NEWS: October 5

NEWS is brought to you by AFSPA Endorsed SUPPLIERS

You're Getting Royally Screwed on Overdraft Fees, These Really Big Numbers Say

Overdraft fees are taking $3.5 billion out of Americans' pockets that they absolutely shouldn't have to pay.

In a report released earlier this year, the Consumer Financial Protection Bureau (CFPB) found that Americans paid $15 billion in fees for bounced checks and other overdrafts in 2016. However, in an online survey conducted by Harris Poll and finance site NerdWallet in August, 66% had no idea that overdraft coverage is optional.

The CFPB data find that overdraft coverage for debit card and ATM transactions -- coverage that is optional by law -- costs the 8 million consumers who overdraw frequently each year $442 annually per person. That's more than $3.5 billion in fees in total, but $442 that would save each person$1,600 in interest and 7.5 years of credit-card debt if those same people put it toward paying off their credit card each year.

The good news is that, according to a survey by, overdraft fees fell last year for the first time in nearly two decades. The bad news? The average fee declined 0.1% to $33.04, but the most common fee per overdraft was still $35. Also, increases in those fees at banks throughout the U.S. outnumbered decreases by a 5-to-1 margin.

"The average overdraft fee has been increasing year in and year out for 17 consecutive years," says Greg McBride, Bankrate's senior vice president and chief financial analyst. "I think it's too early to say that we've reached the peak, particularly because we've seen more increases than decreases." 
Dreher Tomkies LLP
CALIFORNIA: New law may mean more transparency to "payday loans"

Oversight of "payday lenders" in California is expected to crank up some through a new law authored by Assemblywoman Cecilia Aguiar-Curry, D-Winters.

The measure strengthens the tools that the Department of Business Oversight uses to oversee, regulate, and review lenders' reports.

"These businesses can provide low-income Californians under a financial pinch with an option for a temporary fix when in need of money, but this type of loan can quickly snowball into a family financial crisis," says Ms. Aguiar-Curry. "Our government can only root out bad players by having access to information that will highlight predatory business practices. AB 1636 will improve consumer protection by providing more public insight into the practices of payday lenders and their borrowers."

Under existing law, payday lenders are required to submit an annual report to the DBO on certain information regarding their business in the past year. In addition, the Department conducts a voluntary survey to supplement that data. However, the reports are exempt from the Public Records Act, and no enforcement authority exists to compel responses to the survey. As a result, consumers, financial experts, and legislators cannot review the information. AB 1636 makes payday lenders' reports public, and expands DBO's authority to require and expand companies' reporting.

"It doesn't take a rocket scientist to figure out that the businesses most likely to voluntarily respond to regulators' requests are those least likely to prey on the most vulnerable customers," says Ms. Aguiar-Curry. "It's time we made all payday lenders subject to the same kind of public scrutiny and data gathering as other lenders." Read more at CENTRAL VALLEY BUSINESS TIMES
First Equifax, now government: CFPB putting your data at risk. by Edward D'Alessio

When it comes to financial information, security is always a top concern. Data breaches - like the recent Equifax hack, which exposed sensitive data from more than 140 million Americans - have become daily news, driving consumers to worry about their privacy and financial safety. Now a government bureaucracy called the Consumer Financial Protection Bureau is poised to put millions more American consumers' personal financial information at risk.

The CFPB, established under the Dodd-Frank Wall Street Reform and Consumer Protection Act, is supposed to be looking out for consumers and preventing the next financial collapse by monitoring the activities of big banks. But now the CFPB is targeting Main Street businesses, especially the short-term loan industry, and its customers, who had nothing to do with the 2008 downturn.

In the coming weeks, the CFPB will issue a series of new rules aimed at curtailing payday, vehicle title, and certain high-cost installment loans that will cut nearly 30 million customers off from critical forms of credit. Even more significant, however, is that it will begin mandating the collection of huge volumes of unnecessary financial information, and in the process expose people who use these products to a potential hack.

Under the new rule, customers applying for a small-dollar loan - the average being a mere $350 - will be required to submit extensive personal financial information in support of their applications. Lenders will determine a customer's ability to repay the loan, but they will also be required to share this financial information with numerous credit reporting agencies (CRAs) registered with the Bureau. Before the recent Equifax breach, the CFPB boasted that the new rule would prescribe "requirements for furnishing loan information to and obtaining consumer reports from those registered information systems," as if such reporting benefited consumers. Read more at WASHINGTON EXAMINER
Community Involvement
Advance Financial
We were proud to help raise money and participate in the 'Best Buddies Friendship Walk'. The 'Friendship Walk' is the number one walk in the country raising awareness and funds to support individuals with intellectual and developmental disabilities

Alternative Credit Data Aids in Identifying Key Prospects

ATLANTA-FactorTrust®, the Alternative Credit Bureau™, today announced a partnership with leading analytics-driven marketing consultancy, DataLab Data Solutions.™ DDS couples high-quality, clean data with deep analytics and model development, giving its customers the best opportunity for successful targeted marketing programs. The addition of FactorTrust's 275M transaction records aids the analytics expert in executing that process to identify key prospects.

FactorTrust's alternative credit data complements DDS's existing, robust inventory of data records. "By adding FactorTrust's real-time data, we are enriching our inventory and making it even more comprehensive," said David Flam, COO. "This data provides additional insight not only into consumers with strong credit profiles, but also can help identify new consumers who may not otherwise receive firm offers of credit or insurance; our assets together provide the most complete profile of consumers, enabling our customers to grow their marketable universe."

Maryland-based DDS uses its network of data points to build response and conversion models to help guide customers in making targeted marketing selections.

"FactorTrust is pleased to side with industry innovators like DDS," said FactorTrust CEO Greg Rable. "By using FactorTrust's alternative credit data, DDS is harnessing the unique and predictive capabilities of alternative credit data in their lending processes, and their customers are benefitting and extending proper fitting offers to consumers."

FactorTrust has long-provided alternative credit data, analytics and risk scoring information that lenders need to make informed decisions about consumers. It is differentiated from the Big 3 bureaus by its collection of unique, behavioral and transactional data points it captures on tens of millions of consumers that go untapped by traditional sources. Read more at FACTORTRUST
CFPB "Can Improve" Recordkeeping and Notifications of Purpose in Civil Investigative Demands, OIG Finds

On September 20, 2017, the Federal Reserve's Office of Inspector General ("OIG") issued a report on the CFPB's process for issuing Civil Investigative Demands ("CID"). The OIG found that the CFPB "generally complied" with requirements for issuing CIDs, with two exceptions. First, the CFPB failed to use notifications of purpose that adequately informed recipients about the nature of the investigation. Second, the CFPB failed to keep complete organized records of challenges to CIDs.

First, the OIG found that the CFPB's internal policy manual encouraged investigators to "describe the nature of the conduct and the potentially applicable law in very broad terms." Investigators apparently told the OIG that the notifications of purpose must be "necessarily broad." This, they said, is to allow the investigation to "develop over time." The OIG found that such notifications of purpose might "increase the risk that the language in the CID's [] notification of purpose does not comply with [] case law." Such notifications "may [also] limit the recipient's ability to understand the basis for requests and thereby heighten the risk that the CID may face a legal challenge. . . ." These findings are not new. As we mentioned earlier this year, the D.C. Circuit recently affirmed a lower court's determination that a CID was invalid because the notification of purpose was impermissibly vague. The OIG noted that the CFPB took steps to correct this deficiency. It found that those steps effectively cured the problem.

Second, the OIG found that the CFPB could do a better job at records management. It found that the CFPB maintained only decentralized records of CID challenges and lacked a centralized record-keeping system. In reaching this conclusion, the OIG noted that "The lack of a centralized record of all petitions and supporting documents may have contributed to the Office of the Executive Secretariat's delay in responding to our request for the number of petitions filed to date." The decentralized record-keeping issue is relevant to the public and the industry because the CFPB posts CID challenges on its website. The OIG noted that the CFPB took steps to centralize its record-keeping. It indicated, however, that further follow-up was needed to verify that the new system addressed the issue. Read more at JD SUPRA
No one knows alternative credit like we do.

For over 35 years MicroBilt has been helping business assess and manage risk. We were a pioneer in the now exploding alternative credit data space and as such have refined our products and services to deliver true business value.

At our core, we believe that any successful company needs access to the right information to make the smartest decisions possible.

Over the years, MicroBilt has invested heavily in acquiring best-in-class data. We've built sophisticated systems for keeping our data fresh and accurate and powerful predictive models for making decisions around lending, leasing, collections and risk management.

With an eye to the needs of the small and medium-sized enterprises often left out of the big data game, MicroBilt has also structured our products to be right-sized for your business. With MicroBilt you can customize the products you need, and how much you want to spend. And all of our products are provided through a single, simple, access portal.

Whether you're working in originations or debt collection, screening a potential hire or tenant, planning for growth or keeping up with regulatory requirements, MicroBilt can be your partner, providing the insight and information you need to protect your business, grow your bottom line, and keep your company running smoothly.    MICROBILT
A_S Management
43% of Americans Carry Credit-Card Debt for at Least 2 Years

About 29 million people, or 43%, who have been carrying credit-card debt have had a balance for at least two years, according to a new study by, raising concerns about Americans' ability to pay down debt. The total includes 15 million people who have been in credit-card debt for at least five years.

The report referenced findings from the newly released 2016 Survey of Consumer Finances study and underscores the growing debt problem among Americans. The report also states that more people have credit-card debt than any other kind of debt, including mortgages. said that is the first time it has happened in 18 years.

Older baby boomers, ages 63 to 71, are the most likely age group to carry a credit-card balance for at least two years. A total of 63% of older boomers fall into that category, followed by 57% of the so-called Silent Generation (ages 72 and above).

"Carrying credit-card debt is a slippery slope," said Matt Schulz, senior industry analyst at, in a press release. "What may seem inconsequential at first can quickly grow into overwhelming debt. Bottom line: stick to your budget and only charge what you know you can pay off each month."

More than one-in-four Americans (28%) admit to carrying a balance on their credit card from month to month. Middle-aged respondents are most likely to carry credit-card debt, including 36% of Gen Xers (ages 37 to 52) and 33% of younger baby boomers (ages 53 to 62).    Read more at 247WALLST.COM
CFSA Conference

AFSPA helps our members grow their Alternative Financial Services business by providing them with the best information, research, data, support, relationships and by vetting and presenting the best available product and service providers for the Alternative Financial Services Industry. 

Alternative Financial Service Providers Association

315 Tuscarora St., Lewiston, NY 14092