Payday Pundit

The Payday Pundit will be exercising his 1st Amendment rights again on Monday.

From today’s National Journal:

A few dozen banks, consumer finance companies, mortgage companies and other large lenders have been meeting under the auspices of the American Financial Services Association to discuss forming a coalition to fight an Obama administration proposal for creating a new consumer financial protection agency with a large regulatory mandate.

“I think everybody around the table understands the urgency of the challenge we face,” said Bill Himpler, the top lobbyist for the AFSA which has about 350 members including a number of consumer finance companies that provide 50 percent of the nation’s non-mortgage loans.

The Washington Examiner questions ACORN’s use of statistic.  ACORN says they got the numbers from Center for Responsible Lending.    Center for Responsible Lending has yet to respond to the reporter’s questions.

CFSA board-member company, Check ‘n Go, has a new blog.  From the news release:

Check ‘n Go, a leading payday loan lender, launched an on-site corporate blog in May, 2009 to educate consumers about payday loans, Check ‘n Go’s efforts with the National Center for Exploited & Missing Children®, financial tips and current legislation.

“I am really excited we can offer this additional information to our consumers. Here at Check ‘n Go, we want to educate our consumers as much as possible about using payday loans, and financial tips, and this blog will be another avenue for us to do this,” said Jeff Kursman, Director of Public Relations for Check ‘n Go Financial.

Texas credit union join the short-term loan market.  From the story:

Eight credit unions in North Texas said Wednesday that they plan to compete directly with payday lenders, who charge consumers 300 to 400 percent interest, by developing a loan at a fraction of that cost.

“We are in the very early stages of development, but what we do know is that the interest rate will be capped at 18 percent,” said Linda Webb-Mañon, a spokeswoman for the Dallas-based Texas Credit Union League. “That is the max. And when you consider what consumers pay at predatory lenders, it’s a good deal.”

Let’s wait to see what the actual terms (and applications fees) are.

That’s a great way of putting it.  The Wisconsin Coalition for Consumer Choice has an oped in the Wausau Daily Herald today:

If traditional lenders are focusing on borrowers who have the means and resources available, where does that leave the 28 million Americans who live life without a bank account or the 50 million Americans who have no credit score? For consumers, it leaves them searching for alternative financial choices, especially in a time of desperate need or emergency.

From Business Times:

US lenders gear up to kill consumer protection plan

But they face uphill battle as lawmakers voice strong support

(WASHINGTON) Banks and mortgage lenders are placing top priority on killing President Barack Obama’s proposal to create a new consumer protection agency that would regulate home loans, credit card fees, payday loans and other forms of consumer finance.

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It’s going to be a huge fight,’ said Edward L Yingling, president of the American Bankers Association. ‘This is written so incredibly broadly that it affects anyone who has anything to do with consumers. This agency would have broad powers that go beyond every consumer law that has ever been enacted.’

PDLindustryblog discusses Obama’s regulatory scheme.

We thought the British were practitioners of understatement.  That’s why this headline in a British newspaper caught our attention:   “Banks Own the U.S. Government.”

The Payday Pundit happen to run into an old Senate staff colleague yesterday who now lobbies on financial issues.  He was lamenting the fact that banks have lost a lot of clout on Capitol Hill.

Banks have a provision for loan losses 1-2%. The don’t have the appetite, for risk, to offer payday loans as a main product line. Besides, they’re too busy collecting the easy money – overdraft fees.

These groups do their research, dance around the topic and when it comes down to a solution; it’s never realistic.

If the country put a cap on the price of cars, it would suck all the competition out of the market and fewer cars would get sold. The same would happen to lending.