AFSPA
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

June 19, 2018


Trump To Tap Mulvaney Associate To Lead CFPB

President Trump plans to nominate Kathy Kraninger to lead the Consumer Financial Protection Bureau, the White House said on Saturday.

The post is currently held by interim director Mick Mulvaney, who also leads the Office of Management and Budget, where Kraninger is an associate director.

Kraninger is expected to continue Mulvaney's push to make the bureau more business friendly.

According to the statement from White House spokeswoman Lindsay Walters:

"She will bring a fresh perspective and much-needed management experience to the BCFP, which has been plagued by excessive spending, dysfunctional operations, and politicized agendas. As a staunch supporter of free enterprise, she will continue the reforms of the Bureau initiated by Acting Director Mick Mulvaney, and ensure that consumers and markets are not harmed by fraudulent actors."

The CFPB was established by President Obama following the 2008 financial crisis to assure that banks comply with consumer protection laws. Obama appointed Richard Cordray to lead the organization; he resigned this past November to run for governor of Ohio. Cordray was praised by consumer advocates for going after banks for wrongdoing. Read more at National Public Radio
  CFSA
OHIO: Payday lending bill's limits could increase with possible amendment

COLUMBUS, Ohio - Ohio Sen. Matt Huffman said he is working on an amendment to a payday lending limitation bill to allow people to borrow more money.

Huffman said he wants to increase the $500 per loan ceiling in House Bill 123 to $1,000 or $2,500. At the same time, the Lima Republican said he wants to limit people to one or two loans at a time. He said his amendment would require the state to create a database of loans that payday lenders would have to check each time they lend money.

H.B. 123 passed the Ohio House last week and is expected to have its first hearing in the Senate Finance Committee on Tuesday afternoon.

In 2008, Ohioans voted to cap short-term loans at $500 and 28 percent interest. But payday lenders avoided the limits by registering to do business under a different part of Ohio law. The Pew Charitable Trusts found on average Ohioans paid 591 percent APR, the nation's highest, on the loans. The payday industry disputes the figures. Read more at CLEVELAND.COM

MerchantBoost
Rent-A-Center to be sold in deal valued at $1.365 billion

Rent-A-Center said Monday that its board had accepted an $800 million, or $15-a-share, offer from Florida-based Vintage Capital. The deal is valued at $1.365 billion including debt.

Vintage Capital had first offered $13 a share last fall and then said last week that it would pay $14 a share.

And just a week ago, the Rent-A-Center board said it had ended its strategic review and had not received an offer it could accept.

Rent-A-Center shares gained $2.65, or 22 percent, to close at $14.68 a share on Monday.

Monday's offer is not subject to a financing condition and is expected to close by the end of the year. Shareholders are to receive cash for each share. And the $15-a-share offer represents a 49 percent premium over the closing price on Oct. 30, just before the board's announcement that it was evaluating strategic alternatives, including a sale.

The sale process was approved unanimously by the Rent-A-Center board, which includes seats controlled by the activist investor Engaged Capital. Engaged Capital had started pushing for a sale in 2016. Read more at DALLAS NEWS

National Debt Holdings
For consumer agency chief, Trump picks someone who's never stood up for consumers

President Trump has picked a nominee for director of the Consumer Financial Protection Bureau and, true to form, he's made a bad choice.

Trump this week will nominate Kathy Kraninger, a little-known White House budget official, to serve as the nation's top consumer watchdog.

She has no experience in consumer advocacy, no experience as a regulator and no experience in financial services.

What Kraninger brings to the job, according to a White House statement, is "a fresh perspective" and "management experience."

She has never held public office or run a government agency.

Ed Mierzwinski, senior director of the federal consumer program for the U.S. Public Interest Research Group, called Kraninger "completely unqualified" for the CFPB job.

Like other consumer advocates, he told me the suspicion is that Kraninger's main role at the consumer agency will be to do the bidding of her current boss, White House budget chief Mick Mulvaney, who has served as interim CFPB director since November - and has been single-mindedly focused on weakening the agency. Read more at LOS ANGELES TIMES

MicroBilt
Federal Judge Denies CFPB's Request to Halt Small-Dollar Lending Rule

Mulvaney's bureau continues to reconsider the rule finalized in 2017 under former director Cordray.

A federal judge June 12 denied a request submitted by Mick Mulvaney, acting director of the Bureau of Consumer Financial Protection, to stop the small-dollar lending market rule from taking effect.

The request was the latest move by Mulvaney and the bureau to address the controversial rule pushed through last fall under former BCFP Director Richard Cordray.

American Banker reports U.S. District Judge Lee Yeakel denied Mulvaney's request in a brief two-page ruling that was devoid of an explanation.

Mulvaney announced in January that the bureau would reconsider the rule, scheduled to go into effect in August 2019.

"If the bureau wants to change the rule before it goes into effect in August 2019, it will need to start on the [notice of proposed rulemaking] as soon as possible," Lucy Morris, a partner at Hudson Cook's Washington office and a former deputy director at the BCFP told American Banker.

Dreher Tomkies LLP
A "most serious problem" at the IRS: Private debt collectors

Last year the IRS reactivated a program using private debt collectors to collect unpaid taxes from individuals with delinquent tax debts. According to the National Taxpayer Advocate, the IRS' Private Debt Collection (PDC) program is a "most serious problem."

A troubling finding of a recent report was that taxpayers, whose tax debts were assigned to private collection agencies, entered into installment agreements that they are unable to afford, with approximately 43 percent earning income below their allowable living expenses.

To make matters worse, the program costs the U.S. Treasury more than the money it brings in. Part of the reason may be that the private collection agencies can keep up to 25 percent of what they collect.

The taxpayers most likely to be contacted by the program's private debt collectors are those identified by the IRS to have an inactive tax receivable. A tax debt is deemed to be "inactive" when the IRS removes it from their active case list for lack of resources or inability to locate the individual, or if more than a year has passed since the taxpayer had any interaction with the IRS for the collection of the over-due tax.

Private collection agencies will first request full payment of the debt. If the taxpayer can't immediately pay, the agency will then offer an installment agreement. Read more at CBS NEWS

Insight.tm
Former Banker, Now Regulator, Wants To Allow Banks To Make Payday-Style Loans

A powerful banking regulator appointed by President Trump could face tough questions in a Senate hearing Thursday about his efforts to allow big banks to make small, high-interest, short-term loans to consumers.

Joseph Otting is a former banking executive who is now in charge of an agency that oversees the nation's largest banks - including some that Otting used to help run. And he's slated to appear before the Senate Banking Committee, a panel that includes Massachusetts Democrat Sen. Elizabeth Warren, who has been sharply critical of the Trump administration financial regulators.

It's the first time in nearly 40 years that a banking executive has been in charge of the Office of the Comptroller of the Currency, or OCC, an independent financial regulator within the Treasury Department that regulates large banks across the country. Consumer groups have been nervously watching what Otting will do.

His track record as a banker gives them pause.

Otting had been the chief executive of OneWest Bank, which drew criticism for aggressive foreclosure practices after the housing crash. He worked there with Steven Mnuchin, who is now the Treasury secretary. OneWest was later sold and became part of CIT Group. As the chief of OCC, Otting is recusing himself from issues involving CIT Group, the OCC has said.

Employment Skip Tracing
Payday lending group loses lawsuit over record release

The Georgia Supreme Court on Monday ruled that correspondence between a Kennesaw State University professor and a payday lending organization she conducted a study for is subject to disclosure under the state's open records laws.

The ruling, hailed by open government advocates, means that Campaign for Accountability, a Washington-based watchdog group, can obtain communications between Kennesaw State statistics and data science professor Jennifer Lewis Priestly and the Consumer Credit Research Foundation, which touts studies favorable to payday lending.

Campaign for Accountability had filed requests under the state's Open Records Act after Priestly published an article about a study she did for Consumer Credit Research Foundation in 2014. The foundation gave her a $30,000 grant for the work.

When the university system agreed to turn over the correspondence, the Consumer Credit Research Foundation filed suit to block it. Read more at Atlanta Journal Constitution
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Mulvaney says he changed the name of the CFPB to 'send a message'

Mick Mulvaney changed the name of an agency he currently heads to "send a message" about following the law, he said Tuesday.

Mulvaney, the acting director of the Consumer Financial Protection Bureau, has changed the agency's name to the Bureau of Consumer Financial Protection to bring it into alignment with the text of the 2010 law that created it.

"We changed the name because it's the name in the statute," Mulvaney told reporters Tuesday at the agency. "And if ... your whole theme is going to be, 'we're going to follow the statute,' I thought it was a good, small way - but a very visible way - to send a message."

On Monday, the signage at the agency's headquarters across from the White House changed to read "BCFP," replacing the older "CFPB" signs.

Mulvaney said the changes cost nothing, and are a "good thing," to the extent that they get people asking about the underlying law. Read more at WASHINGTON EXAMINER
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ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION 
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