Consumer Bankruptcy Journal Fall 2016 - Page 7

WASHINGTON UPDATE Defense rules limit interest rates to 36%, prohibit arbitration, and provide strong private remedies for all non-purchase money, closed end credit offered to the country’s 3 million servicemembers and their dependents, as described in this article. FROM THE INTEREST GROUPS The Urban Institute, in a study funded by the CFPB, tested whether simple “rules of thumb,” even if they’re not as detailed as other forms of financial education, might help people improve their financial decisionmaking. The Institute concludes: “financial decisions can be complex, and the wrong choices can lead to long-term financial strain. This complexity makes financial education difficult to deliver. Many studies have found that financial literacy classes in high schools, community colleges, and adult education spaces don’t do much to improve financial outcomes for participants. More intense one-onone methods of financial education and behavior change, such as counseling and coaching, have shown promise, but it’s difficult to get people to participate in these time-intensive programs, and they can be expensive to administer. It turns out simple rules of thumb can help at a very low cost.” September 23, 2016 Issue two of our weekly update, designed to keep NACBA members abreast of any significant and relevant activity on the part of Congress, regulatory agencies and interest groups/think tanks over the week ON THE HILL This week’s anticipated vote on the continuing resolution (CR) to fund the government past the September 30th expiration of the current fiscal year funding did not happen. However, as of the Thursday, negotiators are said to be just a couple of sticking points (offsets for Zika funding and disaster money for floodravaged areas of the county) away from a vote. Given the delays, both Senate Majority Leader Mitch McConnell (RKY) and Speaker Paul Ryan (R-WI) have refused to commit to a timeline on the passage of a CR, but neither have suggested there is any serious threat of a government shutdown. Senator Elizabeth Warren (D-MA) made headlines at Tuesday’s Senate Banking Committee hearing when she told Wells Fargo CEO John Stumpf that he should resign in the wake of the $185 million in penalties that Wells Fargo has been assessed as the result of an investigation into its sales practices abuses. And, it wasn’t just Senator Warren who took Stumpf to task; the criticism leveled at both the practices and Wells Fargo’s decision to fire over 5,000 low level employees in response to the investigation was bipartisan. Consumer Financial Protection Bureau Director Richard Cordray also testified at the hearing, and expressed concerns about a bank culture that attempts to “divide and conquer regulators.” Robocalls are currently the number one complaint to t he Federal Communication Commission (FCC) and as such have prompted the House Energy and Commerce’s Communications and Technology Subcommittee to look at whether the Telephone Consumer Protection Act (TCPA) needs to be updated. At a hearing this week, the Subcommittee examined how the law can be amended to continue shielding consumers from invasive and fraudulent phone calls, while ensuring companies can communicate with users without bearing an undue legal burden. Coming up next week: The House Financial Services Committee will be holding a hearing on Tuesday, September 27th , entitled “Examining Legislative Proposals to Address Consumer Access to Mainstream Banking Services.” The hearing can be viewed on their website. Later in the week, the Committee is expected to hold a hearing on the Wells Fargo abuses. National Association of Consumer Bankruptcy Attorneys Fall 2016 IN THE AGENCIES A closely watched Federal Reserve’s Federal Open Market Committee met this week and voted to hold its main borrowing rate steady. While acknowledging that the case for a rate increase “has strengthened”, they determined that this was not the right time to increase interest rates. The decision followed lower-thanexpected jobs numbers in August. The Consumer Financial Protection Bureau (CFPB) sued five title lenders operating in Arizona — Auto Cash Leasing, LLC; Interstate Lending, LLC; Oasis Title Loans, LLC; Phoenix Title Loans, LLC; and Presto Auto Loans, Inc. — for failing to disclose the annual percentage rate in online advertisements about title loans. The Bureau alleges that the companies advertised a periodic interest rate for their loans without listing the corresponding annual percentage rate, a violation of the Truth in Lending Act. In two separate actions, the Federal Trade Commission (FTC) obtained a court order banning mortgage relief scammers from the debt relief business and settled with a debt collections company’s former vice president who is now banned from the debt collection business. You can read about these actions here and here. CONSUMER BANKRUPTCY JOURNAL 7