OVERNIGHT REGULATION: Lawmakers push for payday lending crackdown
March 5, 2015
March 5, 2015
Welcome to OVERNIGHT REGULATION, your daily rundown of rules from Capitol Hill and beyond. It's Thursday evening here in Washington and we're experiencing a little cabin fever after a snow day spent working from home.
The federal government was closed today, but stuff still happened. Here's the latest.
THE BIG STORY
Consumer advocates want lenders to have to consider a borrower's income and expenses before being able to doll out high interest payday loans.
In it's new agenda, the Consumer Financial Protection Bureau listed regulating the short-term lending industry as a top priority and the new rules are expected to be unveiled as soon as this month. The agency is being pushed to adopt the strongest rules possible by Democratic lawmakers.
In a letter to CFPB Director Richard Cordray, the chairs of the Congressional progressive, Hispanic and Black caucuses asked the bureau for rules that stem predatory practices based on exorbitant interest rates and high fees.
"The payday loan industry robs borrowers of the opportunity to secure a foothold in the mainstream financial services market by locking borrowers into a long-term debt trap and by increasing the likelihood that a borrower will suffer other harmful financial consequences, such as bankruptcy, excessive overdraft fees, and involuntary bank account closures," said the letter signed by Congressional Progressive Caucus Co-Chairmen Keith Ellison (D-Minn.) and Raúl Grijalva (D-Ariz.), Hispanic Caucus Chairwoman Linda Sánchez (D-Calif.) and Black Caucus Chairman G.K. Butterfield (D-N.C.).
But lenders like South Carolina-based Advance America say they provide a service consumers not only need, they want.
"The reality is millions of Americans live paycheck to paycheck," said Jamie Fulmer, senior vice president of public affairs at Advance America. "From time to time, for whatever reason, they have cash flow needs, so they use this as a way to make ends meet."
Advance America said 90 percent of its customers repay their loans on time and 50 percent take out five or less loans each year.
But Cordray said CFPB is trying to protect borrowers, who are already struggling financially, from a revolving door of debt after a 2014 agency report found that over 80 percent of payday loans are rolled over or followed by another loan within 14 days.
What the rules are likely to include:
-- A requirement for lenders to determine a borrower's ability to repay a loan.
-- Restrictions on loans that require a borrower's car title as collateral.
-- Restrictions on a lender's ability to automatically roll over a loan.
-- Restrictions on a lender's ability to electronically debit payments from a borrower's checking account.
ON TAP FOR FRIDAY
Neither the Senate nor the House will be session.
The U.S. Judicial Conference will hold a meeting of the advisory Committee on Rules and Appellate Procedure to discuss amending rules and forms. http://1.usa.gov/
TOMORROW'S REGS TODAY
The Obama administration will publish 209 new regulations, proposed rules, notices and other administrative actions in Thursday's edition of the Federal Register.
Here's what to watch:
--The Federal Motor Carrier Safety Administration (FMCSA) will develop new entry-level training requirements for truck drivers.
The FMCSA is announcing a schedule of meetings over the next few during which it will develop training requirements for drivers looking to operate commercial motor vehicles. The agency will use these meetings to develop a proposed rule.
The meetings start later this month and run through May. http://bit.ly/1MbV0zq
--The Federal Election Commission (FEC) will issue new election spending rules for businesses and labor organizations.
The new rules will allow corporations and labor organizations to make independent expenditures and electioneering communications during campaign season in response to the Supreme Court's controversial decision in Citizens United v. FEC.
The FEC said the rules became effective on Jan. 27, 2015. http://bit.ly/1DQDtXe
--The Environmental Protection Agency (EPA) will issue changes to its safer products labeling program.
The changes will include new labeling designs, such as new fragrance-free labels, among other things.
The public has 60 days to comment. http://bit.ly/1CDzrWY
--The Department of Energy (DOE) will correct mistakes made in an efficiency rule.
The Energy Department's Office of Energy Efficiency and Renewable Energy published new energy conservation standards for certain walk-in coolers and walk-in freezer components last June. But the DOE will fix minor errors in that rule.
The corrections go into effect immediately. http://bit.ly/
NEWS RIGHT NOW
Online TV: The Federal Communications Commission's new rules could inadvertently ruin online television, critics say. http://bit.ly/1Ek0NBY
Gay marriage: The Supreme Court will hear arguments next month on whether states can ban same-sex marriage. http://bit.ly/
Cannabis legalization: A growing number of Republicans are backing legislation that would effectively legalize industrial hemp, which is related to marijuana. http://bit.ly/
Payday loans: Federal regulators are getting ready to crack down on controversial payday lenders that offer quick-cash loans in exchange for high interest rates and fees. http://bit.ly/1GYQYHM
Guns: Republicans' legislation would abolish the Bureau of Alcohol, Tobacco, and Firearms (ATF), which regulates guns. http://bit.ly/1A23aD0
Sledding ban: Dozens of children and their parents organized a "sled in" on the west lawn of the Capitol to put a spotlight on the Capitol Police's controversial sledding ban. http://bit.ly/1G3hRJz
BY THE NUMBERS
20,000: The average number of sledding injuries U.S. emergency rooms treat each year.
QUOTE OF THE DAY
"Let them sled!" - Sen. Cory Gardner tweeted today with a link to our story on the showdown over Capitol Hill's sledding ban.
We'll work to stay on top of these and other stories throughout the week, so check The Hill's Regulation page (http://thehill.com/regulation
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