June 26, 2018

Federal court rules CFPB structure unconstitutional

A federal district judge ruled Thursday that the structure of the Consumer Financial Protection Bureau (CFPB) violates the Constitution, countering a January ruling from a federal appeals court.

Judge Loretta Preska of the Southern District of New York ruled that the CFPB's creation as an independent agency with a director that could only be dismissed for wrongdoing was unconstitutional.

In January, the Court of Appeals for the District of Columbia Circuit ruled that the CFPB's structure was constitutional, reversing a 2016 verdict issued by a panel of the court's judges. The appeals court's initial opinion, written by Judge Brett Kavanaugh, sought to fix the issue by ruling that the CFPB director could be fired at will.
Preska, an appointee of former President George H.W. Bush, concurred with part of the D.C. appellate court's initial ruling against the CFPB, which held that the agency "is unconstitutionally structured because it is an independent agency that exercises substantial executive power and is headed by a single Director."

She ruled that the entire section of the 2010 Dodd-Frank Act that established the CFPB should be stricken, and she dismissed the CFPB from the case, which was filed in May 2017 by then-New York Attorney General Eric Schneiderman (D). Preska did not issue an order to shut down the bureau. Read more at THE HILL

June 22, 2018

Community Financial Services Association of America (CFSA) CEO Dennis Shaul released the following statement following a federal judge for the Southern District of New York ruling the Consumer Financial Protection Bureau (CFPB) to be unconstitutionally structured:

"We have said for years that the CFPB's structure is unconstitutional and that partisan politics drove the Bureau under the leadership of former Director Richard Cordray, who led the agency as an unaccountable director with tremendous unchecked power. The Court's ruling validates the claims in CFSA's lawsuit, which also contends that the Bureau's structure violates the U.S. Constitution's separation of powers. The Bureau exercises wide-ranging executive power immune from supervision by both the President, who lacks the authority to fire the Director except for malfeasance, and Congress, which lacks the power to fund the Bureau through the appropriations process. As such, the Bureau's final rule on small-dollar lending is an unconstitutional agency action and should be repealed."    Read at CFSA

What Kathy Kraninger's nomination might mean for the CFPB

Under the Trump administration, the Consumer Financial Protection Bureau has all but closed its doors. Acting Director Mick Mulvaney has been outspoken in saying the federal agency created after the 2008 financial crisis to safeguard Americans needs do to less, not more.

That view may explain the White House's nomination this week of Kathy Kraninger, a mid-level government staffer with no experience in consumer protection or financial services to serve as the CFPB's new director.

If Kraninger is confirmed, banks and lenders can look forward to several more years in which government gives them a wide berth. If her confirmation stalls, it will allow Mulvaney to prolong his stewardship of the agency -- continuing the deregulatory push for several more years.

Kraninger was a virtual unknown until late last week, when rumors of her nomination started circling. Unlike other contenders for the job, she has no experience in finance or leading an agency.

A career government official, Kraninger spent many years at the Department of Homeland Security and working for appropriations committees in the House and Senate. Since last year, she has worked at the Office of Management and Budget, which Mulvaney runs, where she oversees budgets for Treasury, Department of Housing and Urban Development and the CFPB.
OHIO: Advocates Say Senate Changes Would Gut Payday Lending Reform

Some major proposed changes are coming to a bill that passed the Ohio House overwhelmingly earlier this month cracking down on the payday lending industry. Borrowers here pay an average of 591 percent annual interest, the highest in the nation. Statehouse correspondent Karen Kasler reports while one Republican senator is hoping for a compromise, supporters of Houses-passed crackdown are furious.

Changes in the House passed payday lending bill were expected, but Sen. Matt Huffman of Lima showing up at this hearing to present them was a bit of a surprise. And so, too, was some of what he said.

"There will be no more payday loans under my proposal."

Huffman spoke to reporters after more than an hour of presenting his proposals and answering questions from senators. They're looking over a bill that was completely unchanged by the House since it was introduced 15 months ago. That's very unusual, especially since a deal to alter it was scrapped in a House committee.

One of Huffman's biggest changes: "The minimum term will be 30 days. The classic payday loan will go away in Ohio."

He's also proposing a ban on interest-only loans, a cap on loans of $2,500, a six-month maximum for loans under $500, a requirement that lenders to tell customers about other credit options and an increase in time to cancel loans. Read more at WKSU 89.7

PENNSYLVANIA Rep. Heffley holds off on bill critics linked to payday lending

While most of the Capitol was preoccupied with passing a $32.7 billion state budget, a last-minute push to pass legislation critics said would have legalized a form of storefront payday lending appears to have stalled in committee.

State Rep. Doyle Heffley, the bill's sponsor, had earlier promised amendments to the legislation to address the fears of a coalition of interest groups opposed to House Bill 2429. This week, a scheduled Commerce Committee vote was abruptly canceled.

"I'm not trying to sneak anything through," he said, referencing criticism of the bill, which was not initially scheduled for a public hearing. "We're just still working on language...there's a lot of things happening with the budget this week."

Heffley added that he had not been able to come up with mutually agreeable amendments to the legislation and that revisions may not materialize until the fall session.

Dreher Tomkies LLP
Alexa, I can trust you with my checkbook, right? by KEN SWEET

Hey Alexa, what's my bank account balance?

Big banks and financial companies have started to offer banking through virtual assistants - Amazon's Alexa, Apple's Siri, and Google's Assistant - in a way that will allow customers to check their balances, pay bills and, in the near future, send money just with their voice. And with the rapid adoption of Zelle, a bank-to-bank transfer system, it soon could be possible to send money to friends or family instantly with voice commands.

But the potential to do such sensitive tasks through a smart speaker raises security concerns. Virtual assistants and smart speakers are still relatively new technologies, and potentially susceptible to being exploited by cyber criminals.

Regional banking giant U.S. Bank is the first bank to be on all three services - Alexa, Siri and Assistant. The company did a soft launch of its Siri and Assistant services in early March and this month started marketing the option to customers.

Other financial companies have set up virtual assistant features. Credit card companies Capital One and American Express both have Alexa skills that allow customers to check their balances and pay bills. There are other smaller banks and credit unions that have set up Google Assistant or Alexa as well. Read more at ASSOCIATED PRESS

Employment Skip Tracing
An Increasing Number of Struggling Americans Are Turning to Check Cashers and Payday Loans. by Valerie Vande Panne / Independent Media Institute

There's an idea in America that if you are "financially literate," there is a specific way you bank: You have a checking account and a savings account at a big-name bank. You have your checks from your employer directly deposited every two weeks, like clockwork, and you save at least 10 percent out of every check, until you have enough saved to cover living expenses for six to eight months. You contribute to a 401k your employer matches, and your health insurance-which your employer pays for-offers full coverage for you and your family with, perhaps, a $30 co-pay.

The problem with this scenario is that, increasingly for a growing segment of the American population, it is a total myth.

The reality is that a growing number of Americans don't have this type of employment. Mainstream banks are expensive to use. And the middle class has been rapidly pushed-well, down.

America's white population shrinks for the first time as nation ages

The number of non-Hispanic white people in the United States decreased for the first time in the nation's history between 2015 and 2016, according to new figures released Thursday by the U.S. Census Bureau.

The data show the nation's white population is aging rapidly, as Americans delay their decision to have a family and as the flow of foreign immigrants from European countries ebbs. At the same time, minority populations are growing much faster, hastening a demographic shift that has been decades in the making.

The average non-Hispanic white American is 43.5 years old, according to the new data. The average Hispanic American, by contrast, is 29.3 years old.

Demographers say the decline in the white population has been coming for decades, as Americans decide to have children at later ages and as the baby-boom generation moves toward retirement. Today, there are fewer white women in prime childbearing years as a share of the overall population than ever before, and more minorities in childbearing years than ever before.

"White fertility has gone down. There's a little bit less white immigration in the last year," said William Frey, a demographer and sociologist at the Brookings Institution in Washington. "As the white population becomes older, that means that even if fertility gets up a little bit, it's not going to be what it was a long time ago." Read more at THE HILL

National Debt Holdings
The Rent-A-Center Buyout Is Good News for Everyone Involved

Rent-A-Center Inc (NASDAQ: RCII ) surged on news of a buyout deal. The Plano, Texas-based rent-to-own company increased when Vintage Capital Management, LLC agreed to take the company private. Now, as RCII stock is removed from trading, the company embarks on a new era as a private company. Many will wonder if this serves as the best move for investors. Although the direction in which Vintage will take Rent-A-Center remains unknown, the deal creates a chance to recover and move the company in a new direction outside of the public eye.

Terms of the Deal
RCII stock increased by more than 22% when the buyout was announced . Under terms of the deal, Florida-based Vintage Rodeo Parent, LLC , a subsidiary of Vintage Capital, will acquire RCII stock at $15 per share. This amounts to a purchase price of $1.365 billion, including debt. The company expects the deal to close at the end of 2018. Read more at NASDAQ
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Is Your State Financially Savvy?

Did you know that some states are financially savvier than others? And that's not just in terms of state budgeting practices. Some have residents who score much higher than their neighbors in terms of financial literacy and stability, according to a recent survey conducted by WalletHub.

WalletHub used 15 different metrics to measure the financial skills of residents of all 50 states, plus Washington, D.C. Metrics included the percentage of adults with emergency savings, the number of households without bank accounts, and the share of adults borrowing from lenders other than banks.

To see how your state compares, and find out how to improve your own finances, read on.

The most financial savvy states
According to WalletHub, the 10 states with residents in the best financial shape overall, starting with the savviest state are: Read more at THE SOUTHERN
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