NEWS: November 16

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TransUnion Expands Credit Access to More Americans
with Acquisition of FactorTrust

CHICAGO, Nov. 14, 2017 (GLOBE NEWSWIRE) -- TransUnion (NYSE:TRU) announced today the acquisition of FactorTrust, a provider of alternative credit data, analytics and risk scoring information that empowers lenders to make more informed decisions, and increases financial inclusion to a wider population of consumers.

The acquisition reinforces TransUnion's position as a provider of consumer reporting models that capture a wide range of positive payment behaviors. The addition of FactorTrust's short-term and small dollar lending data to TransUnion's suite of credit solutions gives lenders the information they need to offer responsible borrowers a broader range of credit products, supported by TransUnion's robust data security, technology and customer service infrastructure.


"FactorTrust is a strong addition to TransUnion's business," said Steve Chaouki, executive vice president of TransUnion's financial services business unit. "FactorTrust's approach to complete tradeline reporting aligns with TransUnion's business model, and the inclusion of more alternative data in financial institutions' credit and underwriting decisions will enable our customers to better segment risk, allowing them to serve a broader set of customers across the credit spectrum."

"Joining TransUnion is a great match for FactorTrust," said Greg Rable, of FactorTrust. "We share a commitment to serving consumers and customers with the highest ethical and compliance standards. Our products complement TransUnion's slate of online and batch solutions, and our combined data will expand options for consumers and lenders."
Cordray Resigns From CFPB, Allowing Trump to Remake Watchdog

Richard Cordray will step down as the head of a controversial consumer watchdog at the end of the month amid growing speculation that he will run for governor of Ohio as a Democrat.

His decision means President Donald Trump should soon get to install his own director atop the Consumer Protection Financial Bureau, a regulator set up in response to the 2008 financial crisis to police mortgages, credit cards and other financial products. Cordray's departure gives Republican lawmakers and bankers the chance to push a deregulatory agenda at an agency they say has too much power and has burdened lenders with unnecessary red tape.

Cordray, 58, revealed his plans to leave the agency in an email to CFPB staff on Wednesday. He did not specify in the memo what he plans to do next. Washington lobbyists and lawmakers have been predicting for months that he would resign to run for governor in his home state.

"Together, we have made a real and lasting difference that has improved people's lives," Cordray said of the CFPB in his email. "I trust that new leadership will see that value also and work to preserve it -- perhaps in different ways than before, but desiring, as I have done, to serve in ways that benefit and strengthen our economy and our country." 
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SureCare Services
This Democrat Is About To Give Payday Lenders A Big Boost

A bill from Sen. Mark Warner envisions a future when anyone could get a predatory loan at 380 percent interest.

A little over a year ago, Sen. Mark Warner (D-Va.) addressed a small audience of political insiders at the Brookings Institution, one of the most prestigious think tanks in the nation's capital. Times were changing, Warner told the crowd, and the old guard from Washington and Wall Street wasn't keeping up with the needs of the modern workforce. The gig economy, outsourcing and automation had created an era of unprecedented "income volatility" for Americans. New financial technology firms had "an opportunity to bridge part of that new social contract," to "lean forward and meet workers where they're working."

It had been a long day for the Virginia Democrat. A dental appointment had unexpectedly turned into a three-hour ordeal, and he'd arrived at the conference a little "cotton-mouthed," as he put it. When he veered into a discussion about "a much more aggressive way to upscale people" through "an enormous number of intersection points," including "your relationship with that FinTech provider," it wasn't obvious exactly what Warner was after.

But the big picture was clear enough. The government needed to "encourage innovation." Entrepreneurs had to be thinking about a "portable benefits system," about emergency funding to help people meet unexpected expenses. It was time to get past the same old debates about government and regulation. This was about change. It was about progress. Warner had seen the future. Read more at HUFFINGTON POST
The CFPB's payday lending rule is a grand slam for credit unions

It's hard to believe it's been seven years since the forming of the CFPB, but it's easy to remember what fueled its creation - a financial crisis that Americans hadn't seen since the Great Depression. And what was one of the most flammable fuels in the fire? Mortgages. Specifically, mortgages that consumers couldn't afford, couldn't understand, and for which, in years prior, would never have qualified.

So, as part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB was formed to protect consumers from unfair, deceptive or abusive practices in their dealings with financial services and products. Fortunately, the subprime mortgage crisis has since been reigned in, but the bureau continues to monitor other types of predatory lending - namely, high-cost payday loans.

The CFPB has pressed financial institutions to offer better alternatives to high-interest payday loans. Speaking to the Wall Street Journal in February 2016, Richard Cordray said: "I personally believe banks and credit unions can be low-cost providers of small-dollar loans. I think that working with banks and regulators involved, there would and should be an ability for them to offer decent products." Read more at CREDIT UNION INSIGHTS
Dreher Tomkies LLP
Fintech critics call it predatory lending

A bill that would give Americans more access to lending power in the exploding financial technology, or "fintech," market is winding its way through Congress with a possible committee vote on Tuesday. But before lawmakers approve what could be a pig in a poke, they should look at a recent study by the Cleveland Federal Reserve Bank, one of the major federal banks that promotes financial stability nationwide.

The powerhouse of the fintech market is "peer-to-peer" (P2P) lending -- also called "crowdsourcing," or "The Gray Market," as it's ominously known in China. Lenders connect with borrowers online through intermediaries who guarantee identity and creditworthiness. Loans can then be granted in as little as 48 hours for as much as $100,000 -- and the identities of the borrower and lender don't necessarily have to be disclosed to one another.

A study by Morgan Stanley (MS) indicates this could be nearly a half-trillion-dollar market within a few years as many domestic firms sprout up to take advantage of this new opportunity. The bill before Congress "encourages greater financial inclusion" for poor and underserved Americans in rural areas who may not have access to banks, particularly if their credit has fallen on hard times.

"It's due for a markup [debate and possible vote out of committee] today," said Scott Astrada, director of federal advocacy for the Center for Responsible Lending. But he's concerned because his group opposes "predatory" lending, which is exactly what the Cleveland Fed claims could happen if this bill passes and becomes law. Read more at CBS NEWS
Foreclosures figures paint encouraging picture of borrowers. by Walt Wojciechowski

Asking values for homes that are up for sale are climbing. In fact, among existing residential properties on a year-over-year basis, the typical cost of buying a house has risen every single month for more than five years, according to the National Association of Realtors. One might think that this trend puts homeowners at risk of not being able to make their payments, specifically their mortgages.

But as a recently released survey indicates, foreclosure activity is at its lowest ebb in more than a decade, suggesting borrowers are good loan candidates.

Between July and September, there were a total of 191,824 foreclosure filings across the U.S., ATTOM Data Solutions reported. That's a decrease of 13 percent from 2017's second quarter and a 35 percent drop from the penultimate quarter of 2016. Indeed, default notices, bank repossessions and scheduled auctions haven't been this low since 2006.

Foreclosure rate at 11-year low
With median existing-home values reaching $245,100 - based on the most recent figures available from the NAR - average loan balances are swelling, credit agency TransUnion reported. But thanks to smarter spending habits and lending protocols implemented by banks - not to mention more people back at work, with the unemployment rate at a 17-year low, according to the Labor Department - mortgage delinquencies are fewer in number. CoreLogic reported the foreclosure rate fell 0.2 percent in July, which puts the number of homes in some stage of the foreclosure process at its lowest point since July 2007.

Early-stage mortgage delinquencies have also trailed off, slipping to 2 percent in July, according to CoreLogic, which is down from 2.3 percent during the corresponding month in 2016. These are defined as mortgages that are overdue between 30 and 59 days. Read more at MicroBilt
CFSA Conference
CREDIT REPORTING AGENCIES: OVERSIGHT - IT'S THE DISCUSSION, NOT THE SOLUTION. by Barb Sinsley, FactorTrust General Counsel & Chief Compliance Officer

Lately, mostly due to a data breach at a major credit reporting agency, much has been said about credit reporting agency oversight. Some say there is not enough oversight, and even some states (well, ok - just New York) have proposed legislation to oversee and regulate credit reporting agencies. Forgetting for a minute that the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) already oversee credit reporting agencies, there is room for improvement.

While one can debate the solution, perhaps it is the discussion that is more relevant. Consider that the FTC is holding a workshop December 12 on informational injury to examine consumer injury in the context of privacy and data security.[1] The CFPB issued the Small Dollar Rule on October 5, and it seeks to oversee Registered Information Systems (RIS) with a complex application and approval process. The RIS club will likely contain the major credit reporting agencies and really hip alternative credit reporting agencies, such as FactorTrust.

There are also proposals regarding how to best safeguard consumer information by restrictions on how the information is gathered and maintained. I have no great understanding of blockchain systems, but it does sound that it may make access to data more unwieldly and maybe it is not scalable to the type of open credit market we enjoy in the U.S. Another idea was discussed recently by David Medine in an article written for Consultative Group to Assist the Poor (CGAP)-that perhaps "it would be far better to decentralize personal information, keeping it in the hands of the firms, such as banks and credit card companies, that use it on a regular basis to run their business. "[2]

All good ideas and all part of the discussion. Much is said about transparency in the consumer financial services industry, and regulatory whack-a-mole or licensing without reasoning will not likely be effective.          Read more at FACTORTRUST
A_S Management
The CFPB Wants More Data On Free Credit Scoring Sites

The Consumer Financial Protection Bureau (CFPB) is looking for more information on consumers' experiences with using sites that promise free access to a credit score. Published in the Federal Register yesterday, the request for information (RFI) also extends to consumer data about companies and nonprofits that offer their customers and the general public free access to their credit history.

According to the agency, that information is being gathered so that the CFPB can create educational content that is useful to consumers - specifically consumers looking to foster a better understanding of credit reports and scores. More broadly, the RFI seeks consumer data to help the CFPB build better general educational products for consumers.

This expanded effort works hand in hand with the March publication of a list of companies that offer existing credit card customers free access to a credit score.

The list was compiled based on comments received in response to a public notice in October 2016. Read more at PYMNTS.COM
Community Involvement
Advance Financial
Our compliance team helped out yesterday at the Nashville Rescue Mission by serving 
lunches to the homeless.  Nashville Rescue Mission is a homeless center dedicated to 
providing hope for today, tomorrow and eternity to the hungry, homeless and hurting in 
Middle Tennessee. Great job team!
Freedom Debt Relief: CFPB "fundamentally misunderstands" debt settlement process
Nation's largest debt settlement services provider will fight CFPB lawsuit

Last week, the Consumer Financial Protection Bureau sued Freedom Debt Relief, the nation's largest debt settlement services provider, claiming that the company repeatedly lied to its customers about the company's ability to negotiate debt settlements.

According to the CFPB, Freedom Debt Relief collects fees from customers without settling their debts as promised, makes customers negotiate their own settlements, misleads them about the company's fees and the scope of its services, and fails to inform them of their rights to money they deposited with the company.

Freedom Debt Relief, on the other hand, claims that the CFPB "fundamentally misunderstands" the debt settlement process and says that it plans to "vigorously contest" the CFPB lawsuit.

Late last week, Freedom released a lengthy statement rebutting the CFPB's charges and claiming that its services work as promised and that its customers are highly satisfied.

"We firmly believe that the CFPB fundamentally misunderstands how debt settlement works and has acted without proper regard for the consumers it is charged with protecting," Freedom Co-Founders and Co-CEOs Andrew Housser and Brad Stroh say in the statement. 
Nonprofits Call on Business to Provide Financial Education for Employees

A new study by two Texas nonprofit advocacy groups, the Center for Public Policy Priorities and RAISE Texas, calls on businesses to offer financial education for their employees.

The need for financial education is great. Some educational efforts exist, but they are not sufficient. The study authors note that "67 percent of Texans fail a nationally assessed basic financial literacy quiz." The results of this lack of financial literacy are not positive for either workers or their families. As Chris Tomlinson writes in the Houston Chronicle, "About half of all Texans do not have savings accounts, and 60 percent have subprime credit scores." CNBC quotes BankRate,com saying about 57 million Americans have no savings at all. Tomlinson also notes elsewhere, "About 19.9 percent of American families... still use payday lenders, pawn shops or check-cashing stores for their financial needs...[which] represents a huge drag on the ability of these families to break out of the poverty trap." Read more at NON PROFIT QUARTERLY

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