Who is enabling payday predators?

 From NewsBreak:

The District of Columbia yesterday announced a settlement with online lender Elevate that will refund millions of dollars to consumers. The agreement was reached as a result of Elevate violating interest rate caps in DC — the maximum rate for a loan there is 24%.

Loans at 99% to 251% Interest?!?. Rent-a-bank lender Elevate pays $4… | by Andy Spears | Feb, 2022 | Medium

In order to get around the rate cap, Elevate partnered with a Utah bank known as FinWise. Utah’s ABC4 has more:

Elevate Credit, Inc. (Elevate) was laundering loans with up 149% APR to D.C. consumers through Utah FinWise Bank to evade DC’s interest rate limits.

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$30 Billion a Year in "Junk Fees"

 From NewsBreak:

Today, the Consumer Financial Protection Bureau (CFPB) issued a request for information on late and junk fees charged by banks and credit cards. The move is an effort to begin the process of designing protections for consumers in the credit and banking industries.

In making the announcement, the CFPB indicated that industry reform could save consumers billions of dollars each year.

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Consumer Group Takes on Failings of Credit Bureaus

 From NewsBreak:

Following a report from the Consumer Financial Protection Bureau (CFPB) on the failings of the Big Three credit bureaus when it comes to resolving consumer complaints, the Public Interest Research Group (PIRG) issued a call for reform of the industry.

Consumer Advocates Call for Reform of Credit Bureaus | by Andy Spears | Jan, 2022 | Medium

PIRG noted:

For over 30 years now, PIRGs have fought for changes in the private credit reporting system that the Big 3 bureaus dominate. A summary of our own findings is this: The big 3 credit bureaus function as self-appointed gatekeepers to financial and employment opportunity. Their oligopoly has been an epic fail for consumers.

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Wells Fargo Latest Bank to Eliminate NSF Fees

 From NewsBreak:

Wells Fargo announced this week that it is eliminating non-sufficient funds fees and taking steps to reduce overdraft charges. The move comes as other major banks — including Bank of America and Capital One — take steps to reduce or eliminate overdraft charges.

Wells Fargo outlined the following moves that will result in a less fee-heavy banking experience for customers:

By the end of the first quarter, customers will no longer pay a returned item fee if Wells Fargo returns a check or electronic transaction unpaid because the customer does not have enough available funds in the deposit account to cover the payment
Customers who overdraw their deposit account will have 24 hours to cover the overdraft before incurring an overdraft fee. The 24-hour grace period is expected to be offered in the third quarter.

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More on the Risks of Buy Now, Pay Later

 From NewsBreak:

The Consumer Financial Protection Bureau (CFPB) has announced an inquiry into the practices of the Buy Now, Pay Later (BNPL) industry in light of the popularity of products such as Klarna and Afterpay. The move comes as the major credit bureaus are adding information from Buy Now, Pay Later to credit reports.

Use of BNPL has seen astronomical growth. Companies like Affirm, Afterpay, Klarna, PayPal, and Zip (formerly Quadpay) have become almost ubiquitous in the retail market since the pandemic. This past holiday season, usage spiked even higher, especially among young people.

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A Call to Limit Robocalls

 From NewsBreak:

The Electronic Privacy Information Center (EPIC) and the National Consumer Law Center (NCLC) filed comments this week with the Federal Communications Commission (FCC) asking for action to stop illegal robocalls of foreign origin from reaching American phones by way of “gateway providers.”

“Fraudulent robocalls continue to bombard our telephone lines,” said Margot Saunders, senior attorney at the National Consumer Law Center. “To reduce these invasive and dangerous calls, it is essential that all providers in the call path have more skin in the game.”

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Buy Now, Pay Later and Your Credit Report

 From NewsBreak:

American Banker reports that the major credit bureaus are adding designations for Buy Now, Pay Later (BNPL) products such as AfterPay and Klarna.

Beginning in the next few weeks, Equifax will add a business industry code for BNPL to classify data such as payment history, a move that will make BNPL loans visible on credit reports. Equifax says this will provide clients and scoring partners the ability to decide how to include BNPL payments into their own decision making for new financial services. At the same time, TransUnion is working on its own BNPL credit reporting service.

MORE on how including Buy Now, Pay Later will impact your credit score. 

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A Call to Action on Credit Bureau Reform

 From NewsBreak:

On the heels of a report released by the Consumer Financial Protection Bureau (CFPB), advocates at the National Consumer Law Center (NCLC) are calling for major reform to the credit reporting industry.

“The CFPB is to be commended for issuing this report and shining a spotlight on the serious problems of the Big Three credit bureaus in responding to credit reporting disputes,” said Chi Chi Wu, staff attorney with NCLC. We appreciate the leadership of Commissioner Chopra and the efforts of the CFPB staffers who worked on the report. We endorse the CFPB’s conclusion that ‘The [credit bureaus’] responses to these complaints raise serious questions about whether they are unable — or unwilling — to comply with the law.’ And quite troubling is CFPB’s highlighting that the credit bureaus reported relief in response to less than 2% of covered complaints.”

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Protecting Consumers from Big Tech

 From NewsBreak:

While the Consumer Financial Protection Bureau (CFPB) has opened an inquiry into so-called “Big Tech” payment systems, consumer groups are offering comments aimed at boosting consumer protections.

The U.S. Public Interest Research Group (PIRG) summarized its concerns in a recent blog post.

As PIRG, in our joint comment with the Center for Digital Democracy, told the CFPB, “the Big Tech firms have a corporate surveillance business model that has widely different goals than those of publicly chartered and regulated financial institutions; their model is antithetical to fair consumer treatment generally, but which is especially true when financial matters are at stake.”

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A Warning on Early Wage Access

 From NewsBreak:

Early Wage Access (EWA) app Gusto offers employees at participating companies an opportunity to get an advance on expected pay. The service allows employees to request up to 40% of their expected pay days ahead of actual payday, with the loan being repaid when the employee’s payroll check is deposited.

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A Warning on Robotexts

 From NewsBreak:

The attorney general’s office said Americans were on track to get about 86 billion automated text messages this year, already having received 71 billion as a nation.

Any interaction with this type of text will show the scammer that the phone number is active, making the targeted user vulnerable to further messages. Consumers should be wary of opening or clicking links in unrecognized texts.”

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A Warning for Holiday Shoppers

 From NewsBreak:

“Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too,” said CFPB Director Rohit Chopra. “We have ordered Affirm, Afterpay, Klarna, PayPal, and Zip to submit information so that we can report to the public about industry practices and risks.”

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New Rules on Robocalls

 While it might not seem like it, Consumer Reports says robocalls are on the decline;

4-point-1 billion were placed in October 2021. But a recent deadline imposed by the Traced Act requires carriers to certify that they’re using something called Shaken/Stir technology.

Nearly 7,000 carriers have complied so far. Shaken/Stir is designed to help identify spoofed calls that use a fake number to trick you into answering your phone. Those calls are labeled a risk or blocked altogether. The service is free, and there’s nothing you need to do to take advantage of it. But there are even more steps you can take to get as few robocalls as possible.

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                                            Photo by Priscilla Du Preez on Unsplash

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Beware Buy Now, Pay Later Products

 From NewsBreak:

“While the emergence of BNPL as affordable small-dollar credit has potentially provided an alternative to more costly forms of credit, these products also have the potential to cause consumer harm. Many BNPL providers structure these products in an effort to avoid certain consumer protection obligations under the Truth in Lending Act or the Military Lending Act, which generally apply to loans that are repayable in more than four installments or are subject to a finance charge. BNPL products generally do not receive all of the protections credit cards have, including those governing ability-to-repay, monthly statements, reasonable and proportional penalty fees, and the ability to raise merchant-related disputes.

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Reining-in Big Banks

 A NewsBreak story on efforts to prevent another financial crisis by warding off bank consolidation:

Following an announcement from the Consumer Financial Protection Bureau (CFPB) and Federal Deposit Insurance Corporation (FDIC) that the bank regulators are taking action to review the current bank merger process, consumer advocates at the Woodstock Institute highlighted the potential benefits of this action.

Woodstock Institute joins other consumer groups, including Americans for Financial Reform (AFR) in welcoming a comprehensive review of current bank merger practices.

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Regulatory Board May Take Action on Overdraft Fees

 From NewsBreak:

At a speech to the Consumer Federation of America this week, acting Comptroller of the Treasury Michael Hsu outlined some key reforms his agency sees as necessary when it comes to banking — particularly around overdraft fees.

The speech comes as Capital One announced an end to the practice of collecting overdraft fees. Additionally, as American Banker reports, JPMorgan Chase is making some key changes to its overdraft fee policies.

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Will Rose Vote to Protect Consumers from Abusive Bank Practices

 Congressman John Rose, who represents Sumner County in the U.S. House of Representatives, may soon have an opportunity to vote for legislation that would protect consumers from abusive bank overdraft fees. 

A story in NewsBreak explains:

With Capital One announcing an end to overdraft fees and consumer groups putting pressure on other banks and the Consumer Financial Protection Bureau (CFPB) to take action to end the practice, pressure is mounting for major changes in a key source of bank revenue.

Now, Rep. Carolyn Maloney of New York has introduced the Overdraft Protection Act to protect consumers from the most abusive of overdraft fee practices.

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A Call for Banking Reform

 As one major bank — Capital One — announced an end to the practice of charging overdraft fees, a leading consumer group is issuing a call for federal action to end the practice at all banks.

Americans for Financial Reform (AFR)is calling on the Consumer Financial Protection Bureau (CFPB) to use data from a study it conducted to draft rules that would essentially prohibit overdraft fees.

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