ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
Newsletter

January 9, 2018

FactorTrust
20 Banks That Consumers Loved to Hate in 2017

It can seem at times as if everyone complains about their bank. The late fees. The paltry interest. The terrible customer service.

But there's a difference between general grumbling and real problems-and the latter are when the Consumer Financial Protection Bureau is assigned to step in. The agency runs a database that logs official consumer complaints, after which the CFPB typically contacts the financial institutions and tracks whether the company responded.

Those complaints can add up. In 2017, consumers filed 42,094 gripes against 49 large banks, according to research from LendEDU, a company that runs a marketplace for student loans and refinancing. To rank the banks, LendEDU weighted CFPB complaints against a bank's deposit account holdings.

The worst offender? When it comes to CPFB complaints specifically tied to banking activity or services (as opposed to, say, a credit card), Minnesota-based TCF Bank remains sits at the top of the list, LendEDU found. It's worth noting that the CFPB actually sued TCF last January, claiming the bank tricked customers into signing up for expensive (and often unnecessary) overdraft protection program. Read more at MONEY
microbilt
Indiana: Lawmaker files bill to cap payday loan interest rates at 36 percent

INDIANAPOLIS-- Changes could be coming to the payday lending industry in Indiana.

State Sen. Greg Walker (R-Columbus) filed on Tuesday the first of its kind legislation that would cap small loan finance charges at 36 percent.

Currently, the cap for payday loans in Indiana is 391 percent, according to Walker.

"It puts so much stress on the working families," said Walker. "The long term cost of that is just exorbitant. I tell my kids, debt is slavery."

Indiana ranks 44th, among the worst in the nation, when it comes to bankruptcy and Hoosiers and their communities lose about $70 million a year in payday loan fees, according to the Indiana Institute for Working Families.

Currently, 15 states, the District of Colombia and the military already cap payday loans at 36 percent or less.

The institute said if Indiana joins them, consumers will end up paying much less to pay back a loan.

"They will have less stress and more money in their pocket," said Erin Macey, a policy analyst with the Indiana Institute for Working Families. "We expect to see borrowers paying a lot less, and we expect communities that are more financially strong." Read more at THE INDY CHANNEL
Dreher Tomkies LLP
Consumers need a hero, not a hack, to head the CFPB

There has been a lot of attention focused on the battle over who is the legitimate director of the Consumer Financial Protection Bureau (CFPB).

The president has appointed Office of Management and Budget Director Mick Mulvaney (who once referred to the agency as a "sad, sick joke") to be interim director, raising a number of issues and concerns about its future direction.

For starters, there is a serious legal question as to whether Mulvaney even has a legitimate right to the appointment. A lawsuit is pending by CFPB's other acting director, Leandra English, arguing that Dodd-Frank requires that she head the agency until a new director is confirmed by the Senate.


Add to that concerns that Mulvaney is intimately linked to the White House as a political actor, while Dodd-Frank requires that the CFPB director be independent, and it's no wonder so many consumer advocates are alarmed.

But the longer-term picture is equally important to consider: President Trump appears poised to select a nominee - in a matter of weeks - to serve as the next director of the CFPB.

Politico reported this week that the president's list of possible picks is now down to three alarming names: Rep. Jeb Hensarling (R-Texas), former acting Comptroller of the Currency Keith Noreika and George Mason University law professor Todd Zywicki. Read more at THE HILL
SURECARE SERVICES
Unbanked vs. Underbanked: Who they are and how they differ. by Walt Wojciechowski

Slightly more than two-thirds of households in America frequently make use of traditional banking services, according to the Federal Deposit Insurance Corporation. But that leaves 33 percent of people in the U.S. who don't, a significant percentage by any measure.

Making up this group are the so-called credit invisible, who for any number of reasons opt to go without regular patronage of traditional money management and transaction options. They're typically classified as "unbanked" or "underbanked."

The problem with this terminology is the two distinctions are often used interchangeably. In reality, however, they're quite different, even though the similarity between these titles might suggest otherwise.

For the sake of clarity, here are the characteristics that the unbanked and underbanked frequently possess, and how they compare and contrast:

Unbanked

As the title implies, unbanked Americans are those who don't make use of any banking services whatsoever. This includes debit cards and checking accounts, as well as savings accounts. In 2015 - the most recent year for which data is available - the unbanked represented 7 percent of U.S. households, translating to approximately 23 million individuals, including children, the FDIC reported. The percentage of unbanked households in the U.S. is down slightly from 2013, when it was 7.7 percent. Read more at MICROBILT
CFSA Conference
What Employees' Financial Unwellness Is Costing Their Companies And what can we do about it? recommended by David Kilby at FinFit

Financial wellness means being in a place where you are spending and saving your money thoughtfully, where your behaviors and thinking around your personal finances contribute positively to your short-term and long-term goals. In our money journeys, we're always working towards more powerful thinking about our finances, which leads to less stress, and ultimately, more wealth. Being in a state of financial wellness also means that a big, unexpected expense (like a hospital bill or other emergency) wouldn't completely derail us. If we're financially well, we're more equipped to handle unanticipated events and their costs.

It makes sense that financial wellness would make a big impact on our performance at work. According to the newly released PwC 2017 Employee Wellness Financial Survey, the majority of Americans are stressed about their finances. This stress - or financial unwellness - costs companies, just like it costs us as individuals.

According to the 1,600 full-time employees surveyed in PwC's 2017 study, 53 percent of workers report being stressed about their finances, while 65 percent of Millennials said the same. Across all generations - Millennials, Gen X, and Baby Boomers - financial matters were the top cause of stress. Forty-six percent of workers spend three hours or more during the work week thinking about or dealing with financial issues, and 47 percent said their finance-related stress has increased over the last 12 months. And according to a new survey from Bankrate, which interviewed 1,003 adults earlier this year, 57 percent of Americans don't have enough cash to cover a $500 expense.
O_Keefe _ O_Malley
GOP senator calls for probe into 'flawed' vetting process for CFPB official

Sen. Ron Johnson (R-Wis.) on Thursday called on a federal watchdog to review the "flawed" process in which Leandra English jumped from a position as political appointee to serving as a senior career civil servant at the Consumer Financial Protection Bureau (CFPB).

Johnson, the head of the Senate Homeland Security and Governmental Affairs Committee, sent a letter to the head of the Office of Special Counsel (OSC), Henry Kerner, raising concerns about the conversion process in the final days of the Obama administration.

"Based on the information that [the Office of Personnel Management] provided to the Committee, it may be appropriate for the Office of Special Counsel to review whether the conversion of Ms. English from a political appointment at OPM to a career position within CFPB adhered to the merit system principles," Johnson wrote.

Johnson's letter comes after a showdown in November over dueling appointments between the White House and the outgoing CFPB head over who would lead the agency.

Exiting CFPB Director Richard Cordray, an Obama-era appointee, promoted English, his chief of staff, to deputy director - leaving her in a position to lead the agency after he departed.
MerchantBoost
Pro Racecar Driver Scott Tucker Gets Over 16 Years in Prison

The judge said the business was "a fraud from the beginning" and a scam "to extract money from people in desperate circumstances." He added it "created heartbreak and sorrow ... not just a financial loss"

Pro racecar driver Scott Tucker was sentenced to over 16 years in prison Friday after his conviction for running a payday loan business that prosecutors say cheated millions of financially struggling Americans.

U.S. District Judge P. Kevin Castel said it was "staggering" how many people nationwide were affected by Tucker's business.

Over a 15-year period, more than 1 percent of the U.S. population became victims of the business, Castel said as he sentenced Tucker to 16 years and eight months in prison.

The judge said the business was "a fraud from the beginning" and a scam "to extract money from people in desperate circumstances." He added it "created heartbreak and sorrow ... not just a financial loss."

In a letter to the court, the 55-year-old Tucker of Leawood, Kansas, defended his business practices and implied he was misunderstood.

Castel ordered him to immediately begin serving the sentence and he was led from court in handcuffs, but only after he removed his suspenders.

Timothy Muir, 46, a lawyer from Overland, Kansas, was sentenced to seven years in prison for his conviction at the same October trial as Tucker. Read more at NBC WASHINGTON
Community Involvement
AMSCOT
Amscot supports program that mobilizes and empowers local residents with refurbished vehicles

Tampa FL - Amscot Financial recently donated $2,500 to help Wheels of Success during its 12 Cars of Christmas program. The program offers refurbished vehicles to working families who need reliable transportation but could not otherwise afford it.
A New CFPB Scandal - Cost Overruns for Its New Lux Headquarters

Renovation costs for the brand new Consumer Financial Protection Bureau headquarters have skyrocketed, posting 25 percent in cost overruns - significantly above the original budget set by the General Services Administration, according to a Daily Caller News Foundation investigation.

Original cost estimates for the CFPB's renovation were estimated at $55 million, but the bureau ran up the proposed cost to $216 million. The Federal Reserve Inspector General rejected the proposal in 2014, saying there was no "sound basis" for the figure.

As the CFPB renovation costs continued to escalate, renovation was taken out of the CFPB's hands and transferred to the General Services Administration (GSA). GSA's budget, however, was nearly twice the original $55 million, hitting $99 million.

That figure ballooned to more than $124 million, according to a June 30, 2017, GSA document obtained by TheDCNF under the Freedom of Information Act. The document was part of a release of "change orders" and "modifications" submitted by Grunley Construction, the Washington, D.C.-based general contractor selected by GSA to renovate the CFPB building.
Insight.tm
FACTORFACTS

1. Of the top 10 largest US employers in the FactorTrust database, one is a top five bank with a default rate of 33 percent.

2. Fifty-seven percent of underbanked consumers are single.

3. One percent of underbanked consumers has attended a vocational or technical school or program.

4. Of the underbanked consumers' open and active tradelines (or credit accounts), 12 percent have an alternative loan from an alternative financial services provider (AFS).

5. The average open balance on an unsecured loan of underbanked consumers is $9,413.

A_S Management
Lotteries Generate Serious Interest & Revenue

Powerball and Mega Millions are leading a craze. Many people love playing the games and most states love the revenue generated from those selecting potential jackpot numbers and scratch off tickets.

Americans spent some $80 billion on traditional and electronic lottery tickets, according to the North American Association of State and Provincial Lotteries. Each state in the U.S. has its own lottery with the exception of Alabama, Alaska, Hawaii, Mississippi, Nevada, Utah, and Wyoming.

A lottery spending report and analysis released by Hoboken, N.J.-based research firm LendEDU, revealed Massachusetts ranked first with the average resident expending $735.84 on lottery tickets per year. "Of all the uncertainties that come with the lottery, one thing is for absolute certain: People love playing the lottery," Mike Brown Research Analyst at LendEDU, said in a blog.

LendEDU collected raw information from the Census Bureau's preliminary data in its 2015 Annual Survey of State Government Finances released on May 15, 2017. Included within this dataset is income and apportionment data of state-administered lottery funds, income generated from ticket sales (excluding commissions), and the apportionment of those sales. Funds generated from each state's lottery covers prizes for winning tickets and administrative bills with the leftovers going toward various needs. Read more at CREDIT UNION TIMES
SECURECHECK
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
757.737.4088

315 Tuscarora St., Lewiston, NY 14092
dan@afspassociation.com
www.afspassociation.com