THE BLOG

21
Nov

CFPB-Unsecured Loan Industry to Prosper Under New CFPB Head

CFPB

This originally appeared on Mortgage News Daily-by BY: ROB CHRISMAN  here: Here’s something to think about. If the CFPB “dials things back,” wouldn’t the states step in and increase their consumer-focused regulatory levels? Multi-state lenders certainly wouldn’t like that. Since the state regulators have been in regular communication with the CFPB and knowledgeable as to the Bureau’s regulations and impact upon consumers (the protection of whom the states have always viewed as their primary function) it can be expected that we will see more state regulation as the CFPB’s role is reduced. In Pennsylvania, for example, a recent bill supported by the Department of Banking and Securities to license mortgage servicers, incorporated the CFPB servicing regulations. This is a trend that may become viable for other states regarding those CFPB regulations that might be eliminated or reduced in effect.  This is, of course, speculative at this point but it should be considered as we move ahead representing the industry in the states.

Payday Loan ConsultantsAccording to media sources, President Trump is expected to select Mick Mulvaney, the current Director of the White House Office of Management and Budget (OMB), to serve as the interim Director of the CFPB upon Richard Cordray’s resignation at the end of this month. The CFPB is not going away, and neither is Dodd-Frank, although policies and procedures may change. And do we really want it to, given that lenders and vendors in the industry spent billions of dollars implementing the Dodd-Frank framework in our businesses.

Mulvaney is a former South Carolina congressman and served on the Financial Services Committee. Mulvaney had previously been quoted during interviews as being dissatisfied with the CFPB’s performance and even said its lack of accountability showed it to be a “joke”. He was one of those in Congress who reportedly wanted the CFPB to be eliminated. Certainly, the administration intends to reduce federal regulations and the CFPB would make a prime target.

Julian Hebron of The Basis Point issued his thoughts on the future structure of the CFPB.

Ever heard of Think Finance? It doesn’t matter – the CFPB has. On November 15, the CFPB announced it had filed a complaint against Think, a Texas-based service provider, alleging that it had assisted in the collection of loans that were, in whole or in part, void under state law. The complaint filed in the U.S. District Court for the District of Montana alleges that the service provider, which provided services to three tribal lending entities engaged in the business of extending online installment loans and lines of credit, along with two companies responsible for the collection process (collectively defendants), assisted in the collection of loans that consumers were not legally obligated to pay based on identified states’ usury laws or licensing requirements.

Rob Chrisman began his career in mortgage banking – primarily capital markets – 27 years ago in 1985 with First California Mortgage, assisting in Secondary Marketing until 1988, when he joined Tuttle & Co., a leading mortgage pipeline risk management firm. He was an account manager and partner at Tuttle & Co. until 1996, when he moved to Scotland with his family for 9 months.
He returned to the United States in mid-1997 and ran Secondary for Standard Financial, a sub-prime lender in northern California. In late 1997 Rob was hired by CrossLand Mortgage to start, and be the president of, a sub-prime company named OnCall Mortgage (a division of CrossLand). OnCall Mortgage was in existence until Wells Fargo purchased First Security Bank (the owner of CrossLand) at the end of 2000.
Rob then joined CMG Mortgage, a wholesale mortgage bank, as the Director of Secondary Marketing. In early 2003 and re-joined Tuttle Risk Management Services, Inc. TRMS (now Compass) provides mortgage pipeline risk management for mortgage companies and thrifts that seek to originate and sell loans into the secondary mortgage market. In November of 2006 Rob left TRMS to become the Director of Capital Markets for RPM Mortgage, a retail residential lender, leaving there in late 2008 to focus on not only publishing a widely read daily market commentary on current mortgage events but also on his family.
He is on the board of directors of Peoples Bank, a mid-sized depository in Kansas, and of IFC, a financial services company which advances capital to heirs, He is also an associate of the STRATMOR Group, a member of the California Mortgage Bankers Association, and of the Mortgage Bankers Association of the Carolinas and its membership committee. Rob has provided expert witness services for mortgage and real estate-related cases, has lectured to groups around the country.
Rob holds a BS from Cal Poly, San Luis Obispo, and an MBA from UC Berkeley.
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10
Nov

State of Oklahoma & 4 Tribe Lenders vs CFPB

The CFPB is attempting to usurp States’ Rights again! Yes, unelected bureauocrats attempting to make further inroads to payday loan lending and tribal sovereignty.

We’ve written about tribe lenders several times ever since the Wall Street Journal published their front page piece that quoted a founder, Jerry Ayles.

No need to write more on this matter today. Ballard Spahr does a great job with this piece on their Blog.

Unsecure4d Loan Business Consulting: Installment lending, payday lending, car title lending...

Unsecure4d Loan Business Consulting: Installment lending, payday lending, car title lending…

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10
Jul

Cordray & CFPB Ram New Arbitration Rule Down Our Necks!

Another play by Cordray and his future plan to run for governor. This rule will not stand! Bank, credit union and credit card companies will not allow the rogue CFPB and their appointed administrators ram this down our throats. It only benefits attorneys; not consumers.

The Consumer Financial Protection Bureau (CFPB) issued its final rule today on arbitration clauses, only a few days after Rep. Jeb Hensarling, Chairman of the House Financial Services Committee, threatened CFPB Director Richard Cordray with contempt charges if the rule were published. Totalling 775 pages, the new rule is intended to limit the ability of financial service providers to restrict class action lawsuits by consumers via arbitration provisions in contracts. Covered persons under the rule must submit arbitration and select court records to the CFPB.
Jer@TrihouseConsulting.com  – Trihouse Link to CFPB PDF Arb Rule

 

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07
Jul

Payday Loans vs Bank NSF and Overdraft Fees: Reported by CFPB

You think payday loan, installment loan and car title loan APR’s are high?

You want to know why banks, credit unions and so-called consumer advocates hate small dollar lenders?

Did you know the folks who initially funded the Center for Responsible Lending [CRL] launched a credit union – an entity treated as a non-profit?

Follow the money…

Payday Loan, Installment Loan, Title Loan APR's vs Banks

Payday Loan, Installment Loan, Title Loan APR’s vs Banks

Check this out! The USA’s 628 biggest banks reported – after being forced to by the FFIEC – $11.2 BILLION dollars in NSF and overdraft fees in 2015. [2015 is the first year banks having assets exceeding $1B were required to report this number!]

$11.2 BILLION is 8% of these bank’s net income.

The median bank fee was $34.00. However, because of the way bank algorithms work, 25% of bank customers paid $90 per instance [2013].

Average payday loan APR? Just under 400%

The average bank NSF fee? 1400%

Now, realize that these banks have virtually ZERO RISK! They are at the front of the line. Their account holder; their customer – must pay the bank/credit union or they put their customer in the ChexSystem data base and close their customer’s bank account.

And, let’s not forget that the banks borrow their money from the FED’s for approximately 1%. THIS IS NUTS!

[Note: If you would like a copy of the original CFPB Report in PDF format, email: Jer@PaydayLoanUniversity.com ]

60 of the reporting banks derived 20% of their net revenue from overdraft and NSF fees!

  • So… installment, car title and payday lenders must raise capital at average rates of 1.5% to 3%+ per month; typically with personal guarantees.
  • Assume the risks associated with launching a new business.
  • Overcome the challenges the search engines place on them.
  • Face the continued negative pummeling brought down on them by their competition: banks and non-profit credit unions.
  • Approve loans for consumers with zero collateral.
  • Face-off the FED’s regarding Operation Choke Point – we did get a nice victory on this matter recently 🙂
  • Keep their loan portfolios on their books [balance sheet lending] vs securitization by the big boys.
  • And a host of additional B.S. that comes with the territory.
  • Banks and credit unions HATE US because we are cheaper!!

Now mind you, we are not whining! Just asking for a level playing field – never going to happen – AND the realization by all parties that payday loan, car title and installment loans make a GREAT DEAL of sense for millions of consumers EVERY YEAR!

 

 

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08
May

Fewer Companies Settle with CFPB

The Business of Lending is the Oldest Pofession.

The Wall Street Journal [which I have appeared in on several occassions] ran an interesting piece on the CFPB. The fact is, fewer companies are willing to settle with the CFPB today. This is huge. 

Fewer lenders willing to settle with CFPB = more investors/capital scrambling to enter the B2C and B2B alternative lending space. In spite of the competition from the balance sheet and off-balance sheet lenders, my phone is ringing. On the other end of the call? Entrepreneurs, capital groups, technologists… contemplating entrance into the business of lending. Lenders find it hard to ignore the 30%+ net returns available. The banks simply cannot service the demand for small dollar loans. Lenders continue to salivate due to the low cost of money coupled with ease of entry, mobile technology, tribe sovereignty, a more stable and defined state regulatory environment…

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