June 28, 2018

FactorTrust®, a TransUnion company, provides alternative credit data, analytics and 
risk scoring information to help lenders make more informed decisions.
CFPB Supports Reconsideration Of Payday Rule

The Consumer Financial Protection Bureau (CFPB) has filed a response supporting reconsideration of the agency's payday rule. According to The National Law Review, the motion requested that a Texas federal court reconsider its June 12 order that the effective date of the rules not be delayed.

Last October, former CFPB head Richard Cordray finalized the rule that would require lenders to conduct background checks showing that borrowers can afford the loans, and to limit the number of loans made to a single borrower. The rule, set to go into effect in August 2019, has received pushback from payday lenders, which argue that it prohibits them from issuing almost all of the loans they currently grant to consumers.

Payday and short-term lending is an approximately $6 billion-a-year industry, one that both critics and supporters of payday lending agree will take a major hit if the rules went through. With that in mind, Acting Director Mick Mulvaney revealed in January that he would "reconsider" rules regarding the industry. Then, in April, the payday lending trade group Community Financial Services Association of America (CFSA) filed a lawsuit against the CFPB to stop the regulation, saying it will kill the industry.

"We do not take lightly that we are suing our federal regulator. However, we have long said we are pursuing all options with regard to the CFPB's harmful small-dollar lending rule, and one of these options was litigation," said Dennis Shaul, chief executive of the CFSA. 

The voice for the small-dollar, short-term lending industry.
OHIO: Big push for payday lending reform before lawmakers break for summer

House Bill 123 allows lenders to begin earning money on their loan right away

This is the last week of legislative work before lawmakers go on their summer break until after the November general election.

Pushing hard to get payday lending reformed, the Senate's finance committee is entertaining testimony Monday, Tuesday and possibly Wednesday with votes on amendments and potentially on the Senate floor planned.

The committee hasn't had the bill for very long and the rush to get it done is reminiscent of the push to get congressional redistricting done earlier this year.

Similarly, lawmakers are in the same position where if they do nothing or in this case too much, citizens are prepared to pursue a ballot initiative to make the changes for them.

The bill being worked on is House Bill 123, the payday lending reform bill introduced under bipartisan joint sponsorship by State Reps. Kyle Koehler and Michael Ashford. Read more at WKBN 27

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OHIO Senate Won't Pass Payday Lending Reform Before Summer Break

Ohio's Senate leader says senators won't be able to pass a payday lending bill before breaking for the summer.

Republican Senate President Larry Obhof, of Medina, told The Associated Press Tuesday his chamber needs more time to complete its work so no votes will take place this week.

Obhof said he'll trim the Senate's usual summer break to add session dates in September and possibly July and August. He said he's aiming for a final bill that's agreeable to the Ohio House.

The House passed its bipartisan version of the bill June 7. The measure had been languishing for a year.

Republican ex-Speaker Cliff Rosenberger resigned in April amid an FBI probe into his lavish lifestyle and international travel that included trips involving payday lending lobbyists.

A group of advocates, Ohioans For Payday Lending Reform, are collecting signatures for a fall ballot initative that would cap Ohio's interest rates on payday loans and impose additional regulations on the industry ; Read more at WOSU.ORG
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You Thought There Were Only 3 Credit Bureaus - Wrong!

When people think of credit bureaus, they usually think there are only 3: Experian, Equifax, and Transunion. While these organizations play a big role in your life, they aren't the only companies controlling your financial destiny.

There Are More Than 3 Credit Bureaus
In reality, there are over 40 consumer reporting agencies that operate in the US. Most of the others, outside of the big three, function in a specific niche. However, that doesn't make them any less powerful.

Reports from these agencies may determine if you can obtain credit. These reports also determine access to insurance products, landing a job, or even your ability to pay with a check. The companies share information with a range of businesses, utilities, and government entities. They are also diligent about collecting data on you.
If you are wondering what the other credit bureaus mean to you, here's an overview of each category and the companies in that space.

Low-Income and Subprime
Low-income and subprime reporting agencies focus on financial data that applies mostly to the low-income segment of the population. This includes the use of payday loans, check cashing services, rent-to-own arrangements, subprime credit cards, subprime mortgages, the opening of telecommunications accounts, and more. Read more at SAVINGADVICE.COM

National Debt Holdings
National Debt Holdings is a professional Receivables Management Company that partners 
with creditors to purchase and/or manage receivables at all stages of the account life cycle.
American Indian tribes used by convicted payday lender Scott Tucker settle with feds

The fallout from Scott Tucker's illegal payday loan business continued on Tuesday with two American Indian tribes that Tucker used as cover to skirt state usury laws reaching settlement agreements with federal prosecutors.

The U.S. Attorney for the Southern District of New York announced on Tuesday that the Modoc Tribe of Oklahoma and the Santee Sioux Tribe of Nebraska admitted that Tucker set up his payday lending businesses on tribal lands but that the tribes themselves had no meaningful role in the enterprises.

Both tribes also acknowledged as part of the settlement that Tucker used the tribes as a way to sidestep state usury laws - American Indian tribes answer only to the federal government, which doesn't have a usury statute for payday loans - and that his businesses operated out of Overland Park.

The admissions contradict claims by Tucker that the tribes ran the payday loan enterprises and that he was merely an employee. Read more at KANSASCITY.COM

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Florida's next financial regulator could be chosen tomorrow. Here's why it's important.

More than 30 people have thrown in for the job, but the Cabinet already has some favorites.

Florida's top elected officials could pick the state's next financial regulator tomorrow, nearly a month after they pressured the previous person in the job to resign.

More than 30 people have thrown in to become commissioner of the Office of Financial Regulation, but the four-member Cabinet already has some favorites, including: state Rep. Jay Fant, a Jacksonville Republican whose family bank was shut down by OFR in 2012; Linda Charity, who worked in the office and was twice interim commissioner; and Scott Jenkins, a vice president at Wells Fargo who used to work for the Florida Bankers Association.

It's a relatively obscure job, but one that oversees some of the state's most important industries. Here are three reasons why it's important:

1. OFR oversees and regulates the "shadow banking industry." 

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Millennials and Pawn Shops: A New Line of Credit for Families

Postgraduate life can be financially overwhelming for those millennials trying to keep up with student loans and maintain quality lifestyles in today's society. Student loan debt can make it difficult for anyone to be approved for a new line of credit. As a result, almost 30 percent of millennials are turning to alternate fast-cash loan options. According to recent studies, 28 percent of millennials (ages 23-35) are resorting to short-term financing options offered by payday loans and pawn shops. These studies reflect trends over the last five years. This is potentially due to the loose lending requirements of pawn shops and payday loans when compared to banks and traditional lenders. Concerning borrowing, these millennials don't seem to be slowing down any time soon.

Despite the misconception that the majority of pawn shop borrowers come from lower income families, the reality is that a large percentage of them are college educated middle-class citizens that are struggling to maintain the lifestyles they were privileged to have while living with their parents. College, although helpful when searching for higher paying jobs, can also create a sense of false security resulting in a financial culture shock for many postgraduates. Unfortunately, most borrowers already carry debts and have adopted an unhealthy trend of over-borrowing. The national average credit score among millennials is around 638 and which is low compared to those considered prime applicants with scores or 760 and above. The amount of debt accumulated by millennials is substantially higher than that of Generation Z, mostly because people within that age range (Age 21-34) graduated from college during or just after the Great Recession which came to an end in 2009. Read more at THE GOOD MEN PROJECT

Dreher Tomkies LLP
Dreher Tomkies LLP is a law firm concentrating in the areas of  Banking and Financial Services law.
Bills seek to bolster markets, investment opportunities

The House Financial Services Committee approved last week three bills targeting improved capital markets while increasing investment opportunities.

The Modernizing Disclosures for Investors Act requires the Securities and Exchange Commission (SEC) to provide a report to Congress with a cost-benefit analysis of emerging growth companies' use of SEC Form 10-Q and recommendations for decreasing costs, increasing transparency and increasing efficiency of quarterly financial reporting by emerging growth companies.

The Helping Startups Continue to Grow Act expands the on-ramp for emerging growth companies by providing an additional five years of exemptions from certain disclosure requirements, per the Committee.

The third bill of note, the Improving Investment Research for Small and Emerging Issuers Act, requires the SEC to carry out a study to evaluate the issues affecting the provision of and reliance upon investment research into small issuers, including emerging growth companies and pre-IPO companies. Read more at FINANCIAL REGULATION NEWS
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OHIO: Pew willing to talk payday loan changes: Capitol Letter

Room for compromise? The Pew Charitable Trusts said Monday it's open to amending a payday lending bill to increase fees borrowers pay. House Bill 123 would lock monthly loan fees at $20, but Pew's Nick Bourke said he'd be willing to negotiate an increase to $25 or $30. He also said he could talk about increasing the loan maximum from $500 to $1,000. Pew's offer comes as Sen. Matt Huffman is working on a bill amendment that Pew and other reform advocates oppose. However, payday lenders such as Daniel McCabe, who owns six Northeast Ohio payday stores, said they like how Huffman's proposal - which has yet to be unveiled -- sounds.
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