Page 2 The Skanner MINORITY BUSINESS ENTERPRISE EDITION September 21, 2016
®
Challenging People to Shape
a Better Future Now
Bernie Foster
Founder/Publisher
Bobbie Dore Foster
Executive Editor
Jerry Foster
Advertising Manager
Christen McCurdy
News Editor
Patricia Irvin
Graphic Designer
Arashi Young
Reporter
Monica J. Foster
Seattle Oice Coordinator
Susan Fried
Photographer
2016
MERIT
AWARD
WINNER
The Skanner Newspaper, es-
tablished in October 1975, is a
weekly publication, published
every Wednesday by IMM Publi-
cations Inc.
415 N. Killingsworth St.
P.O. Box 5455
Portland, OR 97228
Telephone (503) 285-5555
Fax: (503) 285-2900
info@theskanner.com
www.TheSkanner.com
The Skanner is a member of the
National Newspaper Pub lishers
Association and West Coast Black
Pub lishers Association.
All photos submitted become
the property of The Skanner. We
are not re spon sible for lost or
damaged photos either solicited
or unsolicited.
©2016 The Skanner. All rights re served. Reproduction in
whole or in part without permission prohibited.
Local News
Paciic NW News
World News
Opinions
Jobs, Bids
Entertainment
Community Calendar
RSS feeds
BE A PART
OF THE
CONVERSATION
#SkNews
Opinion
Consumer Agency Wins Court Case against CashCall
The ight for fair lending got
a big boost on Aug. 31 when a
federal court rejected a pay-
day loan collector’s attempt to
evade consumer laws. The de-
cision against CashCall, a Cal-
ifornia-based online payday
and installment lender, up-
held the Consumer Financial
Protection Bureau’s (CFPB)
authority to investigate and
ine lenders for unfair, abu-
sive or deceptive practices.
The court ruling is a key
step in a legal battle that be-
gan nearly three years ago.
In December 2013 and for
the irst time, CFPB sued to
secure consumer refunds of
illegally collected money. Ac-
cording to the iling, “defen-
dants engaged in unfair, de-
ceptive and abusive practices,
including illegally debiting
consumer checking accounts
for loans that were void.”
CFPB charged that Califor-
nia-based CashCall, its sub-
sidiary WS Funding LLC,
ailiate Delbert Services Cor-
poration, a Nevada collection
agency were all the same own-
ership. Loans ranging from
$850- $10,000 were sold with
upfront fees, lengthy repay-
ment terms and interest rates
as high as 343 percent. CFPB
charged that these loan terms
violated state laws in at least
16 states that had in place li-
censing requirements, inter-
est rate caps — or both.
As early as 2009, CashCall
also partnered with Western
Sky Financial, another com-
pany, to claim that tribal law
Charlene
Crowell
NNPA
Columnist
rather than state law applied
to their loans. Readers may
recall a series of television
ads promoting Western Sky’s
quick and easy loans.
The federal court disagreed
and dismissed challenging
arguments, inding CashCall
to be the true lender. The re-
“
trict of Columbia and 14 states
where
excessively-priced
payday loans are not allowed.
Collectively, these states save
more than $2 billion a year
that would otherwise be spent
on payday loan fees.
That’s a good thing for con-
sumers.
Consumer advocates are
celebrating this important
victory. It is one that upholds
the importance of strong state
laws and efective enforce-
ment.
“This important ruling val-
idates the right of states to
protect their citizens from
The noticeable presence of payday
lenders in Black and Latino com-
munities indicate that our people
are being targeted to become i-
nancial victims
lationship with Western Sky
was tantamount to a “rent-
a-bank” scheme. In part the
ruling stated afected states
“have expressed a fundamen-
tal public policy in protecting
its citizens.”
CFPB’s late summer court
victory is similar to another
recent enforcement action by
the Maryland Commissioner
of Financial Regulation. In
that state’s court, CashCall
was found to be a lender that
tried to evade state usury lim-
its by using the rent-a-bank
scheme.
Today, there are 90 million
people who live in the Dis-
predatory loans, whether
they are made online or at
a storefront”, noted Diane
Standaert, director of state
policy and an executive vice
president with the Center for
Responsible Lending. “It rein-
forces the common sense con-
cept that people should not be
harassed for debts they do not
owe. Both states and the CFPB
must continue to enact pro-
tections against unfair lend-
ing and collection practices.”
The court ruling also comes
when the deadline for public
comment on payday lending
approaches. CFPB will ac-
cept comments from citizens
and organizations that have
concerns about payday and
high-cost, small-dollar loans.
An online portal can accept
comments at: http://stoppay-
daypredators.org/crl/.
The deadline for public com-
ment is October 7. If anyone
doubts how these small-dollar
loans cause so much inancial
harm, consider these facts:
• Over $3.4 billion in exces-
sive fees are drained from
payday borrowers each
year.
• Nearly 1 in 4 payday bor-
rowers rely on either pub-
lic assistance or retire-
ment beneits as an income
source.
• Payday borrowers are more
likely to experience bank
penalty fees, delinquencies
on other bills, and delayed
medical care.
All too oten across the
country, payday storefronts
ply their trade in Black and
Latino neighborhoods. The
noticeable presence of pay-
day lenders in our communi-
ties indicate that our people
are being targeted to become
inancial victims. I would
challenge anyone to identify
areas dominated by high-in-
come consumers have a com-
parable number of payday
stores.
Starting now, choose not to
become a payday victim. If
there was ever a time to speak
up or speak out on predatory
lending, don’t miss the Oct. 7
deadline for comments.
Richard Cordray’s Testimony Before the Senate
T
his week, Consumer Fi-
nancial Protection Bu-
reau (CFPB) Director
Richard Cordray deliv-
ered before the Senate Com-
mittee on Banking, Housing,
and Urban Afairs in Wash-
ington, DC.
Below, please ind his writ-
ten testimony: 
Chairman Shelby, Ranking
Member Brown, and mem-
bers of the Committee, thank
you for the opportunity to
speak with you today. In these
brief remarks, I will discuss:
(1) what our investigation
found about the sales practic-
es at Wells Fargo; (2) what we
are seeking to achieve by our
Order; and (3) some initial
thoughts about what further
steps need to be taken to im-
prove the culture and practic-
es of the banking industry.
On Sept. 8, 2016, the Con-
sumer Bureau, together with
our partners at the Los Ange-
les City Attorney’s oice and
the Oice of the Comptrol-
ler of the Currency, took an
enforcement action against
Wells Fargo Bank. Our in-
vestigations found that, in
order to meet sales goals and
collect inancial bonuses for
Richard
Cordray
Director,
Consumer
Financial
Protection
Bureau
themselves, employees of the
bank created unauthorized
deposit and credit card ac-
“
ed applications for 565,443
credit card accounts that may
not have been authorized, by
using consumers’ informa-
tion without their knowledge
or consent. These activities
caused some consumers to
incur fees. Even apart from
that, they represent a stagger-
ing breach of trust and con-
duct that should never occur
at any bank. Wells Fargo has
demonstrated the epic scope
They represent a staggering
breach of trust and conduct that
should never occur at any bank
counts, enrolled consumers
in online banking services,
and ordered debit cards for
consumers, all without their
consent or even their knowl-
edge. Some of these practices
involved fake email accounts
and phony PIN numbers.
The fraudulent conduct oc-
curred on a massive scale. As
detailed in our Order, Wells
Fargo opened 1,534,280 de-
posit accounts that may not
have been authorized, includ-
ing transferring funds from
some customer accounts with-
out their knowledge or con-
sent. Wells Fargo also initiat-
of its failures by terminating
at least 5,300 people thus far,
including branch managers
and managers of managers.
The gravity and breadth
of the fraud that occurred at
Wells Fargo cannot be pushed
aside as the stray misconduct
of just a few bad apples. As
one former federal prosecu-
tor has aptly noted, the stun-
ning nature and scale of these
practices relects instead the
consequences of a diseased
orchard. As our Order de-
scribes, Wells Fargo built and
reined an incentive-compen-
sation program and imple-
mented sales goals to boost
the cross-selling of products,
but did so in a way that made
it possible for its employees
to pursue unfair and abusive
sales practices. It appears that
the bank did not monitor the
program carefully, allowing
thousands of employees to
game the system and inlate
their sales igures to meet
their sales targets and claim
higher bonuses. Rather than
put its customers irst, Wells
Fargo built and sustained a
program where the bank and
many of its employees served
themselves instead, violating
the basic ethics of a banking
institution, including the key
norm of trust.
Our Order accomplishes
several things. First, the kind
of detail that we always make
it a point to provide in our
enforcement orders exposes
Wells Fargo’s illegal miscon-
duct, including its scale, for
all to see for themselves. It
has spawned vigorous pub-
lic scrutiny over the past two
weeks that no doubt will con-
tinue.
Read the rest of this commentary at
TheSkanner.com