CFPB looks at payday lending rule

The U.S. Consumer Financial Protection Bureau said on Tuesday that it intends to reconsider a recent rule that would significantly curb payday lending.

The rule, finalized in October under Obama appointee Richard Cordray and set to begin taking effect this year, would require lenders to determine if borrowers can repay debts and cap the number of loans that lenders could make to a borrower.

The decision to revisit the rule, which applies to small-dollar advances typically repaid on the borrower's next payday, could mark the most significant policy shifts since the Trump administration took control of the agency at the end of November.


Mick Mulvaney, the agency's acting director and President Trump's budget director, had previously said he supported efforts by Congress to undo the rule.


Consumer advocates and Democratic supporters of the CFPB have said strict rules policing payday lenders were necessary. The bureau found low-income borrowers ended up trapped in a cycle of high-interest loans.

But critics said the rule would devastate an industry serving 30 million customers, many of whom lack access to more traditional banking products.

— Reuters


GE faces $6.2 billion after-tax charge

After a decade breaking off substantial pieces of the multinational conglomerate in a bid to return to its industrial roots, a more comprehensive reshaping of General Electric may be on the way.


Chief executive John Flannery, who was put in charge of reviving the company last summer, revealed significant issues at GE Capital on Tuesday that will lead to a $6.2 billion after-tax charge in the fourth quarter.


The problems were revealed after review and reserve testing of GE Capital's runoff insurance portfolio. GE Capital will also suspend its dividend to GE for the foreseeable future.

"At a time when we are moving forward as a company, a charge of this magnitude from a legacy insurance portfolio in runoff for more than a decade is deeply disappointing," Flannery said.

At the heart of the issue revealed Tuesday at GE Capital is the level of premiums being paid to offset costs for aging policyholders. The company, after a deeper dive, found that the premiums being paid would not offset claims.


That led to the charge and the suspension of dividends.

Flannery reiterated that the focus of the Boston company remains on making GE Capital "smaller and more focused."

— Associated Press

Also in Business

AutoNation chief executive Mike Jackson, who publicly broke with the Republican Party after it nominated Donald Tump for president, is giving an array of benefits to employees who stay with the car retailer for several years as a way to share the spoils of the U.S. tax rehaul. While Jackson applauds the sharp reduction in corporate taxes, he said he remains an independent. AutoNation announced increases to 401(k) corporate matches, a new cancer insurance policy and improvements to deferred compensation in the wake of the tax cuts. The tax bill is estimated to save AutoNation as much as $100 million a year.


A federal judge in Philadelphia on Tuesday rejected Wells Fargo's bid to dismiss that city's lawsuit accusing the largest U.S. mortgage lender of predatory lending targeting black and Hispanic borrowers. U.S. District Judge Anita Brody said Philadelphia may pursue claims that the bank's alleged "reverse redlining" violated the federal Fair Housing Act, though she had "serious concerns" about whether claims of economic harm could survive. The lawsuit is one of several against big lenders by major U.S. cities claiming that discrimination causes more defaults by minority borrowers and lower property tax revenue.

— From news reports