NEWS: August 22

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DOJ Officially Ends Operation Choke Point

WASHINGTON * Attorney General Jeff Sessions' Justice Department has ended a controversial Obama-era program that many Republicans, including Rep. Blaine Luetkemeyer, said was a cover for going after industries that former President Barack Obama didn't like.

Operation Choke Point was a DOJ and bank regulator program Obama aimed at payday lending and at banks and other third-party processors providing services to industries that may pose a risk to the institutions' reputations. Democrats defended it as protecting consumers, Republicans portrayed it as a thinly veiled attempt to go after makers and sellers of firearms and ammunition, and other companies Obama didn't like.

Luetkemeyer, R-St. Elizabeth, and several other members of the House, including Financial Services Committee Chairman Jeb Hensarling, R-Texas, had written Sessions asking that the program be ended. Luetkemeyer said Friday he hoped that federal bank regulators would also end its actions related to Operation Choke Point.

Luetkemeyer, is sponsoring legislation, the Financial Institution Consumer Protection Act, that he said would prevent similar initiatives in future administrations. He chairs the Financial Services subcommittee on financial institutions and consumer credit.

"After years of fighting against the Obama Administration's Operation Choke Point initiative, I applaud President Trump's Department of Justice for ending this ill-advised program," Luetkemeyer said.

For the Fourth Time, FactorTrust Named to the Inc. 5000 list for Significant Growth

ATLANTA-FactorTrust®, the Alternative Credit Bureau™, today announced it has been named one of the fastest-growing private companies in the U.S. by Inc. 5000. For the second consecutive year, not only was the company the only private, alternative credit bureau to make the list, it was also ranked the eighth fastest-growing financial services firm in Georgia.

This is the fourth year FactorTrust has been named to the list for its significant growth in revenue and company size. The list represents a unique look at the most successful companies within the American economy's most dynamic segment- its independent small and midsized businesses. The average company on the list achieved a three-year growth of 481 percent.

"Our growing team of industry champions set us on the path to unprecedented growth in both revenue and innovation in recent years," said FactorTrust CEO Greg Rable. "Our team's expertise, coupled with better recognition of the impact of alternative credit data for evaluating creditworthiness of underbanked consumers, is driving FactorTrust as the leading alternative credit reporting and analytics agency."

The Inc. 5000's aggregate revenue is $206 billion, and the companies on the list collectively generated 619,500 jobs over the past three years. Complete results of the Inc. 5000, including company profiles and an interactive database that can be sorted by industry, region, and other criteria, can be found at

"The Inc. 5000 is the most persuasive evidence I know that the American Dream is still alive," says Inc. President and Editor-In-Chief Eric Schurenberg. "The founders and CEOs of the Inc. 5000 tell us they think determination, risk taking, and vision were the keys to their success, and I believe them."
Why Is Richard Cordray Still At CFPB?

After the Wall Street Journal ran an opinion piece on the subject earlier this week, increasing attention is being focused on Richard Cordray who, for some reason, is still in charge at the Consumer Financial Protection Bureau (CFPB). There are a couple of different issues with this Obama holdover, and one of them is the newly arisen question of whether or not he violated the Hatch act. Word on the street is that Cordray is preparing to run for Governor in Ohio and has been engaging in some political maneuvering along those lines. Since he's still an agency official in the Executive branch, that might turn out to have run afoul of the law. (

A Texas congressman has requested a federal investigation into whether Consumer Financial Protection Bureau Director Richard Cordray is illegally working to run for Ohio governor.

House Financial Services Committee Chair Jeb Hensarling, a longtime GOP critic of Cordray, asked U.S. Acting Special Counsel Adam Miles on Friday to review whether Cordray violated the Hatch Act, which prohibits executive-branch employees from engaging in political activity.

In a letter to Miles, Hensarling pointed to media reports that Ohio Supreme Court Justice Bill O'Neill was contacted by an unnamed mutual friend of Cordray's earlier this month stating that Cordray is planning to run for governor and asking whether O'Neill would remain out of the Democratic gubernatorial primary.

I'll confess that my experience with Hatch Act cases frequently leaves me in the dark as to when or how someone might have violated it. There are provisions about "using your office for political activity" and such which seem to be almost intentionally vague at times. But if Hensarling sees enough smoke there to chase after it, the question probably deserves a fair hearing. Read more at HOTAIR
Dreher Tomkies LLP
What to Expect If the GOP Takes Control of the CFPB
By Victoria Finkle

Director Richard Cordray's possible departure from the Consumer Financial Protection Bureau is likely to result in incremental change rather than a big shake-up immediately, consumer-finance attorneys say.

Expect less "rulemaking by enforcement" and a slowdown or even freeze on formal rulemaking. The agency is likely to focus on blatant fraud rather than push the envelope on its jurisdiction and rely more on supervisory referrals with fewer actions against certain non-banks.

"There will be significant changes, but they will be more incremental than monumental," said Alan Kaplinsky, a partner at Ballard Spahr. "After the new director is there for a year or so, that's when I would expect that people might notice more readily what has actually changed."

Such changes fall far short of the wholesale restructuring - or outright elimination of the agency - sought by House Republicans, whose overhaul legislation is unlikely to go anywhere in the Senate this year.

Richard Cordray's five-year term as director expires next July, but there are signs that he could depart soon to run for governor of Ohio. While a clear successor has yet to emerge, consumer advocates fear the bureau's priorities will shift - perhaps dramatically - under a Trump appointee.

"The CFPB was making tremendous progress catching up on several decades of neglect for consumer protections and it was improving financial markets in important ways," said Michael Calhoun, president of the Center for Responsible Lending. "There's certainly a large risk that parts of that will be rolled back and that progress will be slowed or stopped - and that's a huge loss."

Clogged Pipeline

The CFPB's rulemaking agenda is an area where a new director could make quick headway by slowing down or effectively halting pending rules that haven't been finalized. Potential targets include rules governing payday loans, debt collection and overdraft policies. Read more at BLOOMBERG BNA
Community Involvement
Amscot Financial contributes mini-grants to 15 non-profit service groups

Tampa, FL - ( August 1, 2017) - Amscot Financial, a leading provider of convenient, consumer-oriented financial services, recently awarded mini-grants of $100 to $2,000 in support of 15 different non-profit service organizations located in the Florida communities where the company serves several million consumers.

"Helping others is important to all of us at Amscot, that's why we continue to partner with those organizations who work hard to make a difference in the lives of those who need it most," said Ian MacKechnie, Founder and CEO of Amscot Financial.

Mini-grants went to the following organizations: Read more
Forecast: Abundance of Potential New Rulemaking From the CFPB

After making headlines with its controversial arbitration rule, the embattled Consumer Financial Protection Bureau (CFPB or Bureau) released its rulemaking agenda for the rest of the year, putting financial services companies on notice about forthcoming rules on payday, title, high-cost installment loans and debt collection.

What happened

2017 is shaping up to be a busy year for the CFPB. In addition to a significant uptick in enforcement activity, the CFPB's promulgation of its arbitration rule prohibiting class action waivers in July is already the subject of repeal efforts. And the Bureau's long-anticipated amendments to the TILA/RESPA Integrated Disclosure rule (TRID) were published in the Federal Register on Aug. 11, meaning that the rules become effective Oct. 10, 2017 (and a mandatory compliance date of Oct. 1, 2018). And the Bureau has signaled its plans to release additional rules in the coming months.

Released on July 20 by the Office of Management and Budget, the Spring 2017 Rulemaking agenda provides some new details about the CFPB's plans in the following areas:

Debt collection. The CFPB notes this is the "single largest source of complaints to the federal government of any industry," and expressed concern that consumers have limited ability to protect themselves from debt collectors because they cannot "vote with their feet" and choose which entity to work with. The CFPB-allegedly based on the results of a consumer survey, the response to an outline of proposals to regulate the industry in July 2016 and feedback from a panel convened under the Small Business Regulatory Enforcement Fairness Act-intends to issue a proposed rule later this year "concerning debt collectors' communications practices and consumer disclosures." The rule will attempt to "clarify" the application of the 40-year-old Fair Debt Collection Practices Act (FDCPA) to modern forms of communication such as text messages, the Bureau noted, and will be only the beginning of regulation for the debt collection industry. "We intend to follow up separately at a later time about concerns regarding information flows between creditors and FDCPA collectors and about potential rules to govern creditors that collect their own debts," the CFPB explained in a blog post about its rulemaking agenda. Read more at JDSUPRA
A Focus on Financial Wellness Aids With Retention
Employers are seeing how the benefit helps their bottom line.

Most financial executives believe that employee benefits packages stressing financial wellness are key drivers of success for their companies, according to a recent survey by CFO Research and Prudential.

The study found that 82% of executives believe their company will benefit from having a financially secure work force. Only 5% said they do not believe so, and 13% said they were unsure. Most executives view having a financial wellness program as a key component of corporate performance, as well as an effective human resource (HR) and management strategy.

"It is encouraging to [observe] that employers are seeing the value in helping employees focus on financial wellness," says Jim Gemus, senior vice president, distribution and product management, Prudential Group Insurance. "In particular, employers seem ready to look at ways to not only measure the financial wellness of their employees, but also to benchmark it against other companies in their industry. This survey demonstrates that the vast majority of employers recognize that improving the financial wellness of their work force yields significant benefits, for their companies and employees alike."

More than six in 10 respondents (63%) said that employee satisfaction with benefits is important for their company's success, and 65% that benefits are critical to attracting and retaining employees. Even if the deductibility of employer-sponsored benefits were to be removed, several respondents (29%) said their companies would either continue to offer the same package with the same subsidies or increase employee compensation to counterbalance reduced corporate subsidies (28%).
Incite Business
Two Mississippians offering ways to help those in bank deserts

More than 15 percent percent of Mississippians do not have a bank account. Close to a quarter of Mississippians are under-banked, meaning they have limited access to retail banks and credit unions, instead preferring to cash paychecks immediately with a nontraditional financial service.

With these statistics biennially reported by Federal Deposit Insurance Corporation, banking branches and Mississippians have responded by working to provide financial literacy to the unbanked and under-banked.

Two native Mississippians Sheena Allen and Tim Lampkin co-founded CapWay, which is a mobile app for iPhones that provides an education in financial literacy so the users can cope with challenging financial situations such as living in a bank desert.

"The FDIC has reported on this issue for years," said Lampkin. "Several banks are moving away from physical branches, and more predatory lenders are moving into communities. Banking deserts are real, especially in the rural South. This creates a difficult situation for those who are trying to improve their financial situation." Read more at MISSISSIPPI BUSINESS JOURNAL

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