WARREN BUILDS TEAM AT CONSUMER FINANCIAL AGENCY

The Wall Street Journal, November 12, 2010

Elizabeth Warren is assembling a team to deal with one of the fledgling Consumer Financial Protection Agency’s biggest – and most closely watched — responsibilities: Supervising large firms that operate in the world of consumer credit.

Ms. Warren, who is leading the launch of the agency, has tasked Peggy Twohig, who has been heading the Treasury Department’s Office of Consumer Protection, with helping to set up the unit that will oversee non-bank supervision, according to people familiar with the matter. Steven Antonakes, who is currently the Massachusetts bank commissioner, is under consideration to help create the bank-supervision unit, these people said.

Wall Street is watching carefully to see how the supervisory units are staffed and structured. The units have the authority to conduct examinations and are expected to police institutions to ensure products and services don’t pose risks to consumers and that firms aren’t engaging in fraudulent, deceptive or abusive practices. The consumer agency has the power to request all types of data and subpoena power to get documents it can’t otherwise obtain.

The non-bank unit that Ms. Twohig is helping to set up has the authority to oversee a wide range of businesses from mortgage originators to debt collectors to payday lenders. The bank supervision division will oversee depository institutions that offer consumer finance products, such as mortgages and credit cards.

Before coming to the Treasury, Ms. Twohig spent 17 years at the Federal Trade Commission, where she dealt with financial services issues. Mr. Antonakes has been Massachusetts’ bank commissioner since 2003 and is also vice chairman of the Conference of State Bank Supervisors.

The supervision units, which are being created from scratch, are expected to draw staff from both within and outside the government. Many federal bank examiners are being offered the opportunity to go to the consumer agency if they express a preference.

To see Peggy Twohig in action click here to view her presentation at a New America Foundation conference on the unbanked.

ELIZABETH WARREN: PLENTY OF POWER

The Wall Street Journal, November 18, 2010

Just how much muscle the new Consumer Financial Protection bureau and its temporary leader,Elizabeth Warren, have before it gets its full powers and a permanent director next year is a matter of some angst in Washington and on Wall Street.
 
On Thursday, a key Treasury official said that Ms. Warren and her fledgling bureau have quite a bit of authority – including the ability to start the rule-writing process. The bureau can engage undertake studies, solicit feedback from the public “and I think even putting out proposals,” Treasury’s General CounselGeorge Madison said at a luncheon.

The bureau’s current power does not, however, extend to issuing final rules, he said. Treasury Secretary Timothy Geithner has set July 21, 2011, as the date the consumer agency will receive all of the consumer protection authority from existing federal regulators, making that the target for having the bureau up and running at full speed.

Mr. Madison said he expects a permanent director to be named by then. President Barack Obama tapped Ms. Warren, a Harvard law professor who has been urging such an agency for years, to launch the bureau, but it remains unclear who he will nominate as its first official director.

But Mr. Madison’s comments to the Women in Housing and Finance suggest that the bureau — which has broad new powers to write rules for mortgages, credit cards and other financial products — can do most of the heavy lifting before the so-called transfer date, a prospect that’s likely to make many in the financial industry nervous.

ArgusLeader.com, November 22, 2010

WASHINGTON - Sen. Tim Johnson is about to become a more powerful force on Capitol Hill.

The third-term Democrat from Vermillion is in line to become chairman of the Senate Banking, Housing and Urban Affairs Committee when the new Congress convenes Jan. 5. The powerful panel oversees the financial industry and writes laws governing investment and insurance companies, public housing and transit.

The committee's chairman, Democrat Christopher Dodd of Connecticut, is retiring, and Johnson said he has been assured by Senate Majority Leader Harry Reid that the job is his.
Click Here for more

American Banker, October 18, 2010

GOVERNMENT RELATIONS COMMITTEE REPORT

One of the most active committees coming out of FiSCA's re-organization and new emphasis on Washington, DC activities, is the newly reconstituted Government Relations Committee.  Under the leadership of Committee Chairman Joe Doyle, this group has been holding weekly meetings to discuss the landscape in DC and how FiSCA can best fit in.
 
The two DC priorities for FiSCA to address in 2011 are the CFPB and the distribution of federal benefits. 
 
With the decision to retain Manatt, Phelps & Phillips, LLP for additional lobbying and regulatory support, the committee is now working with both The Nickles Group and Manatt, to come up with a strategy for FiSCA to address these priorities meaningfully in 2011.
 
As discussed earlier in this issue of e-currents, Elizabeth Warren has been staffing up the Consumer Financial Protection Bureau, and we now know who will be in charge of the non-bank entities that the Bureau will oversee.  Bill Sellery plans to be meeting with Peggy Twohig and other senior bureau staffers shortly.
 
Research will be very important to CFPB staff and the committee has been discussing the possibility of commissioning a study on check cashing; the role that check cashing businesses play in their communities, the way they serve their customers, the cost to consumers of their products and services and more.
 
The committee also plans to compile all studies completed to date that support PDAs, for member use and reference.
 
The members of the Government Relations Committee are: Joe Doyle, Ian MacKechnie, Rich Gaccione, Aggie Clark, Rob Grieser, Bob Wolfberg, Ted Saunders and Rick Klein.
 
e-currents will keep you posted on the work of this important committee.

Below is a note from FiSCA Chairman Joe Coleman

Dear FiSCA Member:

Many of you have indicated that you have received inquiries on your websites and Facebook pages from customers regarding the recently passed financial reform bill and its possible impact on them. To help you respond, FiSCA has created a new section to its website dedicated to the Bureau of Consumer Financial Protection. It provides an overview of the bureau, an update on recent activities and a Q&A that focuses on consumer-related topics. This section will be updated routinely to reflect changes in the Bureau’s status and actions.  Click here to see the relevant section of the FiSCA site.

I urge you to share this link with your customers so they can  learn more about the Bureau and its possible impact on them.

Joseph Coleman, FiSCA Chairman

Activa Winner:   Pawn America

FiSCA is honoring Pawn America with an Activa Award for their generous participation with the Boys & Girls Clubs of the Twin Cities.  Pawn America is based in Burnsville, Minnesota.  They have been in business for 19 years, with 22 locations and more than 350 employees.

Pawn America helped create and launch Kids Feeding Kids for children who attend the Boys & Girls Club in the winter of 2007 in Minneapolis. The initiative provides an opportunity for local youths to eat, learn culinary skills and cooperative behavior traits while serving their peers a late-afternoon dinner 5 evenings a week. As a former Club kid himself, Pawn America owner Brad Rixmann was familiar with the benefits of the Clubs and wanted to give back. He knew that many kids who attend local chapters of the Boys & Girls Clubs have to go several hours of the day on an empty stomach. Kids Feeding Kids has two kitchens and feeds almost 50,000 meals annually. 
 

The end goal set by Pawn America is to stop childhood hunger in the areas of the Twin Cities that house local Boys & Girls Clubs. Pawn America donates $130,000 annually and with their employees help, they volunteer 1,120 man-hours to help this cause annually. 

Pawn America has also participated with Hennepin County Sheriff’s Foundation, PC’s for People, The University of Minnesota Medical Center, Fairview Transitional Care Unit and Pawn America Builds Libraries for Soldiers in Iraq.  

Chicago Sun-Times, October 25, 2010
 
The costs of checking account fees have risen to an all-time high this year as banks seek to make up revenue they'll lose from new federal rules aimed at protecting consumers, according to a Bankrate, Inc., study released today. Video for the Study.

FDIC SELECTS NINE BANKS FOR BEST  PRACTICES STUDY

The Federal Deposit Insurance Corporation (FDIC) today announced the selection of nine banks to participate in a case study to help the agency identify best practices of banks offering safe and low-cost transactional and savings account products, particularly those that are responsive to the needs of underserved consumers. The selected banks vary in size, location, and business focus.

"Our goal is to highlight accounts that are not only safe and affordable for the over one-quarter of consumers who are not fully utilizing mainstream banks but also are feasible for banks' bottom lines," said FDIC Chairman Sheila C. Bair.

Click Here for the list of nine banks chosen for the study

Click Here to view the full press release

Startup Offers Pawnshop for the Park Avenue Set
American Banker, November 16, 2010

Boomerang Lending isn't a typical pawnshop.

There are no flashing fluorescent lights enticing someone down on his luck to hock grandma's gold-plated necklace in return for a quick $100, no surly proprietor sitting behind bulletproof glass.

On the contrary, the online pawn service prides itself on catering to more affluent consumers who may be in a pinch and need a short-term loan. It lets them sell their Rolex watches and Prada purses discreetly and anonymously from their own home, and later buy the goods back for principal plus accrued interest.

That there is demand for such a service shows that the economic downturn has left even the more well-to-do with reduced access to credit. With the service, wealthy people whose credit scores may have been wrecked by the financial crisis can access short-term cash without having to walk into a pawnshop or go through a credit check.
Click here for more.

PLS' donation delivered the spirit of the season to the less fortunate in their community.  We are glad we could deliver it to you in our November issue.

Happy Thanksgiving from e-currents!

Being a good neighbor is a responsibility that PLS embraces, both at the store level and as a company. So it was no surprise when Bob and Dan Wolfberg, Co-Presidents, showed up at the Pacific Garden Mission on Chicago’s South Side with a truckload of turkeys.

“The Pacific Garden Mission is a longtime refuge for the homeless in our community,” said Dan Wolfberg. “We’re very thankful that we’re able to help them in their work.”

The Pacific Garden Mission, located at 1458 S. Canal Street, has been providing food, shelter, clothing and medical care since 1877. On an average night, over 500 homeless men, women and children receive safe, clean and warm shelter at the site. During the cold winter months, that number can climb above 900. Everything is provided free of charge to all who enter ‘the doors that never close.’

“During the holidays, we’re especially grateful for what’s really important—family, food on the table and a roof over our heads,” said Bob Wolfberg, as he and his brother unloaded the turkeys, which will become part of the Mission’s Thanksgiving feast. “The Pacific Garden Mission works to make sure that those in the greatest need can enjoy these pleasures we sometimes take for granted.” (click here to see photo)

“Thank you for being such good neighbors,” Pastor Philip Kwiatkowski, VP-Ministries, told the Wolfbergs as he and Transportation Director Patrick Doolin accepted the turkeys. (click here to see photo)