- CFPB to Supervise Largest Student Loan Servicers
Huffington Post 03 Dec 2013
The Consumer Financial Protection Bureau (CFPB) has finalized a proposed rule that will allow the agency to regularly examine the practices of the seven biggest student loan servicers to ensure they comply with federal consumer laws. Although the seven companies were not named, observers believe the U.S. Department of Education's four main student loan servicers -- Sallie Mae, Great Lakes Educational Loan Services, Nelnet Servicing, and the Pennsylvania Higher Education Assistance Agency -- are on the list.
- New York Subpoenas Websites in an Effort to Curb Payday Lenders
New York Times 03 Dec 2013
New York Superintendent of Financial Services Benjamin Lawsky recently sent subpoenas to 16 lead generator websites that sell sensitive consumer data to payday lenders to gather information about the websites' practices and connections to the lenders. This comes after Lawsky sent cease-and-desist letters in August to 35 online lenders for writing loans that violate state usury caps.
- Economy Watch: GSE Delinquencies Continue to Drop
Multi-Housing News 03 Dec 2013
The government-sponsored enterprises Fannie Mae and Freddie Mac recently reported declines in the serious delinquency rate for single-family mortgages. Fannie Mae's single-family serious delinquency rate fell to 2.48 percent in October, down from 2.55 percent in September and 3.35 percent in October 2012, marking its lowest level since December 2008.
- Decatur Wants to Tighten Restrictions on Payday Lenders
WAFF.com (Alabama) 02 Dec 2013
The City Council in Decatur, Ala., is considering a zoning ordinance that would limit where payday lenders can set up shop. It also has drafted a resolution calling on lawmakers to cap payday loan interest rates, which often top 200 percent or even 400 percent on an annualized basis, and continues to push for legislation at the state level that would require lenders to report loans to a database to ensure compliance with the $500 limit.
- Wells Fargo, U.S. Bank Face Crossroads on Deposit Advances
American Banker 27 Nov 2013
A handful of banks affected by new federal regulations regarding bank deposit advances -- short-term forms of consumer credit that strongly resemble a payday loan -- confront a tricky decision: either devise a way to offer small-dollar loans that comply with disruptive new rules and still make business sense, or get out of the business altogether.
- S&P: Principal Reductions Perform Better Than Rate Decreases
Housing Wire 25 Nov 2013
A new study from Standard & Poor's indicates that the likelihood of a new default exceeds 50 percent for borrowers who receive interest rate reductions. However, homeowners who obtain the benefit of a write-down and equity gains generally have a better chance of staying current on their mortgages afterward, according to the report.
- Fighting Back Against Foreclosure-Rescue Scam Artists
New York Post 24 Nov 2013
MFY Legal Services has filed a groundbreaking lawsuit on behalf of Elva Brardo, a 60-year-old Queens homeowner who is currently in foreclosure. The complaint alleges that two affiliated firms -- American Hope Group and the Donado law firm -- and seven of their employees cheated Brardo out of $11,885 and violated the law. It reportedly is the first case in New York City filed under the distressed-property consultant law created in 2008 and last amended in 2010.
- Ditching Compromise, Parker Pushes Tough Payday Loan Regulations
Hispanic Business 23 Nov 2013
Houston Mayor Annise Parker has thrown out a compromise plan to regulate payday and auto title lenders, instead promoting stricter measures to limit this type of financing. The city council will vote next month on the regulations, modeled on rules passed by other Texas cities that include Dallas, Austin, San Antonio, and El Paso
- Americans Need More Financial Education, Consumer Watchdog Says
NBC News 22 Nov 2013
A new study from the Consumer Financial Protection Bureau (CFPB) found that the U.S. financial services industry spends about $17 billion a year to market products to consumers, while only about $670 million dollars is spent each year on financial education. “When consumers receive the vast majority of their financial information from companies that are trying to promote an image or sell products, consumers have very little unbiased information,” CFPB director Richard Cordray said in a statement.
- Debt Collector on Other Side in NY Settlement
Buffalo Business First 22 Nov 2013
Under a settlement with the New York attorney general's office, the owner of a string of debt collection firms will pay $165,000 in penalties and restitution for illegally collecting on payday loans, which are illegal in the state. Joseph Bella -- who has operated at least half a dozen debt collection outfits in the Buffalo area over the past five years -- was said by the AG's office to have repeatedly violated the federal Fair Debt Collection Practices Act.
- Scrutiny Over Disparity in Loan Fees at Auto Dealerships
New York Times 22 Nov 2013
Auto dealerships often arrange loans for car buyers through third-party lenders, deciding how much they want to charge for that service and tack their fee onto the lender's interest rate. The National Automobile Dealers Association says franchise dealers typically do not charge more than 1 percent interest on average, but some consumer groups say that average fees range from 2 percent to 2.5 percent, depending on the terms.
- House Banking Panel Passes CFPB Changes
American Banker 22 Nov 2013
The House Financial Services Committee has passed a series of bills to change various aspects of the Consumer Financial Protection Bureau (CFPB).
- Service Members Left Vulnerable to Payday Loans
New York Times DealBook Blog 22 Nov 2013
The Military Lending Act was enacted nearly seven years ago, but some say it has gaps that leave hundreds of thousands of U.S. service members open to potentially predatory loans. Congress passed the law to shield service members from loans with double-digit interest rates that can get borrowers deep into debt. Critics, however, say the law has not kept up with high-interest lenders that operate either online or near bases.
- Dealer Fees for Arranging Car Loans Are Drawing Scrutiny From U.S.
New York Times DealBook Blog 22 Nov 2013
For the 80 percent of consumers who need financing when purchasing a car, many U.S. dealers arrange loans via third-party lenders. Dealers decide how much they want to charge for that service and add the fee to the lender’s interest rate. Because dealerships do not have to disclose how much of the interest rate goes to them, many consumer advocates and regulators have raised concerns about discriminatory lending against minorities.
- Regulators Tighten Restrictions on Bank Payday Loans
Washington Post 22 Nov 2013
Federal regulators moved this week to crack down on short-term, high-cost bank loans, which critics say are just as harmful to consumers as online and storefront payday loans. Deposit advance products, as they are known, "pose significant safety and soundness and consumer protection risks," according to Comptroller of the Currency Thomas Curry, whose office released new guidance along with the Federal Deposit Insurance Corp.
- Americans Recover Home Equity at Record Pace
Bloomberg 21 Nov 2013
Zillow reports that the number of Americans who owe more on their mortgages than their homes are worth fell at the fastest rate on record in the third quarter as prices continued to rise -- further proof that supply shortages may improve as more owners find themselves in a position to sell. The share of homes with mortgages that had negative equity fell from 23.8 percent in the second quarter to 21 percent as of Sept. 30,
- Wisconsin's Auto Title Loan Industry Still Thriving
Capital Times (WI) 21 Nov 2013
Fewer Wisconsin residents are losing their cars to repossession, according to data from the state Department of Transportation, provided in response to an open records request from state Rep. Gordon Hintz (D-Oshkosh). The number of auto title transactions between financial institutions and individuals fell to 10,877 last year from 14,442 in 2010; however, the number of transactions involving auto title lenders, specifically, only declined to 2,680 from 2,898.
- Fresno Pushes Payday Loan Limits, Critics Stress Financial Dangers
ABC - KFSN Fresno (CA) 21 Nov 2013
There are 66 payday lenders already licensed to do business in Fresno, Calif., so officials there are taking steps to check the local growth of such companies -- which state regulators say charge annual interest rates of about 460 percent.
- Payday Lender Cash America Fined Over Claims of Robo-Signing, Gouging Military Members
Washington Pos 21 Nov 2013
The Consumer Financial Protection Bureau (CFPB) has reached a $19 million settlement with payday lender Cash America over abusive practices such as "robo-signing," in which employees stamped a lawyer’s signature on court documents used to sue borrowers for past-due debts. This tactic, according to the CFPB, helped the company improperly make money from at least 14,397 U.S. consumers. The settlement with Cash America is the CFPB's first with a short-term, small-dollar lender. The agency also found cases in which Cash America charged active-duty service members and their families more than the 36 percent interest rate limit set by the Military Lending Act.
- Markey Introduces Bill to Protect Troops From Predatory Lenders
Hispanic Business 20 Nov 2013
Enlisted persons and their families are three times as likely as civilian households to turn to predatory payday loans when in financial distress and also are more likely to carry heavy credit card debt, but new legislation promises to give them alternative choices. The Military Savings Act, introduced Nov. 20 by Sen. Edward Markey (D-Mass.), creates a pilot program under which financial institutions on base offer innovative products to help members of the Armed Services and their families get on more stable financial ground.