Legislation seeks to increase access to credit, opportunity

U.S. Sens. Tim Scott (R-SC) and Joe Manchin (D-WV) recently reintroduced legislation that seeks to expand credit access for those with no credit history or one that is too scarcely populated to generate a credit score.© Shutterstock The Credit Access and Inclusion Act of 2021 would enable landlords, as well as utility and telecom providers, […]

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U.S. Sens. Tim Scott (R-SC) and Joe Manchin (D-WV) recently reintroduced legislation that seeks to expand credit access for those with no credit history or one that is too scarcely populated to generate a credit score.

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The Credit Access and Inclusion Act of 2021 would enable landlords, as well as utility and telecom providers, to report on-time payments to credit reporting agencies.

The lawmakers maintain such action would provide consumers an opportunity to develop a positive credit history via a record of timely paying bills.

“Too many Americans are denied the opportunity to build wealth through buying a home or car or taking out a loan for school because they don’t have a credit score,” Scott said. “If you pay your bills on time, you should be able to build credit—simple as that. We must remove barriers to opportunity by fixing a broken system that currently locks out millions of people in South Carolina and across the country.”

Machine said Americans who pay their monthly bills on time deserve the opportunity to build credit.

“This common-sense, bipartisan bill would give ‘credit invisible’ Americans the chance to develop a credit score, which is needed to purchase a home or car, or take out student loans,” Manchin said. “It is frustrating that the current system keeps many of the most vulnerable Americans from building a credit score. I’m proud to reintroduce this bipartisan bill to ensure all Americans and West Virginians have the opportunity to build credit.”

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CBA advocates Community Reinvestment Act modernization

The Consumer Banking Association (CBA) is advocating for the modernization of the Community Reinvestment Act (CRA).© Shutterstock The position stems from the Office of the Comptroller of the Currency’s (OCC) recent decision to advance efforts to repeal the June 2020 CRA rule and collaborate with the Federal Reserve Board and the Federal Deposit Insurance Corporation […]

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The Consumer Banking Association (CBA) is advocating for the modernization of the Community Reinvestment Act (CRA).

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The position stems from the Office of the Comptroller of the Currency’s (OCC) recent decision to advance efforts to repeal the June 2020 CRA rule and collaborate with the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) on a joint rulemaking process.

“America’s banks have willingly invested trillions into lower and moderate-income communities to help bring access and affordability to those most in need,” CBA President and CEO Richard Hunt noted via a statement. “It is well past time for federal regulators to finally demonstrate responsible government by modernizing CRA for the first time in over two decades. Any modernized CRA rule should be transparent, flexible, and consistent across regulators to ensure banks are able to optimize support for the communities they serve.”

The CBA indicated Acting Comptroller of the Currency Michael Hsu is slated to deliver a keynote address at CBA LIVE next month, presenting a regulatory agenda expected to include CRA modernization.

Per the CBA, the CRA modernization initiative would provide banks with greater clarity concerning which investments would count while also ensuring CRA investments reach communities in greatest need.

“We once again commend the OCC for bringing this issue to the forefront in an effort to modernize this antiquated law, and we look forward to working collaboratively with the OCC, FDIC, and Federal Reserve to modernize the CRA through a joint rulemaking,” Hunt concluded.

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Senate bill would cap interest, fees on consumer loans at 36 percent

A bill has been introduced in the U.S. Senate that would cap fees and interest on consumer loans at an annual percentage rate (APR) of 36 percent.© Shutterstock This is the same limit in place for military service members and their families, the lawmakers said. In 2006, Congress mandated a federal 36 percent annualized usury […]

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A bill has been introduced in the U.S. Senate that would cap fees and interest on consumer loans at an annual percentage rate (APR) of 36 percent.

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This is the same limit in place for military service members and their families, the lawmakers said. In 2006, Congress mandated a federal 36 percent annualized usury cap for certain credit products marketed to service members and their families. Over the years, that has curbed payday, car title, and tax refund lending around military bases.

“Payday lenders make their money through ultra-high interest rates and fees paid by the people who can least afford it,” U.S. Sen. Sheldon Whitehouse (D-RI), one of the bill’s sponsors, said. “This bill would impose sensible limits to help end the inescapable cycle of debt too many Americans currently face. In the long run, we need to restore states’ rights to set usury limits and protect home state consumers from lending abuse.”

Along with Whitehouse (D-RI), the legislation is also sponsored by U.S. Sens. Dick Durbin (D-IL), Jeff Merkley (D-OR), and Richard Blumenthal (D-CT).

“It is time for federal legislation that cracks down on predatory lending and closes loopholes used to exploit hard-working Americans. The Protecting Consumers from Unreasonable Credit Rates Act would eliminate high-cost payday loans and other costly forms of credit that trap vulnerable consumers in endless debt cycles. Too many Americans suffer long-term financial harm from these predatory loans and deceptive tactics, and we must put an end to it,” Durbin said.

Various federal and state loopholes allow lenders to charge high interest rates, as high as 400 percent APR for payday loans, 300 percent APR for car title loans, and up to 17,000 percent for bank overdraft loans.

This bill would establish a maximum APR of 36 percent and apply this cap to all open-end and closed-end consumer credit transactions, including payday loans, car title loans, overdraft loans, credit cards, car loans, mortgages, and refund anticipation loans. Further, it would ensure that this federal law does not preempt stricter state laws. It would also create specific penalties for violations of the new cap and support enforcement in civil courts and by State Attorneys General.

“Back in 2007, we kicked payday lenders—who prey on families when they’re at some of the most vulnerable times in their lives—out of Oregon,” Merkley said. “Americans in every corner of this country deserve the same protections from these lenders’ predatory practices. Let’s make this the year that Congress passes the Protecting Consumers from Unreasonable Credit Rates Act so we can stand up to these lenders and help ensure that Americans seeking to recover from the economic impacts of the coronavirus crisis are not lured into a vortex of debt.”

The bill is endorsed by Americans for Financial Reform, Center for Responsible Lending, Consumer Federation of America, National Consumer Law Center, Woodstock Institute, and Shriver Center on Poverty Law.

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House advances bill restoring FTC’s ability to help consumers get money back from scammers

The U.S. House of Representatives advanced a bill that would restore the Federal Trade Commission’s (FTC) authority to go to court to get consumers and businesses their money back from scammers.© Shutterstock The bill, the Consumer Protection and Recovery Act (H.R. 2668), would restore protections stripped by a recent Supreme Court decision. Historically, FTC would […]

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The U.S. House of Representatives advanced a bill that would restore the Federal Trade Commission’s (FTC) authority to go to court to get consumers and businesses their money back from scammers.

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The bill, the Consumer Protection and Recovery Act (H.R. 2668), would restore protections stripped by a recent Supreme Court decision. Historically, FTC would return money taken by scammers, fraudsters, and other lawbreakers to consumers. In the last three years alone, the FTC returned $11.5 billion to nearly 10 million consumers. However, on April 22 of this year, that monetary relief for consumers stopped when the U.S. Supreme Court ruled that section 13(b) of the FTC Act is limited to stopping or mandating certain conduct. The Supreme Court ruled that it does not allow the FTC to seek equitable monetary relief or require bad actors to return money earned through illegal activity.

The Consumer Protection and Recovery Act restores the FTC’s authority to seek monetary relief by amending section 13(b) of the FTC Act to provide the FTC with express authority to obtain both injunctive and monetary relief, including monetary redress for consumers in court for all violations of the laws FTC enforces. Further, it allows the FTC to pursue many kinds of equitable relief, including restitution for losses, contract reformation and rescission, monetary refunds, and the refund of property.

“Too often, scammers prey on society’s most vulnerable, particularly our seniors, veterans, small businesses, and the disabled,” Rep. Terri Sewell (D-AL), one of the sponsors of the bill, said. “During the COVID-19 pandemic, we’ve seen a surge in this type of illegal activity. This is simple. When hard-working Alabamians fall victim to financial scams, the FTC should have the authority to step in and return them their money … With this bill, we are sending a clear message: government must work for the people.”

The Consumer Protection and Recovery Act has the support of several groups. Including the AFL-CIO
Americans for Financial Reform, Consumer Federation of America, Consumer Reports, Consumer Action, National Consumers League, National Association of Consumer Advocates, and National Consumer Law Center, to name a few.

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Measure targets veteran homelessness, housing assistance programming

U.S. Reps. Lloyd Smucker (R-PA) and Salud Carbajal (D-CA) reintroduced the Home For The Brave Act of 2021, which addresses veteran homelessness while bolstering disabled veterans’ housing program access.© Shutterstock The legislation would exempt veterans’ VA disability benefits from counting toward total income as a means of determining eligibility for housing assistance programs via the […]

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U.S. Reps. Lloyd Smucker (R-PA) and Salud Carbajal (D-CA) reintroduced the Home For The Brave Act of 2021, which addresses veteran homelessness while bolstering disabled veterans’ housing program access.

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The legislation would exempt veterans’ VA disability benefits from counting toward total income as a means of determining eligibility for housing assistance programs via the Department of Housing and Urban Development (HUD).

“Our veterans have put their lives at great risk to keep all of us safe back home,” Smucker said. “To return home and be priced out of housing assistance simply because they receive service-related disability benefits is just plain wrong. Our district has made great strides to eliminate veteran homelessness, and I am proud to stand with my constituents in this noble effort.”

Financial benefits for service-connected disabilities are presently considered as income regarding HUD eligibility for housing assistance programs. Some veterans are deemed ineligible for the housing programs because their disability benefits place them at a higher income level.

Carbajal said it is wrong to deny veterans access to housing assistance programs due to disability benefits received for service-related injury or illness.

“I am glad to work across the aisle on this legislation to assist our veterans experiencing homelessness and housing insecurity on the Central Coast and across the country,” he said. “They stepped up to defend our nation, and now Congress must step up for them by ending this egregious housing discrimination against our disabled veterans.”

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Bill expands small business healthcare options

U.S. Reps. Tim Walberg (R-MI), Michael C. Burgess (R-TX), Rick Allen (R-GA), and Virginia Foxx (R-NC) introduced Tuesday the Association Health Plans Act of 2021, which would expand small business healthcare options while lowering costs via association health plans (AHPs).© Shutterstock The legislation seeks to amend the Employee Retirement Income Security Act of 1974, establishing […]

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U.S. Reps. Tim Walberg (R-MI), Michael C. Burgess (R-TX), Rick Allen (R-GA), and Virginia Foxx (R-NC) introduced Tuesday the Association Health Plans Act of 2021, which would expand small business healthcare options while lowering costs via association health plans (AHPs).

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The legislation seeks to amend the Employee Retirement Income Security Act of 1974, establishing additional criteria for determining when employers may join a group or association of employers treated as an employer under section 3(5) to sponsor a group health plan and for other purposes.

“The high cost of healthcare remains a struggle for small businesses, many of whom are still facing pandemic-related hardship,” Walberg said. “Association health plans are a common-sense solution that empower small employers and their employees when making health coverage decisions. By providing small businesses with greater bargaining power, it allows them to offer more quality options for workers at a better price.”

Walberg said the measure would expand pathways to more affordable healthcare for families nationwide.

“Americans value the freedom of individualism and want the same when choosing a health insurance plan,” Burgess said. “Association health plans expand the opportunity for Americans to choose insurance that meets their needs and for employers to provide quality insurance to their employees. Having owned my own practice, I understand the value of these plans, which allow employers to partner together to offer quality coverage that can be more affordable. These health plans are a step toward expanding our options and restoring our personal liberty in our healthcare system.”

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SEC hits UBS with fines for compliance failures with volatility linked exchange-traded product

The Securities and Exchange Commission took action against UBS Financial Services for compliance failures relating to sales of a volatility linked exchange-traded product (ETP). © Shutterstock The ETP at issue is designed to track short-term volatility expectations in the market as measured against derivatives of a volatility index. The product issuer warned UBS that it […]

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The Securities and Exchange Commission took action against UBS Financial Services for compliance failures relating to sales of a volatility linked exchange-traded product (ETP).

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The ETP at issue is designed to track short-term volatility expectations in the market as measured against derivatives of a volatility index. The product issuer warned UBS that it was not appropriate to hold the product for extended periods. Further, the product’s offering documents made clear that it was more likely to decline in value when held over a longer period.

The SEC’s order finds that while UBS prohibited brokerage representatives from soliciting sales of the product, it did not place similar restrictions on certain financial advisers’ use of the product in discretionary managed client accounts. In addition, it found that UBS adopted a concentration limit on volatility linked ETPs but failed to implement a system for monitoring and enforcing that limit for five years.

Further, the SEC said that between January 2016 and January 2018, certain financial advisers had a flawed understanding of the appropriate use of the volatility linked ETP and failed to take sufficient steps to understand risks associated with holding it for extended periods. These financial advisers purchased and held the product in client accounts for lengthy periods, resulting in meaningful losses.

“Advisory firms must protect clients from inappropriate investments in complex financial products,” Daniel Michael, chief of the SEC Enforcement Division’s Complex Financial Instruments Unit, said. “We will continue to scrutinize firms’ policies and procedures related to these risky products, and we will take action when they are inadequate.”

Without admitting or denying the SEC’s findings, UBS agreed to cease and desist from these violations, a censure, and disgorgement and prejudgment interest of $112,274, and a civil penalty of $8 million to be distributed to investors harmed by the conduct at issue.

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Rep. Horsford introduces bill to end double taxation on consumers who win lawsuits

U.S. Rep. Steven Horsford (D-NV) introduced legislation that seeks to provide tax relief for people who win consumer protection lawsuits. © Shutterstock The End Double Taxation of Successful Consumer Claims Act says that those who win consumer protection lawsuits are not liable for taxes on the fees paid to their attorneys. “Corporate wrongdoing often targets […]

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U.S. Rep. Steven Horsford (D-NV) introduced legislation that seeks to provide tax relief for people who win consumer protection lawsuits.

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The End Double Taxation of Successful Consumer Claims Act says that those who win consumer protection lawsuits are not liable for taxes on the fees paid to their attorneys.

“Corporate wrongdoing often targets the most vulnerable consumers — including our seniors, military families, and those without the means to fight back. When Nevadans successfully litigate fraud claims, they ought to be fully compensated, not hit with burdensome taxes,” Horsford said. “I’m glad to work with Senator Cortez Masto to introduce the End Double Taxation of Successful Consumer Claims Act, which would reverse harmful provisions of the 2017 Republican tax law and ensure that Nevadans can hold corporations fully accountable for fraud and abuse.”

When consumers win legal claims, they are often awarded monetary damages and reimbursement for their legal fees. Typically, the consumer receives the damages while the attorney receives the fees. However, the 2017 Republican tax law required consumers to pay taxes on the amount paid to them and the amount paid to their attorney, with no way to deduct the fees. Attorneys are also required to pay taxes on the legal fees they receive, resulting in double taxation.

Consumer cases typically involve small amounts of damages, while attorneys’ fees often make up a large proportion of the total award. If the consumer is taxed on the total amount — damages awarded plus attorneys’ fees awarded — the taxes can consume a significant portion of the money awarded to the plaintiff. The End Double Taxation of Successful Consumer Claims Act would end double taxation and provide relief for consumers from paying the taxes on attorneys fees.

The bill is supported by the National Association for Consumer Advocates, Consumer Federation of America, American Association for Justice, Americans for Financial Reform, National Consumer Law Center (on behalf of its low-income clients), Consumer Action, Public Citizen, Public Justice, US PIRG, National Association for Latino Community Asset Builders (NALCAB), National Consumers League and Consumers for Auto Reliability and Safety, and the Public Investors Advocate Bar Association.

A companion bill was introduced in the U.S. Senate by Sen. Catherine Cortez Masto (D-NV).

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Bipartisan, bicameral legislation seeks to address reverse transfers of college credit

U.S. Sens. Mark R. Warner (D-VA, Mike Braun (R-IN), John Hickenlooper (D-CO), and Elizabeth Warren (D-MA) recently introduced legislation that would enable the “reverse transferring” of college credits to help identify whether enough credits have been earned for a degree. © Shutterstock The Reverse Transfer Efficiency Act of 2021 would eliminate obstacles preventing students from […]

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U.S. Sens. Mark R. Warner (D-VA, Mike Braun (R-IN), John Hickenlooper (D-CO), and Elizabeth Warren (D-MA) recently introduced legislation that would enable the “reverse transferring” of college credits to help identify whether enough credits have been earned for a degree.

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The Reverse Transfer Efficiency Act of 2021 would eliminate obstacles preventing students from receiving the degree or certification they have earned. Credit reverse transferring would move credits from a four-year institution to a two-year institution where a student was previously enrolled.

“A four-year college is not the only path to prosperity in this country, and community colleges are a vital and economical part of our education system,” Braun said. “Removing roadblocks on the path to attaining a degree from these institutions is overdue.”

The National Student Clearinghouse, an educational nonprofit that verifies enrollment data, found more than 4 million individuals have completed enough credit hours at a four-year institution to be eligible for an associate’s degree but withdrew without a degree or certificate.

The legislation would amend the Family Educational Rights and Privacy Act (FERPA), creating an exemption for sharing student education records between higher education institutions and allowing for the sharing of credit data between post-secondary schools.

“In my district, Alamo Colleges is the largest provider of higher education in South Texas and proves that two-year programs are critical in preparing students for success beyond their hallways,” said U.S. Rep. Joaquin Castro (D-TX), who joined U.S. Reps. Joe Neguse (D-CO) and John Curtis (R-UT) in presenting companion legislation in the U.S. House of Representatives. “The Reverse Transfer Efficiency Act will allow these students to easily transition to four-year universities, like the University of Texas at San Antonio in my district, with an associate’s degree.”

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Brent Beardall appointed chairman of American Bankers Council

The American Bankers Association (ABA) recently announced that Washington Federal Bank President and CEO Brent Beardall has been appointed chairman of the organization’s American Bankers Council.Brent Beardall Beardall’s term will be for the 2021-2022 membership year. His previous within Seattle-based WaFd Bank include vice president, controller, and chief financial officer. The American Bankers Council serves […]

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The American Bankers Association (ABA) recently announced that Washington Federal Bank President and CEO Brent Beardall has been appointed chairman of the organization’s American Bankers Council.

Brent Beardall

Beardall’s term will be for the 2021-2022 membership year. His previous within Seattle-based WaFd Bank include vice president, controller, and chief financial officer.

The American Bankers Council serves as a peer group for midsize bank chief executives, providing input to the ABA regarding pivotal regulatory and legislative matters. Additionally, the panel participates in regular meetings to exchange information and share banking industry best practices.

“Brent is a strong leader who brings a passion and enthusiasm for banking to this important role,” ABA President and CEO Rob Nichols said. “His wealth of knowledge and experience, along with his commitment to ensuring that the banking industry makes a positive difference in the communities we serve, makes him a great choice to lead ABA’s American Bankers Council.”

Beardall said he is honored to accept the ABA post.

“I look forward to working closely with my fellow midsize bank CEOs across the country and the ABA’s professional staff to advance our industry’s agenda,” Beardall said. “Banks of all sizes have provided critical support to our communities through the pandemic, and with the right policy environment, we have an opportunity to help drive the recovery forward.”

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