NEWS: June 15

NEWS is brought to you by AFSPA Endorsed SUPPLIERS

Trump Administration Calls for Major Revamp of Wall Street Rules. BLOOMBERG

The Trump administration laid out its highly anticipated plan for overhauling bank rules, calling on the government to ease, though not eliminate, many of the strictures that were imposed on Wall Street after the financial crisis.

The changes, outlined in a report released Monday evening by the Treasury Department, urge federal agencies to re-write scores of regulations that bankers have frequently complained about in the seven years since the passage of the Dodd-Frank Act. They include adjusting the annual stress tests that assess whether lenders can endure economic downturns, loosening some trading rules and paring back the powers of the watchdog that polices consumer finance.

The Treasury said its plan was designed to spur lending and job growth by making regulation "more efficient" and less burdensome. Unlike the bill passed last week by House Republicans, the report consistently calls for most Obama-era rules to be dialed back, not scrapped.

"Properly structuring regulation of the U.S. financial system is critical to achieve the administration's goal of sustained economic growth and to create opportunities for all Americans," Treasury Secretary Steven Mnuchin said in a statement.

The Treasury review, which President Donald Trump requested in an executive order in February, opens a new front in the administration's deregulatory push. While Mnuchin said the administration backs congressional efforts to roll back Dodd-Frank, the study focuses heavily on changes that can be made without legislation. Read more at BLOOMBERG

Dreher Tomkies LLP

Letter: Misrepresenting payday loans. by Shennen Phillips

A recent editorial presented an inaccurate portrayal of payday advances and the important role they play in the lives of families across our state.

Thousands of hardworking, middle-class consumers in Kansas - teachers, police officers, nurses - sometimes struggle to make ends meet between paychecks. When coping with financial difficulty, consumers first weigh their options, including more expensive options such as overdraft fees, unregulated Internet loans or missing a bill payment, and choose the product that best serves their personal and economic needs.

For many, a short-term loan from a regulated consumer lender - with a fixed, one-time fee that does not require collateral - is the most sensible choice.

In my position as a manager of an Advance America in Topeka, I'm reminded every day that real families are impacted by the services that we offer. An example of this is a woman who recently took out a cash advance to pay for unexpected car repairs. Already facing a tough situation, I'm proud that my company was there to alleviate some of her burdens. Two weeks later, as planned, she repaid the advance.

Though any form of credit can be abused or misused, we provide important protections to help our customers make informed decisions and become responsible borrowers. Our center employees walk each customer through all terms and fees associated with their loan, making sure they fully understand this information before borrowing. As a result, most customers use payday advances responsibly - about 90 percent of our customers repay their advances when due and 95 percent are ultimately paid off.

Consumers benefit when they have a wide variety of financial choices, and I'm proud to offer my fellow Kansans with a short-term loan option when they need it most. 

U.S. Treasury unveils financial reforms, critics attack. REUTERS
By Pete Schroeder and Lisa Lambert

The U.S. Treasury Department unveiled a sweeping plan on Monday to upend the country's financial regulatory framework, which, if successful, would grant many items on Wall Street's wishlist.

The nearly 150-page report suggested more than 100 changes, most of which would be made through regulators rather than Congress, Treasury Secretary Steven Mnuchin said in an interview. 

"We were very focused on, what we can do by executive order and through regulators," he said. "We think about 80 percent of the substance in the report can be accomplished by regulatory changes, and about 20 percent by legislation."

Republican President Donald Trump has gradually been nominating heads of financial agencies to carry out his agenda, but only Mnuchin and Securities and Exchange Commission Chairman Jay Clayton have been approved by Congress. Other agencies are operating under "acting" chiefs or have leaders appointed by Trump's Democratic predecessor, Barack Obama.

Changes proposed by the Treasury Department include easing up on restrictions big banks now face in their trading operations, lightening the annual stress tests they must undergo, and reducing the powers of the Consumer Financial Protection Bureau (CFPB), which has been aggressively pursuing bad behavior by financial institutions.

The plan would also expand the authority of the Financial Stability Oversight Council, which is chaired by Mnuchin, and change the way global capital standards are implemented to give U.S. banks a leg up against foreign rivals. Smaller banks would get some relief as well: Lenders with $50 billion or less in assets would have to jump through fewer regulatory hoops than rivals with multitrillion-dollar balance sheets.

The industry has long sought many of the proposed changes, which would mostly benefit banks like JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N), Citigroup Inc (C.N), Wells Fargo & Co (WFC.N), Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N).

Industry trade groups applauded the proposal on Monday evening, though some said they wished there were more specifics on tricky questions, such as what level regulators should set for banks' assets before subjecting them to stricter rules. Read more at REUTERS

The Industry CARES!
Advance Financial  
Advance Financial
Last week some of our team members in Chattanooga lent a helping hand to the Chattanooga Area Food Bank. The team sorted and packaged food that will be delivered to those less fortunate. Great job guys!

How To Lead A Healthier, Happier Workforce. FORBES

Employee wellness isn't simple, and it's not a one-step process. Employee wellness is complicated because of all the factors that contribute to health and wellness. While providing fresh fruit in place of donuts for a morning team meeting is a step in the right direction, it doesn't even begin to scratch the surface of employee wellness.

Wellness programs need to consider the full continuum of mental, emotional and physical elements of an employee to improve corporate wellness initiatives. Supporting holistic well-being of employees takes into account the diverse wellness needs of employees, rather than just focusing on physical health. It's essential for employers to recognize that all aspects of wellness are related and influence one another. For example, an employee who eats healthily and works out regularly might still be performing poorly at work due to high workplace stress - despite eating well and exercising.

Combining all aspects of well-being is an effective strategy to improve employees' overall quality of life, job satisfaction, happiness, engagement and work performance. Consider some of the following to help encourage and support a holistically enriching life for your employees:

Investing in the mental health of employees is good business. According to NAMI (National Alliance on Mental Illness), approximately 1 in 5 U.S. adults (or 43.8 million) experiences mental illness in a given year. Another 1 in 25 U.S. adults (or 9.8 million) experiences a serious mental illness in a given year that substantially interferes with or limits one or more major life activities. This means that some of your employees are living with a mental illness, and it might be significantly affecting their work performance. Read more at FORBES

Incite Business

Trump's Treasury puts consumer watchdog in crosshairs. POLITICO

President Donald Trump's Treasury Department called for broad changes in the way the government oversees the nation's banks, including a plan to rein in the Democrats' crown jewel of regulation: the Consumer Financial Protection Bureau.

In its first substantive move into the financial regulatory debate, the Treasury Department issued a report Monday calling for the popular watchdog agency to be stripped of much of what it termed its "unchecked regulatory power."

Republicans have been fighting the agency since the passage of the 2010 Dodd-Frank Act, the landmark law passed after the financial crisis that imposed new rules across the finance industry.

The report recommended curbing the consumer agency's jurisdiction, including its supervisory authority. It also suggested a legal change allowing the president to fire the bureau's sole director, or said the agency could be restructured into a multiperson commission.

"The CFPB's combination of an unaccountable structure and broad, unchecked regulatory power is unprecedented," the report said. Its sweeping authority has "led to regulatory abuses and excesses," it charged.

The bureau was established by Sen. Elizabeth Warren (D-Mass.), who blasted the report.

"This report calls for radical changes that would make it easier for big banks to cheat their customers and spark another financial meltdown." Warren said in a statement. She said the administration wants to "gut the agency that's held cheaters accountable and returned more than $12 billion to consumers." Read more at POLITICO

FactorTrust Supports CFPB on Examining "Credit Invisibles" in Establishing Credit

ATLANTA--(BUSINESS WIRE)--FactorTrust, The Alternative Credit Bureau, supports the Consumer Financial Protection Bureau (CFPB) for recently examining findings that bring to light the plight of credit invisibles in their transition to establish credit.

FactorTrust has long-provided alternative credit data, analytics and risk scoring information that lenders need to make informed decisions about underbanked consumers (less than 700 credit scores) and credit invisibles, which the CFPB identifies as about 11 percent of U.S. adults (or 26 million people)-with no credit history at the Big 3 credit bureaus.

The CFPB study1 issued on June 7, 2017 indicates that while consumers' economic situations contribute to establishing credit history, consumers often become visible through credit-negative events, such as debt collections and defaults.

FactorTrust, in its recent Comment to the CFPB's request for information (RFI) on the use of alternative data and modeling techniques in the credit process, contends, however, that consumers can become equally visible with positive payment behaviors not reported to the Big 3 bureaus.

FactorTrust found, for instance, that 57 percent of underbanked consumers had a comprehensive debt to income (DTI) ratio of less than 50 percent. For these consumers, less than half of their income was earmarked for loan payments. Lower DTI typically indicates a lower-risk consumer who is better positioned to responsibly take on new financial obligations.

Furthermore, FactorTrust noted that consumers with lower DTI, had a higher share of debt payments residing outside of the Big 3 bureaus, in alternative credit bureaus like FactorTrust.

"The data we collect from alternative lenders is not reported to the Big 3 bureaus and enables visibility into the creditworthiness of underbanked consumers," said FactorTrust CEO Greg Rable. "Not only can we look to data points in our database to outline positive payment scenarios, but we can collect it in real-time, versus the monthly timeframe of the Big 3 bureaus. Alternative lending tends to have shorter loan terms than traditional lending options, which makes reporting of on-time payments and other data accessible around the clock to lenders, enabling them to make smarter, faster decisions about the creditworthiness of credit invisibles."

FactorTrust is differentiated from the Big 3 bureaus by its more than 250 million unique, behavioral and transactional data points untapped by these traditional sources.

Read the release FactorTrust, visit or contact 866.910.8497

Save the Date

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

315 Tuscarora St., Lewiston, NY 14092