AFSPA
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
December 20, 2018
2018 edition: 101 / 102
Happy Holidays
LoanPaymentPro
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PEW: More Americans are making no weekly purchases with cash

Americans are becoming less reliant on physical currency. Roughly three-in-ten U.S. adults (29%) say they make no purchases using cash during a typical week, up slightly from 24% in 2015. And the share who say that all or almost all of their weekly purchases are made using cash has modestly decreased, from 24% in 2015 to 18% today, according to a new Pew Research Center survey that comes as some businesses experiment with becoming cashless establishments.

Demographic patterns in the new survey, which was conducted in September and October, are similar to those in a 2015 survey by the Center. Most notably, adults with an annual household income of $75,000 or more are more than twice as likely as those earning less than $30,000 a year to say they do not make any purchases using cash in a typical week (41% vs. 18%). Conversely, lower-income Americans are about four times as likely as higher-income Americans to say they make all or almost all of their purchases using cash (29% vs. 7%).

Blacks are more likely than whites or Hispanics to rely on cash: 34% use cash for all or almost all of their purchases, compared with 15% of whites and 17% of Hispanics. And 34% of adults under the age of 50 make no purchases in a typical week using cash, compared with 23% of those ages 50 and older.

As more Americans are going cash-free, a growing share of the public is comfortable being without physical currency. Today, 53% of Americans say they try to make sure they always have cash on hand just in case they need it. Read more at PEW RESEARCH

MaxDecisions
Lending as a Service

CFPB halts agency name-change efforts after backlash

The director of the Consumer Financial Protection Bureau (CFPB) is halting plans to change the agency's name, citing the high costs and potential confusion of rebranding the financial watchdog.

CFPB Director Kathy Kraninger told bureau employees Wednesday that she has stopped all efforts to rename the agency "the Bureau of Consumer Financial Protection," a process that began in March by former acting chief Mick Mulvaney.

"I care much more about what we do than what we are called," Kraninger told CFPB employees in an email obtained by The Hill.

Mulvaney insisted the agency be called the Bureau of Consumer Financial Protection, its formal name under the 2010 Dodd-Frank law. But an internal agency analysis of the name-change, first reported by The Hill, found that rebranding could cost businesses about $300 million.
The CFPB in March released a new logo that referred to the agency as the Bureau of Consumer Financial Protection, and in June changed the sign in the front lobby of its Washington, D.C., headquarters to reflect the name change.

Kraninger cited the high financial toll and "operational challenges" of the name-change in her Wednesday email. Read more at THE HILL


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Why 2019 could be the year of the big bank merger

One trend to pay attention to in 2019: consolidation in the banking industry. A lower corporate tax rate and a favorable regulatory environment are giving banks reason to think that next year might be the time to ink a big M&A deal.

Despite the fact that Democrats are set to take control of the House, the fruits of the Trump agenda on tax policy and deregulation are already in full force. Congress slashing corporate taxes from 35% to 21% has companies sitting on a generous stockpile of cash, and Trump-appointed officials at the bank regulators are hard at work on implementing a law rolling back portions of the Dodd-Frank financial regulatory framework. A notable change in the regulation: raising the threshold for extra scrutiny on banks, from $50 billion to $250 billion.

Prior to the regulatory change, banks near the $50 billion threshold were hesitant to make deals because growing in asset size would subject them to a slew of added regulatory requirements.

But with that line no longer there, the floodgates could open for larger banks to make big deals.
Read more at YAHOO FINANCE

TransUnion
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U.S. banks quietly pull back from riskiest loans amid recession fears

(Reuters) - As U.S. bank stocks tanked this month over fears of an impending recession, industry executives downplayed concerns to colleagues, analysts and journalists, arguing that the economy is in great shape.

But looking behind headline numbers showing healthy loan books, problems appear to be cropping up in areas such as home-equity lines of credit, commercial real estate and credit cards, according to federal data reviewed by Reuters. Lenders are also starting to cut relationships with customers who seem too risky.

All of that suggests U.S. lenders will feel the pain of a recession soon, even if losses are not cropping up quite yet.

"We are in somewhat of a goldilocks period of banking," Andy Schornack, chief executive officer of Flagship Bank Minnesota, told Reuters. "Interest rates are high enough that you can make good money and credit quality is at high enough levels where it's pretty hard to lose money." Bank executives acknowledge that the U.S. economy is probably in the final stages of a long recovery from the 2007-09 global financial crisis. But they say that until credit metrics start to deteriorate meaningfully, there is no reason to boost reserves or slash customer financing.

"There is a big disconnect at this point in time between the market technicals and what we're really seeing on the ground," Citigroup Inc Chief Financial Officer John Gerspach said at an industry event last week. "The fundamentals still look very good." Read more at YAHOO BUSINESS

Alchemy
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What is alternative credit data and how can you use it? by Philip Burgess

The first "credit cards" surfaced at around the turn of the 20th century, as pointed out by PYMNTS. Those credit markers weren't actual cards, but rather often awkwardly shaped metal plates - objects more akin to oversized tokens than anything even remotely resembling the small, sleek, microchip-enhanced pieces of plastic that consumers rely upon so much today. By contrast, the concepts of credit and money-lending - and all of the concerns tangential to those fiscal principles - are considerably older than that, dating back hundreds and arguably thousands of years, to the dawn of commerce. In essence, only the tools and resources have changed; the core principle of credit is still "buy now, pay later."

More than 100 years ahead of when prototypical credit cards emerged, the financial services industry is facing another turning point, albeit one that has been more subtle in its progression than some transitions of the past: the rise of alternative credit data and the different ways of looking at credit that such information allows for. This way of looking at individuals' credit can benefit consumers and businesses alike. But in the world of finance, institutions sometimes become set in their ways and their old habits die hard. As such, alternative credit data is sometimes misunderstood.

In the interest of correcting this problematic perception, Microbilt presents our definitive guide on the precise nature of alternative credit - what it is, how it became a form of financial assessment and its potential value for decades to come: Read more at MICROBILT

ACCELITAS
Accelitas is an alternative data resource that delivers the power of AI to reach more underserved consumers and deliver predictive insights that are customized to your business.

Say good-bye to these tax deductions

Year-end planning has a whole new look now that a few popular tax deductions have gone away.

The Tax Cuts and Jobs Act raised the standard deduction and did away with personal exemptions and some of the most commonly used deductions, such as job-search expenses, the fees you pay your tax preparer, investment expenses and more.

"While the TCJA was designed to reduce most individuals' tax liability, it may mean an increase for some taxpayers," said Jennifer Lowe, a senior director at Wolters Kluwer, Tax & Accounting.

"It all depends on everyone's unique situation," added Christina Taylor, a senior manager of tax operations at Credit Karma Tax. "I can't wait to see what happens."

In the meantime, plenty of deductions and credits are still available for taxpayers to maximize their year-end strategy, according to Lisa Greene-Lewis, a CPA and tax expert at TurboTax.

And "there's still time to make an impact despite the changes," Greene-Lewis said.

Check out TurboTax's infographic below to see which tax deductions have gone away - and the deductions and credits you can still make the most of before December 31.
Read more at CNBC

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Yellen warns of another potential financial crisis: 'Gigantic holes in the system'

Former Federal Reserve Chair Janet Yellen told a New York audience she fears there could be another financial crisis because banking regulators have seen reductions in their authority to address panics and because of the current push to deregulate.

"I think things have improved, but then I think there are gigantic holes in the system," Yellen said Monday night in a discussion moderated by New York Times columnist Paul Krugman at CUNY. "The tools that are available to deal with emerging problems are not great in the United States."

Yellen cited leverage loans as an area of concern, something also mentioned by the current Fed leadership. She said regulators can only address such problems at individual banks not throughout the financial system. The former fed chair, now a scholar at the Brookings Institution, said there remains an agenda of unfinished regulation. "I'm not sure we're working on those things in the way we should, and then there remain holes, and then there's regulatory pushback. So I do worry that we could have another financial crisis.

In the wake of the financial crisis, some agency regulatory powers were vastly expanded, but others, for example, the ability of the Fed to lend to an individual company in a crisis, were curtailed. Current Fed officials have pushed back against criticism that their reforms are making the system riskier, saying they are making the system more efficient. Read more at CNBC

  MerchantBoost
We are transforming lending with innovative payment instrument data and technology, increasing credit access to the financially underserved, and reducing fees for borrowers and creditors.

How do Title Loans work?

When someone needs emergency funding, there are options in the financial marketplace that could provide that kind of financial support. Depending on the loan type and the lender, a credit check may be required.

For those that have varying degrees of credit, they could be denied approval for a loan. So where do people turn?

Fortunately, emergency funding may be available to those that need it, regardless of their current credit score. One of these types of emergency funding options are title loans.

A title loan is a secured loan that uses collateral. The borrowers qualifying car title is given to the lender as collateral until the loan is repaid. For most title loans, the loan amount given to a qualified borrower is based on the value of their vehicle via the Kelley Blue Book (KBB).

Many people compare a title loan to how a payday loan works, but they are quite different. Here are a few differences between the two:

Looking at the differences between the two, it is easy to understand how vastly different these two types of emergency funding are. But what are some of the advantages that title loans offer? Here are a few: Read more at BANKLESS TIMES

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Alan Greenspan: Investors should prepare for the worst

Washington (CNN Business)Alan Greenspan says the party's over on Wall Street.

The former Federal Reserve chairman who famously warned more than two decades ago about "irrational exuberance" in the stock market doesn't see equity prices going any higher than they are now.

"It would be very surprising to see it sort of stabilize here, and then take off," Greenspan said in an interview with CNN anchor Julia Chatterley.

He added that markets could still go up further - but warned investors that the correction would be painful: "At the end of that run, run for cover."

Markets have staggered in recent weeks, with spooked investors selling over mixed messages coming from the White House concerning the status of trade negotiations with China and growing fears of a global economic slowdown.

The jitters come as the Federal Reserve's interest-rate setting committee prepares to meet Tuesday and Wednesday. They're expected to raise rates for the fourth time this year - though investors will also be combing for clues on their plans for 2019. Minutes from the Fed's last meeting in November signaled policymakers want to take a more flexible approach next year adding to investor anxiety. Read more at CNN

  NDH
National Debt Holdings is a professional Receivables Management Company that partners with creditors to purchase and/or manage receivables at all stages of the account life cycle.

Top 5 Financial Policy Predictions for 2019

Bank oversight and Trump tax returns top the agenda

A gridlocked Congress will make lawmaking in financial committees difficult in 2019, but there's still plenty on the agenda as Democrats consider how to use their newfound oversight power in the House.

From bank oversight and the fight for President Donald Trump's tax returns in Congress to increased financial deregulation at the agencies, here are five things experts expect from the year ahead.

Bank oversight is likely to take center stage in congressional financial policy, with incoming chair of the House Financial Services Committee Maxine Waters (D-Calif.) indicating she will call on executives from Wells Fargo & Co., the subject of several sales-related scandals, and of Deutsche Bank AG, which could be tied to alleged financial misconduct from Trump and his associates, to testify before lawmakers.

The hearings will be "part regulation, part theater," said Michael Lux, chief executive of Democratic strategy firm Progressive Strategies LLC, who served as a public liaison for the Clinton administration and on the Obama transition team. The real impact of the hearings will be felt on the campaign trail, he said. Read more at MORNING CONSULT

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Americans' Top 5 Money Questions Answered

Medical symptoms, obscure facts or who your favorite Hollywood star is dating - we often turn to Google with these burning questions. But when we're not searching for the latest on say, Kim Kardashian, many of us are using the internet to make sense of money.

Student loans, 401(k)s and payday loans were among the top five most-Googled financial topics nationwide, according to a report issued earlier this year by Chicago-based Liberty Bank. Leading the pack, the question "How do student loans work" garnered almost 2.5 million searches on average, according to the bank's analysis.

At the state level, Californians were most interested in cash advances, Texans looked for budgeting tips and both New York and Illinois residents wanted to know how much money you need to open a savings account.

Here are answers to your top five money questions:

1. How do student loans work? (2.5 million searches)
The gist: Student loans are funds borrowed to pay for higher education, which you pay back to the lender upon graduation, with interest. With the standard federal student loan repayment plan, you'll make equal monthly payments on your student loans for 10 years. There are other kinds of repayment plans, depending on your income, job and other factors. Read more at NERDWALLET

DMS
Creating and producing results since 1982

Gender pay parity is 202 years away, WEF says

The world barely moved the needle when it comes to closing the gender gap, according to the World Economic Forum's Global Gender Gap Report 2018.

Based on the latest data it would take 108 years to see an equal number of male and female executives in the boardroom. The report also finds that true gender pay parity is still 202 years away. In 2018 the United States took a few steps back and fell two notches to 51st, out of the 149 countries measured.

This year's report suggests we're seeing a decline of women represented in politics. Across the 149 countries measured by the WEF report, only 17 of the heads of state are women, and 18% of ministers and 24% of parliamentarians globally are women. Concurrently, a positive sign is that more women are assuming leadership roles, at 34% globally. However, one finding that has experts worried is that fewer women than men are participating in the workforce.

The report indicates that artificial intelligence may have a disproportionate impact on roles traditionally performed by women. Another challenging aspect is that there are fewer women in growth areas of the labor market because they may not have access to education to get the skills they need in science, tech, engineering and math (STEM). Another possible roadblock is that women may not have the support they need to go back to work because of childcare and eldercare responsibilities. For those looking for the pinnacle of gender of equality so far, they will have to move to the Nordic countries: Iceland, Norway, Sweden, Finland are in the top four of this year's WEF list, with Nicaragua coming in at number five. Read more at YAHOO FINANCE

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

Will a New CFPB Director Heed the Agency's Mission?

In her first news conference as a Senate-confirmed Director of the Consumer Financial Protection Bureau (CFPB), Kathleen Kraninger's remarks sounded a lot like Mick Mulvaney, her former boss at the Office of Budget and Management (OMB). On December 11, just one day into a five-year term of office, Kraninger told reporters she would continue the business-friendly work begun by Mulvaney.

Days earlier on December 6, Kraninger was confirmed to the position by a 50-49 party line vote. However, a broad and diverse coalition comprised of national and state organizations have pledged to valiantly stand up for consumers and their financial rights.

Labor advocates like the AFL-CIO and the Service Employees International Union (SEIU), as well as civil rights stalwarts NAACP, Unidos US (formerly the National Council of LaRaza) and the Leadership Conference on Civil and Human Rights, and consumer advocates like Americans for Financial Reform and Center for Responsible Lending are all among the advocates lending their names and influence on the effort.

"She won't answer questions. She won't release documents. She let industry attend her swearing in but not the public. Now she's forcing important members of the media out of the room during her first press availability as CFPB director. What is Kathy Kraninger hiding," asked Karl Frisch, executive director of Allied Progress. Read more at BLACKPRESS USA

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