June 11, 2019

U.S. consumer watchdog (CFPB) delays existing payday lending rule compliance

WASHINGTON, June 7 (Reuters) - The U.S. Consumer Financial Protection Bureau on Friday said it is once again extending the compliance date for an ability-to-repay provision of a rule cracking down on payday lenders.

Payday firms will now have until Nov. 19, 2020 to begin ensuring borrowers have the means to repay a loan, as well as meet other living expenses, when the loan comes due, typically within 30 days.

Payday loans are small and short-term, typically due with a borrower's next paycheck and often bearing a high interest rate.

The move to extend the compliance date comes after the agency's chief, Kathy Kraninger, issued a proposal in February to seek fresh recommendations on how to implement it.

The CFPB was created in the wake of the 2007-09 global financial crisis to crack down on predatory lenders. While lenders argue that its payday rules would effectively eliminate critical stop-gap funding to borrowers, consumer advocates have long criticized the lenders for saddling borrowers with annualized interest rates that often reach several hundred percent. (Reporting by Katanga Johnson; Editing by Dan Grebler) Read more at REUTERS

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June 6, 2019: CFPB issued a final rule to delay the compliance date for the mandatory underwriting provisions of the 2017 final rule to November 19, 2020.

Note: The CFPB has delayed the compliance date for the mandatory underwriting provisions in this rule to November 19, 2020, and has proposed to rescind those provisions.

Payday, Vehicle Title, and Certain High-Cost Installment Loans; Delay of Compliance Date; Correcting Amendments

The Bureau of Consumer Financial Protection is issuing this final rule to delay the August 19, 2019 compliance date for the mandatory underwriting provisions of the regulation promulgated by the Bureau in November 2017 governing Payday, Vehicle Title, and Certain High-Cost Installment Loans (2017 Final Rule or Rule). Compliance with these provisions of the Rule is delayed by 15 months, to November 19, 2020. The Bureau is also making certain corrections to address several clerical and non-substantive errors it has identified in other aspects of the Rule.

The Bureau is releasing a table of contents for this final rule as well as an unofficial, informal redline to assist industry and other stakeholders in reviewing the changes that this final rule makes to the regulatory text and commentary of the 2017 Final Rule. Read more at CFPB

Proposed rule
Payday, Vehicle Title, and Certain High-Cost Installment Loans

The Bureau of Consumer Financial Protection is proposing to rescind mandatory underwriting provisions of the regulation promulgated by the Bureau in November 2017 governing Payday, Vehicle Title, and Certain High-Cost Installment Loans (2017 Final Rule). The provisions of the Rule which the Bureau proposes to rescind (1) provide that it is an unfair and abusive practice for a lender to make a covered short-term or longer-term balloon-payment loan, including payday and vehicle title loans, without reasonably determining that consumers have the ability to repay those loans according to their terms; (2) prescribe mandatory underwriting requirements for making the ability-to-repay determination; (3) exempt certain loans from the underwriting requirements; and (4) establish related definitions, reporting, and recordkeeping requirements. This proposal is related to another proposal seeking comment on whether the Bureau should delay the August 19, 2019 compliance date for these portions of the 2017 Final Rule.

The Bureau is releasing a table of contents for this proposal as well as an unofficial, informal redline to assist industry and other stakeholders in reviewing the changes that this proposal's amendments would make to the regulatory text and commentary of the 2017 Final Rule.

On June 6, 2019, the Bureau issued a final rule delaying the August 19, 2019 compliance date for the mandatory underwriting provisions of the 2017 Final Rule. Read more at CFPB


The Community Financial Services Association of America (CFSA) is the leading national association representing non-bank lenders that offer small-dollar credit products and other financial services. As consumers demand a more robust and diverse product mix to meet their evolving credit needs.

Texas Passes Debt Buyer Legislation Addressing Out-of-Statute Debt

The Texas Legislature has passed House Bill 996 which limits when a debt buyer can initiate legal action or arbitration to collect consumer debt and requires specific notices with respect to out-of-statute debt. Upon approval by Texas Gov. Greg Abbott, the new provisions will become effective Sept. 1, 2019.

Definition of a Debt Buyer

"Debt buyer" is defined as "a person who purchases or otherwise acquires a consumer debt from a creditor or other subsequent owner of the consumer debt, regardless of whether the person collects the consumer debt, hires a third party to collect the consumer debt, or hires an attorney to pursue collection litigation in connection with the consumer debt. The term does not include:
  • a person who acquires a charged-off debt incidental to the purchase of a portfolio that predominantly consists of consumer debt that has not been charged off; or
  • a check services company that acquires the right to collect on a paper or electronic negotiable instrument, including an Automated Clearing House (ACH) authorization to debit an account that has not been processed."
Compete in the data-driven lending era

Your phone carrier can now block robocalls by default

Washington DC (CNN) Robocalls are flooding cell phones, interrupting dinners, and scamming people out of money. Relief could finally be on the horizon, but perhaps at a cost.

The Federal Communications Commission voted on Thursday to give wireless carriers like Verizon the green light to block unwanted robocalls automatically for all customers. The move could curb a torrent of phone-based scams and unwelcome interruptions that have afflicted millions of consumers, said the FCC.
The vote clears the way for carriers to switch on robocall-blocking technologies for phone lines by default. The technology works by using algorithms and network scanning to identify unwanted calls, similar to how email providers scan for spam messages.
Carriers that switch on such technologies will be required to let customers opt out of the programs if they wish and continue receiving all calls.

Americans now receive roughly 5 billion robocalls per month, according to industry research. Robocalls are automated phone calls people receive that often show up on caller ID as nearby phone numbers, or sometimes even their own number. While some robocalls are legal and come from legitimate institutions like banks, schools or medical providers, a vast share come from scammers and foreign sources. Read more at CNN BUSINESS

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Senators say Fair Debt Collection Practices Act proposal puts industry ahead of consumers

LOS ANGELES - More than 20 U.S. Senators are calling on the Consumer Financial Protection Bureau to reconsider a proposal that would allow debt collectors to send unlimited texts and emails to consumers, as well as call them seven times a week per debt.

Led by Senators Bob Menendez (D-New Jersey) and Sherrod Brown (D-Ohio), 19 Democratic and two Independent senators have signed a letter expressing their concerns that the proposed update to the Fair Debt Collection Practices Act would allow debt collectors to contact consumers more than they already do. Signees include 2020 Presidential hopefuls Senators Kamala Harris (D-California); Kristin Gillibrand (D-New York); Cory Booker (D-New Jersey); Elizabeth Warren (D-Massachusetts) and Bernie Sanders (I-Vermont). Read the letter in its entirety at the bottom of this article.

In the letter to CFPB Director Kathleen Kraninger, the senators express concerns over the cost of sending text messages to consumers who do not have unlimited texting wireless plans and have to pay per text.

"By allowing debt collectors to send consumers unlimited text messages and emails without first receiving affirmative consent for such a method of communication, the proposed rule permits collectors to overwhelm consumers with intrusive
Read more at USA TODAY

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

Keeping Pace: Using Integrated Analytics to Turn Patterns, Predictions and Performance Into Strategies

The name of the game is speed when it comes to business. How fast can you operate: gather and analyze data, develop and test models, present findings, make confident decisions, engage your customers with relevant messages, and adapt to and anticipate needs in an ever-evolving business environment? The key to doing all this successfully, in large part lies in how strong your analytics capabilities are.

The market demands an integrated ecosystem that delivers data, insights and execution in a single platform in order to move fast, smoothly and strategically. Yet, an abundance of data isn't the goal; it's the right data and how it's analyzed and presented. Your business expects to receive findings not yet known to you but which can be used to make swift, reliable decisions and then move to a production environment. That's where many businesses struggle; that last leg of operationalizing, of actually using information to create and modify strategies - now, not in six months. In this consumer first era, people are bombarded by offers and products and when they see a relevant opportunity, they jump on it. You have to move just as quickly to capture those consumers, making offers personal, convenient and ultimately of interest. That's why you need the ability to gain insights, develop strategies and deploy them within days, or execute on a digital marketing campaign with immediate access to the right audience file. Lag time has no place today.
Read more at TRANSUNION

Lending as a Service
As Consumer Protections Dwindle, Schools Push Financial Literacy

Teaching students how to manage their money has become mandatory in many K-12 classrooms. But can it substitute for real enforcement of financial fraud?

In early January, with near-unanimous support, New Jersey legislators passed a law mandating financial literacy instruction for all middle school students across the state. The law says that lessons should provide students with the skills for "sound financial decision-making" and that topics addressed should include budgets, savings, credit, debt, insurance, investment, "and other issues associated with personal financial responsibility." Courses could involve teaching 11-year-olds how to save for retirement, or 12-year-olds about mutual funds. The primary sponsor of the bill pledged to keep fighting until schools start teaching the topics as early as kindergarten, insisting the next generation couldn't afford to wait.

Across the country, a movement to teach financial literacy in public schools has gained tremendous traction. Nineteen states now require financial education to graduate, according to the Council for Economic Education, up from 13 in 2011. In 2018, 29 states and Puerto Rico introduced bills around financial literacy, and 17 states enacted laws or adopted resolutions.

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.

MaxDecisions announces "Fintech Summer" Internship and Scholarship Program

MaxDecisions' Summer Intern Program aims to provide senior undergraduate or graduate students with the opportunity to gain valuable work experience in analytics, marketing and risk management for Fintech industry.

Through project-oriented hands-on assignments and professional development activities, you will obtain a solid understanding of real-world financial and credit risk data, and an overview of risk management lifecycle in the online lending industry.

Now, we offer two project directions: machine learning and web data sights. Both projects will allow you to learn advanced skills, develop cutting edge technologies and show your creativities to transform the lending functions by applying your IT and data science skills.

MaxDecisions Scholarship Awards:

By the potentially helps of your work on the experience development as well as on Fintech industry, MaxDecisions will sponsor Bronze Award ($1000), Silver Award ($1500), and Gold Award ($2000) for the program participants. Read more at MaxDecisions

Introducing AI Lift, the AI-powered credit risk web service that leverages uncorrelated alternative data to identify the 20-30% of today's thin-file and no-file borrowers ready to be creditworthy customers.

Lawmakers seek bank diversity data

The House Financial Services Subcommittee on Diversity and Inclusion has forwarded correspondence to over three dozen financial institutions to request diversity and inclusion data and policies.

Reps. Maxine Waters (D-CA), chairwoman of the House Financial Services Committee and Joyce Beatty (D-OH), subcommittee chairwoman spearheaded the effort to send letters to 37 bank holding companies requesting the information from 2015 to the present - focusing on sites with over $50 billion in assets.

"Unfortunately, a complete picture of diversity and inclusion in the financial services industry cannot be obtained until the financial services industry shares their diversity data and policies with the OMWIs, Congress and the public," the lawmakers wrote. "According to data presented by the Government Accountability Office at a February hearing of the Subcommittee on Diversity and Inclusion, the financial services industry has failed to significantly improve diversity in its management ranks."

The letter notes from 2007 to 2015, the overall representation of women among managers at financial services firms remained generally unchanged while the overall representation of minorities among managers marginally increased, except for African-Americans - whose representation decreased from 6.5 percent to 6.3 percent.
Read more at Financial Regulation News

Payliance: Powerful Payment Processing Technology

Top 5 Identity Verification Methods

Identity verification has become an essential component for many of today's businesses, especially financial institutions and e-commerce companies. Know Your Customer (KYC) and Anti-Money Laundering (AML) rules are driving the development of identity verification techniques throughout the world, although each country has its own regulations and organizations to enforce these rules. For example, the Financial Crimes Enforcement Network (FCEN) is one of the many agencies responsible for regulating identity verification methods in the United States. These techniques generally fall into one of the following five categories.
  • Knowledge-based authentication
  • Two-factor authentication
  • Credit bureau-based authentication
  • Database methods
  • Online verification
Knowledge-Based Authentication
Knowledge-based authentication (KBA) verifies a person's identity by requiring an answer to security questions. These questions are generally designed to be easy for that person to answer, but difficult for anyone to answer. Additional safeguards for KBA include a requirement to answer the questions within a specified time limit. The biggest advantage of KBA is that it's the easiest verification method for users to understand. Its biggest disadvantage is that it's getting increasingly easy to discover the answers via social networking and other more traditional forms of social engineering.
Read more at MICROBILT

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

Federal Push To Scale Back Payday Loan Regulations

CHICAGO (CBS) - It's advertised as a way to get cash quick, but for some payday lending users it can also create a cycle of debt. Now there is a push at the federal level to roll back regulations.

"It's a trap. Yes, we feel that it is a trap," said Laura Varela, who is still paying off her payday loan.

She and her husband Marco needed cash, so they took a payday loan out from one of the dozens of stores around Chicago. That was three years ago.

"We don't have another way to take it," she said. "We didn't have another option."

Payday loans are typically a few hundred dollars. The person borrowing agrees to pay the cash back but with annual percentage interest rates as high as 400%, due by their next paycheck.

"In Chicago most of the predatory lenders have set up shop in mostly black and Hispanic communities," said Raul Raymundo, CEO of the Resurrection Project.

Alternative Credit Reporting

FDIC chair encourages regulators to foster better relationships between banks, communities

Federal Deposit Insurance Corporation (FDIC) Chair Jelena McWilliams is encouraging regulatory agencies to foster better relationships between banks and their communities.

"The role of regulatory agencies is not to stand in the way of relationships between banks and the communities they serve but to encourage them. To achieve that goal requires that regulators get out of the D.C. 'beltway' and hear firsthand both from the bankers and the communities they serve. In my first year at the FDIC, I am almost halfway through a 50-state listening tour," McWilliams said at the Community Development Bankers Association's Peer Forum and Membership Meeting in Washington, D.C., this week.

Over the past year, McWilliams has been meeting with local bankers, state supervisors, and consumer groups for feedback on the needs of their local communities, the FDIC's regulatory approach, ideas to promote economic inclusion, and other important topics. Also, she has encouraged her staff to actively seek ways to reduce the regulatory burden on community banks and encourage community banking. Read more at Financial Regulation News

Redefining how financial service businesses measure risk and process payments.

Serent Capital Invests in Payliance, a Leading Payment Processor for Lenders and Retailers

San Francisco, CA - June 6, 2019 - Payliance, a leading provider of payments processing, payment recovery, and risk management solutions serving lenders and retail businesses, has partnered with Serent Capital, a private equity firm with offices in Austin and San Francisco focused on investing in high-growth technology and services businesses.

Payliance provides a complete suite of solutions for payments processing, payments recovery and risk management designed to solve payment acceptance challenges so that enterprises remain competitive and profitable. Payliance provides payment processing solutions for ACH, eCheck, RCC, and debit and credit card processing.

"Since inception, Payliance has focused on one thing - creating a proprietary, vertically integrated payments platform capable of providing differentiated value to our customers. Payliance is a leader in lending and retail payment processing due to our robust platform, underwriting functionality, and deep relationships across the payments ecosystem," said John Cullen, Co-founder and CEO of Payliance.

He continued, "As we continue to scale, we wanted to bring on an investment partner who could offer the set of resources and expertise that will enable the next phase of our growth plan. We feel that the capability Serent Capital brings is perfectly suited to helping us capture the opportunities ahead, while maintaining a steadfast focus on delivering strong value and a high level of service to our customers." Read more at PAYLIANCE

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

The Power Of The Crowd: A New Approach To Financial Regulation

In an era of rising anti-globalization; bitter trade wars between the US and its partners, China and Mexico; Europe in the throes of the rise of populism; and an impending Brexit - it is assuring to know that some of the world's institutions are still global-minded and focused on how we can all work together to achieve economic progress.

Founded in 1961, the Organisation for Economic Co-operation and Development's (OECD's) mandate is to shape policies that stimulate economic prosperity and global trade. The OECD is a forum for countries committed to democracy and the market economy with convening powers that provide a platform to compare policy experiences, seek answers to common problems, identify good practices and coordinate domestic and international policy standards for its 36 members and up to another 150 countries.

Greg Medcraft is the Director for Financial and Enterprise Affairs at the OECD and is a champion for standard setting in the global community. As a former tier one European banker and securities specialist - in addition to former Australian Securities and Investments Commission (ASIC) Commissioner and International Organization of Securities Commissions (IOCSO) Chair - he has the technical knowledge and experience of the "engine room workings" of global markets regulation combined with the charm of a Saturday evening television compere and the soundbite narrative of a presidential candidate. Read more at FORBES


Alternative Financial Service Providers Association

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