Category: CFPB

06
Oct

CFPB Finally Issues New PDL, Title… Rules

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau or CFPB) is issuing this final rule to establish 12 CFR 1041, which creates consumer protections for certain consumer credit products, and the official interpretations to the rule.
First, the rule identifies it as an unfair and abusive practice for a lender to make covered short-term or longer-term balloon-payment loans, including payday and vehicle title loans, without reasonably determining that consumers have the ability to repay the loans according to their terms.
The rule exempts certain loans from the underwriting criteria prescribed in the rule if they have specific consumer protections.
Second, for the same set of loans along with certain other high-cost longer-term loans, the rule identifies it as an unfair and abusive practice to make attempts to withdraw payment from consumers’ accounts after two consecutive payment attempts have failed, unless the consumer provides a new and specific authorization to do so.
Finally, the rule prescribes notices to consumers before attempting to withdraw payments from their account, as well as processes and criteria for registration of information systems, for requirements to furnish and obtain information from them, and for compliance programs and record retention.
The rule prohibits 2 evasions and operates as a floor leaving State and local jurisdictions to adopt further regulatory measures (whether a usury limit or other protections) as appropriate to protect consumers.
201710_cfpb_final-rule_payday-loans-rule

 

 

10
Aug

Pray for Cordray: CFPB Director Richard Cordray Scratched

It’s official! CFPB Director Richard Cordray has bee scratched! He’s out of the race. Pray for Cordray? Not a chance!

It’s highly speculative at this juncture, but now that Richard Cordray has been scratched, he’ll likely run for governor of Ohio. Richard Cordray is expected to resign primarily because of his poor showing at Del Mar, Calif.

This is good news for BORROWERS! Richard Cordray’s resignation would guarantee consumers in all economic straits continued access to a wide spectrum of financial products rather than the few Cordray and “Big Brother” intend to shove down their throats!

Payday lenders, installment lenders, car title loan lenders and and line-of-credit lenders will likely be dancing in the streets as well. [Here’s a list of software, bond, call centers, credit reporting vendors and more…]

On the other hand, banks and credit unions will NOT be happy! Why? Because the majority of their profits today are derived from their 1400% APR non-sufficient funds fees literally siphoned out of their customer’s bank accounts.

So, CFPB Director Richard Cordray to resign? Running for governor of Ohio? Depending on the timing, this could have serious consequences on consumer credit issues.

31
May

Choice Act Defangs CFPB: “No Authority Over PDL, Vehicle Title Loans.”

Good news for payday loan, title loan and other alternative lenders! Proceed to page 403 of the Financial Choice Act  for some interesting language relevant to those of us who fund loans:

17 ‘‘(t) NO AUTHORITY TO REGULATE SMALL-DOLLAR 18 CREDIT.—The Agency may not exercise any rulemaking, 19 enforcement, or other authority with respect to payday 20 loans, vehicle title loans, or other similar loans.’’

Additionally, the American Bankers Assn. submitted a report to Treasury Secretary Steve Mnuchin requesting CFPB’s proposed payday-lending rules be denied and asking for regulatory changes allowing banks to issue their own payday loans.

Here’s a link to HR 10 The Financial Choice Act as propsed in The House: Choice Act

And, here’s a link to the Bank Report: ABA White Paper on Small Dollar Credit

16
Jan

Payday Loans, CFPB, Trump Divorce Update

By: Jer Ayles-Trihouse Consulting. Get ready my friends! Small dollar  lenders [payday loans, title loans, micro-lenders, Fintech…] will likely experience a renaissance as early as 2017. The CFPB structure has already been determined to be unconstitutional. Congress cannot digest the ability of the CFPB to get funding directly from the Federal Reserve Board – really tax payer money – thus circumventuing congessional purse strings and oversite. And today, the second in command of the payday loan CFPB attack dogs took a drubbing from the Republicans who will likely determine the fate of the CFPB. Will the CFPB have ANY teeth left? Unlikely…

GABE RUBIN over at Morning Consult wrote an exciting piece describing a fractious conversation that took place between President Trump’s potential pick for head of the CFPB [Randy Neugebauer (R-Texas)] and a CFPB staffer (Silberman).

The bottom line is that these CFPB bureaucrats, who are determining the spectrum of financial products and services Americans have access to ADMITTED TO NEVER SO MUCH AS VISITING A PAYDAY LOAN STORE IN THEIR LIVES!

Jer Trihouse Consulting

Jer Trihouse

Meanwhile, the CFPB is proposing regulations that have, and will continue, to destroy jobs, drive entrepreneurs into banktruptcy, empty store-fronts thereby increasing commercial property vacancies and crushing commercial property valuations, while MOST IMPORTANTLY denying consumers the right to choose what financial product BEST SERVES THEIR NEEDS!

As Gabe reports it, “The hearing started off testily, with House Financial Services Financial Institutions and Consumer Credit Subcommittee Chairman Randy Neugebauer (R-Texas) decrying the CFPB’s “paternalistic erosion of consumer product choices” in short-term, small-dollar lending.”

‘It got worse from there. “What the heck is a scholar on payday lending? Is it someone like you, who has never been to a store?” Rep. Roger Williams (R-Texas), asked Silberman to rollicking laughter of his fellow Republicans on the committee.’

[Gabe wrote that Silberman had conceded earlier in the hearing that he had not personally been to a payday lender storefront, though his staff had.]

“It would be great if you’d back off a little bit and realize that consumers know better,” Williams said.

Are you ready to jump into the business of making money by lending money? Get started! Learn the ropes! Get our Book. Schedule a call! It’s going to be fun times for those few entrepreneurs who have access to a few bucks and some guts!

Jer and Miro at PaydayLoanUniversity.com 

 

27
Sep

Google’s Payday Loan Company Settles with CFPB

If you’re a payday loan or installment loan lender and you claim you’re going to help consumers build their credit scores, you’d better really do it!

Oh, and if you’re unaware of this factoid, Google funded Lendup!

CONSUMER FINANCIAL PROTECTION BUREAU ORDERS LENDUP TO PAY $3.63 MILLION FOR FAILING TO DELIVER PROMISED BENEFITS
Online Lender Did Not Help Consumers Build Credit or Access Cheaper Loans, As It Claimed

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) took action against online lender Flurish, Inc., doing business as LendUp, for failing to deliver the promised benefits of its products. The CFPB found that the company did not give consumers the opportunity to build credit and provide access to cheaper loans, as it claimed to consumers it would. The Bureau has ordered the company to provide more than 50,000 consumers with approximately $1.83 million in refunds. The company will also pay a civil penalty of $1.8 million.

“LendUp pitched itself as a consumer-friendly, tech-savvy alternative to traditional payday loans, but it did not pay enough attention to the consumer financial laws,” said CFPB Director Richard Cordray. “The CFPB supports innovation in the fintech space, but start-ups are just like established companies in that they must treat consumers fairly and comply with the law.”

Flurish, Inc., doing business as LendUp, is an online lending company based in San Francisco, Calif. that offers single-payment loans and installment loans in 24 states. The company began marketing its loans in 2012 as a way for consumers to build credit and improve credit scores, and it offered consumers who participated in the program the ability to progress to loans with more favorable terms, including lower rates and longer repayment periods, over time. The company advertised this opportunity as the ability to move up the “LendUp Ladder.”

According to today’s enforcement action, LendUp did not deliver on its promises. Some of its product offerings weren’t available to consumers where they were advertised. In addition, for a time, the company did not properly furnish information to the credit reporting companies, denying consumers the promised opportunity to improve their creditworthiness. LendUp’s conduct violated multiple federal consumer financial protection laws, including the Truth in Lending Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Specifically, the CFPB found that the company:

  • Misled consumers about graduating to lower-priced loans: Many of the benefits the company advertised as available to consumers who moved up the LendUp Ladder were not actually available. Despite the fact that LendUp advertised all of its loans nationwide, loans at the higher levels were not available outside of California for most of the company’s existence. Therefore, borrowers outside of California were not eligible to move up the “LendUp Ladder” and obtain lower-priced loans and other benefits.
  • Hid the true cost of credit: LendUp gave some consumers inaccurate information about the true cost of the loans offered. The company used banner ads on Facebook and other Internet search results that included “slider bars” allowing consumers to view various loan amounts and repayment terms, but it did not disclose the annual percentage rate as required by law.
  • Reversed pricing without consumer knowledge: With one particular loan product, borrowers had the option to select an earlier repayment date. Borrowers who selected an earlier repayment date received a discount on the origination fee. But if a borrower later extended the repayment date, the company would reverse the discount given at origination. The company did not disclose this and, in three states, the company’s loan agreement specifically stated that it would not charge any fees to extend the repayment period. In addition, if a borrower defaulted, any discount received at origination was reversed and added to the amount sent to collections.
  • Understated the annual percentage rate: LendUp offered services that allowed consumers, for a fee, to obtain their loan proceeds more quickly. The company passed along the fee to a third party, but LendUp also retained a portion of the fee from loans made between May 2013 and March 2016. In many instances, these retained fees should have been included in the annual percentage rate calculation; because they were not, the company inaccurately disclosed the finance charges.
  • Failed to report credit information: Although the company began making loans in 2012 and advertised its loans as credit building opportunities, the company did not furnish any information about any loans to credit reporting companies until at least February 2014. Before April 2015, LendUp also failed to have any written policies and procedures about the accuracy and integrity of information furnished to consumer reporting agencies.

Enforcement Action
Under the Dodd-Frank Act, the CFPB has authority to take action against institutions or individuals engaging in unfair, deceptive, or abusive acts or practices or that otherwise violate federal consumer financial laws. Under the terms of the CFPB order released today, LendUp is required to:

  • Provide approximately $1.83 million in redress to victims: The company is ordered to pay about $1.83 million to over 50,000 consumers. Consumers are not required to take any action. The company will contact consumers in the coming months about their refunds.
  • End deceptive loan practices: LendUp must stop misrepresenting the benefits of borrowing from the company, including what loan products are available to consumers and whether the loans will be reported to credit reporting companies. The company must also stop mispresenting what fees are charged, and it must include the correct finance charge and annual percentage rate in its disclosures.
  • End unlawful advertisements: The company must regularly review all of its marketing material to ensure it is not misleading consumers.
  • Ensure accuracy of pricing: The company must regularly test annual percentage rate calculations and disclosures to ensure it complies with the Truth in Lending Act.
  • Pay a $1.8 million civil penalty: LendUp will pay $1.8 million to the CFPB’s Civil Penalty Fund.

The full text of the CFPB’s consent order is available at: http://files.consumerfinance.gov/f/documents/092016_cfpb_LendUpConsentOrder.pdf

The CFPB investigation was conducted in coordination with the California Department of Business Oversight, which today announced a separate settlement with LendUp: http://www.dbo.ca.gov/Press/press_releases/2016/LendUp Settlement Release 09-26-16.pdf

07
Sep

CFPB Lost 12,308 Positive PDL Borrower Testimonials on Hillary’s Server

The Consumer Financial Protection Bureau is more dishonest than the lenders they claim they are trying to protect consumers from.

Payday Loan Industry: CFPB Lost 12,308 Positive Borrower Testimonials on Hillary’s Server.

Here’s just one of the 12,308 POSITIVE TESTIMONIALS the CFPB received that were Posted by REAL consumers on the CFPB’s “Tell Your Story” website portal. Note that the total number of testimonials received was 12,546:

January 21, 2016

I used a payday loan and it got me out of a jam. When I pulled out a payday loan, I had no idea what I was doing. After sitting down with someone at the store, they helped me every step of the way and made sure I felt comfortable with pulling out the loan. I’m so glad they were there to help. Rather than a traditional loan, I payday loan startup businessapplied for a pay day loan and the process could not have been better. Everything was explained to me the minute I walked in the store and I had the cash I needed in no time at all. A bank or credit union does not work when you only need a small loan amount to make ends meet. I already live paycheck to paycheck and have little leftover after my monthly bills are paid. When the holiday season comes around, I can’t afford to give my kid gifts. The pay day loan helped me so my child could open a present. In the end this payday loan helped me out of a tough situation.

The Community Financial Services Association of America said documents they received under a Freedom of Information Act request indicate that 12,308 of the 12,546 testimonials submitted to the CFPB’s “Tell Your Story” consumer portal “reflect positive impressions of the industry.”

Here’s another actual payday loan customer story Posted by a REAL payday loan borrower on the CFPB website portal:

January 21, 2016

I really enjoyed working with my local pay day lending store and I think my story is important. Being able to get a loan for a few hundred dollars was not only easy but it was a necessity. There are no other avenues out there that can lend money like that which are not tied to losing a valuable piece of property or giving up your car entirely. This was a great way to make it work for me. Over the holidays, budgets can be stretched fairly thin. I wasn’t even sure I could provide even the most modest presents for the members of my immediate family. Then I got a quick and easy payday loan, and it truly made a difference to the people closest to me. It was enormously helpful and easy to navigate. I didn’t have the money to fix my car after getting in an accident. Although at first hesitant, I found the entire staff to be extremely helpful and polite. In the end, I m glad I went through with the loan as it was quick and hassle-free. I found that using my pay day loan to cover some medical costs I had recently was a great way to not fall behind on my other bills. Medical bills can be very difficult to get under control and are very confusing. This loan was a great solution for me. I thank you for understanding my situation.

So, the CFPB must have misplaced 12,308 positive payday loan consumer testimonials? More than likely these were simply on Hillary Clinton’s private server.

Meanwhile, go here to read all 12,546 payday loan consumer testimonials. CFSA

And, if you want to learn how to make money lending money, visit PaydayLoanUniversity.com

15
Mar

Payday Loans: Financial Services Subcommittee Destroys CFPB Deputy Director

Make some time available and watch the Video below. There is particularly emotional testimony at 4:16:00 when a payday loan consumer, Mr. Sherill, describes how he started his own business via “these types of loans” and has 20 employees now! His employees rely on payday loans. At times he employs payday loans to access additional business capital.

Payday loan business, car title loans, small dollar lending… CFPB under attack.

This video is a must watch for payday loan consumers, employees, operators and anyone else who believes “big brother” does not know what’s good for Americans.

Want to see CFPB Deputy Director Silberman sweat while testifying during a Financial Services subcommittee hearing titled, “Short-term, Small Dollar Lending: The CFPB’s Assault on Access to Credit and Trampling of State and Tribal Sovereignty?.”

Fun! Fun! Fun! Ms. Love, Mr. Scott and Mr. Williams all sit on the Committee and SERIOUSLY nail CFPB Silberman.

“It would be great if you all would back-off and consider the consumer.” Mr. Williams

“I’m trying to understand why you’re trying to destroy small dollar loans. They are much needed. 75% of American people live paycheck to paycheck. They have emergencies!” Mr. Scott

“You and your CFPB cohorts are trying to destroy these loans! Why are you and other regulators trying to do this to the American people?” Mr. Scott

“You’re hurting the very people who need help the most.” Mr. Scott.

“This rule will reduce lender revenue by 70%.” Mr. Guinta.

“Americans rely on these payday loan, title loan and other products.” Mr. Guinta

“On what authority does the CFPB have to eliminate these small dollar loan products?” Congressman Guinta.

“The coziness between the Community for Responsible Lending (CRL) has been widely reported. Most people would define this as inappropriate.”Mr. Rothfus.

Do you know if The Center for Responsible Lending offers any products that would compete against payday loans?” Mr. Rothfus
“I understand the Center for Responsible Lending is affiliated with credit unions.” Mr. Silberman.

Mr. Mulvaney form South Carolina at 2:19:00. YOU MUST SEE THIS 🙂

The people of America want to lead their lives. They’re tired of elitists in Washington who think they know best. The people want to make choices.” Mr. Pittenger. 2:28:00

Executive Director of Community Financial Services Association CFSA Mr. Dennis Shaul begins at 2:36:00 “CFPB is out to destroy payday loan industry!

At 2:47:00 Mr. Sherill, a consumer, does a great job of explaining why the payday loan product MUST continue to be offered in the marketplace.


“The CFPB rule will eliminate the ability for banks and credit unions to offer short term loans.” Mr. Rothfus.

It starts up again at 4:13:00 Watch it!  The consumer describes life after prison and his inability to access credit. Banks turned him down. Credit unions turned him down. A payday loan lender saved his butt. The terms were very clear. They explained the payday loan product.

01
Dec

Update: Payday Loan Business-Consumer Financial Protection Bureau

The CFPB Consumer Financial Protection Bureau & the Payday Loan Industry

Payday loans, auto title loans, and similar lending products: update from The CFPB

We’ve written often here about the issue of payday loan State’s rights versus the Fed’s and the CFPB.

The CFPB issued an update on their website regarding proposed rulemaking for car title loans, payday loans, installment loans, line-of-credit loans and related loan products made to consumers in the U.S.

Here’s the the CFPB release in full including 3 links to their “research” and “studies.” Take a deep breath and hold your nose…

The CFPB press release and website Post specifically state:

“The Bureau is in the process of developing a Notice of Proposed Rulemaking to address concerns in markets for payday, auto title, and similar lending products. The Bureau is particularly concerned that lenders are offering these products without assessing the consumer’s ability to repay, thereby forcing consumers to choose between reborrowing, defaulting, or falling behind on other obligations. We are also concerned about certain payment collection practices that can subject consumers to substantial fees and increase risk of account closure.”

The CFPB announcement went on to say:

Jer Trihouse Consulting

Jer Trihouse

“The Notice of Proposed Rulemaking will build on feedback we have received from small businesses and other stakeholders after releasing an outline of proposals under consideration last spring for purposes of the Small Business Regulatory Enforcement Fairness Act process. The Bureau will also publish results of further research it has been conducting into these markets in connection with the rulemaking proposal. The Bureau previously released a white paper and a report summarizing some of its research on some of these products. We expect to release the rulemaking proposal in first quarter 2016.”

Here’s a direct link to the CFPB’s “Small Business Regulatory Enforcement Act process (CFPB 1)

And a link to the previous CFPB Payday Loan White Paper, “Payday Loans and Deposit Advance Products: (CFPB 2)

And the CFPB Report, “CFPB Data Point”: (CFPB 3)

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