National Consumer Law Center Issues Report on Alternatives to Payday Loans

 Some banks and credit unions offer "alternatives" to payday loans that are sold as better deals for consumers than what is offered by store-front payday lenders. The National Consumer Law Center has just issued a report on the topic -- Stopping the Payday Loan Trap -- Alternatives That Work, Ones That Don't. An NCLC press release says that some "loans offered by banks and credit unions as 'alternatives' to high-cost, short-term payday loans may instead plunge consumers into a costly and nearly inescapable debt cycle – just like payday loans!" The report's principal auth Lauren Saunders explains that “[t]oo many providers of so-called payday loan alternatives hit consumers with some of the same onerous provisions that predatory lenders use to saddle unwary and vulnerable borrowers with loans they can’t afford to repay.” Check it out.

Handy Side-by-Side Chart on Senate and House Financial Reform Bills

As we await the conference committee's negotiations on the financial reform legislation, the House Financial Services Committee has posted this side-by-side chart comparing the bills passed by the House and Senate. You can click on each topic addressed by both bills and instantly see how the two versions compare. For instance, go here to see how the two chambers treat executive compensation. The page also lets you know when the House or Senate bill does not have an equivalent in the other chamber's bill.

The Mortgage Reform and Anti-Predatory Lending Act

by Jeff Sovern

Buried deeply within the House financial reform bill--beginning at page 1472--is the Mortgage Reform and Anti-Predatory Lending Act.  This bill has no precise analog in the Senate bill, though some of its provisions are echoed in the Senate CFPB bill (in my slides, I didn't discuss this bill, except to the extent that the Senate bill included the same or similar provisions).  I haven't seen much about the MRAPLA in the media or, for that matter, the blogosphere, but, based on a quick look, some of its provisions seem very important.  For example, § 9002 requires mortgage originators to "diligently work to present the consumer with a range of residential loan products for which the consumer likely qualifies and are appropriate to the consumer's existing circumstances;" to disclose to consumers the "comparative costs and benefits" of each loan discussed by the originator; and to tell the consumer if the originator is "acting as an agent for the consumer."  Section 9106 prohibits arbitration clauses.  The MRAPLA also includes a subtitle on high-cost mortgages.  I'm not sure what will become of these provisions, but I hope some of the MRAPLA makes it into the final bill.  If someone has studied the MRAPLA and has summarized its provisions, I hope you will post the summary in the comments below or email them to me.

BP's Warning to Its Customers

What you'll see at BP gas stations:

FTC Settlement with Countrywide

The FTC has announced a $108 million settlement with Countrywide (i.e. Bank of America) in connection with its mortgage servicing practices.  The settlement and complaint are available at the FTC web site.

NHTSA Recalls for May 2010

Go here for the May 2010 vehicle and other recalls from the National Highway Traffic Safety Administration.

Broke USA author on NPR's "Fresh Air"

Gary Rivlin, a former New York Times journalist, appeared on NPR's Fresh Air today. Rivlin is the author of Broke USA, a new book on fringe finance. The interview is here.

Should We Tax Coke and Pepsi to Recover Their Externalities?

Perhaps

Elizabeth Warren on the Fight to Save the Consumer Financial Protection Agency

At politico.com 

Trademark silliness continues in South Africa

by Paul Alan Levy

FIFA, the world soccer federation, is back at it, trying to enforce the right to forbid any mention of the World Cup on merchandise.  But the silliness has apparently reached new heights as this video portrays the South African police out there conducting a publicity campaign against the sale of "fake flags."