March 14, 2019

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Dems Vow To Reverse CFPB Actions Under Mulvaney

The Consumer Financial Protection Bureau came under fire from the House Financial Services Committee, which is now controlled by Democrats, during a hearing Thursday (March 8).

According to a report in the Associated Press, during the hearing Committee Chair Rep. Maxine Waters argued the Trump-appointed leadership is trying to undermine the agency's mission.

According to the Associated Press, Waters said the Trump Administration has "undertaken a sustained effort to destroy the agency." She said she's committed to reversing the damage caused by interim head Mick Mulvaney, who is now the acting chief of staff for Trump. Kathy Kraninger succeeded Mulvaney in December. Mulvaney was a critic of the CFPB before he was made director. When he was in charge, he called for many of the rules and regulations put in place by the CFPB to be scaled back.

The appointment of Kathy Kraninger was also opposed by Democrats due to her lack of relevant experience. Critics argue Kraninger will run the CFPB similar to how Mick Mulvaney did. Under her charge, the CFPB announced in February it will get rid of many consumer protections that the payday lending industry has to follow. This is a win for payday lenders that argued regulations on the part of the government could hurt a big portion of their business.   Read more at PYMNTS.COM

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Poll: Most Americans not interested in new regulations for big tech companies

Tightening regulations on Google, Facebook and Amazon, which have increasingly become the rhetorical targets of President Trump and some of the Democrats who want to replace him, does not appear to be something that most Americans are interested in, according to a new Hill-HarrisX poll.

When asked to choose between whether big tech firms should be regulated or be allowed to operate freely, a majority of registered voters, 53 percent, chose the latter option. Forty-seven percent said the companies should face more government rules.

The results show that the public is closely divided on the newly emerging issue.

Trump has repeatedly called out social media companies for alleged unfairness to conservatives and has accused Amazon of bending government rules in order to maximize its profits. While the administration has begun opposing major media consolidations, such as a merger between AT&T and Time Warner, it has yet to push for legislation that would rein in technology conglomerates.

On the Democratic side, two of the party's presidential candidates, Sens. Elizabeth Warren (Mass.) and Amy Klobuchar (Minn.), have begun calling out large tech firms and arguing for new policies to address them. In an interview with The Washington Post published last Tuesday, Klobuchar said that internet giants have become "a major monopoly problem." Last Friday, Warren unveiled a new proposal to break up Facebook, Amazon and Google. Read more at THE HILL

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Title Loans - Our Big List of Pros and Cons

Do you need some fast cash? One of the best ways to get a fast influx of cash to meet your short-term needs is the car title loan. However, as suggested by the name, a title loan means the title of your car will be required by the lender as collateral.

This quick cash can help get you through a rough patch as long as you know you will be able to pay off the loan on budget and in time. However, that requires that you know everything possible about car title loans- both of their pros and cons - before you get started.

Pros: Individuals with xxx credit can qualify for a title loan.

It is tough to secure a loan if you have xxx credit. Lenders take a look at your credit rating and will either tell you they can't help you - or will charge an exorbitant interest rate so that the loan isn't worth it any longer.

On the other hand, title loans make it possible for you to put up your car as collateral to get a loan even when you have xxx credit. Read more at BALTIMORE POST

Alternative Credit Reporting

Alternative credit data gains acceptance

Auto lenders who study alternative data can identify consumers who are eligible for loans even if they don't have a traditional credit history to prove it.

Looking at alternative data gives auto lenders a fuller picture of their applicants that can broaden their portfolios and put more consumers into vehicles. The concept has gone from a debated topic to one that has gained wide acceptance, said Brian Landau, automotive business leader at TransUnion. He said it was starting to pick up some momentum after the Great Recession, and that momentum seemed to reach its pea
 in the last two years.

Alternative credit data in lending typically refers to gathering borrower information outside of a conventional credit score. It looks at consumer payments on items such as cell phones, utility bills, rent and payday loans.

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

CFPB does not seek lifting of stay of compliance date for payday loan rule's payment provisions in new status report filed in trade groups' lawsuit. by Ballaqrd Spahr LLP

The CFPB and the two industry trade groups that filed a lawsuit in a Texas federal district court challenging the CFPB's final payday/auto title/high-rate installment loan rule (Payday Rule) filed a new status report with the court on March 8 to follow up on their March 1 status report.

The new status report sets forth the parties' views on whether the court should continue to stay the lawsuit and the Payday Rule's August 19, 2019 compliance date. The stays were entered in, respectively, June 2018 and November 2018 "pending further order of the court." Early last month, the CFPB issued proposals to rescind the Payday Rule's ability-to-repay (ATR) provisions in their entirety and delay the compliance date for the ATR provisions until November 19, 2020. The proposals would leave unchanged the Payday Rule's payment provisions and their August 19 compliance date.

In the new status report, the parties agree that it is appropriate for the stay of the ATR provisions to continue and for the litigation over the ATR provisions to remain stayed until the CFPB concludes its rulemaking. Read more at NATIONAL LAW REVIEW

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Trump's CFPB chief defends management of agency to Democrats

Washington (CNN)Democrats on the House Financial Services Committee grilled the Consumer Financial Protection Bureau's new chief Kathy Kraninger on Thursday, in her first appearance before Congress since she was appointed in December.

Kraninger was questioned about decisions made under her predecessor, Mick Mulvaney, as well as about the bureau's role in protecting service members and student debtors -- and was at one point asked to calculate the annual percentage rate on a hypothetical payday loan.

Freshman California Rep. Katie Porter posed the math problem and provided the agency chief with a calculator. Porter, a former law professor who brought along the textbook she wrote titled "Modern Consumer Law," also quizzed Kraninger about the definition of an interest rate.

Kraninger declined to answer, responding: "This is not a math exercise."

Democrats are concerned not just that Kraninger may lack the expertise to lead the bureau, but also that she will follow Mulvaney's playbook and scale back enforcement actions. Many Republicans have long argued that the bureau has overstepped its authority and created burdensome standards for businesses. Read more at CNN

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New protections available for minors under 16

Young people now have more protection from identity theft and fraud, thanks to a new federal law that went into effect September 21, 2018. The new law lets parents and child welfare representatives of people under 16, as well as legal guardians, request a security freeze, also called a credit freeze, on their behalf. Taking this step can help protect a young person from identity theft and fraud - and it's free.

Anyone can be a victim of identity theft
Identity theft happens when someone misuses your personal information, such as a Social Security number, to open accounts, file taxes, or make purchases. Hackers, thieves, and even people you know may steal your identity. Minors typically don't have credit reports, which means that a young person may not find out about issues with their credit reports until they first try to get credit - perhaps even years later.

While a security freeze won't affect anything already on your credit report , it restricts access to your report. That makes it harder for identity thieves to open new accounts using your personal information. With the new law, it's free to freeze and unfreeze your credit file at the three nationwide consumer reporting agencies - Equifax, Experian, and TransUnion. To find contact information for placing a free credit freeze, visit .
Read more at CFPB

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Keep industry insiders out of the payday loan rulemaking process

The Consumer Financial Protection Bureau (CFPB) has been an effective watchdog for consumers. However, since President Trump was elected, it has increasingly been protecting financial predators rather than financial consumers.

The CFPB's recent announcement that it was overhauling the payday lending rule is the latest example of that transformation. Better Markets recently detailed how the CFPB's proposal would create a debtors' prison without bars for millions of Americans who were trapped in an endless cycle of payday loans that they could not repay.

That's because, as the CFPB admitted, two-thirds of payday lender customers could not afford to repay the loan when they received it.

Thus, as the CFPB also admitted, if the "ability to repay" test was not eliminated as it is proposing, then nine out of every 10 payday loan storefronts would shut down. In other words, the CFPB is protecting financial predators, not victimized consumers.

Making all that worse, however, are the recent explosive revelations that the CFPB process that lead to that proposal was allegedly corrupted by concealed industry influence and CFPB lies, as detailed by two recent exposes. Read more at THE HILL

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What is the size of the average retirement nest egg?

According to a 2018 Fidelity Investments analysis, average retirement-account balances are $106,500 for 401(k)s, $111,000 for IRAs, and $85,500 for 403(b)s. That's a far cry from what Fidelity recommends most Americans save: six times their salary by age 50, and seven times their salary by age 55.

Many American Retirees Have No Savings
These numbers are far below suggested minimums required for maintaining a comfortable lifestyle. About 29% of households with members aged 55 and over have neither retirement savings, such as 401(k) plans or individual retirement accounts (IRAs), nor a defined-benefit (DB) plan (a traditional pension). An additional 23% do have a DB plan, but no other retirement savings.

Households that do have retirement savings generally have other resources to draw on as well, such as nonretirement savings and DB plans. Social Security provides most of the income for about half of households including people 65 and older. Read more at Investopedia

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Will This State Be the 8th to Have No Income Tax?

Tax season is upon us, and most taxpayers are focused primarily on figuring out their federal income tax returns. With reform efforts having changed many key provisions of the tax code, adapting to the new set of tax laws has proven onerous for many.

Yet at the same time, Americans in the vast majority of states also have to worry about state income taxes. Only seven states have allowed their residents to escape the double-hit of having to prepare a state income tax return and make payments to state tax collectors. However, there could be an eighth state on track to join this elite group -- if another state doesn't beat it to the punch.

The seven states with no income taxes currently
Right now, seven states have no state income taxes. If you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming, then you won't have to pay any income tax at the state level.

Of course, that doesn't mean that these state governments don't collect other sorts of taxes to make up for the lack of an income tax. In Alaska, Texas, and Wyoming, levies on natural resources provide much of the revenue that runs state government, while key industrial concentrations like the casino industry in Nevada and the credit card industry in South Dakota play a monumental role in helping residents stay income-tax free Read more at THE MOTLEY FOOL

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Panic Attack: Worker Financial Stress Costs Employers $500 Billion Annually

Half of workforce worried about money, leading to depression, panic attacks, sleepless nights and costly distractions at work, survey finds

Another head-shaking survey making a case for employers to provide financial wellness programs for an all-too-big percentage of employees in productivity-sapping financial distress came out this week.

While it boggles the mind that anyone making $160,000 a year still lives paycheck-to-paycheck, those people are apparently out there (probably holding the latest iPhone), and four in 10 people making more than $100,000 per year are considered "financially unstable." They're stressed out about it, and that stress is hurting their employers, too.

In fact, American businesses are losing $500 billion per year due to employees' personal financial stress, according to a new survey of more than 10,000 Americans by Salary Finance.

Nearly one in two U.S. employees are worried about money, leading to depression, panic attacks, sleepless nights and distractions at work; this lost productivity comprises 2.5% of the U.S. GDP.
Read more at 401K Specialist Magazine

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INDIANA: Bill expanding payday lending sees opposition in Indiana House

INDIANAPOLIS (WTHR) - A payday lending bill is getting a lot of opposition at the Indiana Statehouse.

The State Senate already passed the bill that would expand payday lending interest rates to as high as 192 percent and eliminate the 72 percent cap currently in place.

Several civic groups and representatives of military agencies spoke out against the bill Monday, including Steven Bramer. Bramer is a Purple Heart recipient from Hammond who admitted he's now caught up in the vicious cycle of trying to pay back a payday loan.

"Payday loans got me into a far worse situation than I was involved in. Is it my fault? Yes. All the way," Bramer said. "Nobody made me get the payday loan, but I also think these people preyed on my misfortunes. When you feel like you have no other options, you can do desperate things."

Bramer and his wife Megan said they believe the only people who would pass this kind of a law expanding payday lending are people who would never need it. Read more at WTHR

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Worried about next downturn? US credit funds may offer early clues

NEW YORK, March 12 (Reuters) - It seemed like an opportunity a lender would not want to miss.

The loan paid 10.25 percent interest which would go up if a benchmark rose. The borrower was Trident USA Health Services, a growing company which provided bedside medical testing in nursing and assisted living centers.

Trident was buying similar companies across the country targeting cost savings from consolidation.

Trident filed for bankruptcy last month. It had taken on too much debt to cope with reduced Medicare and Medicaid payments, equipment upgrades and other issues. A new billing system for the expanded company failed and it never collected millions of dollars. Trident's lenders face estimated losses of 50 to 100 percent.

"We were wrong," Michael Mauer, chief executive of CM Finance Inc, one of the lenders, said in a Feb. 7 call with stock analysts Read more at REUTERS

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