April 2, 2020
AFSPA Partner

The Community Financial Services Association of America (CFSA) is Encouraging Members to Extend Flexibility in Small-Dollar Loan Repayment During COVID-19 

People need loans as coronavirus spreads but lenders are making them tougher to get

Large U.S. lenders including JPMorgan Chase & Co., Bank of America Corp., Capital One Financial Corp. and Santander Consumer USA Holdings Inc. are among companies reviewing lending criteria

Banks and financial-technology firms are starting to toughen their approval standards for new loans to consumers and small businesses. That means many people could find it hard to get credit just when they most need it, as the novel coronavirus pandemic puts thousands out of work.

Large U.S. lenders including JPMorgan Chase & Co. JPM, -2.156% , Bank of America Corp. BAC, -0.794% , Capital One Financial Corp. COF, -3.273% and Santander Consumer USA Holdings Inc. SAN, -3.862% are among the companies reviewing and revising certain lending criteria, according to people familiar with the matter.
Read more at MARKETWATCH

AFSPA Partner

Paving the Payments Future



The Consumer Financial Protection Bureau (Bureau) today released a policy statement outlining the responsibility of credit reporting companies and furnishers during the COVID-19 pandemic. In response to the pandemic, many lenders are being flexible when it comes to consumers' making payments. The Bureau's statement underscores that consumers benefit if lenders report accurate information about these arrangements to credit bureaus so that the credit reports of consumers are accurate.

"During this time of uncertainty, we are providing clarity to ensure the consumer reporting industry can continue to function," said Director Kraninger. "Consumers rely on their credit report to purchase a new car, their new home, or to finance their college education. An effective consumer reporting system is critical in promoting fair and efficient access to credit in the consumer financial services market."

The Consumer Financial Protection Bureau 


CANADA: Nearly half of Canadians on the brink of insolvency, survey finds

Forty-nine per cent of Canadians believe they are teetering on the brink of insolvency, according to the latest MNP Consumer Debt Index published Monday.

We were already worried about the debt levels of Canadians and the situation has gotten worse. Since December, Canadians have become more worried about their consumer debt than ever before. Almost half (46 per cent) are worried, according to data compiled by Ipsos on behalf of MNP Ltd. earlier this month. That is a 10-point jump since December and the highest level recorded since the insolvency firm began tracking in 2017.

About half of those surveyed said they are $200 or less away from not being able to pay their monthly bills. This number includes the 25 per cent who say they are already unable to meet their debt obligations. As more households lose their income, anxieties are only going to mount. Thirty-four per cent surveyed said they were worried about job security.
Read more at BNN BLOOMBERG


Banks, fintechs prepare for flood of SBA loan applications

As small businesses across the country shutter amid the pandemic, many fintech lenders are concerned banks won't be able to process loans quickly enough to get business owners the cash they need.

Banks and fintechs are preparing for an influx of small-business loan applications ahead of the launch of the $350 billion Paycheck Protection Program, aimed to help businesses negatively affected by the coronavirus pandemic.

The program, which is part of the $2.2 trillion stimulus package, could be operational this week, Treasury Secretary Steven Mnuchin told Fox News on Sunday.

Mnuchin also provided some clarity on what kind of lenders would be able assist with the program, which allows the SBA to distribute funds to small businesses with 500 or fewer employees.
Read more at BANKING DIVE



High end analytics.
Risk and response models.

The key to any successful direct mail campaign is to strike a balance between risk and responsiveness. A well balanced campaign can produce a low cost per funded loan and a low default rate. After a few campaigns, a re-optimized model is needed to further enhance your direct mail campaign performance.
  • Volume: Campaign should have enough volume to gain meaningful insights
  • Data: Use FCRA and Non-FCRA data, avoid using demographics
  • Firm Offer of Credit: is always better in terms of response rate
  • Use Multiple Credit Bureaus: Each bureau has unique coverage
  • Conduct A/B Testing whenever possible
  • Response Model should be paired with a risk model to control for defaults
  • Build a landing page with the same look and feel of your direct mail creative.



Visa, Mastercard delay swipe-fee changes until July

UPDATE: March 30, 2020: Visa and Mastercard will delay until July the swipe-fee changes they'd planned to take effect in April.

Separately, Visa is considering extending an October deadline for U.S. gas stations to upgrade fuel pumps so they accept credit and debit cards with chips. Card networks initially rejected a request to delay the compliance date, which had already been pushed back by several years.

The moves are aimed at alleviating the coronavirus crisis's impact on merchants.
Read more at BANKING DIVE

Dreher Tomkies LLP

NEW MEXICO: Payday lenders deemed 'essential' during coronavirus

Right now, in New Mexico, you can't go to a hair salon, public gym or bookstore.

But you can walk into a building and take out a large loan with interest rates as high as 175%.
That's because payday loan companies are considered "essential businesses" in New Mexico and many other states during the COVID-19 outbreak.

Christopher Moya, director of the Regulation and Licensing Department's Financial Institutions Division, wrote in a March 24 letter that he had received guidance on what businesses were technically "essential," which included non-depository financial institutions, including payday loan companies.



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LPP was developed by experienced lenders for lenders utilizing proprietary patent pending technology to develop the only compliant and cost effective Bankcard, ACH and RCC/Check21 acceptance platform for Storefront Brick & Mortar and Online Lenders.

Exclusive to the short-term consumer and alternative lending industries for: Installment Loans, Title Loans, Personal Loans, Personal Lines of Credit, Student Loans, Military Loans, Subprime Loans, Lease-to-Purchase and Rent-to-Own (RTO). We also have revolutionized the way payments are processed for Online Lenders, including MPL (Marketplace Lenders) and Lending Platforms.

LoanPaymentPro provides a proprietary advanced form of its own Payment Validation and Verification function (think enhanced version of Zero-Dollar Authorization (ZDA). Putting the "control" back into the hands of lenders by allowing them to perform a bankcard validation and/or account verification prior to storing a bankcard or processing a payment. When lenders utilize our new validation technology, it significantly decreases fraud and increases their chance of a successful payment.



'A Double Whammy.' Those Who Most Need The $1,200 Stimulus Checks May Wait the Longest To Get Them

A little less than three weeks ago, when the number of people infected with the COVID-19 virus began to spike, Mikael Laboy found himself in a tough spot. The 21-year-old's job at a biotechnology company in Puerto Rico required him to work in close proximity to his coworkers, and he says his employer wasn't taking enough precautions to keep them safe. Since he lives with his brother and sister-in-law, who is pregnant, he felt he couldn't risk accidentally bringing the infection home. So he quit. "There's people living in my household that I can't put at risk," he says.

It was a difficult decision and bills have been stacking up, but recently, there seemed to be a glimmer of hope. On March 27, President Trump signed a $2.2 trillion coronavirus stimulus package that includes the direct infusion of cash to the majority of Americans-including Laboy. The provision stipulates that any American with a Social Security number who isn't considered someone else's dependent and makes up to $75,000 will receive a payment of $1,200.
Read more at TIME


ALABAMA: Gun sellers, payday lenders remain open in Alabama as 'essential business'

A payday lender in Jefferson County said he's seen a recent decrease in the short-term loans taken out by Alabamians, but advocates for more regulation on that industry are worried more people will turn to loans as businesses remain closed.

"If the economy goes south, so does our business," said Max Wood, a payday lender and president of Borrow Smart, a payday lending industry group.

Payday and title loan companies continue to operate in Alabama amid the shutdown of "non-essential" businesses in an effort to slow the spread of the new coronavirus.

Dev Wakeley, a policy analyst for the progressive advocacy group Alabama Arise, wishes payday and title loan companies had been closed by Gov. Kay Ivey last week.
Read more at WBRC NEWS


The 5 types of expenses experts say you should never charge on a credit card

You can put most everyday expenses on a credit card - but not these. Personal finance experts weigh in on which expenses you should reconsider using a card to pay for so you can avoid "credit creep" and stay out of debt.

Americans carry an average credit card balance of $6,194, and with the coronavirus pandemic triggering financial unrest around the world, that average could very well go up in the next few months.
As you reevaluate your 2020 finances, however, it's good to make a plan for your credit card use so that you stay aware of what makes up the balance on your card.

While you may be relying on your credit card more than usual now to get through a pay cut or a job loss, you should always remind yourself of a few general guidelines of safe credit card use. That way, you keep long-term financial wellness in mind as you get through this difficult time.
Read more at CNBC



Alternative Financial Service Providers Association

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