Topics In This Issue
• Federal Issues
• State Issues
• Firm News
• Firm Publications
• Consumer Finance
• Privacy/Data Security
• Criminal Enforcement Action
Excerpt from Federal Issues
CFPB Holds Field Hearing on Payday Lending. On January 19, the Consumer Financial Protection Bureau (CFPB) held a field hearing in Birmingham, Alabama to discuss payday lending products. The hearing, which was the first such hearing held by the CFPB, included three panels featuring CFPB staff, consumer groups, and industry representatives. In conjunction with the event, the CFPB also released its "Short-Term, Small-Dollar Lending Procedures," which is a field guide for use in examining bank and nonbank payday lenders. These procedures are structured to mirror payday lending activities ranging from initial advertising to collection practices. The CFPB will prioritize its supervision of payday lenders depending on the perceived risk to consumers, taking into account factors such as a lender's volume of business and the extent of existing state oversight. In remarks at the event, Director Richard Cordray stated that there are some payday lenders and practices that deserve more urgent attention because they present immediate risk to consumers and are "clearly illegal." The Director identified two examples of such practices, including (i) unauthorized debits on a consumer's checking account that can occur when the consumer unknowingly "is dealing with several businesses hidden behind a payday loan," any one of which could be a "fraudster" merely seeking the customer's private financial information, and (ii) "aggressive debt collection tactics" including "posing as federal authorities, threatening borrowers with criminal prosecution, trying to garnish wages improperly, and harassing the borrower." Click here for a copy of the CFPB hearing announcement; click here for a copy of the press release regarding the event and payday loan exam procedures; click here for Director Cordray's remarks at the event.
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