Comment: Exploring Special-Purpose National Bank Charters for Fintech Companies (OCC 2017)
Reinvestment Partners submitted this comment to the Office of the Comptroller of the Currency on the agency’s proposal to create a special-purpose national charter for fintech companies.
In crafting this comment, Reinvestment Partners partnered with the Maryland Consumer Rights Coalition to express our common concerns that this charter could eviscerate the strong state consumer protection laws that are already in place in our respective states. Given our presumptions that the OCC may go ahead with their plans, we also responded to their specific questions on how such a regulatory scheme would enhance financial inclusion for under-served consumers.
CFPB Request for Comment on Payday Loans, Vehicle Title Loans, Installment Loans, and Open-End Lines of Credit; Docket No. CFPB-2016-0026 RIN 3170-AA40
Reinvestment Partners submitted this comment to the Consumer Financial Protection Bureau on November 7th, 2016. The Bureau asked for comments on how products sold in connection with payday loans, vehicle title loans, installment loans, and open-ended lines of credit might undermine consumers. This RFI follows on the Bureau’s recent rulemaking on payday, vehicle title, and certain installment loans. Reinvestment Partners also submitted a comment on that rule-making. In this comment, Reinvestment Partners focused upon our concerns associated with credit insurance, deferred interest contracts on installment loans, and non-file insurance.
FDIC Request for Comment on Third-Party Lending (FIL 50-2016)
In its comment on third-party lending, Reinvestment Partners urged the FDIC to establish a strong framework for relationships between its insured institutions and non-bank lenders. We are concerned that these arrangements pose the potential to undermine state usury laws. The FDIC has proposed a definition of these activities that will cover most of the new innovations in this space, but our comment recommends that the new approach should capture some of the related marketing approaches. Throughout, we urge the FDIC to prioritize the risk for these products to bring harm to consumers.
Reinvestment Partners submits these comments in collaboration with the Woodstock Institute (IL), the California Reinvestment Coalition, and the Maryland Consumer Rights Coalition.
Reinvestment Partners submits this comment on the CFPB’s Final Rule for Payday, Vehicle Title, and Certain Installment Loans (CFPB 2015 – 0016). Reinvestment Partners supports a strong rule with extensive underwriting of both income expense, protections against debt traps, and important protections to prevent fraud.
Additionally, Reinvestment Partners organized two sign-on letters, solicited by RP to non-profit groups that serve low-income consumers.
- Diaper Banks: Reinvestment Partners organized this sign-on letter from members of diaper bank networks. A survey of diaper bank clients in Missouri found that one in five had used a payday loan. The evidence that these consumers, who otherwise re-use their diapers were it not for the generosity of diaper banks, speaks to the need for the CFPB’s rule-making.
- North Carolina Non-Profits: Reinvestment Partners organized this letter, signed by executive directors of nine North Carolina non-profits and one elected official, to support a strong rule.
Our letter to the FDIC addresses our concerns with the new high-cost installment loans offered by Republic Bank of Kentucky in partnership with Elevate Credit. The letter also addresses Republic’s Refund Advance product, new tax-related refund loan.
Reinvestment Partners calls on our largest banks to move away from making loans to companies that provide high-cost low-quality loans to consumers. In 2014, Reinvestment Partners published a report that revealed lending by banks to a variety of high-cost consumer finance companies. These loans support payday loans, consumer installment loans, pawn shops, buy-here pay-here car lending, and rent-to-own stores.
This report tracks changes since the publication of Connecting the Dots: How Wall Street Brings Fringe Lending to Main Street back in December 2013.
- Report: September 2015: Banks continue to provide commercial financing for many kinds of high-cost consumer finance companies
Coverage of our campaign:
- “Your neighborhood pawn shop is propped up by big banks” Washington Post, December 13, 2013
- “Big Banks Provide Cash for Payday Loans” Minneapolis Star-Tribune, May 17, 2013
Our letter asking Wells Fargo to withdraw from their support of lenders was signed by more than 30 consumer groups from more than 13 states.
In 2014, RP co-authored a report with three partner organizations on overdraft. Our research revealed that many consumers fail to understand overdraft. When we sent testers to a variety of branches, we discovered that explanations of the service varied.
- Comment: Impacts of Overdraft Programs on Consumers: Docket No. CFPB-2012-007 (2012)
- Press Releases: Big banks mislead customers about overdraft charges, new report shows (2014)