Links in “Payday Lending/Money Services Businesses”

The OCC reiterated its position on not directing banks regarding customer acceptance or non-acceptance with particular emphasis on MSB account management. The OCC noted that MSBs are not de facto high risk and promoted continued use of appropriate oversight to evaluate risks and assign appropriate risk ratings for all accounts. [11/21/14]

Just as “some assembly required” is a red flag to non-DIY types, “money services business” is a red flag to many institutions. However, as AffirmX's Jane Pannier explains in this article, money services businesses (MSBs) "provide a much-needed service for individuals that may not have access to or don’t want to use traditional banking accounts or services." Read this "instruction manual" to find out how to more safely offer these types of accounts. [11/3/14]

CUNA President/CEO Jim Nussle in a recent op-ed piece in the New York Times highlighted credit union programs that help their members end the payday lending and predatory lender cycles, while encouraging savings. Nussle’s comments were in response to a previous editorial that asked how to best protect consumers who need help in restoring their credit. [10/28/14]

The NCUA’s payday alternative loans regulation has been amended to replace all references to “short-term, small amount loans” and “STS loans” with “payday alternative loans” and “PAL loans.” [10/6/14]

About a third of payday loans are now originated online, but online payday lenders account for about 90% of consumer complaints about payday loans. [10/3/14]

A proposed rule from the DOD would extend the Military Lending Act’s rate cap of 36% to all forms of payday loans, vehicle title loans, refund anticipation loans, deposit advance loans, installment loans, and some unsecured lines of credit and credit cards. Currently, the Act only applies to specific short term loans and refund anticipation loans. [10/1/14]

A Missouri-based online payday loan company has received a temporary restraining order from the FTC due to illegal lending practices. In an 11-month period, the company issued $28 million in loans, and collected over $46.5 million. [9/18/14]

The CFPB announced Wednesday its actions against the Hydra Group, alleged to be running an illegal cash-grab scam. The company is purported to use consumer information purchased from lead generators to illegally deposit payday loans into consumers accounts, then withdraw fees without consent. [9/18/14]

The CFPB and FTC have shut down two operations that swindled consumers who were looking for loans online and had money withdrawn from their bank accounts under false pretenses over a period of time. Victims said they couldn't stop the companies from drawing money out of their accounts. [9/18/14]

FinCEN has imposed a civil money penalty against a money services business, BPI Inc. The MSB began receiving citations in 2005, but did not adequately address examiners' findings of deficiencies in its AML system including: internal controls, independent testing, training, and suspicious activity reporting. FinCEN's director Jennifer Calvery explains that the civil money penalty "highlights that money services businesses cannot ignore their anti-money laundering responsibilities, or their examiners." [8/29/14]