NEWS: November 2, 2016

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Capital Compliance
Letter: Don't let feds decide on payday loans

I read with interest The Arizona Republic's recent editorial ("Why the feds must regulate payday loans," Sept. 7). What intrigued me the most is their argument that Consumer Financial Protection Bureau intervention to rid the world of small dollar loans is by virtue protecting families.

The editors seem to have completely ignored the fact that 1) the newly proposed federal rules go well beyond significant restrictions on "payday lending," and 2) that millions of Americans depend on small loan products, not just payday, because they are shut out from traditional banks.

Even the credit unions and community banks have indicated that they will not be able to operate in the short-term, small dollar lending space under the regulatory framework set forth by the proposed rules. So where are the thousands of Arizonans to go for their lending needs if this rule goes forward?

If one simply searches on the Internet for a payday loan, they will have hundreds of options to choose from. No one, even the industries opposing the CFPB's short-term lending rules, want bad actors that prey on struggling families to continue unchecked.

However, I believe that Arizona should determine what is in the best interest of Arizona families, not some disconnected, unresponsive D.C. bureaucrat. Arizona has the responsibility to ensure that all Arizonans have access to credit and ensure there are strong consumer protections in place that roots out any lenders that break the law.

Let's stop with the rhetoric of "predatory lenders" and "debt traps" aimed at demonizing an industry and roll up our sleeves to find solutions for all Arizona families, regardless of their economic situation.

-Senate President Andy Biggs, Gilbert The writer is a candidate for U.S. House in Congressional District 5. See the letter at AZCENTRAL
Prepay Nation
Dreher Tomkies LLP
Small Business Administration opposes payday lending rules by CBS NEWS

On the final day for public comment, the Obama administration's top small-business advocate is calling on the Consumer Financial Protection Bureau (CFPB) to reconsider its proposed regulation of the payday lending industry.

The U.S. Small Business Administration's Office of Advocacy on Friday filed formal comments with the CFPB, saying the agency had "underestimated the potential impact of this rulemaking on small entities."

Darryl DePriest, chief counsel in the SBA's Office of Advocacy, urged the CFPB to instead develop requirements to protect consumers "without jeopardizing their access to legitimate credit in states that do not currently regulate payday lending."

In unveiling its proposal in June, the CFPB cited its serious concerns that risky lender practices were "pushing borrowers into debt traps." That's because within a month, almost 70 percent of payday loan borrowers take out a second loan, and one in five new borrowers ends up taking out at least 10 or more loans, paying more fees and interest on the same debt.

The agency's proposed rules would not prohibit all payday, auto title or other high-costs loans, but they would require lenders to adopt stricter standards to determine if consumers have the ability to repay.

That requirement would make it difficult, if not impossible, for many payday lenders to remain in business, the SBA said. Read the entire article at CBS NEWS

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How to protect your business from ACH fraud. by Philip Burgess

Given that the Automated Clearing House processes approximately $40 trillion in electronic payments and money transfers per year, according to the National Automated Clearing House Association, it's not surprising hackers continue to target the network.

Using dedicated ACH payment computers, verifying customer bank accounts and other tactics enable businesses to prevent hackers from successfully executing ACH fraud, but to develop comprehensive ACH fraud prevention strategies, organizations must assess all the tactics criminals employ.

How cybercriminals commit ACH fraud
In general, ACH fraud occurs when a criminal steals customer financial data to sanction unauthorized money transfers or payment requests. ACI Worldwide noted that, if the scheme proves successful, the perpetrator will usually launder the stolen funds to another account that isn't associated with the customer.

This scenario may change depending on a cybercriminal's skills, preferences and resources. For instance, one criminal may pose as a legitimate company to a bank account customer and trick the latter into providing his account login information. Then, the hacker could change the account holder's contact information to his own. By doing this, he can thwart bank representatives' attempts to confirm the legitimacy of payments, because he'll respond to any inquiries they may receive. Read the entire article at MICROBILT
DM Metrics
10 ways employee financial wellness is getting worse

Employees aren't happy about the state of their finances.

In fact, despite having improved for several years, employee financial wellness has lost substantial ground in many areas over the last year-and the stress is showing.

According to PwC's Employee Financial Wellness Survey, which tracks the financial well-being of full-time employed U.S. adults across the country, "many employees never fully regained stable footing" after the Great Recession-and indeed are experiencing increasing financial stress.

Fifty-two percent indicate they are stressed about their finances and 45 percent say that their stress has increased over the last 12 months.

That's not good news for employers, since financial stress takes a toll not just on employees but also on a company's bottom line, via reduced productivity, increased health issues with correspondingly higher health care costs and lost time at work.

Employees lying awake at night trying to figure out how to stretch their paychecks further, or taking time out of the workday to talk with creditors or even calculate how to divide that last paycheck aren't at their peak, so it's in employers' best interests to help worried employees do better at managing their available funds. Read more at BENEFITS PRO
American Indian tribe buys Mission-based payday loan servicing firm MacFarlane Group

The Otoe-Missouria Tribe, an American Indian tribe in Oklahoma, announced that it completed its acquisition of MacFarlane Group, a Mission company that assisted the tribe with its payday lending operation.

John Shotton, chairman of the Otoe-Missouria, wrote in an Oct. 10 letter to the tribe that it had partnered with MacFarlane Group for the last six years to assist its American Web Loan business with underwriting, software development, marketing and call center support.

Terms of the acquisition were not disclosed.

"By bringing in these operations in-house, the tribe will be able to increase the profitability of our online lending businesses," Shotton's letter said.

Shotton said that the additional revenue would go toward the tribe's health, education and social programs, along with infrastructure improvements.

Mark Curry founded the MacFarlane Group in 2010, according to the firm's website. According to a Bloomberg News article published in 2014, MacFarlane Group generated more than $100 million in revenue from American Web Loan and another website owned by the Otoe-Missouria Tribe, with the tribe keeping 1 percent.

Curry was also chief executive of Geneva Roth Ventures, a Mission payday loan enterprise that had been scrutinized by various state regulators before it stopped doing business.
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