White House Responds to “We the People” Petition

You can read the FISCA new release HERE.  Basically, the White House said, whatever the CFPB says….we’re fine with that.

The silver lining here is that the petition bought us some time and will force the CFPB to really look at the issue.  It bought us some more time possibly.

Here is a pretty good take away from FISCA.  I think getting 105,000 signatures was a good show of solidarity.

The White House response was, however, encouraging in its report that the CFPB is conducting a “thorough analysis” of this issue and that the determination of whether to move forward with these rules is the CFPB’s, “if they do move forward.” “We feel this may reflect the recognition that additional research is necessary before promulgating rules, a view recently advanced by a researcher from the New York Federal Reserve,” D’Alessio said.

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CFPB Scandals Rewind

Obama Extorting Auto Lenders, CFPB Memos Prove

In 2015, The CFPB claims to have “statistical evidence” showing car lenders and dealers marking up loan prices for minorities vs. whites. But lenders and dealers insist that neutral factors such as credit history and rate-shopping explain any racial disparities in loan pricing.

TRUTH: Auto data don’t even include the applicant’s race. So investigators use surnames to identify their ethnicity. Such “proxies” are notoriously unreliable and lead to over-counting of “victims.”

ADMISSION:  “Although there may be some risk of overestimating disparities, the alternative presents an equal (and perhaps greater) risk of underestimating disparities and thus consumer harm,” stated CFPB Assistant Director Patrice Ficklin

 

CFPB’s complaints portal may be riddled with errors

According to current and former Consumer Financial Protection Bureau officials interviewed by American Banker, the agency’s consumer complaints portal may be riddled with errors and distrusted even by some CFPB employees.

TRUTH: In one example cited, a single complaint was counted as 35 different ones. In another, the agency noted a complaint against a bank when the consumer was in fact complaining about an unrelated payday lender.

ADMISSION: Complaints are filed by consumers as narratives. When the CFPB reviews the complaint, it creates a separate entry for any entity named in the consumer’s filing, even though some can be mentioned as incidental or uninvolved players in the complaint.  There is a huge margin for abuse.

Union strife at the CFPB

When a government agency called the Consumer Financial Protection Bureau (CFPB) is created by Congress, one would expect that a few consumers could actually receive protection, but that hasn’t been the case with this agency’s track record of mismanagement, inefficiency and waste. The CFPB has been operating for four years now and if it were a sports team, its coach, Richard Cordray, would certainly be looking for work.  It’s power that has been unchecked.

TRUTH: The very agency charged with protecting minorities is itself facing charges of racial discrimination. A number of CFPB employees testified before Congress about CFPB’s hostile workplace environment. Employees offered examples of mistreatment, discrimination and fear of reprisal for voicing objections. Lawmakers received reports of how black employees were constantly belittled and even racially stereotyped during agency sponsored events.

ADMISSION: Some union members claim Chapter President Rob Cauldwell — an examiner for the bureau’s Southeast region based in Jacksonville, Fla. — is undermining their position, supporting management to the detriment of workers, sharing sensitive emails with CFPB officials and keeping the board and other union representatives in the dark, according to the resignation letters of the two former board members, and the letter signed by 45 employees.  Is the CFPB capable of following the law?

The CFPB as a political machine

What did the CFPB do with the $80 million fine under Cordray’s leadership? Rather than improve its internal systems to identify victims, the CFPB gave the money away to various organizations that work with low-income and minority borrowers. The list of organizations receiving money from CFBP reads like a, “Who’s Who” of powerful left-wing activist groups. It’s likely no coincidence that these same groups receiving money from CFPB pushed for the agency’s creation in the first place.

TRUTH: It’s buying it’s support by extorting businesses and arbitrarily giving it away.

 

 

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Deadline for signing CFPB Petition

Dear Friends,

We have over 95,000 signature, but we need 5,000 more today.  The CFPB is putting together rules that will cripple our industry.  This will directly affect all our jobs, not to mention limit customers access to credit.  Please take a minute to sign this petition by clicking HERE.  If we can get 100,000 signature, the White House will review the rules to see, if in fact, they are in the best interests of the borrower.

https://petitions.whitehouse.gov//petition/oppose-short-term-lending-rules-being-considered-consumer-financial-protection-bureau

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The Consumer Loan Industry Needs 100,000 Signature

Dear Friends,

The CFPB is putting together rules that will cripple our industry.  This will directly affect all our jobs, not to mention limit customers access to credit.  Please take a minute to sign this petition by clicking HERE.  If we can get 100,000 signature, the White House will review the rules to see, if in fact, they are in the best interests of the borrower.

If you want to learn more about the problem with these NEW rules and what the consumer lending industry is doing about it, you can learn more at FISCA’s website by clicking HERE.

Best Regards,

The Team at Intro XL

 

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New Texas CAB rules??!

A Texas lender passed this along…. Texas is adding new rules for CABs.  You can see them HERE.

This is totally out of left field.  I thought this was interesting:

“The Finance Commission adopted these amendments at its October 16 meeting. Final amended figures are available here. The amendments will be effective November 5, 2015. See the rule’s preamble for information about the delayed implementation period, allowing creditors to continue using certain contracts until December 31, 2016.”

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Payday Loans Comprise Less than 1% of CFPB Complaints

“Consumer complaints are the CFPB’s compass and play a central role in everything we do. They help us identify and prioritize problems for potential action,” CFPB Director Richard Cordray said in a press release announcing the new public database.

Sounds like Richard Cordray is speaking out of both sides of his mouth.  The facts do not substantiate his blitzkrieg on payday loans.  They comprise less than 1% of the complaints at the CFPB.   So why all the new rules?  It’s personal.  You can read the full article at titled “CFPB’s Inconvenient Truth Revealed By Complaints Database

  1. mortgage (36 percent)
  2. debt collection (17 percent)
  3. credit reporting (15 percent) and other categories
  4. payday loans (less than 1%)

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Text messaging – Do’s and Donuts (haha)

I’ve received a lot of questions on text messaging, so I’m breaking it out into it’s own post.  I’m not listing the legal cases here b/c they’re everywhere now.  If you’re going to send someone text messages, make sure your documentation is clear, conspicuous and unambiguous. Seems here that if there is a question of an unsolicited text, you have to prove consent ……like zero confusion here.

  • Don’t bury your opt in.
  • Make the customer check a box.
  • Document and prove your opt-ins.
  • Marketing texts must be sent through short codes as opposed to long codes.
  • Two opt-ins are better than one.  This is called a double opt-in.  The consumer responds back to your request that they receive your marketing texts.

I’ll defer to Twilio regarding  the opt-in disclosures for receiving text messages.   Can you make this part of your written opt-in?  Sorry, not sure.

Additionally, the FCC has some short and concise information on both email and text messaging here.  Not sure how definitive it is, but it’s something.

This article from Experian titled SMS compliance: What you don’t know CAN hurt you is extremely helpful.

 

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The Grey Area (and fines) of SPAMMING

This is an attempt to educate you and not provide legal advice blah, blah, blah.  Always consult with your lawyer, first.

It’s easy to assume that SPAM is unwanted electronic messages, but the operative word is “unsolicited”.  Unsolicited means “given or supplied without being requested or asked for.”  I’m going to focus on email and text messaging, which fall under completely different laws, which is worth noting.

SPAM –  “It is named after Spam, a luncheon meat, by way of a Monty Python sketch (funny video) in which Spam is included in every dish. The food is stereo-typically disliked/unwanted, so the word came to be transferred by analogy.”

So, why should you care about being accused of SPAM?

Let’s tackle email first and CAN-SPAM (Controlling the Assault of Non-Solicited Pornography And Marketing).  This law is pretty easy to comply with.  There are seven (7) items to focus on here and they are reasonable.  The truth is that it does not have a lot of teeth b/c does not seem to be enforced a lot, unlike text messaging.

The FTC breaks commercial emails into two categories:

  1. Commercial content:  In a nut shell, advertisement or promotion.  These are the emails that can cost you $16,000 a pop.  CAN-SPAM was a bi-partisan effort, so it’s very forgiving if you follow the rules.  Allegedly consent can be oral or written.  The reality is that if you send borderline SPAM emails, you may not get fined, but the Internet has SPAM filters that will black list you forever.  This is as bad in it’s own special way.
  2. Transactional or Relationship content:  This part is tricky:  If the message contains only commercial content, its primary purpose is commercial and it must comply with the requirements of CAN-SPAM. If it contains only transactional or relationship content, its primary purpose is transactional or relationship. In that case, it may not contain false or misleading routing information, but is otherwise exempt from most provisions of the CAN-SPAM Act.

Next up…text messaging.  I’m not listing the legal cases here b/c they’re everywhere now.  If you’re going to send someone text messages, make sure your documentation is clear, conspicuous and unambiguous. Seems here that if there is a question of an unsolicited text, you have to prove consent ……like zero confusion here.

  • Don’t bury your opt in.
  • Make the customer check a box.
  • Document and prove your opt-ins.
  • Marketing texts must be sent through short codes as opposed to long codes.
  • Two opt-ins are better than one.  This is called a double opt-in.  The consumer responds back to your request that they receive your marketing texts.

I’ll defer to Twilio regarding  the opt-in disclosures for receiving text messages.   Can you make this part of your written opt-in?  Sorry, not sure.

Additionally, the FCC has some short and concise information on both email and text messaging here.  Not sure how definitive it is, but it’s something.

This article from Experian titled SMS compliance: What you don’t know CAN hurt you is extremely helpful.

 

 

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SNL makes fun of executive orders

Must see for anyone that thinks the President has too much power.  These executive orders are used to circumvent the legislative process.  It’s a hilarious parity on the School House Rock public message from the 80’s.

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Is Operation Choke Point Over?

The Washington Post writes, “FDIC attempts to end Operation Choke Point with letter, action.”  So is it?

Wow, what a coincidence?  Republicans take hold of the House and Senate and the financial witch hunt ends.  Obviously, this is good news.

“The FDIC is issuing this statement to encourage institutions to take a risk-based approach in assessing individual customer relationships rather than declining to provide banking services to entire categories of customers,”

Operation choke point targeted businesses that the government deemed illegal, and in the process, cut off banking services to legal, licensed business such as:  payday lenders, gun retailers and ammunition merchants.

So, is ACH a good payment option for lenders?  Meh.  Nacha is proposing new rules:

  • Lower the return rate threshold that could trigger such inquiry for unauthorized debits from one percent to 0.5 percent.
  • Establish for the first time return rate thresholds of 3 percent for administrative returns (for example, debits returned for invalid account numbers).
  • 15 percent for overall returns.

I get the 15% rule at some level, but a charge back does not have any type of remediation  in place.  So, your customer reverses a legitimate payment and your in trouble.  As far as administrative returns, most bank information is entered in by the consumer.  How is that the lender’s fault?  I guess you can verify the account somehow, but it seems like a stiff penalty for something that is usually human error.

 

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