White House Memo on the Importance of CFPB Director: The White House circulated a memo on Sunday evening entitled, Improving Americans’ Financial Security: The Importance of a CFPB Director.” The memo discusses why additional federal regulations are needed for payday loans, money services businesses, prepaid cards, non-bank mortgage lenders and servicers, and credit bureaus. The memo also discusses the impact of non-bank financial institutions’ practices on specific communities including servicemembers, older Americans, students, and latinos. The memo states, “Installment loan companies often have offices near military bases and market their loans online exclusively to the military. The Department of Defense found that the cost of loans was often not disclosed on installment lender sites and annual rates ranged from 391 percent to 782 percent APR for two-week installment loans.”
Richard Cordray Confirmation Vote: The Senate will likely vote this Thursday on Richard Cordray’s nomination to head the CFPB. Before Cordray was tapped by the White House, 44 Republican senators vowed to block any nominee to head the agency unless several changes were made to its structure. We expect those senators to hold strong. The vote is more about political positioning then finding a head for the agency. Senate Democrats and the administration see the fight as a chance to show that they are tough on banks. Sixty votes are need to confirm Cordray, and we expect Thursday’s vote to fall short of that total.
CFPB Servicemembers Forum: The CFPB’s Office of Servicemember Affairs will host a one-day financial fitness forum on December 13. The event is designed to raise awareness of some of the practices and services tailored for servicemembers and their families. The event will serve as a key step in assisting the CFPB in developing a long-term strategy for ongoing engagement with financial services groups serving military personnel and their families. One of the goals of the event will be to generate dialogue between financial institutions about the products and services currently being offered to or used by servicemembers and their families. Participants will also have the opportunity to learn about issues impacting the financial readiness of military personnel. AFSA staff will attend the event.
Consumer Federation of America Financial Services Conference Recap: Rep. Barney Frank (D-MA) gave a keynote address at the conference. He claimed that Senate Republicans were abusing their “advice and consent” power by blocking Richard Cordray’s nomination. He also said that the gridlock in Congress was unlikely to be broken before 2013. The conference included a panel on meeting the financial services needs of military servicemembers during which panelists discussed alleged loopholes in the Talent Amendment which places limitations on terms of credit extended to servicemembers and their dependents.
Regulatory Update: AFSA intends to comment on the notice recently released by the CFPB requesting suggestions for streamlining regulations it recently inherited from other federal agencies. The notices asks the public to identify provisions of the inherited regulations that the Bureau should make the highest priority for updating, modifying, or eliminating because they are outdated, unduly burdensome, or unnecessary. Comments are due on March 5. The CFPB has made some changes to its website and to its complaint process. It is now taking complaints about mortgages. Additionally, the CFPB released a 7-page interim report on credit card complaints. In conjunction with the report, the CFPB has issued a notice of proposed policy statement with request for comment that addresses the CFPB’s proactive disclosure of credit card complaint data. AFSA intends to comment.
