As suggested by prior blog posts, I am no fan of the direction the CFPB, OCC and FDIC seem to be going with respect to payday and deposit advance loans. These agencies have all signaled a willingness to prohibit these loans without regard to Dodd-Frank’s definitions of the terms “unfair” and “abusive” and without applying… More >
Category Archives: Payday Lending
Subscribe to Payday Lending RSS FeedCFPB’s Consumer Advisory Board hears from payday loan consumers and other supporters
Posted in Payday LendingWe have been critical of the failure of the CFPB’s white paper on payday and deposit advance loans to address the very real benefits of payday loans or the question whether (and when) such benefits outweigh the costs. Similar criticism was also voiced by the Community Financial Services Association of America (CFSA), a national trade… More >
Trade group charges CFPB’s closing of Consumer Advisory Board meeting to public violates federal law
Posted in CFPB General, Payday LendingA letter sent today to the CFPB by an attorney for the Community Financial Services Association of America (CFSA), a national trade organization for payday lenders, asserts that the CFPB violated the Federal Advisory Committee Act (FACA) by excluding the public from portions of today’s meeting of the CFPB’s Consumer Advisory Board (CAB). According to the… More >
CFPB payday and deposit advance loans white paper draws industry fire
Posted in Deposit Advance Loans, Payday LendingThe CFPB’s white paper on payday and deposit advance loans received well-deserved criticism in a letter to Director Cordray from the Community Financial Services Association of America (CFSA), a national trade organization for payday lenders.  The CFSA’s letter characterizes the paper’s data as “demonstrably incomplete and misleading” and indicates that the paper’s “tone, conclusions, and… More >
OCC and FDIC proposed guidance could effectively ban deposit advance loans
Posted in Deposit Advance Loans, Payday LendingLast Thursday, the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation proposed guidance on deposit advance loans. The Federal Reserve Board declined to join the OCC and FDIC and instead provided a general warning that such loans need to be thoughtfully structured and lawfully provided. Comments on the OCC and FDIC proposals must… More >
The shoes are dropping: CFPB study of payday and deposit advance loans precedes reported OCC/FDIC action against deposit advance loans
Posted in Payday LendingEarlier today, the CFPB released a white paper reporting on its study of 15,000,000 storefront payday loans and 100,000 accounts eligible for deposit advances (of which approximately 15% involved a deposit advance during the study period). At the same time (and probably not coincidentally), “people familiar with the matter” leaked that the OCC and FDIC… More >
Update on CFPB payday lending studies
Posted in Payday LendingNormally we do not post about private conversations we have with CFPB staff. However, I have received CFPB staff approval to report on a few conversations I had last week concerning the CFPB’s payday lending studies. I infer from my conversations that the CFPB believes, preliminarily, that at least some meaningful conclusions can be drawn from online… More >
Is another expansion of the CFPB’s complaint system imminent?
Posted in Debt Collection, Payday LendingThe CFPB has announced that it will hold a field hearing on March 28 in Des Moines, Iowa on the Bureau’s consumer complaint system.  The CFPB’s practice has been to use field hearings to announce new initiatives. Director Cordray is slated to give remarks, and we would not be surprised to see Director Cordray announce at the March… More >
Pew payday loan study: what’s new?
Posted in Payday LendingAs previously reported, the Pew Charitable Trusts (“Pew”) released a payday lending report last month (the “Report”), the same day that CFPB Director Cordray made some harsh remarks about payday loan “debt traps” in a speech to the Consumer Advisory Board. We have heard reports that news of the impending Pew Report may have spurred… More >
A bad month for payday lenders
Posted in Payday LendingFebruary was not a good month for payday lenders. As previously reported, on February 20, CFPB Director Cordray expressed pointed concerns about payday and short-term loan “debt traps” in a speech to the Consumer Advisory Board. Perhaps not coincidentally—rumors abound that the events were linked—the Pew Charitable Trust released a new payday lending report later… More >
Shoot first, question later?
Posted in Payday LendingIn his recent post, Alan Kaplinsky rightly warned that recent remarks by Director Cordray strongly imply that payday and other short-term loan products may be in “the CFPB’s line of fire.” What bothers me is that, to my knowledge, the CFPB has not even commenced, much less completed, payday lending studies designed to ascertain whether… More >
Director Cordray targets payday and student lenders in remarks to Consumer Advisory Board
Posted in Payday Lending, Student LoansDirector Cordray’s prepared remarks for yesterday’s meeting of the CFPB Consumer Advisory Board contained some particularly ominous signs for student and payday lenders. In the student lending area, Mr. Cordray focused on perceived similarities between servicing problems experienced by mortgage loan borrowers and those experienced by student loan borrowers. Observing that student loan servicing has the “same problematic [financial] incentive… More >
CFPB announces partnership with Navajo Nation
Posted in CFPB Enforcement, Payday LendingHaving previously announced partnerships with the Cities of Chicago and Newark, the CFPB has now announced its first partnership with a tribal government—the Navajo Nation.  A Memorandum of Understanding between the CFPB and the Navajo Nation Department of Justice addresses the mechanics of the information sharing, such as how the CFPB will respond to third… More >
CFPB highlights collaboration with tribal governments
Posted in CFPB Enforcement, Payday LendingA recent CFPB blog post warning Native Americans receiving payments from the settlement in Cobell v. Salazar that they could be targeted by scammers also highlights the CFPB’s collaboration with tribal governments. In the post, the CFPB indicates that its “enforcement team will continue to be on the watch for scams and other harmful financial… More >
Congress passes bill giving CFPB authority to enforce Military Lending Act and creating civil liability for violations
Posted in CFPB Enforcement, Payday LendingThe 2013 Defense Authorization Bill (H.R. 4310), currently awaiting signature by President Obama, makes several changes to the Military Lending Act. Last week, both the House and Senate agreed to the conference report. The MLA, as implemented by rules issued by the Department of Defense, imposes a 36% rate cap on tax refund loans and… More >
CFPB and City of Chicago to share information
Posted in CFPB Enforcement, Payday LendingAt a November 5 joint press conference with Chicago Mayor Rahm Emanuel, Director Cordray announced that the CFPB and the City of Chicago had entered into an information-sharing agreement. The agreement was touted as the first of its kind between a city and the CFPB. In its press release announcing the agreement, the City of… More >
Proposal for OCC to charter “Federal Financial Services and Credit Companies” draws ire from consumer advocate
Posted in Payday LendingA bill introduced in Congress that would provide for the OCC to charter and regulate “Federal Financial Services and Credit Companies” (FFSCCs) was recently called a “get out of regulation free card” in a blog post by Ed Mierzwinski, U.S. PIRG’s Consumer Program Director.   H.R. 1909, titled “FFSCC Charter Act of 2011″ and introduced in May… More >
Native American tribal payday lending continues to spark debate
Posted in Payday LendingNative American tribal payday lending is on the radar screens of the CFPB and the FTC, as reflected in recent comments from CFPB Director Richard Cordray and FTC Commissioner Julie Brill. More specifically, the agencies have been raising questions about the use of tribal immunity as a defense to state usury laws. In response, the tribal… More >
Reader of CFPB Monitor reports on April 13 Richard Cordray Q&A with SD community bankers and credit unions
Posted in CFPB General, Hot Issues, Mortgages, Payday LendingWe received an email from one of our readers, reporting on a recent meeting between CFPB Director Cordray and representatives of the South Dakota banking and credit union industries. We very much appreciate the report and encourage other readers to share their observations with us. Topics addressed in the meeting included the impact of consumer… More >
CFPB keeps heat on payday lending
Posted in Payday LendingThe CFPB wants the public to read the transcript of the field hearing on payday lending it held in Birmingham, Alabama on January 19 and give the CFPB feedback on the issues raised at the hearing. Some of those issues are included in the notice published by the CFPB in the Federal Register which sets an… More >
Let the games begin!
Posted in CFPB General, Hot Issues, Payday LendingThe payday loan industry is abuzz with the news that the CFPB has commenced its initial payday lender exam, operating in tandem with state examiners and providing virtually no advance warning. This news comes on top of a report that the CFPB has begun to examine non-bank mortgage companies. It should serve as yet another… More >
The Native American Tribes respond to Director Cordray
Posted in Payday LendingChris Willis’ recent post referred to the fact that Director Cordray during the Q&A session after his speech to NAAG disparaged Internet payday loans being made by certain Indian tribes. Here is an unofficial audio transcription of the exchange between the Colorado Attorney General, Director Cordray and Julie Brill, a FTC Commissioner: John Suthers: In Colorado… More >
Deposit advance loans under attack
Posted in CFPB General, CFPB Rulemaking, Deposit Accounts, Payday LendingCoincidentally (or not), on the same day the CFPB launched its overdraft fee initiative, previously discussed, 250 national, state and community organizations and individual activists wrote the heads of the CFPB and the federal banking agencies to attack deposit advance products. Both the CFPB in its payday lending exam manual and the authors of this letter… More >
“Payday lending” exam procedures: some highlights
Posted in Payday LendingWe’ve taken a look at the CFPB’s just-issued Short-Term, Small-Dollar Lending Examination Procedures, the latest update to the CFPB’s larger Supervision and Examination Manual, and think there are several noteworthy highlights. The procedures apply broadly to both closed-end and open-end loans that involve small dollar amounts, short-term repayment periods and lender access to the borrower’s… More >
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