NEWS: December 7
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Former CFPB Director Cordray announces run for Ohio governor

Richard Cordray, the former director of the Consumer Financial Protection Bureau (CFPB), launched his campaign for Ohio governor Tuesday, two weeks after leaving the financial sector watchdog.

Cordray, a Democrat who served as Ohio's attorney general before joining the CFPB, announced his candidacy at a diner in his hometown, Grove City, Ohio.

The former CFPB director had long been expected to run, but was barred by federal law from campaigning until he left the bureau. Cordray resigned from the CFPB on Nov. 24, two weeks after announcing his intention to leave.

Cordray cited his experience facing challenging "character builders" as CFPB director, Ohio attorney general and state treasurer in a video announcing his campaign.

It begins with footage of President Obama praising Cordray's work on behalf of consumers as CFPB director. Cordray then recalls his work as the first director of CFPB, which was opposed by a GOP-controlled Congress.

"Being a voice for regular folks wasn't easy," Corday said. "Congress, big banks and then the new administration tried to protect their powerful interests. But we didn't back down."

Cordray's announcement video also includes a clip of Sen. Elizabeth Warren (D-Mass.), the CFPB's architect, praising Cordray for returning $12 billion to more than 28 million consumers through bureau enforcement actions. Read more at THE HILL
Mulvaney Wants More Political Appointees in Place at CFPB

Acting Consumer Financial Protection Bureau Director Mick Mulvaney is looking to add more political appointees to the agency's ranks in the near future, pairing them with senior civil servants in areas such as supervision, regulations, and enforcement.

That structure is the traditional model for agencies like the Office of Management and Budget, where Mulvaney is also permanent director, and one that Mulvaney said he believes would work well at the CFPB. Mulvaney has long been a critic of the six-year-old agency and its leadership structure, endowed with a single director rather than a commission.

"Maybe they didn't think they needed to have any political people here because a lot of the people here were political anyway, even though they're professional," Mulvaney said during a press briefing Dec. 4, referring to career staff.

Mulvaney has already brought in Brian Johnson, a former aide to House Financial Services Committee Chairman Rep. Jeb Hensarling (R-Texas), to be a senior aide at the bureau.

Once his political staff is in place to handle day-to-day matters, Mulvaney said he would "get down to the weeds on something I enjoy, which is the budget."

That review would include the agency's structure, funding, and staffing, he said. "But that will be a couple of weeks before I have a chance to talk about that at an appropriate time," Mulvaney added.

The CFPB is funded through the Federal Reserve System, rather than congressional appropriations. Each fiscal quarter the Federal Reserve transfers funds formally requested by the agency's director. Republican lawmakers dislike that structure and have repeatedly introduced legislation (S. 387) to allow Congress to control the CFPB's purse strings.

Mulvaney said he plans to be at the CFPB for five to seven months, until President Donald Trump can nominate and the Senate can confirm a permanent director. Read more at BLOOMBERG
Mulvaney already is putting his stamp on CFPB - and still sparring over its leadership

Mick Mulvaney is moving quickly to put his stamp on the Consumer Financial Protection Bureau, an agency he has strongly criticized, even as he continues to spar with the deputy director over who is its lawful acting chief.

Mulvaney, the White House budget director whom President Trump appointed to the post Nov. 24, said he had already started installing some of his aides into bureau positions and was reviewing ongoing legal actions against financial firms. He also expressed support for House legislation introduced last week to repeal the bureau's recent regulations cracking down on payday and other short-term loans.

The moves come despite an expectation that Deputy Director Leandra English will continue her legal battle and file for a temporary injunction that would seek to oust Mulvaney from his office and reinstate her as acting chief.

"Aside from her presence here, which is a little strange, I won't lie to you, I think things are going extraordinarily smoothly and extraordinarily well," Mulvaney said Monday of English, who he said continues to report for work.

Mulvaney, who as budget director has held regular news briefings, told reporters that he expected to be in the job for five to seven months because a permanent director still must be nominated and then confirmed by the Senate.

Among his priorities in that time, he said, was acting on an inspector general's report this year that raised concerns about the bureau's data security efforts that "scares me to death."

He said he was halting the collection of all data containing personally identifiable information about consumers as part of the bureau's oversight of banks and other firms until the security issue is "buttoned down." Read more at LOS ANGELES TIMES
Dreher Tomkies LLP
Payday Lending And The New CFPB

The Consumer Financial Protection Bureau and payday loans have had a wild ride over the last 24 months. After a contentious rulemaking process, an even more contentious first draft and then a somewhat less contentious (but still pretty divisive) final rule drafting, the argument about what access consumers should have to shorter-term loans with sky-high interest rates has dragged on.

It's also a long way from being over.

As we noted when we first covered the final draft of the payday lending rule, Congress retains the power to keep the rule from ever making it into the books, so to speak, through the power of the Congressional Review Act. The CRA not only would prevent the payday lending rule from going into effect, but it would also prevent any similar rule changes from being considered for the next five years.

The CRA has already been used against a CFPB final rule in 2018. The arbitration rule, which would have prevented forced arbitration clauses from being inserted into consumer financial contracts, was overturned by the successful passage of a CRA resolution in both the House of Representatives and Congress.

However, as recently as a few weeks ago, the use of the CRA to block the payday lending rule seemed somewhat unlikely. Though efforts against the arbitration rule were successful, House Republicans could not persuade the colleagues in the Senate to a similar repeal of the CFPB's prepaid card rule this summer - and it was thought that because payday lending is such a controversial and politically loaded topic, Congress might instead choose to let this pass. The House of Representatives had moved to repeal the arbitration rule within 24 hours of its final draft being published. Two weeks after the final payday lending regulations dropped, no such action had been taken.

But it seems the change of the guard at the CFPB has also changed the calculus on that some. Payday lending rules might be struck down by the CRA after all. Read more at PYMNTS.COM
Financial firms pin CFPB hopes on Mulvaney

Major players in the financial industry hope for sweeping change at the Consumer Financial Protection Bureau (CFPB) now that a staunch conservative is in charge.

Office of Management and Budget Director Mick Mulvaney was cleared to begin reshaping the CFPB when a federal court last week blocked an attempt to depose him.

While Democrats are fretting about the CFPB's future, banks and others in the financial services sector are eager for a new start at an agency they've long considered unaccountable and harmful.

"We want Mick Mulvaney to be smart, reasonable and balanced," said Richard Hunt, president of the Consumer Bankers Association. "He knows the CFPB has to work not only for the consumers, but for the markets together."  Hunt called for a top-to-bottom review of CFPB personnel in the hopes of bringing in more employees who "understand the relationship between banks and consumers."

Ironically, the very thing critics find most objectionable about the CFPB - the power instilled in a single director - now gives Mulvaney the ability to make wholesale changes to the CFPB's priorities.

"The structure of the CFPB is just fundamentally flawed. Authority that I have now as the acting director really should frighten people," Mulvaney said on Thursday.

"We're going to try and limit as much as we can what the CFPB does to sort of interfere with capitalism and with the financial services market."

Under its last director, Richard Cordray, the CFPB was aggressive in taking on the financial sector. The agency fined banks, financial services companies and lenders millions of dollars for alleged fraud while issuing rules that reshaped much of the industry. Democrats often tout the $12 million in restitution the CFPB won for more than 30 million defrauded consumers. Read more at THE HILL
Why Adding Visibility to Customer Repayments Matters. by Noah Fitzgerald, CPP

Businesses that extend credit or terms to their customers take on an inherent risk. You provide a service, loan, product or goods without getting partial or complete payment at time of delivery with the expectation that the customer will pay you on time in the future. The reality is, when a business extends credit to a consumer they are investing in that consumer's ability to repay for the service or product they received.

This model of extending credit has been around for years, but over the past decade the rate of repayment defaults has climbed sharply. Today, the average repayment default on a payday loan is over 20%, 50% on high interest online installment loans, upwards of 33% on vehicle title loans, and 12% on high risk vehicle loans. These payment defaults not only cost the business loss of revenue and operational expenses, but have significant impacts to the consumer. In a recent study performed by the CFPB, the average default customer incurs total fees of over $185 in bank penalties, of which 36% have their bank accounts closed by the depository institution. In these scenarios, both the customer and the business lose. The customer loses their access to banking services while the business loses their principal and interest revenue with no ability to collect.

Thus, there have been several rules put forth from multiple regulatory bodies. NACHA (the governing body of the ACH network) has tightened the limits on acceptable ACH returns and most recently, the CFPB (Consumer Financial Protection Bureau) has placed strong regulations on financial service providers focused on repayments. These rules and regulations are intended to place the onus on the business to reduce the negative impact on consumers. So, how can a business counteract payment default losses, reduce the effect on consumers, and protect their investment, while fully complying with regulations?

Today, there are a wide range of financial technologies (fintech) which provide companies access to data that can potentially eliminate these issues. At Merchant Boost, we have stayed at the forefront of this fintech revolution, packaging a suite of services, called Repayment Boost. With this suite we are able to provide businesses with visibility into a consumer's available bank account balance in real-time. Merchant Boost's COO, Jesse Berger stated, "This technology enables businesses to verify funds availability prior to submitting payment, to mitigate NSF issues. This allows the business to better service their customer, reduce payment performance issues, like ACH Returns or rejected payments, improve regulation compliance, and ultimately sustain the profitability of each customer."

For businesses to survive, they must adapt to changes in the market, consumer needs, regulations, economy and the evolutions in technology. Those that embrace and leverage technology, like Repayment Boost, will not only better serve their customers, but improve profitability and promote the sustainability of the business.    Read more

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A_S Management
Consumer Bureau's New Leader Steers a Sudden Reversal

The defanging of a federal consumer watchdog agency began last week in a federal courthouse in San Francisco.

After a nearly three-year legal skirmish, the Consumer Financial Protection Bureau appeared to have been victorious. A judge agreed in September with the bureau that a financial company had misled more than 100,000 mortgage customers. As punishment, the judge ordered the Ohio company, Nationwide Biweekly Administration, to pay nearly $8 million in penalties.

All that was left was to collect the cash. Last week, lawyers from the consumer bureau filed an 11-page brief asking the judge to force Nationwide to post an $8 million bond while the proceedings wrapped up.

Then Mick Mulvaney was named the consumer bureau's acting director.

Barely 48 hours later, the same lawyers filed a new two-sentence brief. Their request: to withdraw their earlier submission and no longer take a position on whether Nationwide should put up the cash.

It was a subtle but unmistakable sign that the consumer bureau under Mr. Mulvaney is headed in a new direction - one that takes a lighter touch to regulating the financial industry. The reversal is part of a broad push by the Trump administration to unfetter companies from Obama-era regulations. Read more at NEW YORK TIMES
2018: The year of financial wellness at work

Sound, effective financial wellness is good for people and good for business.

People are the engine of your organization. To drive growth, your employees must be focused, energized and engaged.

This is not the case for millions of workers who are distracted, disengaged and dragged down because they're worried about their finances.

And with good reason. A CareerBuilder survey finds nearly 80 percent are living paycheck-to-paycheck, almost half of the people you meet couldn't take care of a $400 emergency without borrowing money from someone or dipping into their 401(k).

As we carefully analyze financial wellness assessments, we find most Americans are not hopeful about their handling of personal finances. In fact, more than half are worried about their money, with 26 percent saying "scared" best describes their attitude and another 25 percent feeling "confused."

For millennials, who outnumber Generation Xers and baby boomers for the largest share of the American workforce, according to Pew Research Center analysis of U.S. Census Bureau data, the worry is primarily about student loans. Read more at BENEFITS PRO
Community Involvement
Advance Financial
This past weekend, 3 of our Advance Financial team members volunteered as mentors for the Girls on the Run of Middle Tennessee . Each girl participating in the race was partnered up with a buddy to run alongside them. Girls on the Run is a transformational learning program for 8 to 13-year-old girls that teaches life skills through dynamic, conversation-based lessons and running games
Mulvaney says no plans to fire U.S. consumer bureau's English

WASHINGTON (Reuters) - Mick Mulvaney, White House budget chief and acting director of the Consumer Financial Protection Bureau (CFPB), said on Monday he has no intention of firing Leandra English, who had attempted to block him from taking control of the agency.

Former CFPB head Richard Cordray had named English to lead the bureau following his resignation last month, but that appointment had been mired in turmoil after U.S. President Donald Trump had assigned Mulvaney to the same role.

A U.S. District Court judge last week sided with Trump, saying the law gave Mulvaney the right to lead the consumer finance watchdog, but English is challenging the decision.

During a news briefing at the CFPB on Monday, Mulvaney told reporters he would "absolutely not" consider firing English and that he would like her to continue to serve as deputy director but had not had any direct contact with her.

English could not immediately be reached for comment through her lawyer, Deepak Gupta.

Since arriving at the CFPB, Mulvaney has implemented a hiring freeze and suspended all new regulations for 30 days. On Monday, he said he was also reviewing more than 100 pending enforcement actions, including litigation as well as private settlement talks and investigations.

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