AFSPA
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

July 5, 2018


FactorTrust®, a TransUnion company, provides alternative credit data, analytics and risk scoring information to help lenders make more informed decisions.
Consumer protection agency, Congress balk at payday lending reform

Lerlyn Anderson needed help with unanticipated bills. Because she was between paychecks, the Twin Cities woman turned to a payday lender.

When she couldn't repay the $500 she borrowed on time, what was supposed to be a two-week loan turned into a months-long ordeal of taking new loans to pay off old ones and ended up costing more in interest and fees than $500.

"People are getting robbed paying these loans," Anderson said. "You are always playing catch-up because of interest and fees."

The Consumer Financial Protection Bureau (CFPB) announced new rules last year that aimed to make payday lenders do more to ensure that borrowers have the means to pay back their loans on time. But now the CFPB is trying to delay and possibly gut that plan, and Congress recently toyed with killing it altogether.

The rule, laid out in the Federal Register, makes it illegal to make "short-term and longer-term balloon payment loans, including payday and vehicle title loans, without reasonably determining that consumers have the ability to repay the loans according to their terms."

CFSA
The voice for the small-dollar, short-term lending industry.
NEW MEXICO still hashing out new rules for payday loans

It took years for New Mexico lawmakers to finally reach consensus on overhauling the storefront lending marketplace by capping interest rates. But state regulators have yet to finalize the rules needed under the new law to bolster consumer protections and enforcement.

A panel of lawmakers heard from consumer advocates this week who are pushing for the regulations to be finished and for loopholes to be closed.

An interim legislative committee passed a resolution Monday asking regulators to report on how they're enforcing the law. That report is due later this year.

The Regulation and Licensing Department's Financial Institutions Division has received four complaints against licensed small-loan lenders since January, when the law took effect. The agency didn't release details about those cases but said each complaint is thoroughly investigated.

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Dreher Tomkies LLP is a law firm concentrating in the areas of  Banking and Financial Services law.
OHIO - Letter to the Editor: If the payday lending bill is passed, I won't be able to make a profit and stay in business

The editorial published June 27 ("Ohio Senate, don't roll over for payday lenders") fails to address the consequences of enacting House Bill 123 without significant changes by the Ohio Senate. If HB123 is passed as originally proposed I would be unable to make a reasonable profit and stay in business. Our customers would no longer be able to access short term loans or the other services we provide. Our 35 employees would lose their jobs. These are good, hard working Northeast Ohio people who are providing for their families with the stable jobs, competitive wages, good benefits and retirement plans that my company provides. The landlords of our 10 locations would have to try and fill empty retail space. These are the consequences of HB123.

There is a need and demand for small loan/short term products. We all know that. Our customers know and trust us with their financial needs. Reasonable regulation that accomplishes consumer protection while enabling licensed, regulated lenders in Ohio to stay businesses is within the grasp of the Ohio legislature. My industry urges lawmakers to do the right thing for our customers and employees. They are counting it.

Fred Evensen.      Read at CLEVELAND.COM

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4 employee benefits trends that help attract talent. by Arturo Moreno / VP, Bank of America

Attracting and retaining top talent is more challenging than ever in El Paso.

Unemployment sits at 4 percent here in the region, and U.S. unemployment is at a 10-year low.

Baby Boomers are reaching retirement age and exiting the workforce. In fact, the percentage of working-age Americans in the labor force has dropped to 62.9 percent, near a 40-year low.

In addition, the El Paso area has recently been impacted by the oil boom. The Permian Basin, stretching from western Texas to eastern New Mexico, is luring many workers away from El Paso with attractive wages.

This has particularly impacted the transportation and restaurant sectors. During a recent meeting with the owner of a very successful restaurant here in El Paso, the main topic of discussion was the loss of experienced workers to the Midland/Odessa area.

Along the same vein, the owner of a trucking company decided not to buy additional tractors even though she has the demand for them; she just doesn't have enough workers to drive them.

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CFPB inspector general: Consumer complaint database needs better identity management

The Consumer Financial Protection Bureau should strengthen the identity and access management controls in place around its public-facing consumer complaint database, the agency's inspector general says.

In a security review of the system, called Mosaic, the IG found that the security procedure is, for the most part, effective. "However," the IG writes in a summary of the report, "we found that the Bureau can strengthen controls in the area of identity and access management to ensure that the security control environment for Mosaic remains effective." Identity management, simply, is a way to ensure that system users are who they say they are.

The report makes one recommendation in this area, the summary states, but citing the "sensitivity" of information security investigations, the IG did not make the full report public.

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NAFCU advocates for credit union regulatory exemptions

The National Association of Federally Insured Credit Unions (NAFCU) recently announced its support of efforts to provide credit unions with regulatory relief.

NAFCU President and CEO Dan Berger recently forwarded correspondence to Consumer Financial Protection Bureau Acting Director Mick Mulvaney, reiterating the Association's request the Bureau exercise its statutory exemption authority to exclude credit unions from regulations meant to target "bad actors" in the financial services industry, not member-owned, cooperative institutions that actually help their communities.

NAFCU officials said the organization has worked closely with Mulvaney since he began leading the bureau in November, noting he has pursued a number of NAFCU-supported changes at the bureau to increase its effectiveness and transparency.

Berger wrote previous bureau leadership had not used its authority to provide regulatory relief for credit unions, despite increasing consolidation in the credit union industry as a result of immense pressures of regulatory compliance. Read more at FINANCIAL REGULATION NEWS

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Mulvaney-led U.S. CFPB slashes payday lender penalty: sources

WASHINGTON (Reuters) - Mick Mulvaney, head of the U.S. Consumer Financial Protection Bureau, cut in half a fine that his Obama-era predecessor sought against a payday lender and dropped some of the agency's earlier claims in the case, three people familiar the matter told Reuters.

Mulvaney, appointed by President Donald Trump, has vowed to dial back what he says is overreach by the independent agency, which was created following the 2007-2009 financial crisis to stamp out predatory lending.

The CFPB fined South Carolina-based lender Security Finance $5 million on June 13 for harassing borrowers when collecting debt and mishandling credit report data.

Richard Cordray, Mulvaney's predecessor, had wanted to seek additional charges against the company for pushing borrowers to buy personal insurance that was bundled into loans.

Cordray wanted Security Finance to pay $11 million, with $3 million as a penalty for the debt collection and credit reporting abuses and at least $8 million to compensate consumers who felt pushed into insurance, the sources said.  Read more at REUTERS

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If a debtor is employed, we will find them!
Bankrupted KC financier of payday lenders owed $120 million by Joel Tucker and others

A Kansas City company that financed payday loan operators has declared bankruptcy while holding $120 million worth of claims and judgments that it has been unable to collect.

NorthRock LLC listed among its assets a $29 million claim against Johnson County businessman Joel Tucker and others.

Tucker was ordered last year to pay $4 million in a payday loan case. He had been accused by the Federal Trade Commission of falsifying payday loan debts and selling them to bill collectors. The collectors then targeted consumers who sometimes paid off the fake loans just to stop the calls. He is the brother of payday lender Scott Tucker, who was sentenced to more than 18 years in prison.

NorthRock listed among its assets a $35 million judgment against Eldridge Marketing LLC stemming from a lawsuit in Missouri courts. It also has large judgments against three other defendants in that case, each of which had entered bankruptcy previously.

Those other defendants - Del Hodges Kimball, Sam S. Furseth and the payday loan business LTS Management Services they owned - each face judgments of nearly $18 million in NorthRock's favor. Read more at THE KANSAS CITY STAR

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AFSPA
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION 
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
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