Government out of control
Minnesota Bankers Association (MBA) staff attorney Craig Foss noted that during the 11-day period from Jan. 10 to Jan. 20, the new Consumer Financial Protection Bureau (CFPB) issued 3,266 pages of final and proposed regulations and guidance documents. What an absolutely shocking number.
Every bank will be forced to deal with these new rules.
The CFPB is reported to have an average salary for their employees exceeding $100,000.
John Forrest
Brainerd Savings
Comments (21)
Add commentO'Bummer
and his lefter communist pals.
John you better contact Tim Pawlenty , he has a new line of work
TPAW is the new Head Lobby Dude for the Banking Industry.
Im guessing since his new annual salary is in excess of
one million US dollars a year he must be good at his job.
My goodness the banks & their credit card companies have been creative enough to figure out how merchants in 40 states can collect up to a 4% fee from their customers that use credit cards in addition to the similar fee the banks already charge the merchants.
Its creative progress in banking like that that keep the banking industry foremost admired by all citizens for being innovative.
captron, the fee your
captron, the fee your referring to is the retailer charging the customer instead of paying for it themselves. Visa and Mastercard have recently changed their rules to allow this charge to happen. The Banks still get the same amount of money from each transaction.
Just wait until your Govener starts applying his sales tax to banking services, then you can gripe even louder that the banks are out to get you, using the same logic as applied above.
Cap
I saw the subject line in the comment section and knew you were the writer. Predictable.
Mr. Forrest, if you and/or your family voted for Mr. Obama,
then you should contact him. Contact Senator Amy and Senator Al and Congressman Rick for help. The democrats are in charge in the State and the U.S. Senate and the Presidency.
Wait and see what Gov. Dayton wants to tax and what the state democrats want to do with guns and gun registration.
For another point of view.
Ironic that this is online today.
http://www.nytimes.com/2013/02/04/opinion/krugman-friends-of-fraud.html?...
Of course the financial sector doesn't want to be regulated.
They did their best to keep the CFPB from even existing. And they've been successful, so far, in gutting it's effectiveness. The massive, well-funded banking lobby is still clearly in control (and they already have their list of proposed ways to lobby against the protections won for consumers, all 3000 pages). As small consumers, we need to root for the CFPB, not the MBA or their national equivalents.
"When the financial sector is as big and powerful and corrupt as the American financial sector is, and when tax law and special interest loopholes are so weighted to the finance sector and speculative finance as they are today, it drains money out of the real economy- out of manufacturing, out of small business start-up loans, out of housing, out of construction, out of Main Street business and workers’ pocketbooks." (from Wall Street Keeps Winning: Can It Change?" http://www.dailykos.com/story/2013/01/11/1178224/-Wall-Street-Keeps-Winn...)
D.O.Sin.: Prediction: While some parts of Dayton's budget are gaining popular approval, there's not much love for the proposed changes to the business-to-business taxes (including those pd. by banks). They'll probably skate on that. STRIB and St Cloud Times both editorialized against the biz-to-biz taxes this wkend, as well.
southie
take a look at the Austrailian Gun thread.
"And they've been successful,
"And they've been successful, so far, in gutting it's effectiveness"
please explain this statement Bubba.
The CFPB has issued 8 new regs this year, most relating to consumer mortgages. A couple of these effectively eleminate certain types of mortgages (for good or bad). One of the regulations requires consumers to obtain approval from a third party in order to even get the financing (at their own cost).
I hope you are not a real estate investor because the CFPB is coming after you too!
D.O.S.
D.O.Sin: This shares some helpful insights, if you're really interested in how Congress is fighting CFPB: "The Financial Services Industry's Misguided Quest to Undermine the Consumer Financial Protection Bureau" (http://www.masonlec.org/wp-content/uploads/2012/05/Excerpts-from-Wilmart...)
Regarding irresponsible mortgage lending, I'm glad there are some new protections for borrowers. Even real estate investors and realtors can cheer-on rules that protect the little guy (and yes, the "low-information home buyer) from getting into a loan that's unaffordable. Doesn't this protect everyone who owns a home?
"New CFPB rules crack down on irresponsible mortgage lending: Rules promote affordable mortgages, end abuses that led to financial"
http://www.realestaterama.com/2013/01/10/new-cfpb-rules-crack-down-on-ir...
Out of curiousity, DOSin, what real estate investment are you being prohibited from making (that you could previously invest in) as a result of new CFPB regulations? We own our share of real estate, and are poised in invest more. So far, I see nothing prohibitive. Do tell.
they are coming after all of us
Krugman and daily kos would be my first choice for unbiased information,. Having said that, I did click on and read all
suggested articles. I just about fainted at the Strib editorial yesterday but, I do see why.
What I wonder is how is John Ward going to vote?
Another thing Dayton is irritated at is that people can buy a house and spend 2-3 months in the summer without paying any MN state tax for the time they are here. Just a note Mr. Ward, that will affect all the so-called rich people that buy homes on the lakes here. You know - tourism--- they buy things and pay property taxes.
I think the only people that think the regulations are needed and maybe have more have not been on the other side.
Bubba, Nowhere in my
Bubba, Nowhere in my statement did I say any real estate investment will be prohibited.
One of the new revisions of the Truth in Lending Act will require a second appraisal if a dwelling is being re-sold less than 180 days from initial purchase. The cost of the additional appraisal cannot be passed to the consumer.
This forces the bank to eat the cost or not do the loan ... which do you think will happen? Does this hurt the bank or the consumer?
Another change to the same regulation requires consumers to obtain housing couseling before any money can be leant in certain circumstances.
Does this hurt the bank or the consumer?
In the case of appraisals,
if a seller is essentially "flipping" a property within 6 mos., (happening a lot in Twin Cities' market, still -- check out Auction.com and then Zillow listings a couple mos. later) why wouldn't it potentially be the seller who eats the cost of appraisal (through taking a lower offer, less the appraisal amount)? Regarding mortgage counseling for some buyers, sounds like a good idea. There are non-profits who offer the counseling for free.
Broadly speaking, I favor CFPB initiatives that protect consumers from the deep pockets of financial institutions.
That is the question isn't it
That is the question isn't it ... the CFPB does not define who can pay the fee only who cannot (However, generally the bank has no contract with the seller). Also, the CFPB has not defined what the counselling is and who can provide it (other than the bank can not provide it).
The CFPB has created more grey area than black and white. Does this foster a positive dialogue or active confusion?
It fosters confusion if that's how the banks wish to
frame it (in their own self interest). Financial institutions are expert at crafting and understanding their own obtuse policies, contracts, procedures, but then fein to be language-challenged when it comes to understanding outside financial regulations? Sounds convenient.
In the meantime, none of the reputable buyers and sellers I know are facing any difficulties in the real estate market right now. The MN (esp. Twin Cities) market is improving, and new regulations actually protect all home-owners' values by making shady real estate deals (and subsequent forclosures) a less frequent occurence.
Bubba, I think you are taking
Bubba, I think you are taking liberties with the abilities of some of your local financial institutions. No local bank intentionally confuses their customers. The majority of the wording in documents, policies etc. are there due to government regulation.
I garauntee that Deewood bank, Mid-Minnesota or any other local bank doesn't make dime one off of a foreclosure. The bank loses money everytime they have to foreclose on someone who doesn't pay as agreed. (I also find it hard to believe that the large banks make anything either)
Of course none of the people you know have experienced any difficulties, these rules don't go into effect until Jan of 2014.
I'm not as trusting of financial industry
D.O.Sin: I'm not quite as trusting of the financial industry as you seem to be. I think some rules and regulations ARE written to be intentionally complicated, while the simple sales pitch is all "easy money".
I didn't mean to suggest that banks make money at the point of forclosure. Many banks did make money when they sold-off their loans:
"The invention of mortgage-backed securities completely revolutionized the housing, banking and mortgage business. At first, mortgage-backed securities allowed more people to buy homes. During the real estate boom, many less careful banks and mortgage companies made loans with no money down, thus allowing people to get into mortgages they really couldn't afford. The lenders didn't care as much, because they knew they could sell the loans, and not pay the consequences when and if the borrowers defaulted. This created an asset bubble, which then burst in 2006 with the subprime mortgage crisis. Since so many investors, pension funds and financial institutions owned mortgage-backed securities, everyone took losses, creating the 2008 financial crisis." http://useconomy.about.com/od/glossary/g/mortgage_securi.htm
Regardless of when the specific real estate provisions go into effect, the ethical, informed investor has little to fear. Have you seen some of those "flipper" stories? I'm glad a portion of those folks will be subject to more regulations. Thanks for the good conversation.
I agree regulations are
I agree regulations are intentionally complicated ... but I don't think that is what you meant. The secondary mortgage market is a complicated animal and a few simple paragraphs cannot hope to capture the complexity and is separate from our conversation.
I will never believe you can regulate away intentional negligence. If you don't read what you sign and don't choose to ask questions that is your fault. If you are intentionally deceived, then there should be and there are laws and consequences for that.
There is a place for banking regulations, however the CFPB is the Obama of regulators. They focus on the hot buttons only to the point to make the uninformed public feel good enough not to bring it up anymore. It's all for show and no actual fixes (like gun control) and it hurts the people more than it helps them.
but but but
Disciple?? There is just no way in bubbas mind a person would have to be held responsible if they signed it without reading it!! Sorry not the new/lib way.
Yes lets trust the bankers association
NOT! They are out to insure the bottom line for bankers is as lucrative as possible. They have effectively lobbied MN legislators to avoid cracking down on predatory practices for years, as well as measures designed to safeguard investors against bank failures due to extremely LIBERAL lending practices.
The latest is the entry of large consumer banks into the "payday loan" business, where they loan money in advance of a paycheck, a social security check, a pension payment--or any other directly deposited ongoing incoming $$. At astronomical interest rates of several hundred percent. The FDIC, private credit counselors, and a broad variety of banking regulators are HIGHLY critical of such a practices by MN banks such as US bank and Wells Fargo. Far from being a short term aid for a one-time problem, credit counselors and regulators point to extremely high rates of default and entry into debt that can't be crawled out of.
A large number of states ban the practice--thanks to MBA lobbying against a ban, MN is still not one of those.
"For it before they were against it"?
So regulations are okay in theory, but if any of them have Obama's fingerprints on them, Republicans are obliged to invoke that time-honoered move of being "for it before they were against it"? Until this last comment, I didn't realize some of your objection was based on this. Disappointing.
The secondary mortgage market affected real folks in our communities (and still is), so it can't be ignored just because it's complicated. The CFPB rules will now require servicers to follow clear procedures to help troubled borrowers seeking alternatives to losing their homes. The rules also restrict "dual-tracking" (in which servicers simultaneously pursue a loan modification and the foreclosure process.)
Servicing problems -- including poor record-keeping, crummy customer service and "robo-signing" unread foreclosure documents -- are all addressed. Will this prevent all of the problems faced in the height of the forclosure crisis -- of course not. But it will provide some cover for the folks who thought they did their due diligence, (they didn't just sign w/o reading) but were buried in process and paperwork that were unintelligible (and not even local) and nearly beyond resolution.
D.O.Sin, as you know, Republicans fought against Elizabeth Warren long and hard (to prevent CFPB), and they fought her election to Senate, and they fought her appointment to the Senate Banking Committee. Voters and consumers won, imo.(http://www.washingtonpost.com/blogs/plum-line/wp/2012/12/12/its-on-eliza...)
OFB: It would be a mistake to confuse me with someone who let's others off the hook lightly, or as one who doesn't hold folks accountable as required. Not in my DNA. I also know a scam and a rip-off when I see it, and many borrowers got the shaft as a result of rampant robo-signing and other abuses. Some of them will never be made whole, as even the best consumer protections won't retroactively affect everyone. The criminals on Wall Street will skate, while some former ripped-off home-owners may have to forgo the "American Dream" of a house in which to raise their family.
Bubba, that is not what I
Bubba, that is not what I said at all ... and this is not the first time I have had to tell you this.
I was drawing distinct parallels between the way Obama works and the way the CFPB works. Which is indicitive of the way that our Government in general works today. It is all style over substance ... the party over the country ... important conversations divided into sound bites so people do not have to actually think.
This is all Government, Republicans and Democrats are no different. Anyone who thinks they are, is fooling themselves. These regulations wouldn't have to exist if people read there docs and took there time to save a down payment. But everyone wants it now, think they've earned it without doing anything ... but I digress and this is outside the scope of this topic.
Good luck!