Updates

July 2, 2019

 

Article on Income-Share Agreements

Will Income-Share Agreements Be the Next Payday Loans? | Julie Margetta Morgan, Joanna K. Darcus, & Tariq Habash, The American Prospect, July 2, 2019

"Policymakers need to pay attention to the deregulation of these student loan-type products happening in Indiana."

Note that the Arizona Attorney General has admitted Align Income Share Funding, Inc. to the Sandbox to make consumer loans without being required to comply with the consumer protections of the Consumer Lending law.

 

 

Press Launch of the Arizona Fair Lending Act ballot initiative

High-interest car title loans would be banned in Arizona under ballot proposal | Russ Wiles, Arizona Republic, July 2, 2019

"Signature gatherers are starting to fan out across Arizona in an effort to curb a type of high-interest lending in the state.

Roughly 20 community groups on Tuesday kicked off a drive to qualify a measure that would curtail auto-title loans that feature high-interest rates and, critics say, trap borrowers in a debt cycle."

 

July 1, 2019

 

What States Can Do to Help Consumers

A new series of products, What States Can Do to Help Consumers, links advocates, press and decision makers to more technical materials from the National Consumer Law Center (NCLC)

What States Can Do to Help Consumers: High-Cost Loans | NCLC, June 2019

What States Can Do to Help Consumers: Debt Collection | NCLC, May 2019

What States Can Do to Help Consumers: Medical Debt | NCLC, April 2019

 

June 11, 2019

 

This Utah bill created the nation’s third regulatory sandbox program for fintechs

Utah’s New Regulatory Sandbox | The National Law Review, June 11, 2019

"Utah Governor Gary Herbert signed H.B. 378, Regulatory Sandbox, into law on March 25, 2019.  This bill created the nation’s third regulatory sandbox program for fintechs, after Arizona, which enacted sandbox legislation in March 2018, and Wyoming, which enacted sandbox legislation in February of this year."

 

June 6, 2019

 

Wyoming is the second state to create a Fintech Sandbox, with Utah to follow...

Wyoming Creates Fintech Sandbox | The National Law Review, June 6, 2019

"Earlier this year, Wyoming became the second state to create a financial technology (fintech) sandbox by enacting the 'Financial Technology Sandbox Act' (Sandbox Act).  (Arizona was the first state to create a fintech sandbox and we will soon be publishing a blog post about Utah’s new fintech sandbox.)  The provisions requiring Wyoming’s Banking Commissioner and Secretary of State to adopt implementing regulations became effective on February 19, 2019.  The remainder of the Sandbox Act is effective January 1, 2020."

 

May 31, 2019

 

Article on 'Align Income Share Funding, Inc' in the Arizona Regulatory  Sandbox

Could Income Share Agreements Displace Payday Loans? | PYMNTS.com, May 29, 2019

 

May 24, 2019

 

TV report and interview on the Arizona Fair Lending Act ballot initiative

Fight To End Car Title Loans  (video recording and transcript) | KTVK-PHX, May 23, 2019

 

May 16, 2019

 

Arizona Coalition Files Measure to End Predatory Car Title Lending

Arizonans for Fair Lending, a coalition of individuals and organizations from across our state, has filed paperwork with the Secretary of State’s office as the first step to qualify a ballot measure for the November 2020 election. The measure called the Arizona Fair Lending Act, would protect Arizonans from predatory, triple-digit rate car title loans which trap borrowers in a cycle of debt by reducing the rates of these loans from as much as 204% APR to 36% APR or lower.

 

May 13, 2019

 

The deadline to tell the CFPB Not to Repeal Protections Against Debt Trap 400% APR Loans is May 15, 2019. 

Comments are due this Wednesday, May 15, 2019 to urge the Consumer Financial Protection Bureau (CFPB) not to repeal the heart of the payday loan rule. Voters of all political stripes overwhelmingly support reform of the predatory payday lending industry. The payday loan rule, originally scheduled to go into effect later this year, adopts protections that responsible lenders already follow. Lenders that make loans of 45 days or less must make a reasonable determination that borrowers can afford to repay the loan while meeting other expenses. Payday lenders may make only a limited number of loans without assessing ability to repay. The payday loan rule curbs the worst of the endless debt trap.

But the CFPB, under a new leader, has proposed to gut the payday loan rule by repealing these common-sense ability-to-repay provisions. Submit your comment to the CFPB by May 15, 2019 urging it to keep the payday rule. 

 

Coalition members today sent a letter to the CFPB opposing repeal of Ability-to-Repay

The letter is posted here and is linked from the Letters page. 

 

April 24, 2019

 

Court Decision Signals End of Faux Tribal Payday Lending

Press Release | National Consumer Law Center, April 24, 2019 | Contacts: Jan Kruse & Lauren Saunders
This decision sounds the death knell for tribal payday lending,” said Lauren Saunders, associate director of the National Consumer Law Center.

“The faux tribal payday lending model has always been based on the mistaken belief that payday lenders could evade state laws by hiding behind Native American tribes. The Supreme Court has long made clear that tribes must obey state law when they operate off reservation, and that is true of online tribal payday lenders as well. This decision follows the path laid out by the Supreme Court in a 2014 decision showing how to enforce state law against purportedly tribal entities,” Saunders added.

 

April 15, 2019

 

Online Lending Company Agrees to Settle FTC Charges It Engaged in Deceptive and Unfair Loan Servicing Practices

Avant to pay $3.85 million for harming thousands of consumers
Press Release | Federal Trade Commission, April 15, 2019

"Avant, LLC, an online lending company, has agreed to settle the Federal Trade Commission’s charges that it engaged in deceptive and unfair loan servicing practices, such as imposing unauthorized charges on consumers’ accounts and unlawfully requiring consumers to consent to automatic payments from their bank accounts."

 

April 2, 2019


Fact Sheet: State Annual Percentage Rate (APR) Caps for $500, $2,000, and $10,000 Installment Loans

New 2019 Fact Sheet from the Payday Loan page of the National Consumer Law Center (NCLC)

The comparison shows that Arizona is more expensive than the median state for rates on a $500 six-month loan, a $2,000 two-year loan, and a $10,000 five-year loan, even though those rates are allowed under Arizona's Consumer Lender law.

 

March 22, 2019

 

Popular cash advance app Earnin operating in payday loan ‘gray area,’ critics claim

Article by Kevin Dugan | New York Post, March 21, 2019

“It appears to me they’re calling it tips so they don’t have to disclose an APR, so they don’t have to comply with the Truth in Lending Act,” Lauren Saunders, associate director of the National Consumer Law Center, told The Post.

 

Ducey signs bill creating PropTech sandbox

Article in AZBigMedia | AZ Business News, March 20, 2019

"Governor Doug Ducey attended the 2019 Arizona Tech Innovation Summit on Wednesday, an event which brought together business leaders and representatives from companies driving innovation in Arizona. During the summit, Governor Ducey signed legislation creating a regulatory sandbox for property technology companies in Arizona."

 

March 17, 2019

 

Have you heard of fintech? It can help with your finances, but beware of these risks

Article by Russ Wiles | Arizona Republic, March 17, 2019

Featuring commentary on the recent NCLC report (see below) and mention of the Arizona fintech Regulatory Sandbox Program

 

Why are fintechs getting a regulatory pass? 

BankThink Article by B. Dan Berger | American Banker, March 12, 2019

 

March 11, 2019

 

New Report Examines the Benefits and Potential Risks of Fintech Products for Consumers 

"FINTECH AND CONSUMER PROTECTION: A Snapshot" | Lauren Saunders | National Consumer Law Center | March 2019.  

The NCLC Urges Regulators and Policymakers to Maintain Consumer Protections and Proceed with Caution

 

February 18, 2019

 

Sen. Angela Paxton files bill that would allow her husband, Texas Attorney General Ken Paxton, to issue exemptions from securities regulations

Article by Emma Platoff | The Texas Tribune | Feb 16, 2019
"Billed as a consumer protection effort, the proposal would allow approved individuals to serve as investment advisers without registering with the state board — a felony under Texas law that Ken Paxton was charged with in 2015." and "Senate Bill 860, filed Friday, would create within the attorney general’s office an entirely new program — what the bill calls a “regulatory sandbox"

 

February 15, 2019

 

Indentured servitude makes a comeback with payday lending

Editorial in The Arizona Range News | Feb 15, 2019

 

 

The New Way to Deregulate points out that "Offering exemptions from many consumer protection rules is meant to spur fintech innovation, but it could lead to abuse." 

The New Way to Deregulate by Paula Dwyer | Bloomberg Business | Feb 15, 2019

 

February 14, 2019

 

"The Trump administration is helping payday lenders through weak law enforcement and deregulation"

Payday Lenders Sure Have A Cozy Relationship With The Trump Administration | Arthur Delany | Huffpost | Feb 14, 2019

 

 

Will Hacienda HealthCare finally kill Gov. Doug Ducey's #CutTheRedTape crusade?

Op-Ed in the Arizona Republic | Elvia Diaz | Feb 14, 2019

In this Op-Ed, Elvia Diaz asks "Will [Governor] Ducey and the Republican-controlled Legislature reconsider their penchant to ease government regulations?".  Jean Ann Fox, a resident of Prescott, AZ and formerly Director of Financial Services at the Consumer Federation of America sent this letter to the editor in reply.

 

Letter to the Editor, 
Arizona Republic, 
February 14, 2019

          To answer Elvia Diaz’ question “what will end anti-regulation crusade?” (Opinions, 2/14/19), perhaps having a money transmitter abscond with consumers’ money or having a cryptocurrency exchange hacked, losing all the coins held for customers with no recourse.

             Last year Arizona created a regulatory “sandbox” in the Attorney General’s Office to permit financial companies to operate without a license while testing “innovative” products or services. Sandbox players include money transmitters who are not required by the law enacted last year to comply with any of the safety and soundness rules that apply to licensed money transmitters.  No surety bond, no cash on hand, no limit on how the public’s funds can be invested apply by law to money transmitters and cryptocurrency exchanges in Arizona’s sandbox.

           So far, only three companies are playing in the sandbox, with one of them a money transmitter that does not even hold consumers’ money in an FDIC-insured account.  Has the Attorney General required this company to have a bond or adequate funds on hand? Nobody knows, since the AG denies all Public Records requests for information on his actions.

          This year the legislature is moving bills to make the sandbox bigger (HB 2177) and to expand the idea from financial services to real estate products that would not need a license (HB 2673). The House Commerce Committee voted out a bill (HB 2146) this week that would permit companies to operate without a state or local government license if contracts were for up to $6,000 and the service was performed essentially electronically, with a few exceptions.  The crusade to wipe out Arizona’s consumer protections and regulatory oversight of the market is charging forward at the legislature.

             Jean Ann Fox