News Regulators 

Auto lending is vigorous even as high-risk delinquencies build

“In all, there were $1.2 trillion in auto loans outstanding in the U.S., up $23 million from the previous quarter” writes Rachel Koning Beals for marketwatch.com. Only about one-third of all outstanding subprime auto debt, that carried by the lowest-rated borrowers, was originated by banks and credit unions.That’s more than double the 4.4% delinquency rate for subprime loans made by traditional banks, a number that’s largely improved since the end of the financial crisis.Auto loans have grown for 26 straight quarters, drawing more scrutiny of the expansion of the riskiest…

Read More
News 

Thousands of college students who say they were ripped off have waited years for relief — has their time finally come?

“The law gives federal student loan borrowers the right to have their debt canceled if their school committed fraud” writes Jillian Berman for marketwatch.com. But few borrowers took advantage of the regulation until 2015 when the collapse of a large scale for-profit college chain amid whiffs of fraud sent thousands of students clamoring for relief. Source: marketwatch.com Share This:

Read More
News 

Five things college savers should know about the tax plan

“Here are five things college borrowers and savers should know: The GOP plan proposes ending the popular student-loan interest deduction” reports foxbusiness.com. The tax plan would increase aid available under the American Opportunity Tax Credit, or AOTC, which helps defray such higher-education costs as tuition, fees and course materials.The House Republican tax plan includes a number of provisions that, if part of a final bill, would affect a swath of popular higher-education benefits and programs.In the GOP plan, however, borrowers who die or are permanently disabled will no longer get…

Read More
News 

Payday-loan borrowers need protection from the poorly-named Consumer Financial Protection Bureau

“Many borrowers prefer payday loans, as revealed by both academic studies and surveys of payday loan customers” writes Daniel Press for washingtonexaminer.com. But now lawmakers must intervene once again against another consumer-busting rule: the rule put forward by the Consumer Financial Protection Bureau against payday loans.We know this from experience, “thanks” to states such as Georgia and North Carolina that have heavily regulated payday loans for more than a decade.And the overwhelming majority of such borrowers (95 percent) say they value having the option to take out a payday loan,…

Read More
News 

A lender targeting the ‘New Middle Class’ is working to hand out higher credit limits to struggling Americans

“For example, the median credit limit was $1,000 in 2015; in contrast, the median new card credit limit for those with a 780+ credit score was $8,000” writes Frank Chaparro for businessinsider.com. So far, credit cards to subprime borrowers have had limited lines of credit.Elevate, a Texas-based tech lender, is looking to expand into the credit card business.Subprime borrowers are gaining access to credit cards at an accelerating rate, according to Fed research.”We believe that the credit card product will be an important addition to our product line and serve millennials…

Read More
News 

New rules on reverse mortgages: smaller loans and higher costs

“New federal rules that took effect Oct. 2 will raise upfront costs for some homeowners seeking a reverse mortgage, and reduce maximum loan amounts for most, raising the question: Is a reverse mortgage still worth considering?” writes Jeff Brown for marketwatch.com. That type of reverse mortgage “is a much less appealing option moving forward,” says Jamie Hopkins, associate professor at the American College of Financial Services in Bryn Mawr, Pa.Most experts say yes, although the increasingly popular strategy of taking a reverse mortgage line of credit—known as a standby reverse…

Read More
News 

When Payday Loans Die, Something Else Is Going to Replace Them

“And that means, that the millions of Americans who use traditional payday loans will now have to turn to other, potentially dubious sources” writes Gillian B for theatlantic.com. That’s an imperfect swap for many of the 12 million Americans who use payday loans each year to receive an instant cash infusion.The new CFPB payday rules focus on payday and auto-title loans that require repayment in less 45 days or less.In addition to the FDIC, experts say that the OCC could play a critical role in fostering a safe and flexible…

Read More
News 

An upcoming fintech IPO is set to be 2017’s largest Chinese listing in the US

“Online micro-lending company Qudian is about to go public at the New York Stock Exchange on Wednesday, and it’s set to be one of the largest U.S.-listed floats by a Chinese company this year” writes Saheli Roy Choudhury for cnbc.com. That gave Qudian a market value of as much as $7.9 billion, according to Reuters, which said that would make it the largest U.S.-listing by a Chinese company this year.Loans are almost instantly approved, Qudian claimed in a corporate video, because it uses data analytics to assess prospective borrowers.In the…

Read More
News 

These Obama appointees could cause another housing collapse

“Such loans were blamed for plunging millions of minorities into foreclosure in the last housing crisis” writes Paul Sperry for nypost.com. Analysts say the loosening of credit criteria will have a ripple effect throughout the housing market.Cordray, meantime, has sicced his powerful agency, CFPB, on Equifax, Experian and TransUnion, to help ease credit restrictions on minorities as well.But Watt thinks FICO credit is too strict and cuts off millions of low-income minorities and immigrants from mortgages.Fannie and Freddie rely on FICO credit scoring to predict risk. Source: nypost.com Share This:

Read More