The new Qualified Residential Mortgage rule, outlined in the Dodd-Frank bill, creates a scenario that will make many lenders want to abandon their mortgage businesses. The new rule is another example of a good intention that creates unexpected problems.

Dodd-Frank sought to create a means of forcing lenders to keep some skin in the game by (more…)

I have obtained a copy of the complaint (pdf) prepared by Arkansas Attorney General Dustin McDaniel against Mo’ Money Taxes, its successor MoneyCo, and the principal owners of the firm.

The complaint alleges violation of Arkansas’ Refund Anticipation Loan Act (“RALA”) and the Arkansas Deceptive Trade Practices Act (“ADTPA”).

Mo’ Money ceased to exist on August 8th, 2010. Since then, Mo’ Money c0-owner Markus Granberry has established a new company, known as MoneyCo USA. It has its headquarters at the same address as Mo’ Money Taxes. On MoneyCo USA’s web site encourages people to return to (more…)

When is it appropriate for a government agency to spell out the type of products that appear in the marketplace? The upcoming rulemakings on the CFPB seem destined to pit consumer advocates against banks, and the preference among lawmakers for either “suitability” or “choice” will probably provoke much of the contention.

Although the Dodd-Frank bill established the CFPB, much remains to be done to determine what it will mean. From its initial conceptualization, the CFPB has promised to revitalize the power of consumer disclosures.  Elizabeth Warren spoke at the Consumer Federation of America’s annual conference in Washington, DC this morning and she reiterated her faith in the power of disclosure to protect the public. At once excited but simultaneously weary, she made an effort to emphasize that she believes that most Americans will appreciate the results of the new bureau once they can see its benefits.

“Do you hear people saying that the Consumer Product Safety Commission should do less to protect the safety of infants in their (more…)

President Obama says that he will nominate Joseph Smith, the current North Carolina Commissioner of Banks to become the new leader of the Federal Housing Finance Administration.

It is one more instance of how the progressive leadership in North Carolina is moving to Washington to take on the big banks.  Smith’s understudy, Mark Pearce, was recently named to a new position at the FDIC, where he will supervise consumer protections at the 8,000 financial institutions under the regulatory purview of the FDIC.  Eric Stein, formerly an attorney at the Center for Responsible Lending, has been working as the Deputy Assistant Secretary of Consumer Protections at the Department of the Treasury for more than a year.In that time, he has been the champion of the Consumer Financial Protection Bureau.

Smith will have an opportunity to shape reform of the GSEs.

The rules that govern how money changes hands during most debit card transactions is about to change, but it is anybody’s guess where things will stand once the marketplace finds its new equilibrium.

The Durbin Amendment to the Dodd-Frank legislation puts a price ceiling on how much retailers will pay on transactions where the card issuer has more than $10 billion in assets. Most financial institutions do not have $10 billion in assets, but the ones that do are the dominant in the debit card marketplace. Some accounts estimate their market share to be as high as 75 percent.

The pricing is driven by a principle that the ultimate cost of a debit card transaction should be at or below the cost of a paper check. There (more…)