1. 1 February 25, 2013 Would more data sharing really help low income consumers? Center for Responsible Credit Tackling Britain’s high cost credit problem

2. 2 Why is Short Term Lending Different? No market based risk management tools –Credit Bureaus ( marketing / risk avoidance) –No collateral (check secured against future wages) –High charge off rates –No traditional underwriting Short term nature of loan –Pay cycle product / Trend to longer terms Consumer profile –Little to no credit availability –Low mainstream bank usage –Past credit risk behavior Few similar options at lower cost –Borrow from employer –Utility late fee and reconnect –Bank overdraft –Credit card advance

3. 3 Major Policy Issues – Payday Product Cost - Fee or APR –Hard cap, APR plus fees, fee per hundred Affordability – Short Term Should Be Short Term –Establish maximum borrowing limit (e.g., set amount, percentage of gross monthly income), enforcement Multiple Borrowing –Limit usage, enforcement Rolling Loans –No additional fees allowed after due date, except for NSF –Prohibited renewal or extension, enforcement –Repayment plan with zero or limited additional fees –Prohibition against using new loan proceeds to pay off existing loans –Mandatory “cooling-off” period (e.g. between loans, after specified number of days “in the product”), enforcement

4. 4 How does data sharing in real-time change the face of short-term high cost credit? -Policy must be correct. -Cost, Roll over, Outstanding Debt, Terms -Data must be protected from abuse -Data shared should allow for lenders to assess suitability and prohibitions -Data should not be shared for marketing -Data must be real time at point of sale -Duration of loan Jurisdictions which have similar policy and enforce them at the point of sale are a different environment from how the industry has historically operated. Question

5. 5 U.S. Policy Trends Regulations / consumer protections governing multiple products –All loans that meet specific threshold – payday, installment, auto- title (e.g. any loan less than $3,000 with an APR > 36%) –Maximum monthly payment based on consumer ability to repay (e.g. percentage of consumer gross monthly income) –Limits on amount of consecutive time “in the products” Encompasses multiple products offered by multiple Licensees –Addresses “product-morphing” –Addresses “bouncing” consumers between multiple products and / or multiple Licensees Real time enforcement to lower regulatory cost and ensure compliance with consumer protections Trend toward “comprehensive” consumer short-term lending regulatory environment

6. 6 Discussion & Questions