A bill introduced in Congress that would provide for the OCC to charter and regulate “Federal Financial Services and Credit Companies” (FFSCCs) was recently called a “get out of regulation free card” in a blog post by Ed Mierzwinski, U.S. PIRG’s Consumer Program Director.
H.R. 1909, titled “FFSCC Charter Act of 2011” and introduced in May 2011, would allow a company to qualify as an FFSCC if it satisfies certain requirements that include having “a demonstrated history of experience in providing underbanked persons” with a financial product within one of the following services: (1) extending credit to consumers in any amount or to small businesses in amounts less than $10,000, (2) issuing reloadable stored value cards to consumers or small businesses, (3) providing ancillary services to consumers or small businesses such as money orders, wire transfers and check cashing, and (4) offering other short-term consumer credit services as determined by the OCC.
According to Mr. Mierzwinski, the bill represents an attempt by the payday lending industry to eliminate the CFPB’s supervisory authority over payday lenders that was established by the Dodd-Frank Act. Mr. Mierzwinski’s post includes a link to a June 20 letter to Congress written jointly by U.S.PIRG, the Center for Responsible Lending and the Consumer Federation of America that opposes H.R. 1909 and “and any similar legislation that may be introduced.”