December 28

Trump's Wells Fargo tweet cited in court hearing as reason to remove Mulvaney as CFPB acting chief

A recent tweet by President Trump about possible penalties against Wells Fargo & Co. was cited during a court hearing Friday as a reason for removing White House official Mick Mulvaney as acting director of the Consumer Financial Protection Bureau.

The attorney for Leandra English - the bureau's deputy director who has said she is the rightful acting head - said Trump's tweet showed he was trying to exercise improper influence over the independent consumer watchdog.

"I think that [tweet] shows you this isn't just some hypothetical concern," the attorney, Deepak Gupta, told Judge Timothy J. Kelly of the U.S. District Court for the District of Columbia during a nearly two-hour hearing.

In the tweet, Trump appeared to deny a Reuters report that Mulvaney was reviewing whether Wells Fargo should pay tens of millions of dollars in penalties for charging fees to certain homebuyers to secure low mortgage rates.

English is seeking a preliminary injunction to remove Mulvaney and install her as acting director. Last month, Kelly denied a request by English for a temporary restraining order to do just that.

The restraining order decision could not be appealed, so Gupta filed for the injunction, which could be appealed to the U.S. Court of Appeals for the D.C. Circuit if not granted.
Dreher Tomkies LLP
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Did the CFPB Falsify Documents in Payday Lender Exam? by Manatt, Phelps & Phillips, LLP

In an explosive letter to Attorney General Jeff Sessions, a former Consumer Financial Protection Bureau (CFPB or Bureau) employee claims that her former bosses asked her to falsify records in a payday lender examination that resulted in a multimillion-dollar settlement.

What happened

Cassandra Jackson began working for the CFPB in 2011 as an examiner in the Southeast Division. Over the next five years, she claims she participated in more than 30 examinations on various types of regulated financial institutions.

Ms. Jackson's Dec. 6, 2017, letter addresses an examination that allegedly began in September 2013 of a Texas-based payday lender. The company offered installment loans, title loans, prepaid cards and check cashing. Jackson was tasked with examining military lending, storefront transactions and franchise locations.

"During the course of this examination, I was asked to change, remove, and otherwise falsify documents connected with this examination," Jackson claims. The requests came from the examiner in charge (EIC) as well as others in management positions, she asserts, and she further claims that she was instructed "to remove documentation that the lender provided as evidence to support my initial examination report."

Ms. Jackson next alleges that her bosses instructed her to cite the payday lender for a violation for which she had verified the company was in compliance, and to state that the company did not provide (and the CFPB did not receive) documents that would have satisfied the Bureau's guidelines. In fact, she says, the lender had provided such documentation, but Bureau personnel told her to remove that documentation from the case files. Read more at JD SUPRA
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Unbanked vs. Underbanked: Who they are and how they differ. by Walt Wojciechowski

Slightly more than two-thirds of households in America frequently make use of traditional banking services, according to the Federal Deposit Insurance Corporation. But that leaves 33 percent of people in the U.S. who don't, a significant percentage by any measure.

Making up this group are the so-called credit invisible, who for any number of reasons opt to go without regular patronage of traditional money management and transaction options. They're typically classified as "unbanked" or "underbanked."

The problem with this terminology is the two distinctions are often used interchangeably. In reality, however, they're quite different, even though the similarity between these titles might suggest otherwise.

For the sake of clarity, here are the characteristics that the unbanked and underbanked frequently possess, and how they compare and contrast:

As the title implies, unbanked Americans are those who don't make use of any banking services whatsoever. This includes debit cards and checking accounts, as well as savings accounts. In 2015 - the most recent year for which data is available - the unbanked represented 7 percent of U.S. households, translating to approximately 23 million individuals, including children, the FDIC reported. The percentage of unbanked households in the U.S. is down slightly from 2013, when it was 7.7 percent.

Families have a plethora of rationales for why they opt to go without banking services, but it's usually due to what they do not have in terms of savings. Nearly 57 percent of unbanked households cite this as their prime reason, according to the FDIC report. This may explain why almost 30 percent of households fall in the lower income bracket. Read more at microbilt
Why Adding Visibility to Customer Repayments Matters. by Noah Fitzgerald, CPP

Businesses that extend credit or terms to their customers take on an inherent risk. You provide a service, loan, product or goods without getting partial or complete payment at time of delivery with the expectation that the customer will pay you on time in the future. The reality is, when a business extends credit to a consumer they are investing in that consumer's ability to repay for the service or product they received.

This model of extending credit has been around for years, but over the past decade the rate of repayment defaults has climbed sharply. Today, the average repayment default on a payday loan is over 20%, 50% on high interest online installment loans, upwards of 33% on vehicle title loans, and 12% on high risk vehicle loans. These payment defaults not only cost the business loss of revenue and operational expenses, but have significant impacts to the consumer. In a recent study performed by the CFPB, the average default customer incurs total fees of over $185 in bank penalties, of which 36% have their bank accounts closed by the depository institution. In these scenarios, both the customer and the business lose. The customer loses their access to banking services while the business loses their principal and interest revenue with no ability to collect.
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The CFPB Has a New Mission: Protecting America From "Burdensome Regulations"

Another day, another federal agency determined to undo the rules it was designed to write and enforce.

The latest is the Consumer Financial Protection Bureau, the crisis-era creation of Sen. Elizabeth Warren charged with investigating the deceptive practices of lenders, wire services, auto dealers, credit card companies, and so on. The banking watchdog's mission statement now lists its first order of business as hunting down "outdated, unnecessary, or unduly burdensome regulations."

Slate has reached out to the CFPB for comment, but the change can likely be traced to the arrival of Acting Director Mick Mulvaney, who took over the CFPB on Nov. 27. The South Carolina Republican is also the director of Trump's Office of Management and Budget, and as the Intercept's Dave Dayen reports, has quickly moved to fill the ranks of the CFPB with Trump loyalists. (Meanwhile, there is an ongoing legal battle over the director's chair, to which Obama-era Deputy Director Leandra English also has a claim.)

"Mick Mulvaney's new slogan shows that he's more interested in doing the bidding of big banks than standing up for American families," Warren said in a statement to Slate. "That's disgraceful." Read more at SLATE
The CFPB has delayed prepaid regulations

The Consumer Financial Protection Bureau (CFPB) released its 2018 regulatory agenda, which indicates a slowdown in rule-making and regulation, last week, according to The Wall Street Journal and PYMNTS.

That slowdown, which comes amid a leadership scuffle following the resignation of prior director Richard Cordray, will impact the CFPB's sweeping prepaid regulations, which were released last year and set to take effect in 2018. It's not clear if the CFPB will delay the implementation, change the rules, or do away with them entirely.

The new rules were poised to make prepaid cards, which often come with fees, considerably more consumer-friendly. For context, roughly two-thirds of prepaid users pay a fee of some sort. The long set of new rules, which were open to changes and public comment over the summer, could have helped change that - they included requirements for upfront fee disclosure, elimination of overdraft fees, better fraud and loss protection, and more stringent requirements for lines of credit. Those provisions could be attractive to users or potential users of prepaid cards - many of whom are un- or underbanked and might feel squeezed by skyrocketing fees on what seemed like a more affordable alternative to a checking account or credit card - and therefore could have made these offerings more accessible to a key population.

And so a shift could be impactful at a time when prepaid usage is growing and offerings are diversifying. Prepaid volume is on the rise, growing from $20 billion in 2003 to over $300 billion in 2015. This figure has likely risen since as the space evolves, with legacy players consolidating and newer upstarts, like Venmo and Square, entering the space by introducing prepaid stored value products for their peer-to-peer (P2P) users. Read more at BUSINESS INSIDER
SecureCheck Cashing
Game Of Thrones: CFPB Edition

When "Game of Thrones" finished the first half of the season earlier this year, its 17 million weekly viewers were left with a problem: they had a year, at least, to wait until the second half of the final season began. What could they possibly watch until then to get their fix of court intrigue, power struggles for rule and dragons battling zombies?

The world is full of prestige TV - but "Game of Thrones" fans loudly declaimed that nothing, nothing could possibly fill the hole left behind by their favorite weekly battle for control of the throne of Westeros.

And, when it came to fictional TV, those fans were probably right. But luckily, every so often reality will succeed where fiction fails - and in 2017, those impatiently waiting for "Game of Thrones" to conclude got something of an unexpected halftime show to fill the void while they wait. It just happened to be airing on CNN instead of HBO or Netflix.

Game Of Thrones: CFPB Edition.

Spoiler alert - there are a lot more lawyers and far fewer dragons.

But other than that minor difference, the contours of the plot are surprisingly similar. When the old executive director Richard Cordray left his position before his term ended - putatively to run for governor of Ohio - he kicked off something of a leadership crisis as two potential interim heads stepped forward into the role - or at least tried to. Read more at PYMNTS.COM
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ADVANCE FINANCIAL:  Our Cleveland, TN store was overjoyed to help out those less 
fortunate this holiday season through the Salvation Army's Angel Tree program.

ACE Supports Junior Achievement of Dallas with Volunteers, Donation
DALLAS, Dec. 7, 2017 -- For the 11th consecutive year, ACE Cash Express employees have participated in Junior Achievement's JA In A Day program. Volunteers spend a day at local schools to teach students lessons about the importance of entrepreneurship, financial literacy and getting an education.
Millions Are Hounded for Debt They Don't Owe. One Victim Fought Back, With a Vengeance

On the morning a debt collector threatened to rape his wife, Andrew Therrien was working from home, in a house with green shutters on a cul-de-sac in a small Rhode Island town. Tall and stocky, with a buzz cut and a square, friendly face, Therrien was a salesman for a promotions company. He'd always had an easy rapport with people over the phone, and on that day, in February 2015, he was calling food vendors to talk about grocery store giveaways.

Therrien was interrupted midpitch by a call from his wife. She'd gotten a voicemail from an authoritative-sounding man saying Therrien was in some kind of trouble. "I need to verify an address to present you with your formal claim," the man had said. "Andrew Therrien, you are officially notified."

A few minutes later, Therrien's phone buzzed. It was the same guy. He gave his name as Charles Cartwright and said Therrien owed $700 on a payday loan. But Therrien knew he didn't owe anyone anything. Suspecting a scam, he told Cartwright just what he thought of his scare tactics.

Cartwright hung up, then called back, mad. He said he wanted to meet face-to-face to teach Therrien a lesson.    Read more at BLOOMBERG
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