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Updated July 15, 2010 --  Scroll down to read all stories.



The new legislation is now known as "Dodd-Frank Wall Street Reform and Consumer Protection Act" and it will bring about sweeping changes for us in many ways -- most that are unknown at the moment.  It has the potential of reshaping how (and if) we do business.  Many of you may know, we had a lengthy meeting with Senator Shelby last November.  One thing that came from that meeting was crystal clear.  Senator Shelby's message was that this legislation would be the most far reaching and open-ended piece of legislation he has ever seen in his time in the U. S. Congress.  That time spans over 25 years.  Now that most of us have seen the legislation, we can now agree with Senator Shelby 100%!

After reading many reviews and scanning the legislation, here is our assessment of a few points that come across quite succinctly about this legislation:

1) Payday lending is on the target list.  It is the only consumer lending product, other than mortgages and those that are excluded, that gets honorable mention in the bill.  In fact, it is listed in a section all of its own.

2) States may have enforcement rights as it relates to non bank entities (us), but the CFPB will make the rules.  And, the CFPB will have almost unfettered rights to write the rules as they decide with virtually no oversight, other than themselves.  No outside entity will have veto rights over their regulations and rulemaking.

3) Most of the financial products and services many of us provide will likely remain viable for a time, but the outlook and the regulation oversight is very murky for the longer term.

4) The time frame for us to expect changes seems to be further out than some of us may have first thought.  See this article from the American Banker that one of our good friends passed along.  The article does offer some encouragement.  The job is almost overwhelming and it will take time.

The bottom line is we believe there will be massive changes in our industry if this legislation occurs as it is now written (the most likely case).  Some wise person once said, "out of chaos comes opportunity." We hope they are right.  If the opportunity is only half as great as the chaos seems to be in the text of this bill this will be one of the greatest opportunities most of us see in our lifetime.  There will be changes for us and we will need to adapt, but the good news is we should have time to make the adjustment.  But, adapt we will need to do if we wish to remain in this business.



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