May 1, 2018

Comptroller of the Currency Loosens Rules On Short-Term Small-Dollar Loans

Joseph Otting, Comptroller of the Currency, says that rules on short-term, small-dollar lending should be relaxed so U.S. banks are able to offer loans to cash-strapped consumers.

According to Financial Times, strict underwriting rules and the negative publicity surrounding loans with such high annual interest rates have caused banks to avoid providing these types of unsecured loans.

But research shows there is definitely a need for the financing. A survey last year by the Federal Reserve found that nearly half of American families do not have enough in savings to cover a $400 emergency expense, and would have to borrow or sell something in order to do so.

As a result, online lenders have flooded the market, some of them focusing on consumers with low credit scores or no scores at all.

While speaking at a conference hosted by the American Bankers Association on Wednesday (April 25), Otting said the restrictions should be relaxed so that U.S. banks can underwrite small-ticket loans, typically between $500 and $5,000, over periods of 45 and 90 days.
Your local post office could become a bank if this bill passes

Senator Kirsten Gillibrand, D-N.Y., is proposing legislation aimed at putting an end to current payday lending practices by giving some banking services a new home: the U.S. Post Office.

The legislation, called the Postal Banking Act, would make retail banking services available at all U.S. Postal Service locations. That amounts to 30,000 post offices nationwide.

Services would include small-dollar loans for consumers that offer low fees and low interest rates.

Those transactions would compete with payday loans, a short-term advance that typically comes due with your next paycheck.

The terms for payday loans are often unfavorable, said Alex Horowitz, senior research officer for the consumer finance project at Pew Charitable Trusts, an independent research organization.

About 12 million individuals use payday loans annually, according to Horowitz. The average loan is $375 for a period of five months, which accrues about $520 in fees, he said.

"These loans are extraordinarily expensive with annual percentage rates near 400 percent," Horowitz said. Read more at CNBC
Acting CFPB chief mulls taking down public complaint database

The acting director of the Consumer Financial Protection Bureau (CFPB) on Tuesday said he might remove a database of complaints to the agency from public view.

Acting CFPB chief Mick Mulvaney said the bureau's public consumer complaint database contained information not vetted by the agency that could be used unfairly against banks and lenders.

"I don't see anything in here that says I have to run a Yelp for financial services sponsored by the federal government," Mulvaney said, referring to the Dodd-Frank Act, the 2010 law that established the bureau.

Mulvaney's remarks before a Washington, D.C., conference reflect his earlier pledges to make the CFPB more receptive to the concerns of banks. Bankers visiting Washington to push for rollbacks to Dodd-Frank gave Mulvaney a standing ovation as he promised to end the CFPB's record of "regulation by enforcement." Read more at THE HILL
National Debt Holdings
The unbanked are scam targets, too. by Philip Burgess

Convenience is king in the consumer market, and in the name of making buying easier, Americans have a plethora of ways in which to pay for goods and services, including credit card, debit, mobile device and prepaid cards. But at the same time, transaction simplicity has created an opening for identity thieves, who now have more opportunities to steal sensitive data that can cause financial ruin.

But it's important to note that the underbanked and unbanked are also in fraudsters' crosshairs. With an estimated 34 million households not having traditional banking services, according to the Federal Deposit Insurance Corporation, it's a cause for concern for a swath of the country's consumers.

One of the more common vehicles by which money marauders bilk the unbanked is through prepaid card fraud. Prepaid gift cards are popular transaction vehicles, because they allow users to spend freely without worrying about overdrawing. They can also add funds electronically whenever they run out. Their simplicity has led to increased usage, as 38 percent of consumers use prepaid debit cards during the typical year, according to data from Blackhawk Network, more common than mobile wallets or peer-to-peer payment systems. Back in 2009, only 9.7 percent of households used prepaid cards, based on figures from the FDIC. Read more at MICROBILT
Employment Skip Tracing
Mick Mulvaney's full speech to bankers about "burning down" consumer protection

As a legislator, Mick Mulvaney called the Consumer Finance Protection Bureau (CFPB) a "sick, sad, joke." Now that he's the head of the CFPB, he's been undercutting the agency-while US consumers face a barrage of financial frauds, debt collection frauds, and unscrupulous lending practices.

The CFPB was designed to help everyday people make financial decisions and protect them from predatory companies after the 2008 financial crisis. But in a speech to an American Bankers Association conference in Washington DC yesterday, Mulvaney's message was about creating an agency that works with the financial services industry, at one point comparing his bureau to the bank-backing Federal Deposit Insurance Corporation. Read more at QUARTZ MEDIA
Why Your Business Still Needs To Be Available By Phone In This Digital-First World

People use their phones for texting, for accessing their emails and social media pages. And they use them to search for information, products and services. Here's a shocker: they also still use them to make actual phone calls. And sometimes, they even call friends, family members, and, yes, businesses that their search results have brought up. Mobile users do want the convenience of calling, as opposed to typing in messages or filling out forms on their devices. Here are some results of studies/surveys on just this topic, published by Search Engine Watch:

In 2013, Google conducted a study with results that 70% of mobile users call a business directly from a Google search, if that business has a click-to-call button.
  1. A later survey and prediction by Marchex stated that, by the end of 2015, as many as one billion phone calls a month would be made to businesses, for a variety of purposes.
  2. Even more recently, another study estimates that, by 2019, there will be as many as 162 billion monthly calls to businesses from smart phones.
  3. The same article also reported that 74% of consumers would "drop" a business and go elsewhere, after a poor phone experience.
Dreher Tomkies LLP
Don't Give Lawyers A License To Use Abusive Debt Collection Practices

Bill Before Congress Would Shield Debt Collection Law Firms from Being Held Accountable for Harassment and Intimidation Tactics

NEW YORK - Attorney General Eric T. Schneiderman, part of a bipartisan coalition of 20 state attorneys general, submitted a letter today urging Congress to oppose the Practice of Law Technical Clarification Act of 2018, which would strip away protections against debt collection attorneys who take unfair advantage of state courts to intimidate, harass and deceive consumers.

"As the Trump administration continues to dismantle basic protections for consumers, Congress is now considering doubling down - attempting to shield abusive debt collection law firms from being held accountable for their intimidation and harassment tactics," said Attorney General Schneiderman. "My office has not hesitated to take on crooked debt collectors that target New Yorkers, and we will continue to do so, no matter what happens in Washington." Read more at ATTORNEY GENERAL
A_S Management
CFPB's regulation by enforcement halts -- for now

Regulation by enforcement is over at the Consumer Financial Protection Bureau, at least while Acting Director Mick Mulvaney leads the bureau, he told members of Congress this month.

But in testimony to the Senate Committee on Banking, Housing, and Urban Affairs and the House Financial Services Committee in mid-April, Mulvaney said eliminating regulation by enforcement, a common practice of the former director, Richard Cordray, does not mean the bureau will cease to uphold consumer protection laws.

"Regulation by enforcement is where people find out that you accuse them of breaking the law after you file a lawsuit against them. That's what I stopped," Mulvaney said. "I believe you have a right to know what the law is before I sue you for breaking it."

Though he publicly criticized the CFPB before leading it, Mulvaney maintained throughout his testimony that he is going by "the book" with the bureau, continuing investigations and litigation cases initiated under Cordray. Read more at AUTONEWS.COM
In a big win for the mortgage industry, the CFPB finalized an amendment to its "know before you owe" mortgage disclosure

In a big win for the mortgage industry, the Consumer Financial Protection Bureau finalized an amendment to its "know before you owe" mortgage disclosure rule that gives lenders more flexibility to adjust closing cost estimates and pass those increases on to borrowers.

The rule was initially designed to eliminate the sticker shock to borrowers who often faced significantly higher charges at the closing table than what was originally disclosed.

However, the rules created a situation that lenders have called the "black hole," when deadlines for delivering revised upfront and closing disclosures overlapped, forcing mortgage companies to absorb cost increases through no fault of their own.

The amendment, originally proposed last July, is designed to address the black-hole issue, which industry groups told the CFPB was a frequent and costly compliance pain point.

"Creditors may use Closing Disclosures to reflect changes in costs for purposed of determining if an estimated closing cost was disclosed in good faith, regardless of when the Closing Disclosure is provided relative to consummation," the final rule states.
Community Involvement
Advance Financial
Some of our Knoxville team members had a blast at the Big Brothers Big Sisters
Bowl  for Kids' Sake event in Sevierville, Tn. We were also happy to donate
$5,000  to this great organization.

Mick Mulvaney isn't blowing up the CFPB

It's more like death by a thousand cuts, critics say.

Mick Mulvaney wanted to get rid of the Consumer Financial Protection Bureau when he was in Congress, once calling the watchdog agency he now heads a "sick, sad" joke.

But to the surprise of consumer advocates and people who worked at the bureau under former President Barack Obama, he hasn't blown the place up.

Mulvaney has continued with dozens of lawsuits and nearly 100 investigations into corporate abuses in the five months since President Donald Trump installed him as the bureau's acting director.

On his watch, the agency issued its second-largest fine ever - $500 million against Wells Fargo for auto insurance and mortgage-lending abuses. The only major regulation he has reined in is one curbing payday lending, which Republicans in Congress have in their cross hairs anyway. And the staff of 1,700 has only 10 fewer employees now than on the day he walked in the door.

CFPB supporters still fear that Mulvaney is weakening the agency. He has put out a dozen or so requests for public input on ways to overhaul the bureau, telegraphing his intention to limit its reach. And he is thought to be slow-walking enforcement, with no new cases being brought since he took over. Read more at POLITICO

Thank You to the AFSPA Supporters

Cottonwood Financial *****
Advance Financial 24/7 *****
1st Choice Money Center ****
Cashsmart Ohio ***
National Debt Holdings *** + Supplier Level
Texas Organization of Financial Service Centers *** Association
Priority Payout Corp *
Community Financial Services Association (CFSA) Association + Partner
TransUnion / FactorTrust - Supplier Level + Partner
MicroBilt - Supplier Level
Dreher Tomkies LLP - Supplier Level
DECISIONCloud - Supplier Level
Merchant Boost - Supplier Level
National Debt Holdings - Supplier Level
Employment Skip Tracing -Supplier Level
A&S Management - Supplier Level

If you Support what we do
***** Supporter Level
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