Online lending marketplaces claim that they will revolutionize the financial services industry. But financial companies need a lot more than high-tech prowess to achieve sustained success.
Mortgage denials in 2013 were comparable to those recorded a decade ago, analyses of HMDA data show, challenging perceptions about how easy lending really was during the era of "pulse" loans and "fog-a-mirror finance."
Borrowers who are being sued by lenders over the money owed on foreclosed mortgages are making novel use of the Fair Debt Collection Practices Act. They argue that they cannot be sued if they live in a state different from the one where the property is located.
It is unclear if the wave of state actions signals a burgeoning state scrutiny of consumer finance companies or if state enforcers will only employ this new approach on occasion.
A recent study intended to measure Americans' understanding of arbitration clauses asked the wrong questions. The more germane issue is whether arbitration produces better outcomes for consumers than court and class action litigation.
Colorado's interest rate cap on payday lending has successfully brought down costs for borrowers, but the state continues to experience unacceptably high default rates.
Before the CFPB imposes new rules on overdraft fees, it should consider whether restricting consumer access to this feature could drive people to more expensive alternatives like payday loans.
