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ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
July 23, 2019

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CFPB Report: One In Four Consumers Have Debt In Collections

The Consumer Financial Protection Bureau said in a report that a bit more than one in four - to be specific, 28 percent - of consumers have had at least one debt in collections.

The report, released Thursday (July 18), examined collections tradelines - information about a consumer account sent to a credit reporting company, generally on a regular basis - from 2004 to 2018. The data spanned debt buyer tradelines, representing debt bought from creditors that has been charged off by creditors and non-buyer tradelines, which attempt to collect on behalf of the original creditor.

The percentage of consumers sampled with third party collections never went below 27 percent or above 34 percent. Peak levels - and levels of 33 percent and above - occurred after the financial crisis into 2013.

The agency said in its report, titled "Market Snapshot: Third Party Debt Collections Tradeline Reporting," that as many as two thirds of non-buyer tradelines had indicated medical debt in collection, according to the latest data as of the second quarter of 2018. Medical debt comprised 58 percent of total third party collections in that period. Buyer tradelines primarily reported banking, retail and financial debt.
Read more at PYMNTS.COM

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CFPB, FTC and States Announce Settlement with Equifax Over 2017 Data Breach

WASHINGTON, D.C. - The Consumer Financial Protection Bureau (Bureau), the Federal Trade Commission (FTC), and 48 states, the District of Columbia and Puerto Rico announced a global settlement today with Equifax that would provide up to $700 million in monetary relief and penalties. In a complaint and proposed stipulated judgment filed in federal district court in the Northern District of Georgia, the Bureau alleges that Equifax engaged in unfair and deceptive practices in connection with the 2017 data breach of Equifax's systems that impacted approximately 147 million consumers. The proposed settlement with the Bureau, if approved by the court, will provide up to $425 million in monetary relief to consumers, a $100 million civil money penalty, and other relief. The Bureau coordinated its investigation with the FTC and attorneys general from across the country. In total, the settlements with these entities would impose up to $700 million in relief and penalties.

"Today's announcement is not the end of our efforts to make sure consumers' sensitive personal information is safe and secure. The incident at Equifax underscores the evolving cyber security threats confronting both private and government computer systems and actions they must take to shield the personal information of consumers. Too much is at stake for the financial security of the American people to make these protections anything less than a top priority," said CFPB Director Kathleen L. Kraninger.
Read more at Consumer Financial Protection Bureau

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NEW MEXICO: A lending law graveyard

In a Roundhouse meeting room packed with lobbyists and a few consumer protection advocates, the House Business and Industry Committee on Friday quietly tabled a bill that would have capped the annual percentage rates for payday loans and other small loans at 36 percent. The 11-member panel didn't vote on the matter. The committee's chairwoman, Debbie Rodella, D-Española, simply asked her members if anyone objected. No one did.

It was an unceremonious end to a proposal that consumer protection advocates have pushed for years, trying to rein in an industry they say preys on the poor with annual percentage rates that can climb as high as 9,000 percent. And no one, not even the bill's sponsor, who was not present, seemed surprised. And they shouldn't have been.

Since 2010, at least 11 bills that would have capped interest rates on storefront lenders have met quiet deaths without ever making it out of their initial committees. They were among 32 bills related to regulating the storefront lending industry that were killed in that period. While 15 other states, including Arizona, New York and Pennsylvania, have imposed such caps or banned payday lending altogether, lawmakers in New Mexico, which has among the most permissive small-loan lending laws, have been staunchly resistant.
Read more at NM Political Report

MaxDecisions
Lending as a Service

These are the biggest complaints about debt collectors

A strong federal law, the Fair Debt Collection Practices Act, protects consumers against certain unfair collection practices. It applies only to outside, or third-party debt collectors (not creditors collecting their own debts) and only for personal (not business) debts. State laws may provide additional protection.

In its 2018 annual report to Congress about debt collection complaints, the Consumer Financial Protection Bureau described collection complaints received by the Federal Trade Commission.

In 2018, the FTC received 84,500 complaints about debt collectors - down from 88,000 in 2017. A complaint does not mean a law has been broken, and some complaints may be the result of overseas debt collection scammers who harass consumers.

1. Attempts to collect a debt not owed
Percentage of complaints: 39%
Read more at MARKETWATCH

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WISCONSIN: Senate budget loosens payday loan regulations

While the Senate on Tuesday backed off of highly criticized proposals to gut the state's open records law and politicize the panel overseeing the retirement system, it left in place the deregulation of the payday loan industry, which critics refer to as predatory lenders.

"We are particularly disappointed by the last-minute insertion through Motion 999 of provisions to expand the power of predatory lending in Wisconsin," Andrea Kaminski, executive director of the League of Women Voters of Wisconsin, said in a statement. "Payday lending traps many low-income people in compounding interest and spiraling debt."

Critics say payday lenders fleece the poor by charging exorbitant interest rates, which cash-strapped borrowers are often forced to roll over into new loans.

The provision, part of the Motion 999 last-minute Republican budget amendments which drew howls from open government advocates and former and current public employees, was approved on Tuesday in the Senate version of the budget bill, which the Assembly is currently taking up.
Read more at MADISON.COM

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Consumer Financial Protection Bureau Releases Report on Third-Party Debt Collections

WASHINGTON, D.C. - The Consumer Financial Protection Bureau (Bureau) released a report today that found that more than one-in-four consumers with a credit report have at least one debt in collection by third-party debt collectors.

Today's report, which covers 2004 to 2018, is drawn from the Bureau's Consumer Credit Panel (CCP), a nationally representative sample of approximately 5 million de-identified credit records maintained by one of the three nationwide credit reporting companies. Close to 900 third-party debt collectors furnished collection tradelines in the CCP. A tradeline is information about a consumer account that is sent, generally on a regular basis, to a credit reporting company. Tradelines contain data such as account balance, payment history, and status of the account.

Today's findings show that more than one-in-four consumers (28 percent) with a credit report in the CCP in 2018 had at least one third-party collections tradeline on their file. The study also found that more than three-out-of-four third-party collections tradelines are for non-financial debt. More than half (58 percent) of these tradelines are for medical debt and another 20 percent for telecommunications or utilities debt. Positive payment information is generally not furnished for medical or telecommunications debt.
Read more at Consumer Financial Protection Bureau

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Alternative Credit Reporting
Community
Amscot Financial contributes mini-grants to 16 non-profit service groups

Amscot Financial, a leading provider of convenient, consumer-oriented financial services, recently awarded mini-grants of $250 to $3,500 to support 16 different non-profit service organizations located in the Florida communities where the company serves several million consumers.

"Doing the right thing means doing right by our community," says Ian MacKechnie, Founder and CEO of Amscot Financial. "By supporting local organizations we can help create a meaningful impact here in our own backyard."

Mini-grants went to the following organizations:

Central Florida Family Health Center Inc, Seminole County. They are a private, non-profit community health center, serving low-income, uninsured, underinsured, and underserved populations in Central Florida. Services include adult and pediatric family practice, obstetrics and gynecology, dentistry, podiatry, pharmacy, laboratory, and X-ray services. For more information, please visit: www.mytruehealth.org

Florida Police Athletic League, Brevard County. Their mission is to combat juvenile delinquency by offering young people ages six to 18 a meaningful and effective program designed to harness the positive energy of youth, and to... 
Read more at AMSCOT

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Dreher Tomkies LLP is a law firm concentrating in the areas of Banking and Financial Services law.

Americans' No. 1 financial complaint

Quick quiz: Which financial product prompts the most complaints by consumers?

If you're thinking of things like risky payday loans or high-interest-rate credit cards, try again. The product that consistently causes people the most grief is mortgages, according to an analysis of the Consumer Financial Protection Bureau's complaint database by the U.S. PIRG Education Fund.

Since the federal agency started accepting mortgage complaints in 2011, it's received more than 138,000 grievances from consumers, more than any other product and representing about 38 percent of all published complaints.

The report found that one bank stood out, earning the dubious distinction of being the most complained about company in 45 states and the District of Columbia: Bank of America (BAC).

Bank of America has attracted more than 31,000 complaints about mortgages, or almost 23 percent of overall complaints, the study found. That was followed by Wells Fargo (WFC), with more than 19,000 complaints, or about 14 percent, and Ocwen (OCN), with about 15,500 complaints, or 11.2 percent of overall grievances.
Read more at CBS NEWS

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Lawmaker: Lack of financial literacy could be a problem for Facebook Libra users

Lawmakers interrogated David Marcus, Facebook's cryptocurrency chief, asking how the company will educate the 1.7 million unbanked customers it plans to reach.

Elected officials at the House Financial Services Committee hosted a hearing on Wednesday to discuss the social media company's plans for its proposed digital currency Libra.

"How do you take somebody from my district who is underbanked or unbanked and educate them if there's no financial literacy?" asked Rep. Joyce Beatty, D-Ohio, at the hearing.

She expressed concern about the lack of financial education for the unbanked and underbanked, who might not understand how Libra works.

"Where is my protection? What happens if I do this, and we already know I'm ignorant to the process, and then I want my Libras back?" asked Beatty. "With no problem, can I put that money back into my account?" Read more at CNBC

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Opinion: Americans can't afford Trump administration protecting payday-lending debt traps

In the wake of the financial crisis, the Consumer Financial Protection Bureau (CFPB) was established to stop predatory financial activity central to the collapse. For years, the CFPB has stood up to financial predators, holding companies acting in bad faith accountable for wrongdoing and returning $12 billion of ill-gotten profits to consumers. When the CFPB saw predatory payday and auto title lenders targeting the poorest Americans with high-interest debt traps, it studied the issue for five years and proposed a new consumer protection rule to end the predation. Today, the Trump administration is attempting to abandon those efforts and to allow payday lenders to continue to profit off of debt and misery while charging outrageously high interest rates.

Many payday lenders advertise manageable, short-term loans while knowing that their products lock in the average consumer for 11 months and that most consumers pay more in fees than they borrowed in the first place. This is all possible because interest rates approach 400 percent, and by the time consumers realize they can't pay back what they've already borrowed, lenders are eager to continue the cycle with another loan. Most lenders succeed when their customers are able to repay their loans. In contrast, payday and auto title lenders have created an industry that succeeds when their borrowers fail to repay.
Read more at THE HILL

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AFSPA
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

Alternative Financial Service Providers Association
757.737.4088

315 Tuscarora St., Lewiston, NY 14092
dan@afspassociation.com
www.afspassociation.com