California looks to regulate 'earned wage access' apps

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Richard Allyn | ABC News
"People are paying quite a lot to use these apps," said Andrew Kushner, senior policy counsel for the Center for Responsible Lending, a consumer protection advocacy group that supports California's current move to regulate this growing industry. "It doesn't necessarily look like a lot at first glance." Currently, this industry operates in a grey area legally, with little federal oversight.

Think your credit card rate is high? Some in Brazil pay 455 percent.

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Elizabeth Dwoskin and Gabriela Sa Pessoa | The Washington Post
In the United States, charging an APR of 455 percent on a consumer credit card is virtually unheard of — and in some cases, would be illegal, said David Silberman, a senior fellow at the nonprofit Center for Responsible Lending. Twenty states plus D.C. set limits on the interest rates that payday lenders may charge; the highest of these is 36 percent, permitted by several states, according to the center. Lenders nationwide are barred from charging more than 36 percent to active-duty military service members and some of their family members. Federally chartered credit unions may not charge more

States must protect consumers from high-cost fintech cash advances

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American Banker
States are starting to grapple with purportedly new categories of small-dollar loans: earned wage advances and other types of fintech cash advances. Their approach will determine if workers and consumers will be protected from spiraling fees that drain low wages or if a new kind of payday loan will be allowed to operate outside of laws against high-cost lending.

'Buy Now, Pay Later' is more popular, and riskier, than ever

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Colin Salao | The Street
But the use of BNPL comes with risks for consumers, similar to any other financial tool. TheStreet spoke to Center for Responsible Learning (CRL) senior litigation and policy counsel Nadine Chabrier and WalletHub analyst Cassandra Happe to understand what entices consumers to use BNPL and the important information consumers need to know about the growing product.

Buy Now, Pay Later Often a Debt Trap

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Herb Weisbaum | Consumers' Checkbook
Nadine Chabrier, senior policy counsel at the Center for Responsible Lending, worries about consumers who take out multiple BNPL loans. “It’s easy to lose track, and you can quickly be in a situation where you have payments due all over the month,” Chabrier told Checkbook. “You don’t get a statement, and you may end up getting overdraft fees if you don’t have enough money in your bank account. This can make the product unaffordable for some people.”

Apple set to roll out new 'Buy Now Pay Later' feature to all its users - but experts warn unregulated industry could leave Gen Z in debt

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Neirin Gray Desai | Daily Mail
In materials promoting the new service, Apple says Apple Pay Later was 'designed with users' financial health in mind'. But advocates are skeptical. 'The very use of the product itself does lead to a decline in financial health,' Nadine Chabrier, senior policy counsel at the Center for Responsible Lending, told DailyMail.com.

BNPL, EWA bills surface at House hearing

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Caitlin Mullen | Payments Dive
Mitria Spotser, vice president and director of federal policy at the Center for Responsible Lending, called for more regulations with regard to EWA and BNPL. “If it looks like a duck, swims like a duck, and it quacks like a duck, it’s probably a duck,” she said. “Buy now, pay later, early wage access – they look, act and function like credit. They look and function and act like capital and loans. They should be regulated as such.”

Redlining Update Faces Legal Risks Despite Bank-Friendly Changes

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Evan Weinberger | Bloomberg Law
Under the current CRA rules, around 90% of banks receive a “satisfactory” grade and 10% receive “outstanding” marks, the National Community Reinvestment Coalition estimated in a comment letter to the agencies. A “needs to improve” or “substantial noncompliance” score is exceedingly rare. “It was pretty easy to get a pass on CRA exams,” said Mitria Spotser, federal policy director at the Center for Responsible Lending.