Update on Implementation of 32 CFR Part 232

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Update on Implementation of 32 CFR Part 232
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Topics

• Status of state enforcement
• NCOIL resolution
• State legislation in 2009
• What State Regulators are saying about
  enforcement
• Congressional activities

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State Enforcement

• 17 of the 39 states authorizing payday loans do
  not have adequate enforcement authority
• AK, AR1, DE, HI, IL, KS, LA, MN, MS, NE, NM, OK,
  OR2, RI, TX, WI and WY
• 10 of 18 states with specific statute authorizing
  vehicle title loans do not have adequate
  enforcement authority
• GA, ID, IA, IL, KY, MN, MS, NM, OR and SC
• 1 AR has an interest rate cap of 17 percent APR
  on these loans
• 2 OR has an interest rate cap of 36 percent APR
  (excluding an administrative fee) on these loans

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NCOIL Resolution

• National Conference of Insurance Legislators
  (NCOIL) released a resolution
• Coordinated with NACCA
• Released to members in 50 states
• Resolution advocates change to statute to allow
  enforcement of violations of
• any other law in the course of its or his or her
  dealings as a licensee
• Federal statute, rule or regulation pertaining
  to consumer credit
• section 670 of the John Warner National Defense
  Authorization Act for Fiscal Year 2007 (PL
  109-364) or any regulation promulgated under this
  act

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State Enforcement Legislation - 2009
VT
NH
MA
RI
CT
NJ
MD
DE
States with signed MOUs States enforce rule or
prohibit payday and vehicle title loans. States
use regulation in examinations. States do not
recognize the regulation..
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What State Regulators Are Saying

• Examinations show general compliance
• Conclusions in 2008 Report are still holding
  true
• Lenders are not morphing unless the state makes
  a significant change that impacts policies for
  all consumers
• Example Virginia requirement for database for
  payday lenders
• One exception noted vehicle title lenders in
  South Carolina
• List of states with payday and vehicle title
  loans not covered is still short
• VA for payday loans
• KS, SC and VA for vehicle title loans

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Congressional Activities

• Payday Lending Bills
• HR 1214 (Gutierrez) requires repayment plans
  once every 6 months plus mandatory disclosures
• HR 1846 (Baca) interest rate cap, repayment
  plan and mandatory disclosures
• Both remain in committee
• Credit Cardholders Bill of Rights (HR 627),
  Section 9
• Require creditors to refrain from sending
  negative reports to credit agency for Service
  member and disabled veterans
• DoD vigorously opposed provision numerous
  issues
• Definitions of Service member and disable veteran
• Lack of material effect of military service
• Several potential unintended consequences
• Inability to effectively execute