April 3, 2018

CFSA Conference _ Expo

Senators urge CFPB not to reconsider payday loan rule. by Ballard Spahr LLP

A group of Democratic senators (joined by two independent Senators) has sent a letter to Leandra English and Mick Mulvaney urging them to abandon any efforts by the CFPB to reconsider its final payday/auto title/high-rate installment loan rule (Payday Rule).

In January 2018, the CFPB announced that it intends to engage in a rulemaking process to reconsider the Payday Rule pursuant to the Administrative Procedure Act. Although the Payday Rule became "effective" on January 16, 2018, the compliance date for the rule's substantive requirements and limits (Sections 1041.2 through 1041.10), compliance program/documentation requirements (Section 1041.12), and prohibition against evasion (Section 1041.13) is August 19, 2019. The Senators state that they "understand that the CFPB is delaying the rule by granting waivers to companies who would otherwise be taking steps to begin complying with the rule, and that the Bureau may be offering the payday loan industry an opportunity to undermine the rule entirely." According to the Senators, such actions are "further efforts to undermine the implementation of this important consumer protection rule."

The Senators also state that they are "troubled by the CFPB's enforcement actions related to payday lending." Their letter references the CFPB's decision to end a lengthy investigation into a payday lending company and its dismissal of a federal court lawsuit filed by the CFPB against four online tribal lenders. Read more at JDSUPRA

HAWAII: After Nearly 20 Years, Legislature Rethinks Payday Lending

There are now more payday loan stores in Hawaiʻi than there are 7-11s. The state's growing demand for payday loans is no surprise given the high cost of living in the islands. But with interest rates as high as 459 percent, lawmakers are demanding greater regulation. HPR's Kuʻuwehi Hiraishi has this story.

Walk into any one of the 91 payday loan stores across the island chain, and all you need is a couple of recent pay stubs, a bank statement, and a blank check, and you can walk out with as much as $500 cash. Welcome to the world of pay day loans.

"It's taking advantage of folks who don't have access to the mainstream financial system," says Jeff Gilbreath.

Gilbreath is the Executive Director of Hawaiian Community Assets and Hawaiʻi Community Lending. The non-profit provides financial services to underserved communities. For the past three years, his organization collected data on Hawaiʻi's payday lending industry.

When a person borrows $600 from a payday lender today, they pay $105 in interest, and that is going to the payday lenders who are oftentimes not located in Hawaiʻi," says Gilbreath, "So this money is not only being collected off the backs of most times very low and low-income workers and families who have no other option but then its getting stripped from our local economy."
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Acting Director Mulvaney Recommends Statutory Changes in His First Report to Congress

WASHINGTON, D.C. - Today, the Consumer Financial Protection Bureau (Bureau) released its semi-annual report highlighting the Bureau's work. This is the first report issued by Acting Director Mick Mulvaney and it includes his four recommendations for statutory changes to the Bureau.

"The Bureau is far too powerful, with precious little oversight of its activities," said Acting Director Mick Mulvaney. "The power wielded by the Director of the Bureau could all too easily be used to harm consumers, destroy businesses, or arbitrarily remake American financial markets. I'm requesting that Congress make four changes to the law to establish meaningful accountability for the Bureau. I look forward to discussing these changes with Congressional members."

In the report's introduction letter, Acting Director Mulvaney recommends four changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The first recommendation is to fund the Bureau through Congressional appropriations. The second is to require legislative approval of major rules. His third recommendation is to ensure that the Director answers to the President in the exercise of executive authority. And the fourth is to create an independent Inspector General for the Bureau.

The report primarily covers the Bureau's significant work from April 1, 2017 to Sept. 30, 2017, the period before the President appointed Mick Mulvaney as Acting Director. As part of its regulatory work, in February 2017, the Bureau established a task force to help identify and reduce unwarranted regulatory burdens consistent with its objectives under the Dodd-Frank Act. During this period, the Bureau also issued guidance on topics such as maintaining compliance management systems, combatting elder abuse, responding to natural disasters, and ensuring accuracy in credit reporting. The Bureau's enforcement work included actions taken against illegal practices in mortgage servicing, student loan servicing, credit reporting, and debt collection.

April is Financial Literacy Month - Why Financial Wellness Matters

April is Financial Literacy Month and a great time to focus on financial education. A lack of financial preparedness has huge societal costs, and in the coming years as Americans age, these costs will likely increase. There are daunting challenges facing not only the poor but also the working middle class. In the face of flat real wages, structural unemployment, a high tax burden, and higher health-care costs, it is becoming more difficult for millions of Americans to find extra income to save at the end of the month. In addition, many don't understand the enormous commitment a self-financed retirement entails.

This is a complex problem. According to a recent survey, over 50% of Americans have less than $1,000 in savings. To combat this, our country needs a combination of things that will alert citizens to the financial reality they are facing. To start, workers need skill sets that keep pace with a rapidly changing world and wages that at least track inflation and rise with productivity gains. Workers need to be educated on the importance of regular savings especially with the rapid decline of pensions.

There also needs to be a deeper understanding that everyone is responsible for their own financial and how challenging that is to attain. To accomplish this, we need to educate on the importance of starting early. For example, young workers will need to save close to $1,000 per month to remain in the middle class; $925 per month for 30 years at 8% grows to $1.26 million, but that amount saved for 20 years only grows to about $508,000. Young people are often surprised to learn that the few hundred dollars they're saving each month may not be enough to retire into a middle-class lifestyle. Read more at FORBES

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Trump Official Wants To Put Tight Leash On Consumer Watchdog Agency

The Trump administration will ask Congress to make drastic changes to weaken the independence of the Consumer Financial Protection Bureau, NPR has learned.

Sources familiar with the matter, who asked not to be named, tell NPR that the CFPB's interim director, Mick Mulvaney, will ask lawmakers to restructure the bureau in his upcoming semi-annual report to Congress. The bureau could announce the move as soon as Monday afternoon.

Mulvaney wants to give Congress control over the CFPB's budget and to require that any major new rules created by the bureau to protect consumers be approved by Congress before they can go into effect.

He will also ask Congress to give the president more power over the bureau's director, according to the sources. These changes would be a major shift for the bureau, which was designed to be independent from political influence - effectively placing the consumer watchdog on a short leash under the direct control of Congress and the White House.

The CFPB was created in the wake of the financial crisis after reckless mortgage lending and investing by financial institutions helped drive the country into recession and sparked a wave of millions of home foreclosures. In response, Congress created the consumer protection bureau and intentionally insulated it from political control in part by making its funding source come through the Federal Reserve, and not Congress. Read more at NATIONAL PUBLIC RADIO

5 Stocks Benefitting from a Gutted CFPB. by Lawrence Meyers

There's big upside in these 5 financial services stocks

The former director of the Consumer Financial Protection Bureau, Richard Cordray, was always an ideologue. He was opposed to payday lending back when he was the attorney general of Ohio. Once he joined the CFPB, which had no oversight, he began going after financial services companies of every stripe.

To be fair, some of them deserve to be signed and punished by the Bureau. There have always been some bad actors in the financial services sectors, and Cordray is to be applauded for taking some of them to the woodshed.

However, Cordray hated payday lending, and other such consumer loans. Despite years of faulty data collection and placing unnecessary burdens on the consumer finance industry to provide that data, he instituted rules that were designed to kill the entire short- and medium-term consumer loan industry in this country.

All of the Bureau's white papers, press releases and other rhetoric never actually proved that these products because consumers harm. On top of that, he leveled multimillion-dollar fines against several of these companies, despite the fact that they had done nothing wrong. However, because of all the power granted to the Bureau, and that normal due process is not afforded to any of these companies, they got whacked. Read more at INVESTOR PLACE


The unbanked world is bigger than you think. by Philip Burgess

With the explosion of online banking, you'd think that just about everybody has a bank account or utilizes traditional banking services. But as the most recent data available from the Federal Deposit Insurance Corporation shows, over 23 million Americans are underbanked or unbanked, a figure that includes children.

But if you think that number is big, you may be surprised by how many people in the world go without these traditional financial services, a potential consumer market that may present new business opportunities for companies that use alternative credit data in their lending decisions.

More than 28 percent of the world is unbanked
Globally, 2 billion individuals - specifically those who are 18 years of age or older - are unbanked, according to statistics compiled by the World Bank. With a worldwide population of 7.4 billion, this means that nearly 28.5 percent of the world's population doesn't have a checking account, or use other financial services that banks traditionally offer.

Any number in the billions is hard to wrap your head around, but thanks to the speed with which mobile technology is advancing and becoming cheaper to produce, the unbanked world is smaller than it once was. Indeed, in 2011, the total was closer to 2.5 billion, making the 2014 total a drop of 20 percent over three years.

With the approximately 700 million more people worldwide having an account, this means 62 percent of the globe's populace is banked, substantially higher than barely half (51 percent) back in 2011. Read more at MICROBILT

National Debt Holdings

How Latino Credit Unions Clear Banking Barriers
This article was first published on

Latino-friendly credit unions aim to help people who have traditionally been underserved by the American banking system. This includes immigrants, especially from Latin America, who often avoid banks. But a bank account means having a safe place to keep cash and pay bills (regardless of your citizenship or immigration status).

The percentage of unbanked Hispanic or Latino households in the U.S., at 16.2%, is more than double the national rate, according to the Federal Deposit Insurance Corp.'s most recent survey of unbanked households. And nearly 30% of Latino households are underbanked, meaning they have bank accounts but also use alternative financial providers such as check cashers, payday lenders or remittance transfer providers.

The reasons these households are underserved by banking institutions vary. About a third of the Latino population in the U.S. is foreign born, according to 2015 research by the Pew Research Center. And being from a different country can impact people's views of banks in general. (Argentina, for example, has endured a history of banks not protecting customers' money during economic crises.) Language barriers and a lack of traditional identification that banks accept, such as Social Security numbers, also play a role. Read more at SF GATE

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OHIO: Republicans Could Move To Weaken Payday Lending Reforms

The march towards once again trying to reform Ohio's payday lending industry has experienced several shifts in momentum. The latest comes from Statehouse Republicans.

The current bill would cap payday lending interest at 28 percent. Republican Rep. Kirk Schuring now recommends a move away from strict caps, saying they could lead to shutdowns of payday storefronts.

"If it is too restrictive then you might have someone who really needs emergency dollars won't have access to it and if they don't have access to it through a legal challenge then you might imagine what would happen if they have to look at alternative ways," Schuring said.

Schuring is recommending a borrower can't take a new loan out if they already have an active one, and the borrower would have a chance to pay the loan off interest free.

Payday lending reform advocates want to stick with the strict interest rate cap and say Schuring's suggestions only water the bill down.

A citizen's group is also moving to put a reform measure before Ohio voters in November. It would cap all short-term loan rates at 28 percent. Ohio Attorney General Mike DeWine rejected the original proposed ballot language. Group leaders say they think they've fixed any issues with the ballot language and hope to move forward.

Ohioans overwhelmingly approved regulations for payday lenders in 2008, but the industry has been able to work around the regulations by rebranding themselves with titles including auto loan companies and credit service providers. Read more at WOSU Public Media

Dreher Tomkies LLP

National Debt Holdings Uses ComplyARM to Manage Compliance

National Debt Holdings, a receivables management firm assisting creditors with improving their cash flow performance, today announced their deployment of the ComplyARM Dashboard Compliance Management Platform.

"ComplyARM is a solution for so many of our compliance needs" said President Jeremy Poehler. "We wanted to be able to track everything from inquiries to licenses, insurance and other key vendor, buyer and seller information."

ComplyARM Dashboard is a Compliance Management System (CMS) that creates a collaborative environment for the resolution and tracking of compliance related inquiries. Vendors, clients and other partners access the system via the online portal to update their profile information and participate in the resolution of compliance events.      Read more at NATIONALDEBTHOLDINGS

A_S Management

FTC and New York Attorney General Settlements Ban Abusive Debt Collectors from the Debt Collection Business and from Buying or Selling Debt

The operators of a deceptive and abusive debt collection scheme are banned from the debt collection business and from buying or selling debt under settlements with the Federal Trade Commission and the New York Attorney General's Office.

As alleged in the agencies' complaint, the defendants used threats and abusive language, including false threats that consumers would be arrested or sued, to collect supposed debts. The court halted the operation pending resolution of the case.

In addition to the banned activities, the settlement orders prohibit the defendants from misrepresenting financial products and services and from profiting from customers' personal information collected as part of the challenged practices.

The orders against Travell Thomas, 4 Star Resolution LLC, Profile Management Inc., International Recovery Service LLC, Check Solutions Services Inc., Check Fraud Service LLC and Fourstar Revenue Management LLC and against Maurice Sessum impose a $30 million judgment that will be partially suspended upon the surrender of certain assets. The order against Charles Blakely III and Merchant Recovery Service, Inc. imposes an $18,m judgment that will be partially suspended upon the surrender of certain assets. The assets to be surrendered in these settlements include more than $1 million in corporate and individual assets frozen by the court. In each case, the full judgment will become due immediately if the defendants are found to have misrepresented their financial condition. Read more at The Federal Trade Commission


Congress Considers Going Easy on Predatory Lenders
By The Editorial Board

March 29, 2018
The payday lending industry is pressing its friends in Congress to repeal rules that shield borrowers from short-term loans that trap them in debt at interest rates of 400 percent or more. The rules were issued last year by the Consumer Financial Protection Bureau in a last gasp of consumer financial protection before President Trump appointed Mick Mulvaney as its new chief.

The new administration is openly hostile to the rules - which become effective in August 2019 - and is clearly looking for ways to undermine them. Meanwhile, bills introduced in both the House and the Senate would repeal the rules outright, opening the door for the return of lending practices that make working-class families poorer.

The payday industry advertises itself as a source of "easy" credit for workers who run short of money before their next paycheck and take out loans that are typically supposed to be repaid within two weeks. But there is nothing "easy" about this arrangement, as the consumer protection bureau showed in a study of more than 12 million loans. Among other things, the research revealed that the industry relies on people who can almost never repay on time, which usually means they borrow over and over again.

Among the study's findings: Eighty percent of payday loans were rolled over or renewed within two weeks; three out of five loans were made to borrowers who paid more in fees than they borrowed; four out of five borrowers either defaulted or renewed a loan over the course of a year; and one in five payday borrowers - including elderly people on fixed income payments - remained mired in debt for the entire year.

Last year, the bureau issued common-sense rules for loans that last 45 days or less in order to keep financially fragile borrowers from being driven into penury. The rules require payday lenders to determine whether a borrower can pay off the loan and still meet living expenses. In effect, the rules allow someone to borrow $500 without that test - as long as the loan does not trap the customer in debt for an extended period. Read more at THE NEW YORK TIMES

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'Lenny the Loan Shark' Leads Opposition to Payday Rule Repeal. by Doug Sword

Democrats gearing up for one of the biggest fights of the spring

What do Mick Mulvaney, Sens. Lindsey Graham and Richard J. Durbin, Lenny the Loan Shark and progressive groups have in common?

They all appear to be prepping for what is likely to be one of the biggest political fights of the spring - the attempt to repeal the Consumer Financial Protection Bureau's controversial payday lending rule using the Congressional Review Act.

The sidewalk outside the CFPB's downtown headquarters was the venue for a Thursday press conference featuring a man in a shark suit, who identified himself as Lenny the Loan Shark. Lenny sarcastically thanked CFPB Acting Director Mulvaney for dropping enforcement actions and lawsuits against payday lenders, as well as Graham for introducing a resolution last week that would repeal the payday rule published last October.

"I want to thank our crony and Trump apparatchik Mick Mulvaney, who's been controversially appointed acting head of the CFPB, for really helping us turn the CFPB upside down," said Lenny, whose performance was the work of progressive groups, including Americans for Financial Reform and the Center for American Progress. The protests also touched on other Mulvaney actions related to payday lenders. Read more at ROLLCALL

Advance Financial
Advance Financial Celebrates Grand Opening Of Ooltewah Store With
$1,000 Donation To Ooltewah Harrison Education Fund

Nashville-based financial services company Advance Financial cut the ribbon on March 23 in Ooltewah at one of the company's newest stores. To mark the occasion, the Advance Financial Foundation donated $1,000 to the District Nine Ooltewah Harrison Education Fund.

Amscot Financial Contributes Mini-Grants to 15 Non-Profit Service Groups

April 02, 2018. 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.  AMSCOT
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