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Payday lending
Slideshow

'The distorted lens of one's ideology': Comments of the week

By Victoria Finkle
January 24, 2019 10:00 PM

Readers weigh in on the Consumer Financial Protection Bureau's payday rule, consider the gender wage gap in banking, debate restrictions to membership at the Federal Home Loan banks and more.

CFPB Director Richard Cordray
Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), testifies before the Senate Committee on Banking, Housing, and Urban Affairs with John Stumpf, chief executive officer of Wells Fargo & Co., not pictured, in Washington, D.C., U.S., on Tuesday, Sept. 20, 2016. Stumpf, struggling to quell public rancor after the bank's employees opened unauthorized accounts for legions of customers, said the company has expanded its review of the matter to include 2009 and 2010. Photographer: Pete Marovich/Bloomberg
Pete Marovich/Bloomberg
On how one academic study is now at the center of two contrasting approaches to the Consumer Financial Protection Bureau's payday loan rule:

"Under Cordray's reign, the CFPB usually started with their conclusion and worked backwards. Any data supporting that conclusion was seized upon; any that conflicted with it was disregarded. That's what happens when everything is seen through the distorted lens of one's ideology. Let's hope the new Director brings a more objective approach to analysis and rule-making, and a higher regard for due process."

Related: One study, two vastly different visions for CFPB payday rules
Citigroup sign
Signage is displayed outside of a Citigroup inc. Citibank branch in the Little Tokyo neighborhood of Los Angeles, California, U.S., on Monday, July 13, 2015. Citigroup Inc. is expected to report second-quarter earnings results on July 16. Photographer: Patrick T. Fallon/Bloomberg
Patrick T. Fallon/Bloomberg
On a survey from Citigroup showing a significant gender pay gap across their global workforce:

"While statistics never tell the whole story, a [29%] gap indicates a significant issue. It's 2019, Citi, time to get with the program. I'd like to see the males in leadership try to explain this disparity to their daughters."

Related: Citi says female employees earn 29% less than men
loans.jpeg
loan application in business folder showing financial investment concept
gunnar3000 - stock.adobe.com
On an argument that the Federal Home Loan Bank System should not give nonbanks membership through captive insurers:

"The system has never suffered a loss because the over-collateralized loans never lost any money. I'd take that bet all day long. Under those collateral terms why not open up the membership? The fully secured advances program is not the FHLB program to worry about. The biggest risk lies in the unsecured short-term and overnight Fed funds market to non-members dominated by FHLBs."

Related: Keep nonbanks out of the Home Loan Bank System
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Another reader weighs in on the debate over whether nonbank financial firms should be able to join the Federal Home Loan banks:

"The Federal Home Loan Bank system was designed for a purpose. That purpose shouldn't be subverted through the purchase of existing members by entities that would otherwise not have membership."

Related: Keep nonbanks out of the Home Loan Bank System
Rep. Barney Frank, D-Mass., and Sen. Chris Dodd, D-Conn., in 2010
Representative Barney Frank, a Democrat from Massachusetts and House Financial Services Committee chairman, left, speaks at a news conference with Senator Christopher "Chris" Dodd, a Democrat from Connecticut and Senate Banking Committee chairman, at the White House in Washington, D.C., U.S., on Wednesday, March 24, 2010. Dodd said President Barack Obama wants to move quickly on financial-reform legislation with the goal of getting a strong bill to sign this year. Photographer: Andrew Harrer/Bloomberg *** Local Caption *** Christopher Dodd; Barney Frank
Andrew Harrer/Bloomberg
On an argument by the Chamber of Commerce that the CFPB should move forward with a rule collecting data about small-business lending to women and minorities, as mandated by the Dodd-Frank Act:

"Shocking to see Chamber of Commerce advocating for more costly regulations and bureaucracy that will only harm the ability to extend small business loans. Seems nobody checked with the any of the Chamber's bank members who will be subject to yet more data collecting expenses and abuse. Who knows what government will do with all this additional data on every small business loan application in the age of disparate impact accusations. Scrap Dodd-Frank section 1071 to support small business."

Related: Time for CFPB to move forward on small-business lending
CFPB nominee Kathy Kraninger
Kathy Kraninger, director of the Consumer Financial Protection Bureau (CFPB) nominee for U.S. President Donald Trump, speaks during a Senate Banking Committee confirmation hearing in Washington, D.C., U.S., on Thursday, July 19, 2018. Kraninger, a little-known official who has worked for the White House's Office of Management and Budget (OMB) since March 2017, is poised to succeed her boss Mick Mulvaney as director of the CFPB. Photographer: Andrew Harrer/Bloomberg
Andrew Harrer/Bloomberg
On CFPB's permanent director Kathy Kraninger asking Congress for explicit authority to supervise financial firms for compliance with the Military Lending Act, a regulatory gap raised by her predecessor, acting Director Mick Mulvaney:

"Finally... someone who is taking direct measures to fix this gap instead of just pointing out the hole in the dam like Uncle Mick did. Go get 'em KK!"

Related: CFPB's Kraninger asks for 'clear authority' over military lending exams
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On the concerns of some smaller institutions that Fiserv's acquisition of First Data will make the combined company less responsive to customers:

"Sad for community bankers. I talk to a lot of banks and have never met one that said, 'We love Fiserv.' There are probably some that love them but I am convinced they are a minority. Fiserv is the largest only because of the pain and costs of conversions. I fear this will further impair their customer service, which is already terrible. (one example: a former co-worker told me in the past she would never do a conversion. Two years with Fiserv has changed her mind)."

Related: Fiserv-First Data: Why small banks fear big fintech
Victoria Finkle
BankThink Editor , American Banker
Payday lending Small business lending Richard Cordray Kathy Kraninger CFPB Citigroup Fiserv
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