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The U.S. Consumer Financial Protection Bureau (CFPB) yesterday asked five "buy-now, pay-later" companies for information on their business practices, amid concerns that the financing products are putting consumers at risk, Reuters reported. The agency issued the order to Affirm Holdings, Afterpay Ltd, Klarna, PayPal and Zip Co in the wake of a boom in "buy-now, pay-later" services, which allow consumers to split purchase payments into installments, driven in part by online shopping growth during the coronavirus pandemic. The CFPB said it is concerned about "accumulating debt, regulatory arbitrage, and data harvesting" and is seeking data on the risks and benefits of the products. "The consumer gets the product immediately but gets the debt immediately too," CFPB Director Rohit Chopra said in a statement. A survey in September by personal finance company Credit Karma found that one-third of U.S. consumers who used "buy-now, pay-later" services have fallen behind on one or more payments, and 72% of those said their credit scores declined.

The federal eviction ban, along with a mix of state and federal moratoriums, is credited with keeping millions of Americans in their homes during the pandemic and preventing the spread of the coronavirus. There was a brief lull in evictions after the ban ended in September. But housing advocates say that they’re on the rise in many parts of the country — though numbers remain below pre-pandemic levels due to the infusion of federal rental assistance and other pandemic-related assistance like expanded child tax credit payments that are also set to end, the Associated Press reported. Part of the increase is due to courts catching up on the backlog of eviction cases. But advocates say the upsurge also shows the limits of federal emergency rental assistance in places where distribution remains slow and tenant protections are weak. Rising housing prices in many markets also are playing a role. According to the latest data from the Eviction Lab at Princeton University, evictions have been rising in most of the 31 cities and six states where it collects data. Evictions in September increased 10.4% from August. October numbers were 38% above August levels and 25% higher than in September. Filings fell around 7% from October to November and now remain about 48% below pre-pandemic levels.

Americans’ $1.58 trillion of student loans is likely to come to the political forefront again, according to a Bloomberg News commentary. Since March 2020, the U.S. government has cut interest rates to 0% and suspended payments and collections on defaulted debt. For millions of Americans, it has been a tremendous relief. This emergency measure was supposed to expire on Sept. 30 but was ultimately extended until Jan. 31. Some Democrats, well aware of the political ramifications, are again calling to keep the freeze in place for longer, with Senate Majority Leader Chuck Schumer bemoaning that “horrendous interest will pile up at a time when too many are still not financially prepared to shoulder a giant monthly bill.” But with the U.S. economy in the midst of an outright boom, the arguments for “at least” one more extension are losing momentum. As unpopular as it may be, expect student-loan payments to resume soon, according to the commentary. Schumer’s reference point was a survey last month from the Student Debt Crisis Center, an advocacy group, and Savi, a startup that helps borrowers cut their payments. The top-line takeaway: “89% of full-time employed student loan borrowers say they’re not financially secure enough to begin making payments.” That sounds ominous, but it looks subject to selection bias: The survey was based on 33,703 responses from a group of about 2 million Student Debt Crisis Center followers. Broader economic indicators tell a more optimistic story. The student-loan burden disproportionately falls on 18- to 29-year-olds, according to Federal Reserve Bank of New York data. They have about $350 billion of the loans, or almost one-third of their overall debt. Those ages 30 to 39 have more in nominal terms, at about $510 billion, but that’s just 15.4% of their total debt because of a pickup in mortgages among that cohort.

Ohio State University and Smith College are the latest institutions to try to spare another generation of undergraduates from shouldering an all-too-common burden: student debt, the Washington Post reported. Starting next fall, the schools will take loans out of their financial packages and instead pour philanthropic dollars into more grant aid for undergraduates. The decision is rooted in an awareness that affordability is at the heart of national conversations about student debt. The public policy debate over broad student debt cancellation is forcing colleges to confront their role in a lending system that provides critical access for those wanting to attend but comes at a cost that can limit the value of higher education. Eliminating the need to borrow positions colleges to attract and retain strong students, but sustaining and scaling the policy is challenging. There is a reason only 76 colleges and universities have adopted no-loan policies since Princeton University’s seminal program in 2001: It is expensive. Most schools employing the strategy have large endowments, enroll nominal numbers of needy students and are selective institutions. Some universities counted in the ranks restrict eligibility or have had to scale back their programs. Still, as institutions compete for the best students — who are increasingly price-sensitive or may lack financial resources — bolstering grants to supplant debt may become a central component of more aid packages. “Colleges are legitimately worried about student loan debt, but they’re also concerned that if they don’t do this, they won’t be able to compete for the students they want,” said Robert Kelchen, a higher education professor at the University of Tennessee at Knoxville.

The U.S. Consumer Financial Protection Bureau (CFPB) will issue new guidance aimed at curbing banks' reliance on fees from overdraft and non-sufficient funds (NSF) facilities that lenders impose on consumers, its top official said yesterday, Reuters reported. Rohit Chopra added that he has also tasked the regulator's bank examiners with prioritizing lenders that over-rely on such fees, of which banks netted $69 billion in the third quarter. The agency also hopes that impending data-sharing rule changes aimed at boosting competition among lenders will make it easier for consumers to dump banks that overcharge them. "The (consumer watchdog) is considering a range of regulatory interventions to help restore meaningful competition in this part of the checking market, rather than allowing large institutions to rely on overdraft and non-sufficient revenue fees forever," Chopra said. Chopra pointed out that a "blockbuster" third quarter far outstripped the $15 billion netted in 2019. Also on Wednesday, Capital One Financial said it would eliminate all overdraft and NSF fees for consumers, ending a practice that drew the ire of U.S. lawmakers at a Senate hearing earlier this year.