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How Has The UK Short Term Credit Market Been Revolutionised by The 2015 FCA Price Cap Regulation?

How Has The UK Short Term Credit Market Been Revolutionised by The 2015 FCA Price Cap Regulation?

Since the FCA introduced price cap regulation back in 2015, there have been changes in the short-term credit market.

The latest Social Market Foundation (SMF) report (Click here to download the official report) commissioned by the CFA (Consumer Finance Association) offers the latest assessment on the impact of price cap regulation on the short-term credit market in the UK with a special focus on cost as well as access to loans. The report contains information gathered from industry data as well as short-term credit consumers in the UK.

Considering 6.8 million UK households still live below the poverty line, a significant number of UK households rely on credit. Changing employment and work patterns as well as state benefit changes have also resulted in income instability which has, in turn, increased dependence on credit. Rising inflation and housing costs have also increased the need for short-term credit in the UK.

Let’s not forget the poor saving habits in the UK. A previous SMF research study shows that 40% of UK citizens have less than a week’s worth of income as savings. With this in mind, the health of the UK short-term credit market can’t be overlooked since most people with financial difficulties turn to short-term loans. Considering the FCA price cap regulation is the latest and most significant UK credit market event, how is the market now?

What has changed?

1. Cost of loans

According to the latest SMF report commissioned by the CFA and produced independently by the SMF, the cost of loans has fallen significantly. The latest industry data shows that the cost of loans has reduced by from 1.3% (in 2013) to 0.7% currently. In a nutshell, loans cost less now. It gets better! Loans are cheaper than the 0.8% initial cost cap set by the FCA which is an indication of healthy competition in the industry.

2. Default fees

Industry data also shows that default fees have fallen. The proportion of short-term loan on which borrowers pay additional over and above contractual interest has halved from 16% back in 2013 to 8% currently. In cases where loans are subject to default fees, the total amount of fees including interest charged after default has dropped from £45 to £24. However, concerns linger on whether the fees are still high considering they represent approximately 10% of the value of most short-term loans taken in the UK.

3. Borrower perceptions and experiences

According to the latest SMF survey, consumer perceptions have improved on affordability. Consumers are of the notion that short-term loans have become affordable. 56% of recent borrowers agree that short term loans have become more affordable. Only 43% of borrowers who took out short term loans before 2015 believed they were affordable. Although there are consumers who insist that loans haven’t become affordable, a majority of such opinions can be attributed to the fact that some borrowers assess affordability based on their own ability to service loans.

In regards to experience, most people (90%) feel short term loans are the most convenient source of short-term credit today. Some concerns have however been expressed on repayment. Approximately 20% of all recent borrowers today state that they have problems repaying short-term loans as planned or in time.

4. The size of the short-term credit market (Number of loans sold)

The latest industry data shows that the number of loans sold decreased significantly over the January 2016 to April 2016 period. The loans taken during this time were 42% lower compared to the same period in 2013. Industry experts attribute the fall to a decreasing number of lenders during this period. Many short term loan lenders exited the market between January and April 2016 after finding it extremely difficult to operate in the confines of the new price cap regulation.

5. Access to loans

The FCA had predicted that the regulation would exclude some consumers from the short term credit market more so, lower income individuals. This prediction is consistent with industry figures. The SMF report suggests that access has become restricted. An SMF survey shows that consumers are of the notion that it has become harder to obtain loans. 57% of all consumers who have taken loans before and after the regulation changes state that short term loans have become more difficult to access.

The SMF survey, however, shows that only 16% of people who have tried accessing loans before the regulation, not afterwards, have been denied loans. This is against 18% who haven’t bothered to take loans after the new regulation just because they thought they wouldn’t qualify.

Many consumers still find access to loans important for essentials or avoiding other borrowing channels such as borrowing from family members and friends. According to the SMF survey, 27% of consumers risk going without essentials if they don’t get access to short-term loans. The survey also reveals that 37% of consumers are forced to pursue other credit channels such as borrowing from family and friends if they don’t access credit despite this option being the least reliable and suitable for many.

The rest are forced to cut back on spending, misappropriate funds or rely on alternative or mainstream credit which comes at a higher cost. Some customers also resort to borrowing from unlicensed lenders when they fail to secure funding from licensed short-term credit lenders.

Summary

In a nutshell, the new regulation may have reduced the cost of loans and default fees as well as improved consumer perceptions, however, access to credit has shrunk, and the hardest hit borrowers are low-income individuals. Although the regulation stops exploitation by lenders, which was a huge problem especially in the payday loan industry, some borrowers are being forced into the hands of unlicensed lenders. This is contrary to the FCA’s previous conclusion that the new regulation would be a good thing to low-income borrowers.

The price cap appears to have reduced unscrupulous lending practices among licensed lenders, but there is an increasing number of borrowers turning to unlicensed lenders giving rise to worse problems. Unscrupulous (unlicensed) lenders don’t have to work as hard as before to attract borrowers since access to short-term credit has shrunk among the lower income borrowers. Short term credit lenders in the UK have stricter affordability assessments today which have reduced the number of loans being offered to individuals who are deemed high risk.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Data Protection Act in the UK Explained

Data Protection Act in the UK Explained

Definition

The DPA (Data Protection Act) in the UK is a law that controls how the personal information of any UK citizen should be used by businesses, organisations or the government. Every person or entity responsible for using personal information or data of any UK citizen must follow data protection principles which are simply, strict rules on the proper use of data. The individual or entity must ensure the personal information is; used lawfully and fairly, used for the intended purpose and used adequately in a relevant manner that is not excessive. The individual or entity must also make sure the data is handled according to data protection rights, and the data is kept in a safe and secure manner. Stronger legal protection applies to more sensitive data such as a person’s overall health, sexual health, criminal records, political opinions, religious beliefs and ethnic background.

Data subject rights: Finding out the type of data an organisation/company has about you
Under the DPA, UK citizens have the right to see the type of information a company or the government stores about you. The DPA allows you to ask about personal information in writing through an enquiry referred to as a subject access request. When writing to an organisation to get a copy of the information they have about you, you should address the letter to the organisation’s company secretary. The organisation has a legal mandate to share with you such information as long as you make a formal request.

What it means for customers submitting their information to companies

Customers don’t have to guess or remember the exact kind of information they submit to companies. If you aren’t sure about the information a certain organisation has about you, just write a formal request.

It is, however, worth noting that information can still be withheld even after making a formal request. For instance, if the information is about the armed forces or national security, organisations reserve the right to withhold the information. Organisations can also withhold information if it is about detection, investigation or prevention of a crime. Information about assessment/collection of tax as well as judicial/ministerial appointments is also supposed to be withheld and organisations aren’t obligated by law to disclose why they are withholding information.

In a nutshell, if you are a regular UK citizen who just wants to know the kind of information an organisation has about you, there is no reason why you shouldn’t get access to such information.

Cost

Although you can get this information for free, some organisations charge to provide such information. Most organisations charge £10 or less although the cost can increase depending on the amount and type of information. For instance, it will cost you more to get numerous paper records held by a public authority in an unstructured way. Health and education records also cost more.

Launching a complaint

If you suspect your data has been stored insecurely or misused by any organisation/company in the UK, you should contact them immediately and share your concerns in writing. If you are not happy with the response you get, you can contact the ICO (Information Commissioner’s Office). The ICO is also open if you need any advice on data related issues or concerns. The ICO has a telephone helpline: 0303 123 1113. The ICO also has an online chat feature that allows you to talk to an adviser.
The ICO has the mandate to investigate claims as well as take the necessary action against individuals or entities that misuse personal data.

What it means for the company taking the information

The ICO takes its data protection mandate very seriously. Just recently, the ICO fined UK telecommunication provider TalkTalk £400,000 after finding the company guilty of maintaining poor data protection measures. TalkTalk failed to prevent a data breach which compromised personal data belonging to approximately 157,000 of its customers back in 2015. Payday loan lender Wonga is set to face the same fate after facing the worst customer data breach in history. In April 2017, the lender suffered a data breach that saw the theft of sensitive data belonging to 270,000 customers. If Wonga is found guilty, the payday loan giant could pay a hefty fine amounting to millions of pounds.

Companies which receive sensitive personal information from their clients have no choice but to invest heavily in data protection security measures or face disgruntled customers and the ICO.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Bill Set Out To Tackle 'Extortionate' UK Overdraft Fees

Bill Set Out To Tackle ‘Extortionate’ UK Overdraft Fees

MP Rachel Reeves has proposed legislation to make UK banks subject to the same rules applicable to payday loan lenders.

Bank customers who have been subject to ‘extortionate’ overdraft fees have hope going forward after a parliamentary bill tabled recently promises to protect customers from escalating overdraft fees. On 25th April 2017, Labour MP Rachel Reeves who also happens to be a Treasury select committee member tabled the bill outlining plans for FCA (Financial Conduct Authority) regulators to cap the total amount of money UK banks are allowed to charge their customers for making unauthorised overdrafts. The bill proposes limits similar to those imposed on payday loan charges.

According to Rachel Reeves, UK banks have forced many people to take up more debt with the charges applied on unauthorised overdrafts. Reeves argues that UK banks have a responsibility to help their customers get out of debt rather than being part of the problem.

The FCA has already included overdraft fees into a review on high interest loans alongside doorstep lending and payday loans. The FCA announced it would be including overdraft fees in its review in response to a two-year investigation into high street banks conducted by the Competition and Markets Authority (CMA) in 2016. The CMA was focused on capping overdraft fees but stepped back and instead required banks to be publishing their monthly maximum charges going forward. The FCA has taken over the issue.

It is estimated that UK banks make approximately £1.2 billion every year from unauthorised overdraft fees. Rachel Reeves is pushing for restrictions to bring down this amount. The current cost of borrowing a hundred pounds (£100) via unauthorised overdraft for a month can amount to ninety pounds (£90). This is 400% more than the maximum limit set on payday loan charges.

Rachel Reeves has been campaigning for a cap on extortionate overdraft fees in the UK for a long time. In her statement, she expressed concerns about UK households saving less due to these unjust fees. Her concerns are evident according to statistics given the fact that the savings ratio is at 3.3% currently (a record low from 2010) while unsecured debt has increased by a record 10% in the past year alone. Statistics also indicate that the debt-to-income ratio has increased by 6% in the past year to stand at 145%. This poses serious economic risks to Britain’s economy according to Reeves.

With an election looming, Reeves’s bill may not become law in the current parliament. She, however, promises to reintroduce the bill as a private member or via a bill amendment in parliament if she gets re-elected. Reeves has also called on parties to incorporate the bill in their manifestos. She wants to see banks subject to the same limits as payday lenders to bring an end to extortionate UK overdraft fees charged by high street banks.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

FCA UPDATE on Fintech

FCA UPDATE on Fintech

The FCA regulates over 56,000 firms which employ over 2 million people in the UK. The financial services industry is obviously an important industry in UK’s economy given this statistic. This highlights the need for Fintech initiatives going forward (technology initiatives supporting or enabling the financial industry). One such initiative is Project Innovate. The initiative was developed back in 2014 to promote competition and growth in UK’s financial services industry. The initiative has been supporting small and large businesses which make new products and services that benefit customers genuinely. In the first year of operation, Project Innovate helped over 175 businesses. Currently, the project has helped over 358 businesses.

The latest FCA update on Fintech as of April 2017 focuses on a few main points. First and foremost, the FCA continues to tackle regulatory barriers to allow firms to continue innovating for the benefit of their clients. The FCA is doing so given the fact that the demand for its support is increasing. Project Innovate is also entering a new phase. As a forward-looking regulator, the FCA sees the need to continue evolving its approach. The FCA has seen an emergence of Fintech hubs in the UK and has reaffirmed its commitment to support these hubs by offering more/better local assistance.

The FCA’s approach to innovation

In an effort to highlight the importance of innovation in the financial services industry, the FCA continues to educate the public on why innovation is important. According to Christopher Woolard, the FCA’s Executive Director of Strategy and Competition, the FCA has an obligation to make UK’s financial services work well. To do this, the FCA continues to assess the integrity of financial markets and consumer protection issues. The FCA also has the duty to continue promoting the interest of consumers.

According to Woolard, the FCA is increasingly focused on using innovation to promote competition going forward. The FCA has completed its second round of testing innovative products/services, business models and well as delivery mechanisms in practice through its Regulatory Sandbox program. The FCA is also continuing to support technologies that will facilitate the delivery of regulatory requirements better than existing capabilities. The regulator has already held successful initiatives aimed at bringing market participants together to solve crucial problems in the financial services industry.

Priority areas going forward

The FCA is increasingly focused on expanding the scope of its Advice Unit which has been making automated advice models in the investment, pension and protection space. The FCA’s Advice Unit has a broader scope now. The unit is currently engaging the general insurance, mortgage, and debt sectors as well as many other firms that are keen on providing guidance, instead of advice. According to Woolard, the FCA will do more to spearhead the conversation about emerging innovations and trends. The regulator has already started a conversation about the risks and advantages of Distributed Ledger Technology.

The FCA also intends to take an international approach to innovation i.e. restarting its commitment to supporting innovation globally by signing cooperation agreements. The FCA has already signed such agreements with China, Hong Kong, Japan and Canada and is also working with other global regulators to foster a common understanding on good innovation. The regulator is working towards this via international bodies such as the IOSCO and the G20.

In early April 2017, the FCA hosted the first ever International Innovate Seminar featuring over 90 regulators from 56 countries globally.
According to Woolard, this will foster stronger international cooperation as well as help to secure the future of the industry in the long-term. Woolard, however, insists that the FCA is still focused more on supporting emerging Fintech hubs in the UK.

In his latest remarks, London has experienced the most Fintech emergence regionally. This emergence is however expected to spread beyond London. The FCA sees numerous exciting Fintech developments across the UK from Liverpool to Bristol which is why the regulator has promised to work with numerous organisations across the UK. The FCA is focusing on areas with a technological presence as well as strong financial centers. The FCA is also looking at areas where it has established strong relationships with local learning institutions like universities.

The regulator has mapped out the Leeds-Manchester and Edinburgh-Glasgow areas as promising emerging Fintech hubs and is focused on offering such areas the same access to regulatory support as key areas like London. The FCA is committed to ensuring good Fintech ideas in the financial services industry come to fruition regardless of where they are conceived.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

How to Stop the Constant Cold Calling Here In the UK

How to Stop the Constant Cold Calling Here In the UK

Cold calls, which are simply unwanted phone calls, top the list of UK’s most hated marketing tactics. Although marketers cold call people all over the world, the problem is worse in the UK. If you hate cold calls, look no further. Below are top 6 tips for you to consider.

1. Register with the TPS (Telephone Preference Service)

TPS-registered phone numbers are protected from cold calling. UK-based companies are barred from making unsolicited sales/marketing calls to TPS-registered phone numbers. You can register with TPS for free by visiting the website (www.tpsonline.org.uk/) or calling 0345 070 0707. It’s, however, worth noting that the TPS stops unsolicited sales/marketing calls only. You can still get market research calls as well as calls where you have opted in. Also, the TPS doesn’t stop calls from companies which are based abroad.

2. Keep your contact details off directories

Most companies especially local businesses use phone books to get phone numbers. To avoid cold calling, you need to request for your contact details to be removed from directories. Keeping your contacts off directories ensures marketing companies don’t find your number when looking for target customers. You should also be careful when giving out your contacts. If you have to give out your phone number, request whoever you are giving your number to; avoid calling you for sales/marketing offers or giving out your number to third parties.

3. Screen all your calls and use call blocking software

You should also avoid picking calls from unrecognised numbers. You can use software such as Truecaller to help you identify calls from numbers you haven’t saved in your phonebook. Screening calls is an effective way of avoiding cold calling since you get to know the identity of every person/organisation that calls your phone immediately. You can also block ”suspect” numbers.

4. Never bow down to cold-calling pressure

Some resilience can also go down a long way. Some marketing companies use underhand tactics to pressure their victims into accepting calls and offers. Never pick a cold call if you don’t want to. If you pick a cold call unknowingly, don’t disclose your personal information. Simply cut short the conversation and hang up. If you receive a cold call from a company you are interested in, insist on contacting them yourself. Most marketing companies will stop calling you if you don’t express any interest whatsoever or if they notice you won’t bow down to pressure.

5. Record cold-call numbers and report them

You should also record all unsolicited calls and report such numbers to organisations like Ofcom to take the necessary action. Get as much information about the company or person cold calling you and report them. Ofcom is UK’s communication industry regulator with a mandate for investigating and prosecuting individuals and companies which breach communication laws. You can also report cold calling offenders to TPS which will then forward the complaints to Ofcom or the ICO to take the necessary action against repeat offenders.

6. Use opt-out options

Sometimes you may be a victim of cold calling because you submitted your contact details somewhere without much thought. In such an instance, you should look for ways of stopping such calls. Legitimate companies have opt-out options that prevent calls or any other type of correspondence at the touch of a button. If you can’t find such options on a company’s website, call the company directly and ask the sales/marketing team to stop calling you. Legitimate companies abide by verbal requests so you shouldn’t have a problem stopping cold calls this way. You can consider writing a formal request just in case the cold calling doesn’t stop, and you have to take legal action.

Summary

Constant cold calling is a huge problem in the UK. Luckily for you, it is possible to stop this menace by taking any one or more of the above measures. Start by being cautious when giving out your contact information. You should also use the technology and institutions at your disposal. Being resilient and getting your contact information off directories will also go a long way.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Payday Loan Giant Wonga Suffers Major Customer Data Breach

Payday Loan Giant Wonga Suffers Major Customer Data Breach

Payday loan giant Wonga HACKED!

On 8th April 2017, Wonga sent its clients correspondence stating that it had fallen victim to hackers who stole confidential information belonging to its customers. The hackers made away with the names, addresses, bank account numbers, phone numbers and sort code numbers of over a quarter million Wonga customers. The hackers are also believed to have accessed the last 4-digits of bank cards belonging to 270,000 Wonga customers.

According to the correspondence released by Wonga, the lender doesn’t think Wonga account passwords were compromised but advised clients to change their passwords. Customers have also been advised to be on the lookout for suspicious activity on all bank accounts as well as online portals. Wonga has also contacted all financial institutions believed to have been affected directly or indirectly by the hacking.

Wonga began contacting customers after discovering the severity of the breach on 7th April 2017. The breach is believed to have taken place late March 2017. The firm has already established a help line (0800 3166 745) to assist borrowers who may want to contact the lender for more information or guidance.

Wonga is currently in the process of investigating the hacking which it terms as illegal and unauthorised access to personal information of some of its clients. The hacking is believed to have affected Wonga customers in the UK and Poland. Approximately 245,000 UK customers and 25,000 Poland customers have been affected.

The lender has already apologised for any inconvenience caused and is in the process of informing all affected customers. Wonga is also working closely with the police to bring the culprits behind the attack to book.

Although Wonga is already in a mess trying to contain the effects of the data breach, the lender is expected to face the office of the ICO (Information Commissioner’s Office). If the ICO finds Wonga’s data security measures inadequate, the Lender could face a hefty fine.
Wonga could suffer the same fate as UK telecom provider TalkTalk which paid £400,000 for being unable to prevent a systems breach which compromised personal information of approximately 157,000 customers back in October 2015. Given Wonga’s breach affects almost twice the number of people and it spans across borders, Wonga may face a stiffer penalty if found guilty by the ICO.

This is on top of the fact that Wonga is set to spend millions of pounds securing its systems among other costs incurred responding to the incident. Wonga’s revenues are also expected to drop as some customers choose other lenders with better data security measures.

Considering the lender doesn’t appear to be sure about how the breach occurred, some customers are expected to jump ship reducing the projected earnings significantly. This attack doesn’t help considering Wonga has been in the news again for the wrong reasons.
Back in 2012-2013, Wonga was the subject of a massive identity crime case involving A Nurse, Sherene Bascoe that saw customers scammed £3 million. Wonga’s faulty site algorithms allowed scammers to submit 19,000+ payday loan applications using a single password, ”Bengali90”. The identity theft gang responsible requested for payday loans using stolen identities leaving innocent Wonga customers with payday loans they hadn’t signed up for.

The £3 million scam was successful because of Wonga’s faulty site algorithms. Although the masterminds of the scam paid the price, Wonga is yet to learn how to safeguard its client’s personal information. Considering there is an investigation underway and Wonga has had a troubling data security history, 2017 doesn’t look good for UK’s biggest payday loan lender.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Is Debt Starting To Affect Our Mental Health? What Should You Do?

Is Debt Starting To Affect Our Mental Health? What Should You Do?

According to a recent UK survey carried out by market research company ComRes and insolvency & restructuring trade body, R3, 22% of all adults stated that their finances are affecting their mental health. The survey targeted over 2,000 British adults living East of England.

According to R3, the survey revealed other key causes of mental health issues revolving around personal health or family member health issues. Job, relationship and current global issues also account for some of the main causes of mental health problems in the UK.

The survey reveals that over 37% of all adults living in the Easter region don’t have enough money to wait for the next payday. They attribute their financial struggles to the rising cost of food (52%) and transport (45%).

According to Frank Brumby, R3 Eastern Chairman, financial struggles are universal regardless of the occupation, age or location of an individual. He goes ahead to state that financial worries have an enormous negative effect on a person’s well-being even if the concerns are about the financial situation of other people such as friends and family members.

According to R3 research findings as well as the experiences of R3 members’ clients, a lot must be done to educate people on the options available to them when they find themselves in debt problems. Brumby attests to the fact that improving financial education is among the best ways of reducing stress and mental health problems caused by debt.

R3 Eastern indicates that the personal finance landscape in the eastern region is relatively benign with real wages/income growing while interest rates remain low. Personal finance concerns have however remained sizeable. Bureaucratic obstacles are also stopping many people from taking advantage of the best suitable insolvency procedures.

Brumby continues to state that personal finance pressures will definitely increase in the region considering inflation is bound to rise throughout this year. There are many obstacles which can be solved by easing access to insolvency procedures. According to Brumby, the £680 fee payable by all individuals entering bankruptcy should be paid over time instead of one time to ease stress and boost mental recovery.

Below is a 9-point action plan by R3 Eastern to help anyone with financial/debt issues.

1. Acknowledge your debt problem: Refusing to admit that you have personal finance problem only makes the problems worse.

2. Ask for help: After admitting you have a debt problem, the next step is seeking professional advice. You can get professional financial advice easily for free. You can call the National Debtline, your local Citizens Advice Bureau or a licensed insolvency practitioner.

3. Prioritise debt repayment: Seeking professional advice will help you identify the source of your debt problems as well as effective ways of dealing with them. One of the best ways of dealing with debt problems is prioritising debt repayment. You must adjust your lifestyle to find money for repaying your debts. If you have problems doing this, you can ask for help from an advisor.

4. Be 100% honest with yourself: To solve personal debt problems, you must be honest about the kind of lifestyle you can afford while repaying your debts. Start by calculating how much money you owe. Proceed by adding your most important expenses. Your income should be able to cater for debt repayment as well as those expenses you can’t afford to live without. To accomplish this, you will need to take some drastic measures such as; looking for discounts more aggressively, moving to a cheaper home, etc.

5. Budget: Budgeting helps to identify essential financial commitments as well as trace where your money goes. When you are in debt, you don’t have the luxury of not following where every single cent you spend goes. Budgeting will help you get a true picture of your current financial situation. A budget will also help you stay on track as you try to get out of debt.

6. Maintain open communication with your creditors: Debt problems result in a lot of unnecessary stress due to lack of open communication at an early stage. If you let your creditor know that you have problems repaying as soon as possible, the creditor can extend help which might not be available if you waited. For instance, your creditor can revise payment terms giving you more time and flexibility.

7. Take your time: Although time may not be on your side when dealing with debt problems, avoid being pressurised to make decisions if you haven’t thought them through carefully. Most importantly, the decisions should be supported by expert advice.

8. Stop taking up new debt: You also need to stop applying for new credit cards, payday loans among other types of short-term debt before you get your situation under control.

9. Understand your options: Lastly, you need to know and understand all options available to you. If you need formal insolvency, there are several options appropriate for different debt levels. DROs (Debt Relief Orders) are great for small debt. Other options include; (IVAs) Individual Voluntary Agreements and bankruptcy. It costs more money and time to choose the wrong option so, make sure you understand all options first.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Donald Trump Wants To Scrap The Consumer Protection Agency, What Does This Mean For Borrowers In The US?

Donald Trump Wants To Scrap The Consumer Protection Agency, What Does This Mean For Borrowers In The US?

US President Donald Trump is facing immense pressure to get rid of America’s consumer protection agency CFPB (Consumer Financial Protection Bureau). This is according to the man set to head the agency. If this happens, rogue debt collectors, loan sharks, and payday lenders will have unmatched freedom to rip off American borrowers.

According to Randy Neugebauer who is slated to replace the current CFPB Director, President Trump is facing immense pressure from the Republican Party to break up the agency completely. The former Texas congressman held talks with the then President-Elect Trump shortly after his election victory in November.

While speaking to The Independent exclusively in his 1st interview since the new Trump administration took office, Mr. Neugebauer stated that his meetings with President Trump have involved discussions revolving around deregulating as well as gutting the CFPB.
Mr. Neugebauer went ahead to state that some of his colleagues are in favour of doing away with the agency completely. He is however of the opinion that it’s better to change certain aspects of the agency as opposed to doing away with the agency completely. Mr. Neugebauer feels that the government shouldn’t be telling the public what types of financial products are the best but rather, creating a safe environment where the public is safe from unfair lending practices.

This is where the CFPB comes in. The agency has the power to take any necessary action against companies which break the law. The agency also takes on cases revolving around race or age discrimination.

Under Mr. Neugebauer’s watch, the agency’s current form is likely to be dismantled which may result in the agency losing much of its influence. Mr. Neugebauer claims that American consumers are currently being suffocated by regulations. He prefers a consumer environment where consumers have the freedom to choose the loans they want whether the deals available are good or bad.

Mr. Neugebauer has stated that he is willing run the agency if appointed. However, it will depend on what the long-term plan of the agency will be. Although Mr. Neugebauer admits to having had broad discussions with President Trump, he goes ahead to state that he hasn’t discussed any specific job offer with the president.

Mr. Neugebauer has been on the record voicing his support for payday loan lenders, despite the apparent lack of transparency as well as crippling interest rate charges that have contributed to calls for payday lenders to be banned.

He also backs President Trump’s executive order aimed at reviewing the 2010 Dodd-Frank financial regulations. Mr. Neugebauer states that the Obama administration rules meant to get rid of risky lending practices were an overreaction. Mr. Neugebauer views the current regulation as blanket regulation meant for the whole financial market yet some entities weren’t part of the cause of the financial crisis that warranted the 2010 Dodd-Frank financial regulations. In his opinion and those of many others, the regulation went too far.
Under the current CPFB director Richard Cordray, customers who have been victims of credit scams or unfair banking sector practices have received billions in compensation. However, Mr. Neugebauer claims that the problem was overstated and individual states were doing a better job when compared to the CPFB.

He admits to the fact that there are people who will always try to abuse the system, however, action can and has been taken against such people.
Furthermore, the CFPB is already under threat given the federal appeals court ruling in October that the agency has an unconstitutional structure. The ruling also gave President Trump the power to dismiss the current director at will and appoint his replacement anytime even before his term ends in 2018.

The agency which came into being after the 2010 Dodd-Frank reform law was enacted is among former President Obama’s main domestic policy achievements. The achievement is, however, unpopular with libertarians who think it has resulted in unplanned long-term commitments that shifts from the initial objective. Most libertarians feel the agency should either be reformed or disbanded.

A bill has already been introduced by Representative John Ratcliffe and Senator Ted Cruz to disband the agency. If the bill is passed prompting the disbandment of the CFPB, the move will be hugely controversial. Many banking sector players have warned against such a move claiming it will do more harm than good.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.