Back to Basics, Continued—Collections again November 3, 2021 United States: I write about collections often because it remains the life blood of the consumer finance industry. Consumer finance has always functioned on a two-part model—first, get money out the door in the form of loans, and second, get the money back with interest in order to pay the bills and have enough left over to make a profit. Sometimes, part one is easy.
Back to Basics, Continued—The Things Your Lender Looks For October 27, 2021 United States: Consumer finance lenders and credit sellers are accustomed to making the credit decisions—that is, determining whether consumer customers are “creditworthy.” What happens though when the shoe is on the other foot? That is, what do banks and lenders to creditors look for in determining whether the creditor is creditworthy?
Back to Basics, Continued—Lessons learned from CFPB past Consent Orders October 20, 2021 United States: Four years ago, the CFPB was particularly active in the enforcement of the consumer finance laws and regulations. Enforcement slowed during the Trump Presidency. But, there is a new sheriff in town; and, it is time once again to focus on the types of activities that can get a lender or a credit seller into regulatory hot water.
Back to Basics, Continued—the Federal Trade Commission regulations that touch every consumer credit transaction October 12, 2021 United States: If I asked you to name each of the Federal Trade Commission (FTC) regulations that impact credit sales and loans every day, could you? I couldn’t until I decided to look them up for today’s blog and to review my blog post from last year.
Back to Basics, Continued—Prescreening v. Prequalification—Again! October 5, 2021 United States: Last week, I wrote about credit inquiries as “soft-pulls” v. “hard pulls.” See Dentons - BACK TO BASICS, Continued—Credit inquiries, “soft-pulls” v. “hard-pulls,” and the Fair Credit Reporting Act. I neglected to discuss a concept known as “prequalification” that depends on “soft pulls.” There is a substantial difference between “prescreening” and “prequalification;” and, that difference is implicated when talking about soft v. hard “pulls.”
Back to Basics, Continued—Credit inquiries, “soft-pulls” v. “hard-pulls,” and the Fair Credit Reporting Act. September 28, 2021 United States: There is a lot of disinformation about pulling credit reports out there—primarily initiated and promoted by the plaintiff’s bar. I want to take a moment to add some clarity.
BACK TO BASICS, Continued—Tell Me Again About Property Insurance to Protect the Creditor’s Interest in the Debtor’s Collateral… September 21, 2021 United States: In most jurisdictions, a creditor may require that the consumer carry property insurance in an amount to protect the creditor’s interest in collateral given by the consumer to secure the repayment of debt. This insurance is commonly referred to as “credit property insurance."
Back to Basics, Continued—Interest Free Installment Sales September 14, 2021 United States: One of the latest trends in “buy here, pay here” used car sales is the self-styled claim of the availability of “interest-free financing.” Dealers are promoting sales by advertising that installment sales will be free of finance charge; and that customers can make purchases over 36, 48 or even 60 months without a financing cost. Too good to be true? Well of course it is.
Back to Basics, Continued—The Wisdom in Compliance Audits September 7, 2021 United States: Most consumer finance companies and credit sellers are also borrowers. That is, they look to banks and investment groups to provide the capital with which to operate. And, their promissory notes and retail installment sales contracts are given as the primary collateral to secure that financing from banks and investors.
Back to Basics, Continued—The Federal Trade Commission flexes its muscles—or if at first you don’t succeed… August 31, 2021 United States: Last year, I wrote about the role of the Federal Trade Commission (FTC) in light of the newer and mightier Consumer Financial Protection Bureau (CFPB). See here. Just when it seemed that the FTC’s role would be diminished by the CFPB’s use of its broader rule-making ability and enforcement powers, the FTC seems to have other thoughts.