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Senate Passes Military Lending Amendment to Defense Bill
American Banker (12/04/12) Finkle, Victoria

On Dec. 3, the Senate passed an amendment to the defense authorization bill that would strengthen the 2006 Military Lending Act, which prohibits lenders from charging servicemembers more than 36 percent interest on their loans. Sponsored by Sen. Jack Reed (D-RI), the amendment tightens the law by allowing financial regulatory agencies to use their civil enforcement capabilities to uphold the rate cap. “This amendment enhances the Military Lending Act by allowing federal regulators to use all of the tools at their disposal to make sure lenders are following the law," said Reed.  


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Inside the Beltway
Consumer Bureau, Chicago Join Forces in Hunt for Predatory Lending
The Hill (12/05/12) Schroeder, Peter

The city of Chicago and the Consumer Financial Protection Bureau (CFPB) are partnering to protect consumers from predatory lenders and financial scams. On Dec. 5, CFPB Director Richard Cordray and Mayor Rahm Emanuel announced the information-sharing collaboration. Under the agreement, Chicago share information with the CFPB about local lending activity and the CFPB will provide analytical tools.
In addition, Chicago is introducing a new ordinance to regulate and license debt collectors through fair collection guidelines and new zoning regulations that will limit the spread of payday lenders and other "predatory financial services" across the city.

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First CFPB Ombudsman Report Emphasizes Complaint Process
InsideARM (12/03/12) Lunsford, Patrick

On Nov. 30, the Consumer Financial Protection Bureau’s (CFPB) Ombudsman Office issued its first annual report. The goal of the Ombudsman Office is to advocate for a fair process between consumers, providers of consumer financial products and services, and the CFPB. Of the inquiries received from December 2011 through September 2012, the most common issue related to transparency within the Bureau’s consumer response process. The report highlighted steps the ombudsman recommends the CFPB take in the coming year, including providing more information to the public on the process and highlighting which companies currently can accept a consumer complaint from the Bureau. 

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Waters Secures Top Democratic Spot on House Financial Services Committee
The Hill (12/04/12) Schroeder, Peter

Upon being named the top Democrat on the House Financial Services Committee,
Rep. Maxine Waters (D-CA) vowed to protect the Dodd-Frank Wall Street Reform and Consumer Protection Act from Republican attempts to change it, while pursuing housing finance reform. Although she and new chairman Rep. Jeb Hensarling (R-TX) rarely agree on policy, Waters stated a desire to "reconcile our visions."
"I look forward to working with my colleagues to protect, defend and implement the important provisions of Dodd-Frank, which will continue to strengthen our financial system," she said. "I understand that regulatory certainty is an important aspect of growing our economy, and remain committed to ensuring clear and transparent regulation which creates the space for innovation, safety and soundness."
As a longtime housing advocate, Waters reaffirmed that housing reform would be a top priority of hers in the 113th Congress. "Housing finance reform, in particular, will be crucial to ensuring the long-term success and stability of our economy. I believe we need a financial system that facilitates economic opportunity and wealth creation for all, and I stand ready to work with my colleagues towards that goal," she said.


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Warren Expected on Banking Panel
The Wall Street Journal (12/04/12) McGrane, Victoria and Boles, Corey

According to three Democratic aides, Senator-elect Elizabeth Warren is expected to join the Senate Banking Committee in the 113th Congress. Committee assignments will be formalized early next year, when the entire Senate Democratic caucus will vote on Senate Majority Leader Harry Reid’s (D-NV) recommendations. Because Reid works closely with committee chairmen to determine assignments, it is rare for lawmakers to vote against his recommendations.
The force behind the creation of the Consumer Financial Protection Bureau, Warren is a sharp industry critic. She has embraced several policy positions that bankers oppose, such as a return to Glass-Steagall, the Depression-era law that separated commercial and investment banks. Warren’s presence on the committee could make it harder for CFPB critics to succeed in making significant change to the agency.
Sen. Joe Manchin (D-WV) is also expected to join the banking committee next year. 

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National and State News
FTC Issues Amended Rule on Identity Theft Red Flags
Subprime Auto Finance News (12/05/12)

The Federal Trade Commission (FTC) published an interim final rule on identity theft red flags, and is seeking comments until Feb. 11, 2013, when the rule will become effective. Under the rule, red flag programs must: include reasonable policies and procedures to identify indicators of identity theft in day-to-day business operations, be designed to detect the indicated red flags, identify actions the business will take upon detecting red flags, and periodically re-evaluate its program to reflect new risks. 

The FTC first issued the Red Flags Rule in 2007. Then in December 2010, Congress passed legislation to narrow the definition of creditors covered by the rule. Under the amended rule, a creditor is only covered if, in the ordinary course of business, it regularly obtains or uses consumer reports in connection with a credit transaction, furnishes information to consumer reporting agencies in connection with a credit transaction or advances funds to or on behalf of an individual. 

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One in Three Consumers Would Consider a Mortgage from Walmart: Study
American Banker (12/03/12) Browdie, Brian

One in three consumers said they would consider a mortgage from Walmart and nearly one in two consumers said they would consider a mortgage from PayPal, according to a survey by consulting firm Carlisle & Gallagher. Conducted in September, the survey asked 618 consumers about their views toward home ownership, their most important factors in applying for a mortgage loan, and whether they would consider a loan from an alternate mortgage provider. Walmart and PayPal currently do not offer mortgages, but warehouse club Costco Wholesale began offering mortgage services online last year through bank partnerships. 

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CNW: Used Sales Just Shy of 3M Units, but Soar from Nov 2011
Auto Remarketing (12/04/12) Overby, Joe

Used car sales approached 3 million in November, up 14.6 percent from a year ago. According to CNW Research, year-to-date used vehicle sales were 37.37 million, compared to 35.65 million sold in the first 11 months of 2011. The year-to-date used sales also surpassed full-year figures from 2008, 2009 and 2010.

Compared to October, franchised dealers experienced a two percent decrease in market share, but still increased used sales by more than 28 percent. Independents had an approximate one-percent decrease in market share, but their sales increased as well. Conversely, the market share for private-party sales rose more than two percentage points and year-over-year sales were down significantly.
“Casual sales are suffering because dealers are becoming increasingly aggressive in selling used cars and are having vehicles shipped into the Northeast from as far away as California to meet the demand,” CNW president Art Spinella said.

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Equifax to Buy Computer Sciences' Credit Unit for $1B
American Banker (12/03/12) Stewart, Jackie

Equifax announced a deal to buy CSC Credit Services, which owns consumer credit files in 15 states, for $1 billion in cash. The credit services business of Computer Sciences provides consumer information products to banks, mortgage companies, retailers, the automotive industry, medical entities, utility companies and other users of financial and credit information. CSC has been Equifax's biggest credit affiliate since 1988, and Equifax has been processing its credit information and selling the files nationally since then.

The deal is scheduled to close by the end of the year and is intended to "be a catalyst for the long-term growth" of Equifax's U.S. consumer information solutions unit, said Equifax Chairman and Chief Executive Richard F. Smith. 


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December 6, 2012

Forward To A Colleague

Black Book
Life of the South
ParaData Financial
Counselor Library
Wells Fargo Preferred Capital
Carleton, Inc.
GoldPoint Systems
Allied Solutions
AFSA Newsbriefs

AFSA Newsbriefs is a weekly executive summary of AFSA initiatives and consumer credit articles. AFSA Newsbriefs is free for members. Send an email to newsbriefs@afsamail.org to subscribe.

AFSA's mission is to protect and improve the consumer credit business, maintain a positive public image, and create a legislative climate in which reasonable credit regulation can and will be enacted. The association operates in the public interest, encourages and maintains ethical business practices, supports financial education for consumers of all ages, and provides other assistance in related fields on an as-needed basis.

The American Financial Services Association has provided services to its members for over ninety years. The association's officers, board, and staff are dedicated to continuing this impressive legacy of commitment through the addition of new members and programs, and increasing the quality of existing services.