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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsRichard Cordray, consumer bureau announce new supervision of payday lenders
Richard Cordray, consumer bureau announce new supervision of payday lenders
by Joan McCarter
Last week, Richard Cordray and the Consumer Financial Protection Bureau started out with a bang, establishing new guidelines for regulating mortgage lender practices for banks, and for the first time, also for non-bank mortgage lenders.
This week, they're rolling out the guidelines for payday lenders. These businesses, and some banks that have created short-term, payday-type lending products, have proliferated in the past two decades, and the non-bank businesses have been largely unregulated by the federal government. Cordray is holding a field hearing in Birmingham, Alabama on Thursday to gather information and input on the payday lending market.
http://www.dailykos.com/story/2012/01/19/1056374/-Richard-Cordray,-consumer-bureau-announce-new-supervision-of-payday
by Joan McCarter
Last week, Richard Cordray and the Consumer Financial Protection Bureau started out with a bang, establishing new guidelines for regulating mortgage lender practices for banks, and for the first time, also for non-bank mortgage lenders.
This week, they're rolling out the guidelines for payday lenders. These businesses, and some banks that have created short-term, payday-type lending products, have proliferated in the past two decades, and the non-bank businesses have been largely unregulated by the federal government. Cordray is holding a field hearing in Birmingham, Alabama on Thursday to gather information and input on the payday lending market.
We recognize the need for emergency credit. At the same time, it is important that these products actually help consumers, rather than harm them, said CFPB Director Richard Cordray in his opening remarks at todays field hearing. Now, the Bureau will be giving payday lenders much more attention. [...]
Payday loans are typically marketed to bridge a cash flow shortage between pay or benefits checks. They generally have three features: the loans are small dollar amounts; borrowers must repay the loan quickly; and they require that a borrower give lenders access to repayment through a claim on the borrowers deposit account.
Most loans are for several hundred dollars and have finance charges of $15 or $20 for each $100 borrowed. For the two-week term typical of a payday loan, these fees equate to an Annual Percentage Rate ranging from 391 percent to 521 percent. Loan amounts and finance charges vary depending on state law. If the consumer does not repay the loan in full by the due date, the loan agreement typically permits the lender to cash the consumers check to obtain repayment.
With the establishment of the CFPB, a federal agency for the first time can supervise not only bank payday lenders but also all nonbank payday lenders. Specifically, the Short-Term, Small Dollar Lending Procedures describe the types of information that the agencys examiners will gather to evaluate payday lenders policies and procedures, assess whether lenders are in compliance with federal consumer financial laws, and identify risks to consumers throughout the lending process. The procedures track key payday lending activities, from initial advertisements and marketing to collection practices.
Payday loans are typically marketed to bridge a cash flow shortage between pay or benefits checks. They generally have three features: the loans are small dollar amounts; borrowers must repay the loan quickly; and they require that a borrower give lenders access to repayment through a claim on the borrowers deposit account.
Most loans are for several hundred dollars and have finance charges of $15 or $20 for each $100 borrowed. For the two-week term typical of a payday loan, these fees equate to an Annual Percentage Rate ranging from 391 percent to 521 percent. Loan amounts and finance charges vary depending on state law. If the consumer does not repay the loan in full by the due date, the loan agreement typically permits the lender to cash the consumers check to obtain repayment.
With the establishment of the CFPB, a federal agency for the first time can supervise not only bank payday lenders but also all nonbank payday lenders. Specifically, the Short-Term, Small Dollar Lending Procedures describe the types of information that the agencys examiners will gather to evaluate payday lenders policies and procedures, assess whether lenders are in compliance with federal consumer financial laws, and identify risks to consumers throughout the lending process. The procedures track key payday lending activities, from initial advertisements and marketing to collection practices.
http://www.dailykos.com/story/2012/01/19/1056374/-Richard-Cordray,-consumer-bureau-announce-new-supervision-of-payday
Consumer Bureau Targets Payday Loans
http://online.wsj.com/article/SB10001424052970204301404577171001066772154.html
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Richard Cordray, consumer bureau announce new supervision of payday lenders (Original Post)
ProSense
Jan 2012
OP
Kingofalldems
(38,458 posts)1. These scavengers need to be heavily regulated
Turbineguy
(37,343 posts)2. Oh dear.....
that's going to hurt republicans. They need all the fucked over people they can get to vote for them.
loving Cordray.
AtomicKitten
(46,585 posts)4. Bravo! Cordray hit the ground running.
Eugene
(61,900 posts)5. Reuters: Payday lenders plead case to consumer agency
Source: Reuters
Payday lenders plead case to consumer agency
By Verna Gates
BIRMINGHAM | Thu Jan 19, 2012 6:52pm EST
(Reuters) - Payday lenders gathered an array of supporters at a hearing hosted by the Consumer Financial Protection Bureau, trying to sell the new agency on the benefits of the controversial short-term, high-interest loans.
The CFPB, which recently gained the power to oversee the industry, held the event on Thursday in Alabama - the state with the highest number of payday lenders per person.
A call went out from Advance America, the country's largest payday lender, on a website for neatly dressed, articulate and positive customers.
Supporters packed the room to tell tales of how short-term lending products have helped them get by.
[font size=1]-snip-[/font]
By Verna Gates
BIRMINGHAM | Thu Jan 19, 2012 6:52pm EST
(Reuters) - Payday lenders gathered an array of supporters at a hearing hosted by the Consumer Financial Protection Bureau, trying to sell the new agency on the benefits of the controversial short-term, high-interest loans.
The CFPB, which recently gained the power to oversee the industry, held the event on Thursday in Alabama - the state with the highest number of payday lenders per person.
A call went out from Advance America, the country's largest payday lender, on a website for neatly dressed, articulate and positive customers.
Supporters packed the room to tell tales of how short-term lending products have helped them get by.
[font size=1]-snip-[/font]
Read more: http://www.reuters.com/article/2012/01/19/us-financial-regulation-payday-idUSTRE80I04R20120119
ProSense
(116,464 posts)6. Typical. n/t