March 28, 2019
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Democratic AGs threaten legal action over proposed Payday Rule compliance delay. by Ballard Spahr LLP

A group of 24 Democratic state attorneys general and the D.C. attorney general have submitted a comment letter to the CFPB setting forth their opposition to the CFPB's proposal to delay the compliance date for the ability-to-repay (ATR) provisions of its final payday/auto title/high-rate installment loan rule (Payday Rule). They conclude their letter by threatening to "closely examine whether to take action to address any unlawful action by CFPB" should the CFPB finalize the proposed delay. (The AGs state in the letter that they will be submitting another comment letter opposing the CFPB's proposal to rescind the Payday Rule's ability-to-repay (ATR) in their entirety.)

The comments made by the AGs include the following:

The reasons cited by the CFPB in its proposal for "contradicting" its prior UDAAP analysis and prior analysis for setting the August 19, 2019 compliance date "are woefully insufficient and therefore arbitrary and capricious in violation of the [Administrative Procedure Act]."

The AGs reference the CFPB's statement that certain "potential obstacles to compliance" by the August 19 date, specifically recently-enacted changes to state laws and third-party software vendor issues, were unanticipated when the August 19 date was set. According to the AGs, the state law changes were not unanticipated and instead were taken into account when the August 19 date was Read more at CONSUMER FINANCE MONITOR

Accelitas is an alternative data resource that delivers the power of AI to reach more underserved consumers and deliver predictive insights that are customized to your business.
We are accepting applications for our Advisory Committees

To be sure that we hear from a variety of experts with diverse viewpoints, we set up the Consumer Advisory Board, the Community Bank Advisory Council, the Credit Union Advisory Council, and the Academic Research Council. These advisory committees provide us with information about emerging trends and practices in the consumer financial marketplace. They also allow us to hear directly from small financial institutions.

Starting today, we're accepting applications for membership in all four of our advisory committees. We're inviting applications from individuals who can provide us with advice as we carry out our work. Here's what we're looking for:

Experts in consumer protection, community development, consumer finance, fair lending, and civil rights
Experts in consumer financial products or services, including consumer reporting, debt collections, and debt relief
Representatives of banks and credit unions that primarily serve underserved communities

Payliance: The Power Behind Payments Technology

Stay On CFPB Payday Lending Rule Upheld

A federal judge late last week ordered a stay on the August 2019 compliance date tied to the "payday lending rule" mandated roughly two years ago by the Consumer Financial Protection Bureau (CFPB).

As reported late last week across outlets such as American Banker, the rule had been drafted under the tenure of Richard Cordray, who had served as the previous director. The new Director Kathleen Kraninger has proposed eliminating one of the components of the rule, which put in place new underwriting requirements for lenders (such as verifying borrowers' ability to repay the payday loans). The rule also had another component, focused on how often a lender can try to debit payments from a customer's bank account.

The ruling, per U.S. District Judge Lee Yeakel, means the stay (which has been in place since November), well, stays, resulting in the delay of the rule's implementation. The judge wrote in his March 19 ruling that he had not received a request to lift the stay.

The Kraninger-proposed rollback of the aforementioned underwriting requirements came last month, and several trade groups, such as the Community Financial Services Association of America, had asked Judge Yeakel to delay compliance dates until the underwriting rollback had been completed. The CFPB had asked the court to wait until a separate case had been decided. That case, in which a payday lender has challenged the CFPB's very constitutionality, is still with the Court of Appeals for the Fifth Circuit. Read more at PYMNTS.COM

Alternative Credit Reporting

The large need for small-dollar lending

In 2017, the Federal Reserve found that about 40 percent of adults wouldn't be able to pay an unexpected $400 expense without borrowing funds or selling a personal item. Further, almost three-quarters of checking account holders in a Fiserv-sponsored survey said they need to access short-term credit resources at least once a year. Consumers say they usually require less than $1,000-$100 to $499 is typical-and unexpected auto and home repairs along with health care costs most frequently precipitate the need.

Every week in the news we hear of another study or survey that concludes the same thing: Despite the growing economy, millions of Americans still have difficulty accessing cash when they need it the most.

So what will your account holders do if-or more likely when-they encounter a costly medical expense, leaky roof or need a new tires to drive to work (where they earn their money in the first place)?

Small-dollar lending: proven success, discontinued products

Compete in the data-driven lending era

How Will You Grow in 2019?

A new year and desire for growth brings expansion to our executive team, a waterfront office relocation to Petaluma, California, and a new Credit Risk Web Service that is blowing away traditional credit screening services.

Mark Smith is now Senior Vice President, Product Development, and Scott Mullins is Senior Vice President, Marketing.

Mark has over 20 years' experience delivering product solutions to corporate and government customers. His extensive management experience includes planning, implementation, IT infrastructure, software deployment, and managed services for ERP applications.

Scott has been building iconic global brands through integrated communications for more than 20 years. His diverse category experience and strategic leadership has contributed to the growth of some of the world's most recognizable companies like Adobe, Samsung, HP and Intel.

We are also excited to introduce our new Credit Risk Web Service called - AI Lift. This AI-powered service leverages alternative data to deliver an AI Lift Score that is uncorrelated to traditional sources, enabling lenders to identify 20-30% more creditworthy thin-file and no-file borrowers.
Read more at ACCELITAS


New study highlights just how bad Americans are with credit cards

A new study details how Americans manage credit cards and how stressful credit debt can be.

Commissioned by Clever Real Estate and conducted by online polling software Pollfish, the report looked at 1,000 survey responses of Americans who owned at least one credit card.

"The most shocking find to me was how many Americans carry credit card balances month to month," Tommy O'Shaughnessy, an analyst at Clever Real Estate Analyst and the author of the report, told Yahoo Finance.

Nearly half of the respondents (47%) carried some amount of credit card debt month to month, according to the survey, with 72% of borrowers carrying more than $1,000.

"With the average 17.64% APR, that debt compounds quickly and can become unmanageable for lower income families," O'Shaughnessy noted. Read more at YAHOO FINANCE

Lending as a Service

Chase's Checkless Account Won't Make A Dent In The Unbanked Ranks
As reported by Reuters:

Responding to calls for more bank services for low-income consumers, JPMorgan Chase on Monday began offering checkless accounts with access to its mobile app, branches and ATMs for $4.95 a month and no minimum balance. Thasunda Duckett, chief executive of Chase Consumer Banking, said she hoped the new accounts will attract more low-income individuals and people who have never had bank accounts. "The very first step in building financial health really starts with a bank account," Duckett said. The annual cost of $60 for the new accounts compares with charges of $200 to $500 a year at check cashing and money order services, she said."

Anybody wanna make a bet?

I say that, a year from now, of the people who open one of Chase's new checkless accounts, more will come from the already-banked population than from the unbanked. In fact, I'll go as far as to say that 90% of the customers Chase gets with this account will already have a checking account.

Cost Isn't The Problem Read more at FORBES

Merchant Boost Announces Name Change to ValidiFI
Redefining how financial service businesses measure risk and process payments.

The road to financial wellness is paved with good intentions. by David Kilby

Financial wellness programs are becoming a staple in the employee benefit universe.

As a rapidly growing industry, we often lack a consistent definition for financial wellness. This leads to organizations believing they have implemented a financial wellness program when in reality, they are only offering a handful of tools or resources that may present more challenges when offered in a silo.

I define financial wellness as the process by which an individual can efficiently and accurately assess their financial posture, identify personal goals, and be motivated to gain the necessary knowledge and resources to create behavioral change. Behavioral change will result in improved emotional and mental well-being, along with short- and long-term financial stability.

Seventy-eight percent of U.S. workers live paycheck to paycheck to make ends meet. The need for financial wellness is clear, but there are consistent pillars that must be addressed to affect change. This includes: Spending, saving, borrowing and planning. When evaluating employers' financial wellness plans, the biggest challenge for each organization is defining what a successful program looks like, determining what aspects are currently being offered and identifying gaps in the services they provide. Read more at CREDIT UNION JOURNAL

Trust Science
Say "yes" to thin-file and no-hit borrowers with REAL alternative data and a fully compliant, AI-powered score, customized for your business.

As Payday Loan Market Changes, States Need to Respond: PEW TRUSTS

Ohio's Fairness in Lending Act is a good model for reforms

State lawmakers need to be on the alert: Big changes are underway in the payday loan market, many of which will be detrimental to borrowers and socially responsible lenders. Longer-term, high-cost payday and auto title installment loans have spread dramatically as companies diversify their business models in an attempt to reduce reliance on conventional payday loans. However, without state-level safeguards, these longer-term products often have excessive prices, unaffordable payments, and unreasonably short or long durations, and therefore can be as harmful to borrowers as conventional payday loans.

What should states do?
State lawmakers who want a well-functioning market for small loans will need to establish strong but flexible safeguards to protect consumers and ensure transparency. Legislators in states where payday loan stores operate should consider measures similar to Ohio's Fairness in Lending Act (H.B. 123), which was passed in July. The law tackles the main problems in the market by lowering prices, requiring that payments be affordable, and giving borrowers reasonable time to repay. It also includes crucial provisions to balance the interests of consumers and lenders, thereby ensuring widespread access to credit. Read more at PEW TRUSTS

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.

INDIANA: Consumer Backlash Meets Indiana Senate's Payday Loan Bill

With household debt at historic highs, oppositions say now isn't the time to expand these types of high interest loans.

A coalition is urging Indiana lawmakers to stop a bill that would significantly expand high interest loans in the state.

Senate Bill 613 would allow loans with interest rates above 72 percent, which is currently considered felony loan sharking.

Indiana veterans groups, faith organizations and social service agencies say the bill would open the door to predatory lending practices.

But supporters maintain it fills a gap for borrowers, between traditional bank or credit union loans and payday lending.

Erin Macey, a senior policy analyst with the Indiana Institute for Working Families, says the only winners would be the payday lenders. Read more at EAGLE COUNTRY ONLINE

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

Banks seek Congress' help to block fintech path to 'industrial' charters

Industry group expects efforts to have bipartisan support on Hill

A bank industry group is lobbying Congress to block financial technology firms, such as online lender Social Finance Inc. and payment processor Square Inc., from obtaining an obscure form of a state bank charter that would let them operate nationally with little federal supervision.

The Independent Community Bankers of America last week distributed a policy paper around Washington calling for an immediate moratorium on providing federal deposit insurance to industrial loan companies, or ILCs, which are chartered by only a few states - most notably Utah.

Now, the ICBA says it's presented the report to FDIC Chairwoman Jelena McWilliams and is set to discuss the issue with members of Congress in the days ahead, focusing on members of the Senate Banking and House Financial Services committees.

The group says industrial charters are a loophole in the banking law that Congress should close. Fintechs that own state-chartered ILCs would not be subject to supervision by the Federal Reserve and would not have to divest any nonbanking-related commercial activities, "leaving a dangerous gap in safety and soundness oversight," ICBA said. Read more at ROLLCALL

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

FTC and CFPB Report on 2018 Activities to Combat Illegal Debt Collection Practices

The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (Bureau or CFPB) reported on their 2018 activities to combat illegal debt collection practices. The annual report to Congress on the administration of the Fair Debt Collection Practices Act (FDCPA) highlights both agencies' efforts to stop unlawful debt collection practices, including robust law enforcement, education and public outreach, and policy initiatives.

In the report, the FTC states that it filed or resolved a total of seven cases against 52 defendants, and obtained more than $58.9 million in judgments. The FTC also banned 32 companies and individuals that engaged in serious and repeated law violations from ever working in debt collection again. The FTC continued its aggressive efforts to curb egregious debt collection practices, including initiating or resolving four actions involving phantom debt collections. The FTC returned $853,715 to consumers who lost money to two phantom debt collection operations previously stopped by the FTC. In 2018, the FTC also:

Initiated or resolved three other actions, in addition to the phantom debt cases, to protect consumers from unlawful debt collections practices;
Deployed educational materials through multiple channels and formats to inform consumers about their rights and educate debt collectors about their responsibilities under the FDCPA and FTC Act; Read more at The Federal Trade Commission

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

Alternative Financial Service Providers Association

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