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January 10, 2019
2019 edition: 003 / 102

How to Respond to Negative Press. by Todd Stone

Wondering what to do about negative press? deBanked spoke to some Public Relations professionals about helpful techniques to manage the situation.

"When it comes to a negative story, we advise our clients to bridge back to something they are comfortable talking about," said Bill McCue, Executive Consultant at Indicate Media.

McCue said this is known as "bridging."

"If you're asked a question about something you don't want to talk about for whatever reason, you can use transitional phrases like 'You know that's an interesting point, but what the real story here is...' or 'What we believe is truly the most important thing to talk about is...' And just keep bridging from a topic you're not comfortable addressing to a topic you are comfortable addressing."

McCue noted that politicians and professional athletes are excellent at this. His favorite example is hockey players, who never talk about themselves. When they get a question about their own performance, they always "bridge" to something like the strength of another player or the coach or the entire team.

McCue also advises all clients, whether they're overcoming negative press or not, to speak in simple terms, and avoid jargon or acronyms.

"Never assume that the reporter is an expert on your industry," McCue said. "He or she might be writing about [multiple] topics throughout a given business day. Or they may have been writing about real estate last week and now they're writing about small business lending...So never assume a certain level of expertise." Read more at deBANKED


One potential winner from the government shutdown - Payday Lenders

But the partial shutdown is largely seen as weighing on U.S. businesses - especially the aviation industry

While the partial government shutdown is largely bad news for U.S. companies, payday lenders look set for a boost.

"We're now getting to the point where federal employees are going to need some kind of short-term loan in some cases," said federal budget expert Stan Collender.

In cases where these employees can't turn to family or friends, companies that provide payday loans "are going to benefit a little bit, because there's going to be a request for funds," said Collender, known for his Budget Guy blog.

About 800,000 federal employees are furloughed or working without wages thanks to the shutdown, now in its 18th day. They're preparing to miss out on their usual paychecks, which otherwise would generally be coming this Friday. Read more at MARKETWATCH

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Consumer credit has second straight big jump in November

Consumer credit grows $22.1 billion, or at a 6.7% annual pace

The numbers: Consumer borrowing stayed strong for the second straight month in November, according to the Federal Reserve on Tuesday. Total consumer credit increased $22.1 billion in November to a seasonally adjusted $3.98 trillion. That's down only slightly from a $25 billion gain in October, which was the fastest pace in 11 months. Economists had been expecting a $19 billion gain in credit, according to Econoday.

This is the third month out of the past four that consumer credit grew more than $20 billion. That hasn't happened in four years. Consumer credit has been trending around a $15 billion-a-month growth rate.

What happened: Revolving credit, such as credit cards, cooled off a bit in November, rising by 5.5% after a 10.9% gain in October. Nonrevolving credit, typically auto and student loans, picked up, rising 7.1% in November after a 6.5% gain in the prior month. The data does not include mortgage loans.

Big picture: Economists have not been troubled by the gains in consumer credit. Households appear to be in good shape, at least though the fourth quarter. Spending is strong and credit growth remains below gains in personal income. This could all change if the uncertainty over the outlook starts to feed back into job cuts. For now, the rise in consumer borrowing adds to signs of a strong holiday shopping season. Read more at MARKETWATCH


Most and Least Complained About Banks for 2018

Banks with the Most Complaints Per Billion ($) in Deposits

Before opening a bank account, most people check out interest rates and look at fees first. After that, availability of ATMs and branches, technology offered and the safety of your money are also important. But what about customer service? Once an account is opened may not be the best time to discover that the bank's ATM machines are unreliable, that it may close your account without informing you or that promised sign-up bonuses never seem to happen.

This is where online loan marketplace LendEDU's annual report listing the most- and least-complained-about banks can be very helpful. For this year's report LendEDU sifted through 244,114 banking-related complaints received by the Consumer Financial Protection Bureau (CFPB) Consumer Complaint Database between Jan. 1, 2018, and Dec. 19, 2018. Ultimately, LendEDU included data from 42,946 complaints filed against 73 banking institutions listed on Standard & Poor's Banks Select Industry Index.

The CFPB Complaint Database
The CFPB Consumer Complaint Database collects and processes complaints about several different financial products and services, including those provided by banks. When a consumer adds a complaint to the database, CFPB sends it to the company for a response, after which the complaint is added to the database and published (minus personal information). LendEDU began turning the CFPB's raw data into an annual report in 2016, partly to put information about each bank's performance into an easy-to-read format for consumers and partly due to concerns that the CFPB Consumer Complaint Database would be blocked from public view by the Trump administration. Read more at INVESTOPEDIA


IRS confirms tax season will start Jan. 28, despite government shutdown

The IRS announced on Monday night that income tax filing season would begin on Jan. 28 and that it would pay refunds to taxpayers, in spite of the government shutdown.

The agency said that it would recall a "significant portion" of its workforce, summoning them back to work without pay.

A spokesman for the IRS was unable to provide the specific details on how many IRS workers would be brought back and for which functions, as the agency has not yet released its updated contingency plan for the filing season.

The announcement from the IRS came after a Trump administration official told reporters on Monday that federal income tax refunds would be paid even though the government is shut down.

"Tax refunds will go out," said Russell T. Vought, acting director of the White House Office of Management and Budget, in a briefing on Monday.

There have been growing concerns that tax refunds might be delayed as 800,000 federal workers are either furloughed or working without pay as President Donald Trump and Congress are mired in a standoff over funding for a southern border wall. Read more at CNBC


Robocalls jumped 60 percent in the U.S. last year and scammers are finding more ways to make money
  • Some 48 billion robocalls were made last year to U.S. mobile phone users last year, according to YouMail, a company that tracks the calls.
  • The scams are surprisingly effective, with 3 percent to 5 percent of people responding to the automated messages and sometimes sending scammers thousand of dollars.
  • Cell carriers and tech companies are working to fix the problem, but criminals are outpacing them with cheap technology.
It's not your imagination. You are getting bombarded with robocalls.

Robocalling, a practice where marketers send automated voice messages to thousands of phones at once, surged 60 percent in the U.S. last year to 48 billion calls, according to preliminary year-end data from YouMail, a robocall management company that tracks the volume of calls.

"Scam calls have been increasing very steadily, and it's driving people to not answer their phone," said YouMail CEO Alex Quilici. "It's driving people to not answer their phone and it's kind of created this death spiral of phone calls as the robocallers ramp up their efforts, and the legitimate roboccalls try harder to get through."

Both mobile carriers and smart phone makers are racing to keep up with the influx, but have been unsuccessful so far because the technology to deploy the calls is cheap, easy and lucrative for scammers. Scams make up an estimated 40 percent of all robocalls, Quilici said, while the other 60 percent are "legitimate" robocalls, like those that come from pharmacies, libraries, schools and political candidates. Read more at CNBC

Dreher Tomkies LLP

Supreme Court debates the meaning of the term 'debt collector' in a foreclosure protections case dating back to the financial crisis
  • The Supreme Court on Monday heard arguments in a case that dates back to the financial crisis a decade ago.
  • The justices, missing Justice Ruth Bader Ginsburg, attempted to resolve a legal question that could have broad ramifications on hundreds of thousands of Americans who are foreclosed on without a judicial process each year.
  • A key issue in the matter is who or what can be considered a "debt collector."
WASHINGTON - Markets are racked by turmoil, and there are signs the booming U.S. economy could slow down later this year. Yet the Supreme Court is reckoning with the lingering fallout from the financial crisis that rocked the global economy a decade ago.

The top court on Monday attempted to resolve a legal question that could have broad ramifications on hundreds of thousands of Americans who are foreclosed on without a judicial process each year. A key issue in the matter is who or what can be considered a "debt collector."

The justices were divided, but not into clear ideological zones. Chief Justice John Roberts and Justice Brett Kavanaugh, Republican-appointed conservatives who are typically business friendly, were among the most skeptical questioners of the respondent in the case, a law firm working on behalf of Wells Fargo.

To be sure, there are ideological divides at issue. Sen. Elizabeth Warren, D-Mass., who announced a formal step toward a bid for the presidency last month, took a public stance on behalf of the petitioner in the case. Read more at CNBC


Small business tax deduction has CPAs scratching their heads

NEW YORK (AP) -- Millions of small business owners will be in uncharted waters this tax season as they try to determine if they qualify for a deduction that could exempt one-fifth of their income from taxes.

Five months after the IRS issued guidelines to help business owners and tax advisers understand how the complex deduction works, accountants and tax attorneys still have questions. Even those who have attended seminars and workshops about the new law have come away scratching their heads, especially about a section that bars service providers like doctors, lawyers and consultants from claiming the deduction. Some of these company owners have businesses that don't easily fit into the IRS guidelines or proposed regulations the agency has also issued.

"There's a lot of conflicting advice out there," says Jeffrey Berdahl, a CPA with RLB Certified Public Accountants in Allentown, Pennsylvania. "It's going to be like the Wild West."

The deduction is aimed at giving tax breaks to sole proprietors, partners and owners of S corporations; these businesses are known as pass-throughs because company income "passes through" to owners' 1040 forms, where it is reported to the IRS. Before the law was enacted, many of these owners couldn't get the more favorable tax treatment enjoyed by traditional corporations, those known as C corporations. Read more at ASSOCIATED PRESS

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Business valuation tools and techniques. by Philip Burgess

Business valuation is an important process for small and large companies alike, offering owners and prospective buyers an objective method by which to appraise the worth of a business entity. Financial experts use a range of tools and techniques to determine the value of a company, which help them formulate selling prices, set the terms of mergers and acquisitions, and anticipate future earnings.

While revenues are a major factor in the process, they do not always provide a complete picture of a business's overall value. For example, investors must consider the potential that a publicly traded company has in addition to its present economic standing, otherwise their investment decisions would be limited to present market conditions. By looking at all aspects of a business, investors can balance the risks against the possibility of high returns down the line, which can be achieved through the calculation of objective measures such as capital structure analysis and earnings prospects.

Of course, valuation measures are equally important for business owners who want to understand the ins and outs of their finances. Typically, potential buyers and investors will turn to a company's financial statements to assess its value, meaning disclosures such as: Read more at MICROBILT


MaxDecisions, Inc. Receives Metro2 Certification from CDIA (Consumer Data Industry Association)

Plano, TX (Jan 4th, 2019) - For Immediate Release - MaxDecicisons Inc., is a leader in analytics and predictive modelling and performance marketing, today announced today that it has received Metro2 certification from CDIA (Consumer Data Industry Association). The combination of our analytics, portfolio management report and Metro2 Credit Reporting capabilities make it easier for lenders and financial institutions to report accurate representations of consumer payment behaviours to major credit bureaus.

"I am excited that our team has passed rigorous training and testing from CDIA to further assist our clients with confidence and accuracy needed when interacting with Consumer Credit Bureaus, " said Timothy Li, CEO of MaxDecisions, Inc.

Lending is a highly regulated activity with regulatory oversights from the state, federal level. The often overlooked credit bureau reporting process is also regulated by Fair Credit Report Act - FCRA.

Lenders often need help interims of understanding it's own data structure from industry standards Loan Mangement Systems as well as the data structure needed to report to credit bureaus in the Metro2 format.

MaxDecisions has developed algorithms and software to translate often difficult data structures into reportable Metro2 formats for all credit bureaus. We make this process painless and cost-effective. Read more at MAXDECISIONS


A quarter of Americans expect to die in debt

Americans who are in debt don't have an optimistic view of the future.

In fact, nearly two-thirds of Americans in debt don't know when, or if, they will ever completely pay off their debt - including 25% of debtors who expect to die in debt, according to a new survey from

The debt pessimism isn't constant across age groups, however, and 35% of Americans overall believe they will pay off their debt at some point in life.

Millennials were the most optimistic generation when it came to paying off their debt, with only about 20% of respondents indicating they would never be debt-free. The opposite was true for the Silent Generation, defined as those above age 73, which indicated a larger percentage, about 30% believed they were destined to die in the red.

Strangely, households with less income indicated they believed they would pay debt off sooner, according to the survey. Households with total income below $50,000 listed 47 as the average age they would be debt-free compared to age 55 for households with total income above $50,000.
Read more at YAHOO FINANCE


'Tribal Immunity' may no longer be a get-out-of-jail free card for payday lenders. by Leslie Bailey

Payday lenders are nothing if not creative in their quest to operate outside the bounds of the law. As we've reported before, an increasing number of online payday lenders have recently sought affiliations with Native American tribes in an effort to take advantage of the tribes' special legal status as sovereign nations. The reason is clear: genuine tribal businesses are entitled to "tribal immunity," meaning they can't be sued. If a payday lender can shield itself with tribal immunity, it can keep making loans with illegally-high interest rates without being held accountable for breaking state usury laws.

Despite the increasing emergence of "tribal lending," there was no publicly-available study of the relationships between lenders and tribes-until now. Public Justice is pleased to announce the publication of a comprehensive, first-of-its kind report that explores both the public face of tribal lending and the behind-the-scenes arrangements. Funded by Silicon Valley Community Foundation, the 200-page report is entitled "Stretching the Envelope of Tribal Sovereign Immunity?: An Investigation of the Relationships Between Online Payday Lenders and Native American Tribes." In the report, we set out to analyze every available source of information that could shed light on the relationships-both claimed and actual-between payday lenders and tribes, based on information from court records, payday loan websites, investigative reports, tribal member statements, and many other sources. We followed every lead, identifying and analyzing trends along the way, to present a comprehensive picture of the industry that would allow examination from several different angles. It's our hope that this report will be a helpful tool for lawmakers, policymakers, consumer advocates, journalists, researchers, and state, federal, and tribal officials interested in finding solutions to the economic injustices that result from predatory lending. Read more at PUBLIC JUSTICE

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