The Federal Financial Forum

From: Washington Post

By Chico Harlan

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The proposal from the Consumer Financial Protection Bureau marks the first attempt by the federal government to regulate shorter-term loans, which also include auto title and installment lending.

The rules still face months of review — and potential court challenges — but if they take hold they could dramatically transform and shrink an industry that provides cash to borrowers in a pinch. Some lenders say that under the new rules fewer loans will get made; they’ll have no choice but to close up shop. Yet consumer advocates see this as an opportunity for borrowers to turn to safer options — without having to pay triple-digit annualized interest rates.

Editor’s Note: Cross-posted from OIRA Watch.

From: Ballard Spahr

By Barbara S. Mishkin

The American Bankers Association has sent a comment letter to the CFPB challenging the Bureau’s use of the generic clearance process to conduct research in connection with its overdraft rulemaking.  The letter was submitted in response to the CFPB’s request for approval from the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) of an existing generic clearance “to collect quantitative data on effective strategies and consumer experiences….” (Qualitative Consumer Education Generic Clearance).

From: Tech Times

By Katrina Pascual

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The Consumer Financial Protection Bureau (CFPB) found overall that people assigning their cars as collateral for a supposedly short-term emergency loan are suffering high repossession rates, protracted repayment periods, and interest rates soaring to 300 percent.

The report (PDF) is deemed the first from federal regulators to delve on the auto title lending sector, which has significantly grown in years, but stays prohibited in half of the United States. In the similar case of payday loans, the findings could result in additional regulatory measures in the industry.

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From: Mondaq

Article by Steven D. Lofchie | Cadwalader, Wickersham & Taft LLP

In its annual report, the Government Accountability Office (“GAO”) encouraged Congress to make legislative changes to the financial regulatory structure in order to improve (i) the efficiency and effectiveness of oversight, (ii) the parity between consumer and investor protections, and (iii) the consistency of financial oversight for similar institutions, products, risks and services. GAO also called on Congress to consider whether aligning the authority of the Financial Stability Oversight Council with its mission to respond to systemic risks necessitates legislative changes.

For a number of years CRE has stated that baby boomers, born between 1946 and 1964, were in large part on a path to economic doom. The reason behind this doomsday projection was the severe downward trend in conventional (defined benefit) pensions.  Extended unemployment, the non-availability of pensions and failure to utilize defined contribution plans are also contributing factors but are all part of the same problem–lack of sustainable income at an advancing age.

In order that federal policy makers be armed with sufficient data of high quality CRE personnel made numerous suggestions to federal agencies to conduct studies which would support the aforementioned hypothesis. Fortunately the talented individuals of the Bureau of the Census conducted such studies.