March 19, 2020
AFSPA Partner 
CFPB and Better Business Bureau (BBB) data indicates that a majority of complaints about small-dollar loans are likely related to scams, not regulated lenders.
Interim Guidance for Businesses and Employers

Plan, Prepare and Respond to Coronavirus Disease 2019

This interim guidance is based on what is currently known about the coronavirus disease 2019 (COVID-19). The Centers for Disease Control and Prevention (CDC) will update this interim guidance as needed and as additional information becomes available.

CDC is working across the Department of Health and Human Services and across the U.S. government in the public health response to COVID-19. Much is unknown about how the virus that causes COVID-19 spreads. Current knowledge is largely based on what is known about similar coronaviruses.

Coronaviruses are a large family of viruses that are common in humans and many different species of animals, including camels, cattle, cats, and bats. Rarely, animal coronaviruses can infect people and then spread between people, such as with MERS-CoV and SARS-CoV. The virus that causes COVID-19 is spreading from person-to-person in China and some limited person-to-person transmission has been reported in countries outside China, including the United States. However, respiratory illnesses like seasonal influenza, are currently widespread in many US communities. Read more at CDC

AFSPA Partner
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Regulators urge banks to use Fed's discount window for emergency, short-term loans

In the past, banks have shied away from borrowing directly from the central bank

U.S. regulators urged banks on Monday to access the Federal Reserve's discount window if they need emergency, short-term loans as the coronavirus pandemic threatens to disrupt the global economy.

In a joint statement, the Fed, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency said banks should use the instrument so they can "continue supporting households and businesses" and "avoid actions that have negative consequences for their customers, such as withdrawing credit during times of market stress."

The discount window is intended to help banks weather short-term funding crunches. But the U.S. central bank, to discourage banks from leaning too heavily on it, typically charges them a higher interest rate than it would be short-term funding.
Read more at FOX BUSINESS


When's the last time a lawmaker needed a small-dollar loan? by D. Lynn DeVault

Consumer needs are constantly evolving and the best companies know the key is to listen and innovate according to their customer demands. But there's a roadblock ahead.

The one place where innovation lags or worse, is killed, is Washington.

Instead of advancements, onerous rules and regulations are mandated that too often do more to harm consumers than protect them. This month's National Consumer Protection Week presents an opportunity for lawmakers and regulators to step down from their ivory towers, stop regurgitating the same talking points, and take a moment to understand and listen to the ever-changing needs of consumers.

Washington must realize the consumer landscape has dramatically changed in recent years. In the financial services sector specifically, consumers increasingly demand more convenience and choice; greater access on their phones, tablets and laptops; personalized services and full transparency.


Major US banks halt share buybacks in response to coronavirus pandemic
  • The U.S.'s largest banks pledged on Sunday to halt share buybacks through the second quarter of the year in response to the coronavirus pandemic, according to a statement from the Financial Services Forum.
  • The economic policy and advocacy organization's member institutions include Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street and Wells Fargo.
  • "The decision on buybacks is consistent with our collective objective to use our significant capital and liquidity to provide maximum support to individuals, small businesses, and the broader economy through lending and other important services," the group said in a statement.

Read more at BANKINGDIVE


TEXAS: OCCC Advisory Bulletin on Coronavirus Emergency Measures for Credit Access Businesses

The OCCC has posted an advisory bulletin on coronavirus emergency measures for credit access businesses. A link to the bulletin has been posted at:

Any revisions to the bulletin will also be posted to this page.

Office of Consumer Credit Commissioner
2601 N. Lamar Blvd.
Austin, TX 78705
Tel 512.936.7600
Fax 512.936.7610


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This made personal loans the fastest-growing debt category

Unsecured personal loans continue to hold the place as the fastest-growing form of consumer lending in the U.S., with the total balance expected to reach $180 billion in 2020, according to TransUnion. That's a 150% increase in just five years, from $72 billion in 2015. What is the reason for this surge in popularity? How did the personal loan, previously considered a last resort for escaping debt, become mainstream in a time span of just a few years?

The rapid growth of personal loans
Looking at debt in total, the balance of personal loans owed in the U.S. has more than doubled in recent years, from $72 billion in 2015 to an all-time high of $156 billion in 2019. TransUnion also predicts that the total balance will increase with an extra $24 billion in 2020. In other words, personal loans are still growing rapidly in the U.S.

A distinctive advantage of a personal loan, and a main reason for its popularity, is the flexibility. An unsecured personal loan can be used for just about anything. The choice lies entirely with the borrower, unlike mortgages.
Read more in AZ Big Media

Dreher Tomkies LLP
MaxDecisions Delivers 4% Response Rate In Direct Mail Campaign

MaxDecicisons is a leader in analytics and predictive modeling, today announced an industry first, unparalleled direct mail response result with 4% response rate with its newest subprime lending client.

"We are excited to announce our new partnership with a mid-size subprime lender to produce unparalleled results in direct mail marketing." said Timothy Li, Founder of MaxDecisions. "We are constantly striving for analytical excellence in the areas of risk and response modeling for all online finance clients. Our unique approach to each of our clients is a complete and custom solution from letter design to list selection. Every one of our clients is now enjoying multiple generations of direct mail custom risk and response models ."

MaxDecisions, Inc. was able to turn around this important marketing channel for our clients and delivered 20X increase in performance. Our client is ecstatic to continue to support this marketing channel moving forward. Direct Mail has become an important strategic customer acquisition channel for our client. Below is an illustration of prior direct mail campaigns before MaxDecisions applied its analytical services and after with June 2017 campaign performance.
Read more at MaxDecisions, Inc.


How to Protect Your Finances and Credit in Tough Times

The quickly unfolding coronavirus outbreak is an extreme case, but any sort of hard times will test our personal finances. Many people are now facing reduced work hours and income while watching with worry as stock market upheaval continues.

Preparation is better than panic, however. And starting now is better than doing nothing.

To get your finances ready for tough times, you should know:
  • How to find savings in your budget.
  • How to make some quick cash if hours are reduced.
  • How to protect your credit score.
  • How to triage bills if you can't cover everything.
  • How to think through your next move if you lose your job.

Read more at NERDWALLET


What's in store for online lenders. by Todd Baker

One of the great unknowns about online lending is how individual lenders will perform in the downslope of a credit cycle. We'll soon know the answer.

The online lending story will play out in a three parts, beginning with credit fundamentals and funding availability and ending with servicing and collections efficiency.

Let's start with credit. Credit deterioration in the sector likely won't be visible in the numbers for a month or two. Look for the first signs of stress in the performance of small business loans from businesses directly affected by coronavirus "social distancing" and the tourism/travel crash (signs of stress related to the tariff wars are already evident). Then expect to quickly see delinquency issues with nearprime/subprime consumer loans as layoffs drive delinquency for LMI borrowers who are already on the razor's edge. Prime and superprime online lenders will see smaller and later losses than the first two categories but are still at significant risk depending on the length and depth of the downturn. Read more here


There's 'something fundamentally wrong' with people working full-time and living in poverty: Robin Hood CEO

The new coronavirus outbreak has drawn attention to millions of working poor in the U.S., as President Donald Trump and members of Congress weigh financial measures for hourly workers who feel pressure to stay on the job while sick.

In a newly released interview, taped on March 3, the head of anti-poverty nonprofit Robin Hood says "there's something fundamentally wrong" with the fact that people can work full-time and still live in poverty.

"When you have a situation where you have people who are working in some cases multiple jobs and still not able to do the basics of supporting their family, we're not valuing work," says Wes Moore, the chief executive of New York City-based philanthropic organization Robin Hood.

"We're not valuing effort," he adds. "We're not being honest about what it means to be able to really support people in this environment."
Read more at YAHOO FINANCE


U.S. banking regulators urge banks to help borrowers struggling due to coronavirus

WASHINGTON, March 9 (Reuters) - U.S. banking regulators said in a joint statement on Monday they would not penalize banks that help borrowers struggling to repay loans due to the coronavirus outbreak, and vowed to provide "appropriate regulatory assistance" to affected institutions.

The statement from the Federal Reserve and others urged banks to work constructively with customers in affected areas, and urged institutions to continue to meet their financial needs. Prudent efforts to provide loan relief would not be criticized by bank examiners, they said. (Reporting by Pete Schroeder; Editing by Leslie Adler and Tom Brown)
Read more at REUTERS


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