"For
Lenders You Can Trust Look For The Borrow Smart Seal."
BIRMINGHAM CFPB
HEARING
Monday, February 6, 2012
CFPB WILL HAVE SIGNIFICANT IMPACT ON SHORT TERM LENDERS.
We continue to learn more regarding the CFPB and their plans for the short
term lending industry as noted below. The focus is
payday lending at the moment but clearly all lenders will be under the
microscope in the short to intermediate term for full compliance with all
federal laws as seen in the CFPB field examination manual
here. And then
over the course of the next six to nine months we can expect new
regulations to be promulgated by the CFPB that will increase the intensity.
The message from our industry leaders in Washington is to expect changes.
Big changes.
Compliance exams will be quite extensive. A national law firm that focuses
on the new CFPB is Ballard Spahr and they have published recent
articles regarding exam expectations and what this means for the industry.
Click here for their opinion on what you can expect in an examination and
click here to read their discussion about the "remittance transfer" rule to
see how complex something as simple as an electronic transfer to a foreign
country transaction will become.
We strongly believe the compliance area of the CFPB will be significant for
all operators.
We are in the very early stages of developing a solution for association
members. Stay tuned.
Friday, January 30, 2012
CFPB DIRECTOR CORDRAY ON MEET THE PRESS SUNDAY, JANUARY 29, 2012.
The video on the right is an abbreviated version of the full interview with
Director Cordray that
occurred on Meet The Press on January 29th (full interview below). Note a
few of the Director's
comments:
Immediate enforcement
Tough questions of industry
Sustainability of customers
Enforcement action
Director Cordray used many of these same comments at the hearing in Birmingham
on January 19th. There should be absolutely no doubt whatsoever of
the CFPB's plans and intentions. We believe their focus will be on
enforcement of a myriad of quite complex federal laws that most in the industry
have not previously focused on and on repeat transactions of single payment
loans.
While Mr. Cordray's remarks yesterday on Meet The Press addressed payday lenders
only one time during the interview, don't take any comfort that our industry is
not in the CFPB's crosshairs. Do not forget, the very first public action
the CFPB took was against our industry (scroll down). And remember, when
they came to Birmingham on January 19th they met privately with many interest
groups (activist, credit unions, etc.). They did not, however, meet
privately with any industry groups or with our own state regulators. So,
we believe their focus is against our industry and it will be a federal effort
as succinctly outlined by Mr. Cordray on the two last occasions we have seen
him.
Our local associations are working hard to prepare for major and significant
changes in the way we do business. If you are a member login above and
click here or the CFL News tab on the left for an assessment
of what we expect and discussion of plans. You will need your member login
to access the member section of the web site.
A REPORT ON THE CFPB HEARINGS HELD TODAY
IN BIRMINGHAM.
The CFPB hearing today, for the most part, went as expected. This was a
consumer event and you can pretty well imagine how the comments and testimony
unfolded even though the industry was well represented.. You should expect
to see fairly vigorous national reporting on this event.
The CFPB has a website and it is updated often (here).
The remarks from yesterdays meeting will be on the web site soon. You will
also find the CFPB field examination manual
here.
If you are a member of Borrow Smart you can click here
and go to our member section for a more detailed report on today's meeting.
Wednesday, January 18, 2012 -- 4:00 PM
This is an update to the post below made on January 16 and will provide you
with the very latest information that we have on the hearing tomorrow. Here are a few comments:
1) The venue for the meeting has changed. The new venue will accommodate a
much larger crowd. However, we have no clue how many will be allowed to
attend. The same is true for those who did not register -- we don't know
if you will be allowed into the room if you did not register. The CFPB notice
document requested that people register as you see in this latest notice (click
here). We have heard reports that the registration system no
longer works. That is all we know at the moment.
2) We have a special member update for TPCA and Borrow Smart members regarding
more information about attendance and what you can expect. CLICK HERE FOR THAT ADDITIONAL INFORMATION. You will need a
member login and you will need to navigate back to this page after you have
logged in. If you are a member (TPCA or Borrow Smart AL) or a guest and do
not have a login follow the steps to register as instructed in the links at the
top of this page. We will review your request and respond back promptly.
As soon as we know more that we can share we will be in touch. Otherwise,
we will update again on Friday.
January 16, 2012
THE NEW CFPB FEDERAL AGENCY IS SET TO
HOLD HEARINGS IN BIRMINGHAM THIS THURSDAY!
We urgently need your help in locating customers who can attend this hearing
which is set for this Thursday, January 19th in Birmingham. If you can
help click here
for instructions and contact information from the CFSA who is coordinating this
effort. Please work hard on this request it is important.
Read the story below for more information regarding this event.
CFPB TO HOLD HEARINGS IN BIRMINGHAM. January, 16, 2011.
The new CFPB (Consumer Financial Protection
Bureau), which only recently named their new director with a
controversial appointment, is now set to begin their regulating
effort. The have set a field hearing for this coming Thursday,
January 19 in Birmingham.
Click here to see the notice. It is noteworthy they selected
Birmingham as the venue for this first ever field hearing. It is
noteworthy on two accounts. First, Birmingham is noted as a
birthplace for the civil rights movement (the hearing is being held at
the Civil
Rights Museum) and second, we recently went through an extended
battle over a moratorium against short term lending (click
here) in Birmingham.
The big question is -- what is the impact? The
answer is -- no one knows. The announcement was made last Thursday in the
press. Borrow Smart is working closely with the CFSA to coordinate
attendance and media at the hearing. The CFSA has developed a relationship
with the CFPB but the CFSA has not published a public statement yet.
It will be after the hearings before we have more
information. At a minimum, we believe this may mark the beginnings of the
CFPB's regulatory effort. But beyond that we do not know. We will
report back after the hearing with more information.
