ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
Newsletter

January 11, 2018

FactorTrust
Warren blasts Mulvaney for 'unjustified' actions at CFPB

Sen. Elizabeth Warren (D-Mass.) accused the acting director of the consumer bureau of using concerns about cybersecurity to sabotage the agency's oversight of the financial sector.

Warren, in a letter released Monday, said acting Consumer Financial Protection Bureau Director Mick Mulvaney had been "hobbling the agency" by suspending data collection.

"I fear that the freeze in data collection has in practice fundamentally changed how the CFPB interacts with its regulated entities," wrote Warren to Mulvaney, also the director of the Office of Management and Budget, and deputy director Leandra English on Jan. 4.

President Trump appointed Mulvaney as the CFPB's temporary head in November after former Director Richard Cordray resigned to run for Ohio governor. Mulvaney, a fierce critic of the CFPB, ordered employees to stop collecting consumer data in December.

In announcing his decision, Mulvaney cited reports from the CFPB inspector general highlighting cybersecurity concerns at the bureau. Conservatives have long opposed the CFPB's collection of personally identifiable information from banks and financial services companies, which they've called intrusive and unsafe. Read more at THE HILL
Dreher Tomkies LLP
10 banks consumers complain about the most

Banks are one of those businesses people love to complain about.

They compete with cable companies, airlines and drug companies as being some of the most disliked.

Only 32% of Americans have "a great deal" or "quite a lot of" confidence in banks, according to a recent Gallup poll.

The image of banks took a big hit after the 2008 financial meltdown and it has slowly improved since then but the industry is still seen less positively than it was prior to the crisis.

LendEdu, an online marketplace for student loan refinancing, looked at consumer complaints filed with the Consumer Financial Protection Bureau (CFPB) for a second straight year.

The analysis found that consumers filed 42,097 complaints against 49 financial institutions that are included in the S&P Banks Select Industry Index. An additional thirteen banks in the index had no CFPB complaints filed about any banking product.

"The most common complaint categories in order were: mortgages, debt collection, credit reporting, credit card, and bank accounts or service," according to LendEdu research analyst Mike Brown. Read more at USA TODAY
MicroBilt
Hensarling aide to join CFPB as chief of staff

An aide of Rep. Jeb Hensarling (R-Texas) is joining the Consumer Financial Protection Bureau (CFPB) to serve as chief of staff, just as the lawmaker's name joins others being floated as potential picks to head the consumer watchdog.

Kirsten Sutton Mork will be departing the House Financial Services Committee for which she serves as staff director. Hensarling chairs the committee.

Mork is not the first of Hensarling's aides to join the CFPB. Reuters previously reported that Brian Johnson, a top Hensarling aide, had left the House Financial Services Committee to help CFPB Acting Director Mick Mulvaney.

"As one of my longest-serving and most dedicated aides, Kirsten has been an indispensable advisor to me for the last nine years. Her leadership, deep understanding of financial policy and the legislative process, strength of character, and commitment to conservative principles have been vital to the great victories the committee has achieved for the American people during her tenure here," Hensarling said in a press release. "While I am sad to lose such exceptional talent, I know she will do an outstanding job as chief of staff for the CFPB and be a tireless advocate for American consumers."

Mork served in Hensarling's personal office as financial services policy advisor and then legislative director from 2009 to 2013 before being appointed as the Financial Services Committee's deputy staff director in 2013. She has been staff director for the committee since early 2017.
CFSA Conference
Warren Slams CFPB's Mulvaney Over Data Decision

Acting head of the Consumer Financial Protection Bureau (CFPB), Mick Mulvaney, is coming under fire by Senator Elizabeth Warren over limits placed on staff members to access or acquire digital data.

Shortly after Mulvaney was appointed acting director by President Donald Trump, Mulvaney instituted a freeze on the collection of any personal data by the CFPB staff, due to security issues that were highlighted in reports from the Federal Reserve and the CFPB inspector general. But as Senator Warren argued in a letter to Mulvaney last week - as reported by American Banker - the inability to collect data impaired the staff members' abilities to do their jobs.

"The CFPB cannot fulfill its core functions without collecting personally identifiable information," Warren stated in the letter. "Given how integral these data are to these basic CFPB functions, I fear that the freeze in data collection has in practice fundamentally changed how the CFPB interacts with its regulated entities, particularly in the Division of Supervision, Enforcement and Fair Lending. My staff has obtained internal CFPB documents that confirm these fears."

The senator noted that the data freeze stopped agency lawyers from looking over electronic evidence that was found in discovery. Warren argued that the freeze hurts the CFPB and consumers more than the data security issues brought to light by the general inspector.
SURECARE SERVICES
Help your kids understand their personal finances

Don't let your kids develop bad spending habits early on

What is that age-old expression? You can't teach an old dog new tricks? When it comes to being smart with money, bad spending habits are extremely hard to break.

In a recent survey conducted by personal finance authority GOBankingRates, 57% of Americans have less than $1,000 in their savings accounts with 39% having absolutely no savings at all. With January being Financial Wellness Month, it's about time we take a look at ways that people can break this cycle.

Gregg Musset the CEO of the personal finance resource BusyKid, believes that this statistic could have been reversed a long time ago if only we helped our children understand their finances earlier on in life.

"The thing that I believe that changes the entire conversation" explains Musset, "is starting children early and teaching them two primary things: How to work and teaching them to be smart with money. Those two things are kind of it! Those two things can set them on a path that absolutely changes everything for a kid going forward into adulthood."

He believes that by teaching your children about the importance of understanding the value of money and the work that goes into earning it, they will not spend frivolously or be reckless with their money. In his eyes, the best place to start is outside of the classroom. Read more at METRO USA
Insight.tm
Trump budget chief shuts down consumer 'protection' bureau 'slush fund'

An educational "slush fund" used by the Consumer Financial Protection Bureau has come under the "strictest review" by acting director Mick Mulvaney amid concerns the Obama-era agency has been doling out cash only to Democratic cronies.

Mulvaney, President Trump's budget chief who has been temporarily installed at the agency the president once promised to kill, is reviewing all spending by the troubled consumer watchdog created to protect Americans from big financial companies.

"All of this is under strictest review. While we get our arms around it, the director is personally approving any payment out of these funds to ensure that they are going to actual victims," an official said. Mulvaney replaced former President Barack Obama's director, Richard Cordray, who resigned in November.

CFPB, the brainchild of Democratic Massachusetts Sen. Elizabeth Warren, collects fines from financial institutions and spends it on victims and educating the public on its mission. Millions of dollars have been set aside for the education funding.

But the agency has been secretive about who gets the money, and groups such as taxpayer watchdog Cause of Action and the Competitive Enterprise Institute have been critical.
MerchantBoost
NCUA chair on shortlist to head CFPB

While legal disputes over temporary leadership at the Consumer Financial Protection Bureau continue, an appointment of a permanent head may not be far off.

According to industry observers, National Credit Union Administration Chair J. Mark McWatters is on the shortlist of potential CFPB directors, American Banker reported.

If President Donald Trump ultimately picks McWatters for the role, the appointment could cool the partisan tension over CFPB leadership. Trump's appointment of Mick Mulvaney as acting chief has been vigorously protested by critics on the left, according to the report. Mulvaney, the director of the Office of Management and Budget, had previously criticized the CFPB.

Unlike other candidates under consideration, McWatters has not openly criticized the CFPB. However, he has previously asked the agency to roll back credit union oversight in several instances. Additionally, McWatters was confirmed to lead the NCUA over the summer. This suggests his ability to secure the necessary votes for the role, offering the administration another way forward.

McWatter joins others whose names have been floated in recent weeks. Todd Zywicki, a law professor at George Mason University; Rep. Jeb Hensarling (R-Texas), who chairs the House Financial Services Committee; and Keith Noreika, the former acting comptroller of the currency, have been the subject of speculation to replace Richard Cordray, who resigned in November to run for governor of Ohio. Read more at MPA
SecureCheck
PayPal Co-Founder Max Levchin Gave a Remarkably Honest Response to Accusations About His New Startup

The personal loans startup Affirm offers a straightforward proposition: Buy things now, pay for them later. The service is not so different from a credit card, but consumers take out individual loans instead of a revolving line of credit. Pretty basic, right?

To its critics, though, Affirm, which recently raised $200 million in a growth round, is engaged in something sinister, luring people into a financial trap by enticing them to buy things they can't afford. CEO Max Levchin doesn't agree with that interpretation at all, but he does accept some of the blame for not creating a more accurate perception.

"There are several layers to this which I have failed to communicate over and over again," Levchin, who also co-founded PayPal, told Inc. "I'll try it anyway, because I try every time." (He also mentioned that Affirm recently hired a director of communications to help with this task, so Levchin won't be left to flounder much longer.)

Here's how Affirm works: You can borrow money to make a purchase at any store that integrates with Affirm (or any store at all if you use the mobile "virtual card"). If Affirm's proprietary credit model judges that you'll be able to pay back the sum, then you're offered a loan. During the next several months -- up to a year -- you're expected to make monthly payments, which include interest. The APRs range from 10 to 30 percent. Read more at INC.
A_S Management
This may be the key to increasing employee productivity:  Financial education at work

Many companies do not realize this, but many of their employees struggle with an escalating epidemic that is affecting today's workforce.

One in three employees report that issues with personal finances serve as a distraction at work, according to a report published by the Center for Financial Services Innovation. Financial stress contributes to lost productivity, increased absences and healthcare claims, higher turnover and costs associated with workers who cannot afford to retire on time, the report also found.

The potential solution? Financial literacy education in the workplace. Financial consultant Kyle Sanders is here to share why and how this can help not only employees, but also their workers.

When employees spend time worrying about their personal finances, productivity is what takes the biggest hit. Not only are they abusing company time, but important work is not completed, further placing companies in a dire situation. Moreover, workers recognize the severity of this epidemic, whether their companies do or not, as employees admit their concerns with personal finances interfere with their quality of work, the Personal Finance Employee Education Foundation found.

For these reasons, there is a very compelling business reason for employers to advance the well-being of their workers through financial literacy education in the workplace.

Increasingly, companies are beginning to recognize the value in non-traditional, company-supplied benefits that will strengthen employees' financial wellness. In fact, according to a 2015 study conducted by Aon Hewitt, 93 percent of 250 employers surveyed said they want to do more to enhance employees' financial well-being than providing 401(k) matching.
O_Keefe _ O_Malley
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

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