New Consumer Protection Agency To Monitor Lenders
The Massachusetts Public Interest Research Group recently released a report which revealed practices of lenders who offer private or student loans. Private loans differ from Federally based loans. Private loans have no capped limit on interest rates and some lenders are charging significant up front fees in order to originate the loan.
Because of these practices, the public interest group is encouraging the governments creation of the Consumer Financial Protection Agency which would help monitor lenders that offer privately based loans. The Consumer Financial Protection Agency Act was introduced on July 8, 2009, the final house vote is scheduled for January 1, 2010.
House approval of this bill will move this financial reform one step closer to the Senate floor where debate is anticipated to continue well into 2010. According to the report, the CFPA “would close the gap that currently leaves private lenders free to make abusive loans to students/consumers without supervision or limits”. The CFPA would monitor other products offered by financial institutions. These include credit card debt accounts and mortgage loans. The agency will be responsible for these financial products and others while prohibiting unfair, deceptive or abusive acts or practices by lenders.
Other changes expected with this bill include the creation of a mutual commercial bank charter which would help thrift institutions make the transition toward becoming banks and the requirement of financial institutions to offer information in their branches explaining overdraft protection program fees.
Comments
Leave a Reply
