FiSCA moves to where the financial regulatory action is
The Financial Service Center of America (FiSCA), a trade association that represents check cashing and payday lending stores, has moved from its 20-year home in Hackensack, N.J., to Washington, D.C. Bloomberg Business reports that this will place FiSCA a mere two blocks from the newly formed Consumer Financial Protection Bureau. According to FiSCA general counsel Ed D’Alessio, the move enables the association to meet the increased levels of financial regulation that are on the way for the financial services industry.
FiSCA awaits a flurry of regulatory moves
FiSCA, which had been regulated primarily on the state level before the Obama administration’s financial reforms, handles approximately $106 billion annually in transactions for more than 30 million customers via such transactions as payday loans, investments and other financial arrangements. The payday lending industry and other groups represented by FiSCA are hopeful that new regulations will enable them to take market share from traditional banks that offer similar services, but financial legislation will determine the success of this endeavor.
The Dodd-Frank Wall Street Reform Act (aka the Dodd-Frank law) sketched the new regulatory landscape only in broad strokes. Thus, Bloomberg reports that there are as many as 330 new rules on the way by July that will affect payday lending, derivatives trading and mortgage lending, to name but a few industries. Some industries will benefit from Dodd-Frank, while others will face greater restrictions. As financial regulation expert Douglas Elliott of the Brookings Institution told Bloomberg, what happens to bankers could play a significant role in the U.S. economic recovery.
“Bankers could be hurt badly or could come away without too much damage, and the economy could be helped or hurt, depending on those choices,” said Elliott.
Mortgages: A blip on the consumer protection radar
Wells Fargo would like the Consumer Financial Protection Bureau to allow banks to retain a stake in home loans sold into mortgage-backed securities. U.S. Bancorp and SunTrust Banks are lobbying to exempt a wide array of mortgages from crackdown, while Wells Fargo is seeking to exempt only those riskier mortgage loans with a 30 percent or higher down payment. Smaller banks want the extra exemptions because they are less equipped to handle risk.