Another Day Older and Deeper in Debt

By: Tuesday June 11, 2013 6:16 pm

Last week in a narrow vote, the Pennsylvania Senate Banking and Insurance Committee approved Senate Bill 975, opening the door to thousands of predatory payday lenders to come to Pennsylvania and charge fees on short-term loans that equal an annual interest rate of over 300% on a typical two-week payday loan.

 

Bernanke Wants Looser Lending Standards in Bubble Reinflation Effort

By: Saturday November 17, 2012 1:00 pm

I don’t know why I felt so insulted by Ben Bernanke’s housing speech yesterday, but it really stuck with me. Probably because he managed to give an entire speech on housing – one that at points implicitly blamed homeowners for their predicaments – without mentioning the word “fraud.” Or saying “I’m sorry.”

It was very much a forward-looking rather than backward-looking speech. But he describes the foreclosure crisis as the prime contributor to the Great Recession without bothering to mention that his agency had oversight responsibility over the mortgage market throughout the inflation of the housing bubble. The Greenspan Fed rejected consumer protection or regulation of any kind as a matter of ideology. And Bernanke wasn’t about to let that fact be known to the Operation HOPE audience. In fact, his message was that originators aren’t writing ENOUGH loans at this point

Banks Face Competition From Retailers on Financial Transactions

By: Wednesday November 14, 2012 3:25 pm

After consolidating the financial sector rather than seeing it broken up over the last few years, Wall Street actually faces competition, in the form of big box retailers.

It shows you just how much trust banks have lost when people would rather do financial lending business with Home Depot or Sam’s Club.

CFPB Report on Student Loan Servicing Shows Same Predatory Tactics as Mortgage Servicing

By: Monday October 22, 2012 9:00 am

The Consumer Financial Protection Bureau released an eye-opening report on student lending late last week that got me thinking about a simple truth I think I had overlooked previously. I’ve documented for well over a year the extent to which mortgage servicers make their profits almost entirely through ripping off their customers, adding on unnecessary fees, and basically using opaque processes to skim money off the top.

Changing the Subject Doesn’t Make Payday Lending in PA a Better Idea

By: Sunday October 7, 2012 7:00 pm

As we’ve explained before — and as the U.S. military, U.S. Congress, and former President George W. Bush have all agreed — payday loans are a debt trap that further impoverishes low-income families, driving more of them into bankruptcy. Pennsylvania should leave in place the strong regulations that make use of payday loans much less common here than nationally.

CFPB Getting Reputation as a Fearsome Regulator

By: Thursday September 13, 2012 2:45 pm

You might have guessed that I don’t have a ton of respect for our nation’s regulatory apparatus, particularly in the finance space. Too often regulators listen to their Wall Street friends over the nuances of the law, are slow to identify abuses and slower still to crack down on them, and when they finally get around to accountability measures, give the lightest slaps on the wrist possible. This makes sense for them, as they wouldn’t want to upset their future employers with rules and regulations and enforcement actions that cut into their profits. The common phrase used is “regulatory capture” – at this point, I’m not sure they have to be captured. Everybody knows the deal.

Banks Charging “FDIC Fees” Against FDIC Wishes

By: Friday August 24, 2012 8:16 am

What we’ve learned over the past few years is that banks base a large segment of their profits on their ability to flat-out rip off their customers. Here’s a great example, courtesy McClatchy. Banks have been charging their business customers what is labeled an “FDIC fee,” presumably to recoup costs from the deposit insurance fund into which they pay. Problem is, there’s no such thing as an FDIC fee, and the FDIC has warned banks to stop using their name to gather fees from their customers.

CFPB Proposes New Mortgage Servicing Rules

By: Friday August 10, 2012 5:45 pm

It is a sad day in America when large banks will be prevented from making as much money as before. But this would greatly benefit the consumer. Mortgage servicing, by design, can only make big profits with a bare-bones staff that doesn’t attend to the needs of the customer, and with the ability to rip off those customers with illegal fees and charges. Wells Fargo admitted in court that their servicing arm routinely pays off fees and interest before paying down principal in any payment given to them, which violates what is supposed to be the standard practice. And that’s just one example of systematic servicer abuse.

CFPB Goes After Loan Modification Fraudsters

By: Thursday August 2, 2012 6:00 am

Adding to its enforcement actions, the Consumer Financial Protection Bureau has taken a California company to court over a loan modification fraud scheme. This is low level, low-hanging fruit, ideal for CFPB enforcement. But we need Treasury and others to go after the big banks and their servicers.

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