September 5, 2019
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Congressional leaders urge CFPB director not to delay compliance date for payday rule

Congressional lawmakers are calling on the director of the Consumer Financial Protection Bureau to reconsider the bureau's decision to delay the compliance date for the payday loan rule.

The compliance date for the 2017 Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule - or payday rule - was supposed to be Aug. 19. The bureau has yet to ask a court to lift a stay the agency requested so that the payment provisions of the rule could be implemented without further delay.

"Contrary to recklessly false characterizations, payday, car-title, and predatory consumer installment loans made without regard to the borrower's ability to repay are not acceptable or sustainable sources of credit," Rep. Maxine Waters (D-CA), chair of the House Financial Services Committee, and Rep. Jamie Raskin (D-MD), wrote in a letter to CFPB Director Kathy Kraninger.
Read more at Financial Regulation News



Opportunity for organizations that serve economically vulnerable populations to receive support

For the past five years, the Bureau's Office of Community Affairs has supported organizations committed to helping people manage their money and work toward their goals using a suite of financial empowerment tools called Your Money, Your Goals. If your organization serves economically vulnerable populations and you are interested in gaining more intensive support, such as training and technical assistance for your consumer financial empowerment efforts, you can apply for the Your Money, Your Goals 2020 cohort.

The Office of Community Affairs-which focuses on economically vulnerable consumers-is looking for approximately 40 organizations from across the country that are interested in using the Your Money, Your Goals toolkit, issue-focused booklets, and companion guides to help build the financial well-being of the people they serve.

The Office of Community Affairs is interested in working with organizations that serve economically vulnerable populations to equip frontline staff and volunteers to introduce financial capability topics in their meetings with the people they serve. These organizations may include:
Read more at CFPB


Banks Want Efficiency. Critics Warn of Backsliding.

WASHINGTON - A decade after big banks needed government support to dig out of the financial crisis, the Federal Reserve is slowly, but steadily, making a series of regulatory changes that could chip away at new requirements put in place to prevent a repeat of the 2008 meltdown.

Some of the changes, seemingly incremental and technical on their own, could add up to a weakening of capital requirements installed in the wake of the crisis to prevent the largest banks from suffering the kind of destabilizing losses that imperiled the United States economy. Another imminent change will soften a rule intended to prevent banks from making risky bets with customer deposits.

Fed officials and others who support the changes, including big banks, say the Fed is engaging in what they call "tailoring" - a regulatory correction that will bring greater efficiency to standards written in the heat of a meltdown. They say the tweaks will not weaken the ability of banks to withstand financial losses but will reduce burdensome regulations that could have unintended consequences, like encouraging risk-taking.
Read more at NEW YORK TIMES


Regulate Fintechs for What They Do, Not What They Don't

During Fortune's Brainstorm Finance conference in June, my panel was asked whether fintech, as an industry, faces too much or too little regulation. Panelists answered the question differently depending on their product and a common theme emerged: It depends.

Fintech companies face costly compliance with a mountain of financial regulations, most of which describe work we don't do. Like many technology-driven industries, our regulations are horribly outdated, authored at a time when an app meant fries for the whole table, and spam was just canned meat. Imagine running a business under laws written before your industry or product ever existed. That's the reality for most fintechs. Congress's directions for regulators about what "banks" are and do are based on how banking worked in the 1970s.

Regulators and lawmakers we meet with regularly tell us: "We know the laws are outdated and need to be scrapped and rewritten, but it's just too big, too hard, and too much work." To some extent, they're right. Bank board members and federal regulators can't grasp the scope or pace of change, or possibly keep up if they insist on treating every company like a bank and every loan like a 30-year mortgage. Read more at FORTUNE


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CFPB should have a say in bank mergers

The Consumer Financial Protection Bureau oversees some of the largest financial institutions in the United States, yet it has no say when those banks expand via merger.

The CFPB's inability to stop banks with poor compliance records from growing exposes consumers to potential harm.

Look no further than TCF National Bank, which recently merged with Chemical Bank and thereby nearly doubled in size. Consumers have lodged more complaints about TCF than any other U.S. bank over the past several years, according to one report. Customers alleged, among other things, that TCF regularly charged improper overdraft fees-misconduct for which TCF paid $30 million in penalties last year.

The CFPB might have blocked this merger - had lawmakers given it a say. But by law, the safety-and-soundness regulators - the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. - decide whether to approve or deny bank merger applications. Read more at AMERICAN BANKER


The digital trends disrupting the banking industry in 2019

Banking Industry Overview
The banking industry is in a much healthier place now than it was after the financial crisis of 2008. Total global assets climbed to $124 trillion in 2018, according to The Banker's Top 1000 World Banks Ranking for 2018.

With so much money to manage, major banks such as JPMorgan Chase, Bank of America, Wells Fargo, and more are releasing new features to attract new customers and retain their existing ones. On top of that, startups and neobanks with disruptive technologies are breaking into the scene, and traditional banks are either competing with them or merging with them to improve their service.

So let's dive into the banking industry, the challenges it faces, and the road ahead.

Banking Industry Trends
The most prevalent trend in the banking industry today is the shift to digital, specifically mobile and online banking (more on each of those in a bit). In today's era of unprecedented convenience and speed, consumers don't want to have to trek to a physical bank branch to handle their transactions. This is especially true of Millennials and the older members of Gen Z, who have started to become the dominant players in the workforce (and the biggest earners).

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CUNA (Credit Union National Association) favors national data privacy standard

Credit Union National Association (CUNA) officials said the organization is supporting Federal Trade Commission (FTC) Safeguards Rule amendments addressing national data privacy standards.

"Strong data security laws will not stop criminals or rogue nation states from attempting to penetrate even the most sophisticated data and cybersecurity defenses," Lance Noggle, CUNA senior director of Advocacy & Senior Counsel for Payments and Cybersecurity wrote in correspondence to the FTC. "However, American consumers that trust their personal information to businesses deserve the most diligent effort by those businesses and entities to protect this data from theft and misuse."

The CUNA is recommending the definition of a financial institution be broadened as much as possible to maximize consumer protection, adding enhanced data security requirements should always help safeguard consumers' private information.
Read more at Financial Regulation News


Job growth is the highest in these 5 US cities

The U.S. labor market continues to remain a bright spot in the economy, with employers shrugging off mounting fears of a global growth slowdown.

In August, job openings in the U.S. remained near an all-time high, rising at a healthy 3.2 percent year-over-year to 5.94 million available positions, according to new data published by Glassdoor on Tuesday. That's just below July's revised all-time high of 6 million job openings.

Although job opening growth cooled slightly compared to 2018 -- and pay growth remains stubbornly low, holding steady at 1.9 percent -- August figures ultimately showed the labor market continues to expand at a moderate pace that's fundamentally healthy.

Americans mostly dismissed recession fears, remaining confident in the state of the economy, with consumer sentiment near generational highs. That's helping to boost industries like retail, restaurant and bars, and beauty and fitness. Read more at FOX BUSINESS


Traditional banks continue to flirt with obsolescence

There are many things retail banks do well: custodial duties, managing customer calls, cultivating relationships, keeping secrets.

People need institutions that can reliably manage trust, serve as fiscal caretakers and guide them through challenging financial matters - whether it's restructuring a business or resetting a PIN.

In other words, banking services are needed. But the long-term sustainability of banks is another matter.

In 2017, Heather Cox, USAA's then-chief technology and digital officer, was named one of the top "Women to Watch" in the banking industry. Less than a year later, after working in the banking sector for more than a decade, she left the industry.

Why? Maybe she saw the writing on the wall. She certainly indicated it in the past.


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3 things a small business can do to retain employees

With the economy strong and a lot of companies looking for help, workers have more options than they otherwise would. That can create problems for small businesses, which may not be able to match the pay or perks at bigger firms.

But just because big companies might offer your employees a raise does not mean you can't compete. As a small business owner, you need to be creative and figure out what you can offer that the big boys may not be willing or able to match. Here are three ideas.

1. Offer flexibility
As a small business, you don't have to lock employees into a traditional schedule. Maybe one worker needs to schedule around a school bus pickup and drop-off, while another likes to work longer days in order to leave early on Friday. Read more at FOX BUSINESS

Dreher Tomkies LLP

As workers delay retirement, younger employees get stuck

More Americans are delaying their retirement - and it's making it harder for younger employees to get a promotion at work.

A little more than half of the companies surveyed in a new study by financial services company Fidelity Investments (55 percent) feel their employees aren't saving enough money to be able to retire when the time comes.

Fidelity kept track of company records since 2008 and found that a whopping nine out of 10 that offer retirement plans reported they have had employees work well past their desired retirement date leading to higher benefit costs, and lower productivity. And younger employees will stay stagnant longer because of it.

Indeed, 73 percent of employers said costs are rising, including benefits; 33 percent said younger employees are less likely to get promoted, 31 percent said companies can't implement strategic planning and 27 percent said delayed retirement leads to lower productivity.
Read more at FOX BUSINESS



CFPB Releases Research on Tax Time Savings

WASHINGTON, D.C. - The Consumer Financial Protection Bureau (Bureau) released today the results of a pilot study, Planning for tax-time savings, launched with the tax preparation company H&R Block that shows that simple messages encouraging customers to use their prepaid card to save at tax time increased the likelihood that they would do so.

The pilot study, conducted during the 2017 tax filing season, randomly assigned a subset of H&R Block's prepaid card customers to one of three groups. One group was sent an email with a message encouraging them to save using a savings feature on the prepaid card, one was sent an email message offering them a $5 incentive to save on the card, and one was not sent any savings message.

The study showed that early messaging and small incentives were effective at encouraging some customers to save using the savings feature on their prepaid card. The message that included the incentive offer was most effective at encouraging customers to save using their prepaid card, but the message simply encouraging customers to save also increased the number of customers who saved on the prepaid card compared to customers who were not sent any savings-related message.
Read more at CFPB



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