hope that Paul and his colleagues will assist in implementing constructive solutions.  Paul writes that “[i]t is certainly true that citizens can choose to give up their adjudicative rights, but those choices have legitimacy only if they are knowing and voluntary.”  We would welcome suggestions from Paul, Jeff and their colleagues on how consumer arbitration language could be drafted in order to pass muster under the criteria they applied in their study.  If wordsmithing is the main issue, there may be a way to bridge the gap between arbitration advocates and consumer advocates.

CFPB issues prepaid account study

Posted in Prepaid Cards

Simultaneously with the release of its 870-page prepaid account proposal last week, the CFPB issued a “Study of prepaid account agreements.”  On December 12, 2014, from 12 p.m. to
1 p.m. ET, Ballard Spahr attorneys will hold a webinar on the proposal.  A link to register is available here.

To conduct the study, the CFPB identified 325 publicly available account agreements for prepaid products that appeared to meet the proposal’s definition of the term “prepaid account.”  The CFPB looked at agreements for general purpose reloadable (GPR) prepaid cards, including GPR cards marketed for specific purposes (such as travel or receipt of tax refunds) or specific users (such as teenagers or students), payroll cards, cards used for the distribution of certain government benefits and prepaid programs specifically used for P2P transfers.  The CFPB did not look at agreements for gift cards and other prepaid programs that would not be covered by its proposal.

In the proposal’s background information, the CFPB states that while it “collected a large number of agreements [for the study], it cautions that this collection is neither comprehensive nor complete.”  It further states that “there does not currently exist any comprehensive listing of prepaid card issuers, program managers, or programs against which the Bureau could compare the completeness of its analysis.”

The study analyzes provisions in the agreements reviewed by the CFPB that dealt with error resolution (including provisional credit), liability limits, access to account information, overdraft and treatment of negative balances and declined transaction fees, deposit insurance, and fee disclosure.  The study contains the CFPB’s findings and observations about what information these provisions did or did not contain and related statistics.  It is interesting that while a significant portion of the CFPB’s proposal deals with prepaid accounts with overdraft and credit features, 96.62% of all of the agreements reviewed by the CFPB offered no formal opt-in overdraft service and 77.54% of all such agreements imposed no fees for negative balances.  (The CFPB did not count an agreement as one imposing no such fees if it did not contain information about negative balance fees.  Agreements without such fee information comprised 12.92% of all agreements reviewed by the CFPB.)

The CFPB also found that 77.85% of the agreements it reviewed contained error resolution provisions (including provisional credit) that substantially tracked Regulation E requirements.  In the proposal’s background information, the CFPB acknowledges that it found “a significant majority of [prepaid] products are already substantially in compliance with existing Regulation E provisions.”  Ironically, the CFPB uses this finding to dismiss objections about the regulatory burdens its proposal imposes, stating “objections about the burden of including various types of products within the ambit of this proposed rule are largely negated by” this finding.

CFPB settles second loan originator compensation case

Posted in CFPB Enforcement, Mortgages

The CFPB entered into a stipulated order and final judgment with Franklin Loan Corporation (Franklin) to settle allegations that Franklin paid its employee loan originators compensation based on the interest rates charged on mortgage loans in violation of the Regulation Z loan originator compensation rule.  Without admitting or denying the allegations, Franklin agreed to pay $730,000 in connection with the settlement.  The CFPB advised in announcing the settlement that it did not seek a civil money penalty based on Franklin’s financial condition and the CFPB’s desire to maximize relief available directly from Franklin to affected customers.

The alleged conduct occurred before January 1, 2014, and was subject to the original loan originator compensation rule adopted by the Federal Reserve Board under Regulation Z.  On January 1, 2014, a revised version of the rule adopted by the CFPB pursuant to Dodd-Frank became effective.

The CFPB alleges that before the original loan originator compensation rule became effective on April 6, 2011, Franklin would pay its employee loan originators a “commission split” that was between 65% and 70% of the gross loan fees, that included the origination fee, discount points and retained cash rebate.  According to the CFPB, the retained cash rebate was the portion of the rebate created by a premium interest rate set by the loan originator that was retained by Franklin and not credited to the borrower.  The CFPB asserts that this compensation method encouraged the loan originators to place consumers in higher interest rate mortgage loans.

The CFPB also asserts that Franklin realized that the loan originator compensation rule would prohibit this compensation method, as the rule does not permit a loan originator to be compensated based on the terms of a mortgage loan (other than compensation based on a fixed percentage of the loan amount).  According to the CFPB, Franklin wanted to continue to pay its loan originators financial incentives to originate high-interest mortgage loans, and devised a new compensation plan.  The CFPB alleges that under the new plan Franklin would pay its loan originators (1) an upfront commission based on a set percentage of the loan amount, and (2) a quarterly bonus paid from the loan originator’s individual “expense account,” and that contributions to the “expense account” were based on a percentage of the retained rebate on each loan.

The CFPB considered the contributions to the expense account, which ultimately were paid to the loan originator as a quarterly bonus, to be based on the interest rates charged on the originator’s loans.  The CFPB viewed the bonus payments as compensation that violated the loan originator compensation rule.  The $730,000 settlement amount was the total amount of quarterly bonuses that the CFPB asserts were paid by Franklin to its loan originators from
June 2011 to October 2013.

This is the second settlement entered into by the CFPB based on alleged violations of the loan originator compensation rule.  (We reported previously on the earlier settlement with
Castle & Cooke Mortgage.)

The mortgage industry should take note of CFPB activity in this area.  The CFPB likely will focus on loan originator compensation during examinations.

 

CFPB holds field hearing on proposed rules for prepaid accounts

Posted in CFPB Rulemaking

Ballard Spahr to hold a webinar on the proposal at 12 p.m. ET on December 12th. A link to register is available here.

Yesterday I attended the Consumer Financial Protection Bureau’s (CFPB) field hearing in Wilmington, Delaware, at which the CFPB unveiled and accepted public comment on its long-awaited proposed rule for prepaid accounts under the Electronic Fund Transfer Act (Regulation E) and the Truth In Lending Act (Regulation Z) (the Rule).  A copy of the 870-page proposal and request for public comment can be found here.  For a detailed discussion of the Rule, please see our legal alert.

CFPB Director Richard Cordray delivered prepared remarks explaining the agency’s desire to afford strong consumer protection for, and to fill “gaps” experienced by, consumers in the prepaid market, and highlighting some of the general protections, obligations and restrictions of the Rule.  Addressing one of the more controversial aspects of the proposal, the extension of certain credit card protections to prepaid customers whose accounts include credit features, the Director recognized that such protections could make “certain credit features impractical for prepaid cards,” but observed such protections to be “very important in this context.”

At the conclusion of Director Cordray’s remarks, a panel of commentators made individual statements. The panelists included CFPB General Counsel Meredith Fuchs; Douglas Bower, Executive Director and President of the Network Branded Prepaid Card Association; Cecilia Frew, the head of U.S. Prepaid Products for Visa, Inc.; Rashmi Rangan, Executive Director at Delaware Community Reinvestment Action Council, Inc.; Lauren Saunders, an Associate Director at the National Consumer Law Center (NCLC); Steven Streit, Chairman of Green Dot Corporation; and Susan Weinstock, Director of Consumer Banking for The Pew Charitable Trusts.  Following such statements, the panelists each fielded directed but general questions from CFPB representatives in attendance, including Ms. Fuchs, Steven Antonakes, Deputy Director and Associate Director for Supervision, Enforcement, and Fair Lending, and William Wade-Gery, Assistant Director for Card and Payments Markets.

Ms. Fuchs described briefly the efforts and consumer testing undertaken by the CFPB since having received some 220 comments on the original ANPR for prepaid card regulation that came out in 2012, and emphasized that the proposed rule is just that— a proposal regarding which the CFPB is actively seeking comment and feedback.

The panelists generally agreed that the proposal represents an important, and even welcome, first step in the right direction.  For example, Mr. Streit of Green Dot fully supported the rulemaking, seeing it as “another milestone” in the “maturation” of the industry.  He believed it to be a very positive development for consumers and the industry that providers will have a uniform set of rules to follow.  Several commentators hoped the rules would serve to ease some of the problems currently associated with such products or encountered by its users, especially the more vulnerable segments of the unbanked and underbanked populations, such as an inability to easily comparison shop among products, or the difficulty experienced by users in accessing information about the terms of their own accounts, or in doing so without incurring inordinate levels of hidden fees.

Other commentators expressed a general uneasiness, or more specific concerns, about the continuing ability for prepaid accounts to link to a credit feature under the proposal or about other aspects of the proposal.  For example, Ms. Weinstock suggested that the CFPB should delineate more specifically how such credit offers can be marketed to ensure consumers are not pressured or misled into accepting such credit features, and suggested that the model disclosure forms do not include certain information points that would be useful to consumers to know.  Ms. Saunders indicated her organization will urge that no link to credit features be permitted for prepaid accounts under the final rule (stating that a separate credit product could be offered by the prepaid provider instead of as a linked product), and, more generally, that the NCLC would be seeking to tighten rules or to extend their reach where in its view the rules do not go far enough as proposed.

Public comment from the audience was invited and several consumers and non-profit group representatives expressed their views, which tended to reflect similar themes and concerns as those raised by the members of the panel.