PDL & Car Title: Today's News Highlights
Published: Mon, 01/27/14
Justice Department Inquiry Takes Aim at Banks' Business With Payday Lenders:
"The new, more rigorous oversight could have a chilling effect on
Internet payday lenders, which have migrated from storefronts to
websites where they offer short-term loans at interest rates that often exceed 500 percent annually. As a growing
number of states enact interest rate caps that effectively ban the
loans, the lenders increasingly depend on the banks for their survival.
With the banks' help, the lenders that typically work with a third-party payment processor that has an account at the banks are able,
authorities say, to automatically deduct payments from customers'
checking accounts even in states where the loans are illegal."
Read more... http://goo.gl/5ER3FC
Pew: Payday Loans Consume 30% Of Income In 35 States
"The third in a series of Pew reports on payday lending in the U.S.,
the study found that the nation's 12 million annual payday loan
borrowers often aren't able to meet their loan obligations, spending
on average $520 in interest to secure just $375 in borrowing."
read more... http://goo.gl/1uxzv2
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Canada PDL's attacked: The 2014 budget is also expected to focus on consumer
issues. The government says it wants to take aim at cable-TV packages that
don't allow consumers to pick and choose, payday loan
companies, lack of competition among wireless providers and price
differentials on the same goods between this country and the U.S.
Read more... http://goo.gl/VF1dDq
Deal Book New York Times:
"While examining another company, Rex Ventures, bankers at Four Oaks
learned that one of the investment firm's top executives was using a
false Social Security number and that an address for the company's
headquarters turned out to be a "vacant lot," court documents show.
Still, that was not enough to dissuade Four Oaks from allowing Rex
Ventures to process payments through its accounts. By August 2012,
the Securities and Exchange Commission shut down Rex Ventures,
accusing the company of duping investors out of $600 million.
In an email included in the lawsuit, one executive said: "I'm not
sure 'don't ask, don't tell' is going to be a reasonable defense,
if a state comes after one of our originators."
Read more... http://goo.gl/ERB6dP
Car Title Lending: "The defendants' practices resulted in rates
of default and repossession that are higher than other subprime
used-car dealers. The complaint also alleges that the defendants
failed to provide customers with a reasonable notice of
repossession, repossessed vehicles of customers who were not in
default on their contracts, failed to give customers refunds they
were due, improperly seized customers' personal property in
repossessed vehicles and used global positioning system devices to
locate and repossess vehicles without informing customers that the
dealership had installed these devices."
Read more... http://goo.gl/OGaAWC
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