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AFSA Comments on SEC Asset-Level Data Proposal
On March 28, AFSA sent a letter to the Securities and Exchange Commission (SEC) on asset-backed securities (ABS). The SEC is proposing that ABS issuers disclose specified asset-level data, and is seeking comment on the proposal for the third time. AFSA’s letter reiterated the association’s concerns that such disclosure is unnecessary and raises privacy and competitive concerns. AFSA asked that the SEC substantially revise its proposal to account for the legal questions, public policy concerns, and business implications associated with asset-level disclosures.
In this comment request, the SEC specifically asked about disclosing asset-level data on issuer websites. AFSA’s letter disagreed with the SEC’s assertion that disclosing asset-level data through an issuer website would remove privacy concerns. Additionally, AFSA wrote that the websites “and the personal information posted on them, would be at risk of a data breach.” The letter went on to question how such websites would work, asking how long investors would log in and what legal issues are involved.
AFSA Joins Instagram and Announces Contest
AFSA has joined Instagram (@AFSA_DC) to facilitate picture sharing among members, particularly at AFSA conferences. To encourage participation, AFSA is holding an Instagram contest for the best picture taken during the upcoming Independents Conference at La Quinta Resort & Club in Palm Springs, Calif. To participate, attendees can snap a photo from around the resort or at a conference event and tag @AFSA_DC in the picture, as well as use the hashtag #AFSAmtgs. Attendees also can like their favorite photos from the conference on AFSA’s Instagram page. The picture that gets the most likes will receive a $150 gift card.
AFSA (@AFSA_DC) also tweets extensively during the conference, including sharing program updates, room changes and takeaways from sessions using the #AFSAmtgs hashtag.
Both Instagram and Twitter are available from your mobile phone’s app store.
How the CFPB Seeks to Shape the MessageAmerican Banker (04/01/14) Witkowski, Rachel
Harry Douglas Lane, a former auto dealer who now is a consumer advocate, revealed that his expenses were covered by the Consumer Financial Protection Bureau (CFPB) to attend the agency’s Auto Finance Forum last year. It is not uncommon for federal agencies to pay for witnesses to attend hearings and speak at conferences, but Douglas only was attending the meeting. "They paid my way up there. I flew in the night before, they put me in the Club Quarters, they paid for the whole nine yards," Lane said. "They wanted me to be there." When Lane was called on, however, he may not have said what the bureau had wanted. "I just want to know from the Consumer Financial Protection Bureau, is this really going to have teeth, are you really going to protect the retail automotive consumer?" he asked. "Or is this just going to be a happy talk thing?" They deflected his question, saying that the agency as only receiving feedback at the time. The CFPB stated that Lane was originally slated to speak as part of a panel, but was instead asked to speak as a member of the audience and they did not disclose his role because it was “limited.”
Some of the actions the CFPB takes seem to be designed to inhibit the flow of information, including the embargoing of press releases until late hours of the evening. "The CFPB's press office does seem to act a lot more politically oriented compared to other regulators," said Bill Himpler, executive vice president of the American Financial Services Association. "Part of that could be because the other agencies have been around for decades so they're much more regular order in trying to get institutions they regulate the information they need to be responsive." The midnight embargo means that reporters are unable to get responses from other qualified sources, making the CFPB the sole source in news articles.
Officials: Scrutiny of Auto Loans a Big Priority for CFPB and JusticePoliticoPRO (04/01/14) Davidson, Kate
The Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DoJ) repeatedly have warned lenders that they could be held liable for discrimination if dealers are found to have illegally marked up loans for minority or low-income borrowers. In response, the National Automobile Dealers Association (NADA) in January announced a voluntary program that would move the markup to a standard flat rate and then lower that rate based on certain criteria.
CFPB Director Richard Cordray noted that he was encouraged by the NADA plan, but other officials at the bureau, such as fair lending deputy director Rebecca Gelfond, have dismissed it simply as a “dealer level response.” A DoJ representative also noted that indirect auto lending would be a significant focus of the civil rights division’s focus in the coming months. “We’re doing a lot more work in the auto lending space these days,” said Steven Rosenbaum, chief of the housing and civil enforcement section of DOJ’s civil rights division. In March 2013, the bureau issued a bulletin on the subject, prompting House and Senate lawmakers to inquired about details of the bureau’s plans, warning that overly burdensome regulation could restrict access to credit.
Checks Are Expendable, but in Legal Tender We TrustThe New York Times (04/01/14) Corkery, Michael
As banks and financial institutions turn their attention to credit cards and digital currencies, consumers continue to rely heavily on cash. The amount of U.S. currency in circulation increased by 64 percent since 2006 to $1.2 trillion, mostly because of hoarders who, in the face of uncertain economic conditions, have turned to cash for security. As the European debt crisis intensified in 2010, people living abroad converted more of their Euros into dollars as well.
A recent Federal Reserve Bank of San Francisco report found that cash transactions are declining, meaning that more people are using debit and credit cards. The report also found that people are more likely to hold onto larger notes, such as $100 bills, for value and spend the smaller notes for goods and services. The Great Recession may have spawned a group of people who are more attracted to using cash because they are able to hold it in their hands.
While the number of bank tellers is declining, the number of ATMs remains relatively the same. As interest rates rise, the report found, Americans should again begin to let go of their cash and put their money into interest-bearing accounts. However, cash always will be in a fall-back position.
N.Y. AG Aims to Curb Auto Title Loans in Deal with Repo FirmsAmerican Banker (04/01/14) Todd, Sarah
An April 1 press release from N.Y. Attorney General Eric Schneiderman announced that ten auto repossession companies will stop claiming vehicles on behalf of title-loan companies under agreements with the AG’s office. Some title lenders have provided loans online and asked local repossession companies to perform the repossessions. N.Y. law prohibits unlicensed lenders from charging rates above 16 percent, but some of the online auto title lenders were charging upwards of 300 percent.
"I applaud these companies for agreeing to stop obeying orders from predatory title-loan companies that take advantage of unsuspecting New Yorkers," Schneiderman said. "Any other business that repossesses the vehicles of New Yorkers based on illegal title loans should recognize that my office will not tolerate this kind of behavior."
Wal-Mart Sues Visa for $5 Billion Over Card Swipe FeesReuters (03/27/14) Wahba, Phil
WalMart is suing Visa Inc. for $5 billion, alleging that the network is charging excessively high card swipe fees. The lawsuit comes months after the retailer opted out of the class-action settlement between merchants and Visa/MasterCard. WalMart, Amazon and Target were among a number of retailers that opted out of the $5.7 billion settlement that was approved in December 2013. Walmart is seeking damages from January 1, 2004, through November 27, 2012, and contends that Visa has worked with banks to prevent retailers from recouping and protecting themselves from the costs of swipe fees.
WalMart contends that the way Visa set swipe fees violated antitrust regulations and allowed them to generate nearly $350 billion.
April 3, 2014
AFSA Newsbriefs is a weekly executive summary of AFSA initiatives and consumer credit articles. AFSA Newsbriefs is free for members. Send an email to email@example.com to subscribe.
The American Financial Services Association, or AFSA, is the national trade association for the consumer credit industry, protecting access to credit and consumer choice. The association encourages and maintains ethical business practices and supports financial education for consumers of all ages.