Bureau Publishes Payday Loan Examination Procedures; Hosts First Field Hearing
WASHINGTON, D.C. – In Birmingham, Ala. today, the Consumer Financial Protection Bureau (CFPB) is convening the agency’s first-ever field hearing to gather information and input on the payday lending market. The hearing coincides with the publication of the Bureau’s Short-Term, Small-Dollar Lending Procedures – a field guide CFPB examiners will use to make sure payday lenders – banks and nonbanks – are following federal consumer financial laws.
“We recognize the need for emergency credit. At the same time, it is important that these products actually help consumers, rather than harm them,” said CFPB Director Richard Cordray in his opening remarks at today’s field hearing. “Now, the Bureau will be giving payday lenders much more attention.”
The Short-Term, Small-Dollar Lending Procedures can be found here.
Payday loans are typically marketed to bridge a cash flow shortage between pay or benefits checks. They generally have three features: the loans are small dollar amounts; borrowers must repay the loan quickly; and they require that a borrower give lenders access to repayment through a claim on the borrower’s deposit account.
Most loans are for several hundred dollars and have finance charges of $15 or $20 for each $100 borrowed. For the two-week term typical of a payday loan, these fees equate to an Annual Percentage Rate ranging from 391 percent to 521 percent. Loan amounts and finance charges vary depending on state law. If the consumer does not repay the loan in full by the due date, the loan agreement typically permits the lender to cash the consumer’s check to obtain repayment.
Payday lenders have sprung up across the country over the past 20 years, beginning in storefront locations. With the advent of new media, payday loans now are offered through the Internet. Most recently, some banks began offering similar loan products.
With the establishment of the CFPB, a federal agency for the first time can supervise not only bank payday lenders but also all nonbank payday lenders. Specifically, the Short-Term, Small Dollar Lending Procedures describe the types of information that the agency’s examiners will gather to evaluate payday lenders’ policies and procedures, assess whether lenders are in compliance with federal consumer financial laws, and identify risks to consumers throughout the lending process. The procedures track key payday lending activities, from initial advertisements and marketing to collection practices.
The CFPB will be implementing its payday lending supervision program based on its assessment of risks to consumers, including consideration of factors such as the volume of business and the extent of state oversight. The CFPB also will be coordinating with federal and state partners to maximize supervisory capability and minimize regulatory burden. If a violation of a federal consumer financial law has occurred, the CFPB will determine whether supervisory or enforcement actions are appropriate.
In general, CFPB supervision will include gathering reports from and conducting examinations of bank and nonbank activities. The examination process will begin with scoping, review of information, and data analysis followed by onsite examinations. The CFPB will be in regular communication with supervised entities, and it will conduct follow-up monitoring.
Part of USDA's Healthy Meals Incentives, these sub-grants are designed to increase K-12 schools' procurement of local, higher-quality food items and scratch cooking
BOULDER, Colo., March 22, 2023 (Newswire.com)
Chef Ann Foundation (CAF) has signed a cooperative agreement with the USDA's Food and Nutrition Service (FNS) as part of the Healthy Meals Incentives Initiative. An allocation of $7.8 million is provided to CAF as part of The School Food System Transformation Challenge. These funds will be used to build a sub-grant program to incentivize innovative partnerships between school districts, food producers, suppliers, distributors, and community partners to strengthen the availability and access to nutritious food products in the K-12 school food.
"The pandemic shed light on the cracks in our food system, and school food teams have been burdened with supply chain issues. We need to help our schools and their regional food communities work together to empower local food production and distribution," said Mara Fleishman, CEO of Chef Ann Foundation.
In partnership with USDA FNS, CAF partnered with Gretchen Swanson Center for Nutrition, Kitchen Sync Strategies, and the National Farm to School Network. These partners will ensure that the sub-grants will increase the offering of healthier food products in the K-12 school food marketplace; leverage innovative partnerships between School Food Authorities (SFA) and key stakeholders in their local food systems; expand SFA procurement capacity at the local and regional levels; and increase market opportunities for local growers and producers. The sub-grants will be developed with an eye towards cultivating equity, nourishing students, fostering a resilient supply chain, and creating scalable and sustainable change for SFAs across the country.
"Procurement, in particular, remains one of the most complex processes within school food service departments. SFAs are required to navigate sourcing ingredients that fulfill the mission of serving fresh, local foods while working within limited budgets, under-resourced producers, and strained supply chains," says Elliott Smith, co-founder of Kitchen Sync Strategies.
In order to effectively meet current standards, in addition to upcoming changes that align with the USDA Dietary Guidelines, school districts must be equipped with the network and resources necessary to achieve such requirements. Realistically, no SFA or individual business is capable of accomplishing such a complex universal goal without multiple strategic partnerships with other organizations, businesses, and agencies in their food economy. The sub-grants support the development of the hard and soft infrastructures needed to successfully increase access to nutritious and appealing foods for kids.
"USDA is taking a holistic approach to supporting school meal programs, which includes strengthening the food supply chain that supports them," said Stacy Dean, deputy under secretary for Food, Nutrition, and Consumer Services. "We're hopeful that these grants will accelerate and expand innovation in the school food marketplace, so that schools - and ultimately our children - have better access to healthier food products."
These initiatives are part of the Biden-Harris Administration's National Strategy on Hunger, Nutrition, and Health. The National Strategy provides a roadmap of actions the federal government will take to end hunger and reduce diet-related diseases by 2030 - all while reducing disparities. The National Strategy was released in conjunction with the first White House Conference on Hunger, Nutrition, and Health in over 50 years, hosted by President Biden in September 2022.
About Chef Ann Foundation
Chef Ann Foundation is a 501(c)(3) nonprofit working to ensure that school food professionals have the resources, funding and support they need to provide fresh, healthy, delicious, scratch cooked meals that support the health of children and our planet. To date, the organization has reached more than 14,000 schools and 3.4 million kids with healthy school programming. Learn more at chefannfoundation.org and follow us on Facebook, Twitter, Instagram and LinkedIn.
About Gretchen Swanson Center for Nutrition
The Gretchen Swanson Center for Nutrition (GSCN) is a nonprofit research institute providing expertise in measurement and evaluation to help develop and enhance programs focused on healthy eating and active living, food security, and local food systems. With expertise in public health nutrition, GSCN is dedicated to building measurement strategies to assess the impact of innovative health-related programs, which advance health equity. GSCN was founded in 1973, is headquartered in Omaha, NE, and has 44 team members across 24 states.
About Kitchen Sync Strategies
The Kitchen Sync Strategies Collaborative (KSSC) is a team of consulting and brokerage companies that brings a combined 25+ years of farm-to-school and school food procurement experience. The members of KSSC - which include Kitchen Sync Strategies, Supply Change, and Shared Plate Strategies - have supported over 250 SFAs nationwide to procure food from socially disadvantaged producers and meaningfully impact the racial and economic equity in their region.
About National Farm to School Network
National Farm to School Network has a vision of a strong and just food system for all, and we seek deep transformation toward this vision through farm to school - the way kids eat, grow, and learn about food in schools and early care and education settings.
USDA touches the lives of all Americans each day in so many positive ways. In the Biden-Harris Administration, USDA is transforming America's food system with a greater focus on more resilient local and regional food production, fairer markets for all producers, ensuring access to safe, healthy and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America. To learn more, visit www.usda.gov.