On Brian Brooks’ first day as Acting Comptroller of the Currency, the OCC issued a final rule intended to resolve the legal uncertainty created by the Second Circuit’s decision in Madden v. Midland Funding. In that decision, the Second Circuit held that a nonbank that purchased charged-off loans from a national bank could not
Usury
This week’s podcast: A discussion of the Veterans and Consumers Fair Credit Act with Bill Himpler, CEO of the American Financial Services Association
By Barbara S. Mishkin on
Posted in Regulatory and Enforcement, Usury
The Veterans and Consumers Fair Credit Act, which has been introduced in the House (H.R. 5050) and Senate (S. 2833), would impose a 36% national usury limit on most forms of consumer credit. Bill Himpler responds to claims that the rate limit will not reduce credit access for creditworthy consumers and discusses relevant studies, the…
CFPB, joined by South Carolina Dept. of Consumer Affairs and Arkansas AG, files lawsuit targeting service providers to pension advance products structured as purchases
By Alan S. Kaplinsky & James Kim on
The CFPB filed a complaint in a South Carolina federal district court against Upstate Law Group LLC. and two of its individual owners and managers that alleges the defendants violated the Consumer Financial Protection Act’s UDAAP prohibition in connection with the brokering of pension advance products structured as purchases by engaging in unfair and deceptive…
Virginia House of Delegates passes bill to establish 36% rate cap for “short-term” and other loans
By Alan S. Kaplinsky on
Posted in Regulatory and Enforcement, Usury
On January 31, 2020, by a vote of 65 to 33, the Virginia House of Delegates passed a bill that would establish a 36% rate cap on certain consumer loans. Since Democrats also hold a majority in the Virginia Senate, the Senate is expected to also pass the bill.
The bill amends Virginia’s general…
This week’s podcast: The Veterans and Consumers Fair Credit Act: a discussion with the bill’s drafter
By Barbara S. Mishkin on
Posted in Usury
The Act, which has been introduced in the House (H.R. 5050) and Senate (S. 2833), would impose a 36% national usury limit on most forms of consumer credit. We are joined by the bill’s drafter, Professor Chris Peterson of the University of Utah S.J. Quinney College of Law, for a discussion of the rationale for…
CFPB announces proposed consent order with companies alleged to have collected loans void under state law
By Alan S. Kaplinsky on
The CFPB announced that it has entered into a proposed consent order with Think Finance and six subsidiaries (collectively, the “Think Entities’) to settle the Bureau’s lawsuit filed in November 2017 that alleged the Think Entities engaged in unfair, deceptive, and abusive acts or practices in connection with their collection of loans that were void…
This week’s podcast: The OCC’s and FDIC’s proposals to undo the Madden decision: what they would and wouldn’t fix
By Barbara S. Mishkin on
In this podcast, we review Madden, its implications and the OCC’s reaction, and discuss the proposals to undo Madden, including the agencies’ troublesome comments, remaining problems and what the agencies can do to fix them.
Click here to listen to the podcast.
CA DBO concludes certain point-of-sale financing arrangements are loans, not credit sales
On December 30, 2019, the California Department of Business Oversight (DBO) announced two actions regarding companies offering unregulated, point-of-sale financing to California residents. In the first action, the DBO denied the application of Sezzle Inc. for a lender’s license under the California Financing Law (CFL). According to the DBO in its Statement of Issues,…
House Financial Services Committee announces January hearings on CRA, “rent-a-bank schemes,” mobile payments
By Barbara S. Mishkin on
The House Financial Services Committee has announced that it will hold the following hearings this month:
- On January 14, the Subcommittee on Consumer Protection and Financial Institutions will hold a hearing entitled, “The Community Reinvestment Act: Reviewing Who Wins and Who Loses with Comptroller Otting’s Proposal.” (On January 29, from 12 p.m. to 1 p.m.
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OCC and FDIC issue proposed rules to undo Madden
By Jeremy T. Rosenblum on
The OCC and FDIC issued proposed rules this week intended to eliminate the uncertainty created by the Second Circuit’s decision in Madden v. Midland Funding. In that decision, the Second Circuit held that a nonbank that purchased charged-off loans from a national bank could not charge the same rate of interest on the loan…