March 29, 2018

CFSA Conference _ Expo

Senator Graham introduces CRA Resolution To Overturn CFPB Payday Loan Rule; Mulvaney To Testify On April 11 to House Financial Services Committee. 3/26/2018

The American Banker has reported that last week, Senator Lindsey Graham introduced a joint resolution under the Congressional Review Act (CRA) to override the CFPB's final payday/auto title/high-rate installment loan rule (Payday Rule). The CRA is the vehicle used by Congress to overturn the CFPB's arbitration rule in a party-line vote.

In December 2017, a bipartisan joint CRA resolution to override the Payday Rule was introduced in the House and, in January 2018, the CFPB announced that it intends to engage in a rulemaking process to reconsider the Payday Rule pursuant to the Administrative Procedure Act (APA).

To be eligible for the special Senate procedure that allows a CRA resolution to be passed with only a simple majority, the Senate must act on the resolution during a period of 60 "session days" which begins on the later of the date when the rule is received by Congress and the date it is published in the Federal Register. While the deadline for voting on a CRA resolution cannot be definitively determined in advance because of uncertainty as to which days going forward will count as "session days," it appears the deadline will occur by mid-May. Read more at NATIONAL LAW REVIEW

' No more kings:' The Supreme Court must rein in the CFPB. 3/26/2018

"No more kings," said "Schoolhouse Rock." But one bureaucrat can come pretty close to wielding royal power.

The director of the Consumer Financial Protection Bureau enforces 19 laws dealing with every aspect of your finances - from your credit card to your student loans. Worse, the CFPB director enforces these laws as his whim dictates. Although the director's decisions can cripple the American economy, the director's office shields him from suffering any of the consequences himself. He answers to no one.

When a congresswoman demanded to know why the bureau spent over 200 million dollars of taxpayer money to renovate its office with a two-story waterfall in the lobby, the now-former director responded, "Why does that matter to you?"

You might think that the Constitution says a thing or two about placing all that power in the hands of one unaccountable bureaucrat. Yet the second-highest court in the land recently upheld the director's position. Now it's up to the Supreme Court to restore our Constitution's system of checks and balances.

The Founders knew that checks and balances were needed not just for their own sake, but to protect liberty. They designed a system in which the people may hold bureaucrats accountable, because they well understood that even a consumer protection bureau may fail to protect the consumer.

States taking over where CFPB is leaving off
CFPB Deferment of Enforcement Authority to States Will Lead to Increased Scrutiny. 3/27/2018

At a recent gathering of states attorneys general, Mick Mulvaney, Acting Director of the Consumer Financial Protection Bureau ("CFPB" or "Bureau") indicated his preference that they take the lead on the enforcement of consumer protection laws along with state regulators. According to Acting Director Mulvaney, "States know best how to protect their own consumers". This approach marks a stark contrast from the previous regime at the CFPB. Historically, under the CFPB's previous director, Richard Cordray, states often took a back seat to the CFPB on enforcement actions. This aggressive enforcement policy was often criticized as many believed this authority was used solely to set new industry standards independent of the rulemaking process. Mulvaney is determined to change the narrative. However, such a shift in the CFPB's enforcement philosophy should not be interpreted as a loosening of the proverbial "oversight belt". Rather, the "oversight belt" is still tight and will continue to get tighter; as now, it is being worn by a new , more politically charged and unpredictable source: states and cities. Read more at InsideARM


Benefits of Selling Receivables to a Qualified Partner. March 27, 2018

Many creditors that do not have experience selling receivables portfolios are reluctant to start selling their debt. There have been plenty of negative headlines over the past 5 years, attacking debt buyers and their business models, and inexperienced sellers just do not know where to start. Those creditors that can look past the negative headlines, can quickly find qualified debt sale partners that help the creditor to establish immediate cash flow for otherwise value-less accounts while minimizing compliance and brand risks.

To assist creditors with identifying legitimate debt buyers Receivables Management Association (RMA) has created a comprehensive certification program. The RMA Certification Program sets minimum requirements for debt buyer, collection agencies, law firms, brokers and other receivables professionals that exceed those set by Federal, State and local regulations. Certified debt buyers must meet specific education requirements, have appropriate policies and procedures in place along with a list of other certification requirements. To ensure that certified debt buyers meet minimum requirements, they are subject to third party audits every 3 years, the results of which are reported to RMA. RMA certified debt buyers provide a great starting point for identifying a qualified partner. By selling accounts to a qualified partner, creditors are able to achieve their goals while minimizing associated risks. Read more at NATIONAL DEBT HOLDINGS

CFSA Conference _ Expo

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:

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

National Debt Holdings

CFPB Indicates Softening of Lending Protections. 3.26.2018

The Trump administration is relaxing many of the bureau's regulations

How much regulation is too much regulation? This has been a long-standing question among those in the financial industry and, at least in the immediate future, it looks like less regulation will be the goal.

In the wake of the 2008 financial crisis, the Obama administration took several proactive steps to stiffen lending rules and promote accountability - something that was clearly necessary in the midst of tremendous carelessness by both the financial community and the general public.

But as the recession moves further and further into the rear-view mirror and the economy continues to strengthen, the question is: Do we really need so many strict regulations and lending rules?

The Trump administration says no - and it's taking action to relax many of the lending protections that the Consumer Financial Protection Bureau has enforced over the last decade.

CFPB to relax stance
In order to understand the CFPB and its role in the financial industry, you first have to understand the relationship it shares with the White House. It was initially launched by Elizabeth Warren and the Obama administration as a way of curbing excessive lending practices and preventing abuse. Over the years, however, it became just another tool for increasing regulations and putting a few powerful people in Washington in charge of the flow of money into impoverished communities.

The $300B Employee Financial Stress Tax On Employers. 3/27/2018

Financial stress costs employers $300 billion in lost employee productivity. And in the case of one desperate employee, her job when not having the money to buy her daughters medicine drove her to steal money from the company. That story built a company, FinFit, and President David Kilby and Karen Webster use three other data points to explain how 100,000 employers are using financial wellness platforms - including short term loans - to help employees get financially fit.

Four hundred dollars.

That's the dollar amount that is out of reach for a significant number of employees in a world where financial stress is commonplace.

It's where an emergency, such as car repairs or a broken water heater, means choosing between fixing those items or paying the rent, perhaps.

It's an oft-quoted stat, illustrating how ill-prepared many individuals and families are to deal with shocks and unforeseen events. Thus: short-term lending, massive debt and a financial black hole that gets deeper and deeper.

In the latest Data Drivers, the question arose: Should employers care when their workers are in financial distress?

David Kilby, FinFit president, told Karen Webster that employers have - or should have - a vested interest in how their employees are coping with financial reality.

The company - which provides both financial education and short-term lending programs to more than 100,000 employers, who in turn offer them to their employees - was born of Kilby's personal experience. Read more at PYMNTS.COM

CFSA Conference CFSA Conference

Three Tips to Improve Credit Card Processing Costs. by Adam DiVeroli

As a business, each expense counts, including credit card processing costs. Credit card processing is a necessity to businesses today, but it comes at a price, is very complex, and complicated to understand. Furthermore, for online businesses and companies with recurring customers the threats of fraud and loss are very high. To improve your company's profit margin and reduce risk, we discuss steps you can take to protect your sales and mitigate expenses, potentially saving thousands of dollars each year.

Chargeback Management
Chargebacks can be the death of a business, not only as a loss of revenue, sales and product, but with the potential loss of card processing services. The card brands have specific tolerances based on the ratio of sales to chargebacks and disputed transactions. Anything over a 1% ratio of chargebacks to sales, jeopardizes your ability to accept credit cards as a form of payment.

When shopping for payment processing services, processors look at each of the KPIs of your current processing to establish your risk profile. The more chargebacks that you have increases the processor's risk of loss, as such your processing rates will be adversely affected. Merchant Boost employs a team of Certified Payment Professionals (CPP) with the expertise and experience in helping businesses better manage their payment ecosystem. We can help you to not only win a chargeback dispute, but also identify and reduce chargebacks from occurring in the first place.
Employment Skip Tracing

Senate Democrats warn Mick Mulvaney against repealing payday loan rule

The vast majority of Senate Democrats are worried that acting Consumer Financial Protection Bureau director Mick Mulvaney is going to kill major new federal regulations on payday loans.

Forty-three Democrats wrote to Mulvaney Tuesday not to undo the agency's payday loan rules, which he announced in January would be reconsidered.

"The CFPB's role in serving as a watchdog for American consumers while making our financial markets safe, fair, and transparent continues to be of critical importance," the Democrats wrote. "To this end, we urge you to end any efforts to undermine and repeal this critical consumer protection."

The rule was finalized in October under an Obama holdout director, Richard Cordray. After being appointed by President Trump, Mulvaney, who also is the director of the Office of Management and Budget, took the first step toward revising or undoing the rule by giving notice that it would be reconsidered. He also eased off some of the agency's investigations of payday lenders.

Of interest, several centrist Democrats did not sign the letter, including Missouri's Claire McCaskill, Montana's Jon Tester, North Dakota's Heidi Heitkamp, and West Virginia's Joe Manchin. All four senators are up for reelection in states that Trump won. Read more at WASHINGTON EXAMINER

A_S Management

Changing The Direction Of Debt Collection

Debt collectors are historically an unpopular group of people. Even the Bible has shade to throw their way. (Debt collectors, Biblically speaking, share a category with adulterers, swindlers and the unjust.)

Part of that is the nature of the beast. Spending money is a good deal of fun. Repaying money is not. No one wants to hear from the entity whose job it is to send polite reminders that a bill is due - or past due.

But the ill-will toward debt collection in the U.S. by the numbers is hard to explain away as a mere occupational hazard.

Debt collectors have been the second-leading major generator of consumer complaints since the Consumer Financial Protection Bureau (CFPB) added them as an area that consumers could log complaints against in June 2013. Mortgages have dominated the top spot since the database itself launched in 2012 - which is unsurprising given the CFPB was created following a crisis in mortgage underwriting. Read more at PYMNTS.COM

Dreher Tomkies LLP

Regulatory contracts needed to hold consumer financial bureau accountable

New leadership at the Consumer Financial Protection Bureau promises a whole new approach to running the agency. A new director will have the opportunity to swiftly implement a law-based approach to rule-making through rescinding guidance, changing enforcement priorities, and placing more rules through a more transparent notice and comment process. New leadership will be able to accomplish this objective in part because of the unprecedented independence and authority Congress placed in that agency.

But what's to stop the next CFPB director from falling into politically motivated abuses of discretion? The same discretion afforded to the agency could once again be used to swing the agency's priorities away from a rule of law approach, and away from clear guidance to help foster innovation in consumer finance. One tool the CFPB could use to cement interpretations of rules is the regulatory contract.

Consider the case of U.S. v. Winstar Corp. During the aftermath of the Savings & Loan (S&L) crisis, the Office of Thrift Supervision encouraged healthy thrifts to buy up distressed thrifts, and along the way they made promises to healthy thrifts in binding contracts about which accounting methods they could use in determining regulatory capital requirements. Read more at THE HILL

Advance Financial
The Advance Financial Compliance and Marketing team joined forces with Amerigroup  and 
Second Harvest Food Bank of Middle Tennessee  to provide food for those less fortunate. 
The team met up at a local Nashville church and helped serve 170 individuals
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. 

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