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ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
August 6, 2019

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Financial Watchdog (CFPB) Shifts From Enforcer to Educator

Critics say the push shifts the burden of consumer protection from financial companies to ordinary citizens

WASHINGTON-A federal regulator set up after the financial crisis to be a watchdog over the financial industry is shifting its mission from enforcement to consumer education.

Under the leadership of Kathy Kraninger, a Trump appointee who took over the agency seven months ago, the Consumer Financial Protection Bureau has increased its focus on financial literacy. The CFPB continues to boost spending on consumer education and engagement this year, after raising such spending by 76% during the fiscal year ended Sept. 30, 2018, to $77.8 million, nearly twice the level from two years earlier when Obama officials still ran the bureau.

The shift was apparent when the CFPB showcased its work under Ms. Kraninger in June, leading with a program it created to help consumers build emergency savings called "Start Small, Save Up." The CFPB also plans to roll out soon a saving "boot camp," a series of videos and booklets to teach consumers how to save, CFPB officials said.
Read more at THE WALL STREET JOURNAL

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CFPB on verge of industry-changing lawsuit

The Title Report has learned from multiple sources that the Consumer Financial Protection Bureau is on the verge of filing a lawsuit against an independent mortgage lender concerning violations of the Equal Credit Opportunity Act (ECOA).

The action - which could come as soon as Monday morning, The Title Report has learned - concerns an investigation of an ECOA violation that appears to be based on marketing.

Sources have told The Title Report that the target of the investigation is a small, three-person mortgage company located in Chicago, which marketed their services on a conservative AM radio station in the area. The Title Report reached out to legal counsel for the firm but has not gotten a response.

If the regulators file expected allegations, sources said the lawsuit could effectively end the industry's ability to market and advertise their services through a variety of channels, including trade publications, online media, newspapers, radio stations and TV for fear of regulators charging companies with ECOA violations based on the predominant demographics or political leanings of each media outlet. Read more at THE TITLE REPORT

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Parties file another status report in trade group lawsuit challenging CFPB payday loan rule. Jeremy T. Rosenblum. Ballard 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 August 2.

The status report references the CFPB's proposal to revise the Payday Rule to rescind the rule's ability-to-repay (ATR) provisions in their entirety and its final rule delaying the compliance date for the ATR provisions until November 19, 2020. The reports states that "the Bureau is continuing to make progress" on its proposal to rescind the ATR provisions. It also states that the parties "are not requesting that the Court lift the stay of the litigation or lift the stay of the compliance date at this time." (Although the Bureau's final rule delaying the compliance date for the ATR provisions left unchanged the August 19 compliance date for the Payday Rule's payment provisions, the stay of the compliance date entered by the court on November 6, 2018 stayed the compliance date for both the ATR and the payment provisions.)

On May 30, 2019, following the filing of a status report on May 17, the court entered an order continuing the stay of the lawsuit and the August 19 compliance date for both the ATR and the payment provisions. The order directed the parties to file another joint status report by August 2.
Read more at JDSUPRA


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How Employers Can Reduce Stress in the Workplace

As most of us can attest to, it is difficult to leave life's challenges and stresses at the door when we arrive at work. These challenges and stresses can be quite aggressive, competing for attention normally dedicated to work responsibilities.

The top source of this productivity killer? Money-related stress. 46% of employees say financial challenges cause them the most stress in their lives.

It's certainly understandable. Medical insurance costs continue to increase. Student loan debt is sitting at $1.4 trillion, 75% of Americans live paycheck to paycheck, and the average American doesn't have more than $400 in savings.

The effects of financial stress in the workplace are not isolated to the employee. Employers take a direct hit through decreased productivity, increased absenteeism, higher turnover, and increased healthcare expenses. A staggering 46% of employees spend, on average, two to three hours per week dealing with personal finance issues during work hours. Translated into dollars, businesses lose half a billion dollars a year because their employees are stressed about their personal finances.
Read more at FINFIT


PRESS RELEASE
Manulife's CEO (ret.) invests in Trust Science

Mr. Donald Guloien recently retired as the President & CEO of $1 Trillion (AUMA) Manulife Financial (parent of John Hancock in the USA), one of the largest insurance and asset management companies in the world.

Palo Alto, CA July 30, 2019:  www.Trust.Science.com USA Inc., a leading provider of AI-powered Underwriting support known as Credit Bureau 2.0™, is thrilled to announce an equity investment by Donald Guloien, the previous President and CEO of Manulife Financial (parent of John Hancock in the USA), one of the largest insurance and asset management companies in the world.

During his 36 years at the company, Mr. Guloien participated in the consistent growth of Manulife and John Hancock across the United States, Canada, and Asia, reaching over $1 Trillion of assets
under administration and a $50 Billion market cap. Manulife was not only financially successful under Mr. Guloien's leadership--soundly beating benchmark indices--but it was also a multiple award-winner such as #1 Trusted Brand and Most Admired Corporate Culture. Personally, Mr. Guloien's own leadership did not go unnoticed, being voted as one of the Highest Rated CEOs by Glassdoor.com and awarded the Queen Elizabeth II, Diamond Jubilee Medal.

Since retiring, Mr. Guloien has begun "investing in early-stage companies with truly exceptional ideas..." through Guloien Capital.



Florida residents are the fourth-worst in the U.S. for paying back loans

With a little to no affordable housing, a swath of low paying jobs, and skyrocketing healthcare costs, it really shouldn't come as a surprise to anyone that Floridians are drowning in debt.

Financial planning company Fabric recently published a comprehensive ranking of the nation's states with the most unpaid debt, and Florida barely missed the podium, ranking as the fourth worst state.

The study, which analyzed statistics from Federal Reserve Bank of New York, the U.S. Census Bureau, and the Bureau of Labor Statistics, took into account four different types of loans - auto, student, credit cards, and mortgages. The study showed that Florida has an auto-loan delinquency of 5.3%, credit card delinquency of 9.7%, mortgage delinquency of 1.6% and a whopping student loan delinquency of 13.7%, which is significantly higher than the national average of 11.4%, according to Forbes. Read more at ORLANDO WEEKLY

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You'll Be Surprised What Type of Debt Is Growing the Fastest

There are lots of ways to borrow money when you need spare cash. In recent years, however, consumers have increasingly been turning to one specific type of funding: personal loans.

In fact, according to Experian's data from the fourth quarter of 2018, personal loans were the fastest-growing type of consumer debt over the prior year.

Personal loan debt hit a total of $291 billion at the end of 2018, with a total of 36.8 million outstanding personal loan accounts. This aggregate balance was an 11.9% increase compared with a year prior -- which is double the increase in credit card debt, as the outstanding balance on cards went up just 5.9%. The total personal loan balance also grew faster than the auto loan balance, mortgage loan balance, and balance of student debt.

A total of $291 billion in personal loan debt is a lot of money, but this debt is spread around among a lot of borrowers. In fact, Experian reported that around 10.8% of all adults in the United States had a personal loan as of the fourth quarter of 2018.

Why are so many more people taking out personal loans?
Personal loans have become increasingly popular because more people know about them and they are easier to get than ever before. In fact, Experian explains that the rise in online lenders offering personal loan products has been a major contributing factor in increasing the number of Americans with personal loans. Read more at YAHOO FINANCE

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Why Los Angeles restaurants aren't accepting cash payments

Nick Montgomery says when it came time to decide whether his Echo Park restaurant would accept cash, it was a tough call.

"This is a small space," he says of Konbi, a Japanese-style cafe and sandwich shop on Sunset Boulevard. He adds that money is also a factor.

"It is about $5,000 a year for a restaurant this size just to count cash every day and take it to the bank. That's a lot of money to a small business."

Akira Akuto, Montgomery's business partner, points to another reason that pushed them to make their restaurant cash-free: "It costs money to take cash. Our insurance goes up."

Konbi is one of a small, yet growing number of restaurants in Los Angeles that are ditching cash. Everything else is fair game: credit, debit, and gift cards; electronic payment methods like Apple Pay or PayPal. Read more at KCRW

MaxDecisions
Lending as a Service

Report: High-interest lenders have circumvented Arizona's ban by moving to auto-title loans

High-interest lenders have circumvented an Arizona ban on payday loans by migrating to auto-title loans, including those where borrowers don't own their vehicles, a study critical of the practice has found.

More than one-third of companies now providing high-cost loans on vehicles here were licensed as payday lenders more than a decade ago, when Arizonans voted to ban payday lending, said the Tucson-based Center for Economic Integrity in a report released Aug. 5.

Several of the largest auto-title lenders operating in Arizona didn't respond to requests for comment on this article.

Focused on low-income borrowers
The Tucson group is critical of loans that it says can keep consumers mired in a cycle of debt as they try to pay off obligations that could carry annualized interest rates of up to 204%. Customers tend to be lower income and frequently include racial minorities, the report added.
Read more at AZCENTRAL

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

What's FinTech? by Timothy Li

People often ask me, what is FinTech and what does it mean to me?

FinTech is the libration of everyone living on this planet that has been denied access to banking, credit, payments and wealth management. Freedom of data, transparency in black box decisions is the hallmark of FinTech.

Access to banking is a fundamental human right to transact, store and build wealth without being harassed, extorted with hidden fees, overtaxed and tricked into privacy loopholes. FinTech is to deliver banking services to every man, women and child everywhere on this planet and beyond. Paypal, Venmo, Varo, Chime, N26, and pioneers like Simple are just some of the examples of FinTech companies delivering banking services to everyone.

Access to credit is the ultimate uplifting tool one can leverage to get an education, a car, a home, and a future. FinTech is destroying decades of manual underwriting, subjective and experiential decisions and most importantly, archaic math such as traditional credit scores that just don't tell the whole story and end up denying millions of people access to credit.

This credit score centric credit system that plagues us in the United States, UK and Australia should be completely reconstructed with FinTech that leverages alternative data, behavioral data, spending data and use data science to truly understand why the applicant in question is seeking credit. The "3 digit score" system we've been using for the past six decade needs a serious reform now. That's what FinTech is about. ZestFinance, Tala, Plaid, Yodlee, and Argyle and poised to redefine how we access to credit and how lenders grand credit. FinTech is on the cusp to providing access to all.
Read more at MEDIUM

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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.

Sorry, you're not getting $125 from the Equifax settlement, FTC says

Payout pool is too full, so FTC urges consumers to get free credit monitoring instead

Remember that $125 you could have gotten from the Equifax Inc. data-breach settlement? Yeah, never mind.

The Federal Trade Commission announced Wednesday that, due to an overwhelming response, cash payments aren't going to be anywhere near $125 each, and urged consumers to sign up for the free credit monitoring offered as an alternative.

About 147 million people were affected by the 2017 Equifax EFX, -0.31% breach, but only $31 million was set aside for payments as part of the $700 million settlement, announced last week. A quick bit of math shows that for everyone to have gotten $125 from that pot, there would have to be only 248,000 claimants. While the FTC didn't give a number, they said there were already "an enormous number of claims filed."

A large number of claims for cash instead of credit monitoring means only one thing: each person who takes the money option will wind up only getting a small amount of money," the FTC said in a blog post Wednesday. Read more at MARKETWATCH


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The big financial mistake Americans don't want to talk about

Americans don't want to admit it, but the vast majority of them have made financial mistakes Opens a New Window. .

Those are the findings from a new survey conducted by TD Ameritrade, which showed that about three-quarters of people admitted to having made a misstep when managing their finances.

What did people consider their biggest financial mistake? Not investing in a 401(k).

About 36 percent of people say they made mistakes based on a lack of financial education or knowledge - slightly fewer thought it was impolite to discuss finances in social situations.

Recently, President Trump has been touting the benefits a booming stock market has had on Americans' 401(k) accounts.

During a rally in North Carolina earlier this month, he said that if a Democratic opponent "ever got into office," people's 401(k) accounts would experience a "big crash."

In May, the president said the average 401(k) balance has soared 466 percent since "the bottom of the market. Read more at FOX BUSINESS

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Texas Joins 12-State Brief With SCOTUS Challenging Constitutionality of the Consumer Financial Protection Bureau

Texas Attorney General, Ken Paxton is the lawyer for the State of Texas and is charged by the Texas Constitution to:

defend the laws and the Constitution of the State of Texas
represent the State in litigation
approve public bond issues

To fulfill these responsibilities, the Office of the Attorney General serves as legal counsel to all boards and agencies of state government, issues legal opinions when requested by the Governor, heads of state agencies and other officials and agencies as provided by Texas statutes.

The Texas AG sits as an ex-officio member of state committees and commissions, and defends challenges to state laws and suits against both state agencies and individual employees of the State. Read more at SM CORRIDOR NEWS

Alchemy

We are a revolutionary merchant service and technology firm servicing the debt repayment industry.

What Is the Difference Between a Credit Lock and a Credit Freeze?

You may have heard about credit freezes and credit locks and wondered "What is the difference?" Good question! A credit lock or credit freeze both block access to your credit report, preventing anyone from using a credit report to open a new account in your name, such as a credit card or loan. Freezing or locking your credit are part of the protection options TransUnion offers to help you manage your credit and safeguard your identity.

So how do you decide whether to freeze or lock? It really depends on your personal preference.

Lock
Locking your credit is one of the many great features available to you when you subscribe to a TransUnion product solution: TrueIdentity, is a FREE product that makes it easy to lock and unlock your credit with a simple swipe, and is accessible whenever you need it, in a mobile app or online.
Read more at TRANSUNION

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Alternative Credit Reporting

How Fintech Is Eating The World

In the early 2000s, people thought of technology as its own industry. There was healthcare, industrials, finance, and... technology. Technology was separate, unique and altogether foreign to the others. It was the domain of innovators that made operating systems like Microsoft and search engines like Google.

Everything has changed. Instead of being viewed as a distinct vertical, today every company is a technology company. Perhaps most aptly, Marc Andreessen captures the current zeitgeist "Software is eating the world".

A similar dynamic is playing out in financial services, which used to be an entirely distinct vertical - the domain of banks, payment processors and insurance companies. Through innovation led by fintechs, the financial services industry is poised to become a horizontal as well, and permeate across the fractured silos of the economy. This is manifesting itself in many ways.

Non-financial companies offer financial products

Non-financial firms - from ecommerce distributors to healthcare providers - have myriad unique assets, notably a large customer base, unique insights, and crucially, trusted relationships. Capitalizing on these, non-financial companies can offer financial products and services to their customers. The sum is often larger than its parts.
Read more at FORBES

TransUnion
Alt Data is the key to compete effectively

Could The New Financial Action Task Force Regulation Be The End Of Bitcoin?

When people talk about Bitcoin, you often hear it being described as a private, peer to peer, digital store of wealth. However, when it comes to regulators around the world, there is a certain fixation on the privacy aspect of cryptocurrency. While it is important that everyday people are able to maintain their personal and financial privacy, anonymous transactions have the potential to facilitate money laundering. So in order to address this issue, the Financial Action Task Force (FATF) put forth a new regulation in June designed to break the privacy of cryptocurrency. This regulation is called the "travel rule".

A quick background on the FATF: it is a group of 37 member countries with the purpose of setting international anti-money laundering standards. It is essentially the United Nations for fighting financial crimes. While regulations put forth by the FATF are not law, the member states are obliged to turn FATF regulatory suggestions into locally enforceable regulation.

So what is the travel rule? It requires all financial institutions to identify both the sending party and the receiving party within a payment transaction equal to or greater than $3,000.

It turns out that this already happens within today's traditional financial systems when conducting bank transfers. However, accomplishing this directly within the Bitcoin is close to impossible. There is a technique to embed text data by converting the data into a wallet address and sending that address a small amount of funds. However, this would be giving away private consumer data publicly with no way to remove it, forever. there It leaves behind a lot of questions.
Read more at FORBES

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ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

Alternative Financial Service Providers Association
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