October 8, 2019


FBI Issues 'High-Impact' Cyber Attack Warning-What You Need To Know

Be it the prohibition-era gangsters of the 1920s or the global war on terrorism, the Federal Bureau of Investigation (FBI) has been the primary U.S. investigative agency of the federal government with a responsibility to protect the nation. As part of what the FBI describes as being "a unique dual responsibility, to prevent harm to national security as the nation's domestic intelligence agency and to enforce federal laws as the nation's principal law enforcement agency," it has increasingly had to deal with the cyber threat. One "high impact" and ongoing cyber threat has become such a critical concern that on October 2, the FBI issued a warning to U.S businesses and organizations.

What is the high-impact threat to U.S. business?
The FBI's Internet Crime Complaint Center (IC3) last posted a warning about ransomware on September 15, 2016. Then it was urging victims to report ransomware incidents to federal law enforcement to help paint a detailed picture of the threat. The threat landscape revealed has been a constantly changing one. The frequency of attacks has remained relatively consistent, but the nature of them has not. The FBI reports that the incidence of indiscriminate ransomware campaigns, such as evidenced by WannaCry on May 2017, has "sharply declined." However, losses from ransomware have increased significantly as the attacks become "more targeted, sophisticated and costly."
Read more at FORBES

CFSA Conference

ARIZONA: Ballot initiative would allow lenders to charge any interest rate they want

Lenders operating in Arizona would have no limits on how much they could charge for interest rates under a ballot measure introduced last week

The proposed Economic Fre Act would prohibit mandatory limits on the prices of most private transactions.It also would limit future state minimum-wage increases.

"The hallmark of a free society is the ability of autonomous individuals to decide for themselves whether and on what terms they wish to transact goods, services or money," the text of the proposed constitutional amendment reads. The proposal would "prohibit the government from dictating price terms in transactions between private persons."

Read more at AZ CENTRAL


CFPB And The Fifth Circuit Agree That Independent Agency Directors Should Be Removable At Will

A recent decision from the United States Court of Appeals for the Fifth Circuit and statements by the Director of the Consumer Financial Protection Bureau (CFPB) may prompt the Supreme Court to consider the constitutionality of the CFPB's single director structure.

Sitting en banc, the Fifth Circuit ruled earlier this month that the directorship structure of the Federal Housing Finance Agency (FHFA) is unconstitutional. The FHFA-an independent agency created under the Housing and Economic Recovery Act of 2008 (HERA)-serves as regulator and conservator of government sponsored enterprises such as Fannie Mae and Freddie Mac. Like the CFPB, the FHFA's sole director is only removable by the President "for cause." In Collins v. Mnuchin, the Fifth Circuit ruled that this "for cause" language should be struck from HERA, deeming it an unconstitutional limitation on the President's removal power under Article II. Notably, however, the Court of Appeals found only that severing the provision would be warranted, and did not rule that invalidating the FHFA outright was an appropriate remedy.

An analog provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank Act") established a similar, but not entirely identical, removal procedure for the CFPB's sole directorship. Among other things, the Dodd-Frank Act defines removal "for cause" to mean removal "for inefficiency, neglect of duty, or malfeasance in office."
Read more at MONDAQ


Toronto will no longer issue licences to payday lenders

The City of Toronto will no longer hand out licences to payday lenders, and will prevent the establishments from advertising on city-owned property.

City council voted to end the issuing of the licences amid concerns that the services are taking advantage of low-income residents by charging hefty fees.

"Their services shortchange those in need," Councillor Anthony Perruzza said.

"We want the public to seek the financial empowerment supports that help them make better decisions, not to be taken advantage of when they're in a desperate situation."

The city's decision to ban establishments from advertising on city-owned property, includes its agencies, boards and commissions, such as the Toronto Transit Commission (TTC).
Read more at CTV News


CFPB Announces Advisory Committee Members

WASHINGTON, D.C. - Consumer Financial Protection Bureau Director Kathleen L. Kraninger today announced the appointment of members to the Consumer Advisory Board (CAB), Community Bank Advisory Council (CBAC), Credit Union Advisory Council (CUAC), and Academic Research Council (ARC). These experts advise Bureau leadership on a broad range of consumer financial issues and emerging market trends.

"The Bureau is able to protect consumers in the financial marketplace better when it receives input from a wide range of experts and stakeholders," said Director Kraninger. "With the enhancements we made earlier this year to the structure of the advisory committee program, I am confident that these groups will be able to hit the ground running in their efforts to provide meaningful feedback on Bureau policy and regulations. I look forward to working with them."
Read more at Consumer Financial Protection Bureau


Community banks won't survive without tech innovation, FDIC chair says

The survival of community banks hinges on their ability to successfully collaborate with fintechs, FDIC Chair Jelena McWilliams said Tuesday at a conference on the future of banking at the Federal Reserve Bank of St. Louis.
McWilliams said it's the responsibility of regulators to foster an environment where bank and fintech collaboration can thrive.
"It is my goal that the FDIC lays the foundation for the next chapter of banking by encouraging innovation that meets consumer demand, promotes community banking, reduces compliance burdens and modernizes our supervision," she told the audience in a speech.

Dive Insight:
Community banks face challenges from consolidation, economies of scale and competition from larger banks, credit unions, fintechs and nonbank lenders, McWilliams said. So the FDIC has no choice but to create an environment where innovation can thrive, she said.

"This is not optional for the FDIC. We must lay this foundation because the survival of our community banks depends on it," she said.

Since taking the top position at the agency last year, McWilliams has made innovation and technology among her top priorities. Read more at BANKING DIVE


California cities could open their own public banks under new law meant to fund housing

California cities could start their own public banks under a new law Gov. Gavin Newsom signed Wednesday in an effort to make it easier for projects in the public interest, like affordable housing, to access capital.

The measure lays out a process for local agencies to create their own public banks that would likely take years.

Opponents argue such ventures are risky and impractical. Supporters say public banks could provide an easier avenue than private banks to secure loans for projects in the public interest that may not be commercially attractive, such as affordable housing developments or small businesses.

"The public's money should serve the public's purpose, not line the pockets of Wall Street investors," said the bill's author Assemblyman David Chiu, D-San Francisco. "This is about giving local communities the option to bank elsewhere and make our tax dollars work for our communities."


IRS audits more poor taxpayers because it's easier, cheaper than targeting the rich

Instead of going after the wealthy, the IRS has been under fire for targeting lower-income taxpayers with audits - which the agency now says is partially because it is easier and can be accomplished by less-skilled employees.

When questioned by Oregon Democrat Sen. Ron Wyden as to why a large proportion of lower-income taxpayers were being audited, IRS commissioner Charles Rettig admitted it is a much easier and less costly task when compared with auditing higher-income tax returns.

Correspondence audits, which are often used to look into low-income people claiming the Earned Income Tax Credit (EITC), cost just $150.

"EITC correspondence audits are the most efficient use of available IRS examination resources with the average time to complete the audit of 5 hours per return," Rettig explained in a letter.
Read more at FOX BUSINESS


Cryptocurrency: What to know about digital money

Investors around the world have taken notice of Bitcoin's rapid rise in price - as well as some dramatic falls -since it launched just a decade ago.

Buying and selling cryptocurrencies can feel like doing commerce in a sort of digital wild west. There are fortunes to be made, but also scammers and thieves ready to take advantage of the unprepared.

But as the world enters its second decade with crypto, traditional financial services and mainstream businesses have been examining how they can get in on it, and regulators have also taken note. As the market continues to evolve, here are five things to know about cryptocurrency:

How it works
Cryptocurrencies rely on a technology called blockchain, which is an open database of every transaction that verifies the security of transactions.
Read more at FOX BUSINESS


Florida governor announces initiative to attract FinTech companies

Florida officials have launched an effort designed to encourage the start, relocation, and expansion of financial technology (FinTech) companies within the state.

Florida Gov. Ron DeSantis made the announcement Monday with Chief Financial Officer (CFO) Jimmy Patronis, Department of Economic Opportunity (DEO) Executive Director Ken Lawson, Mayor Lenny Curry and business and community leaders from the Jacksonville area.

"From day one, we've made it a priority to create a regulatory environment that provides opportunities for businesses in the financial technology and banking sectors to thrive without being impeded by high taxes and burdensome regulation," DeSantis said. "The initiatives demonstrate that we are committed to making Florida the top destination for FinTech companies to grow and succeed."

DeSantis is directing DEO and Enterprise Florida, Inc. (EFI) to expedite the review of Florida Job Growth Grant Fund proposals providing workforce training programs in the financial services industry, with a focus on FinTech skills training;
Read more at Financial Regulation News

Dreher Tomkies LLP

Consumer Bankers Association comments on CFPB's proposed debt collection rule. by Ballard Spahr LLP

The Consumer Bankers Association (CBA) has filed a letter commenting on the CFPB's proposed debt collection rule. Ballard Spahr served as counsel to the CBA in preparing the comment letter.

In the letter, the CBA urges the Bureau to make various revisions and clarifications to the proposal, including the following:
  • Taking the following steps to remove any uncertainty about the potential application of the final rule to creditors: (1) rely solely on the Bureau's FDCPA authority for all provisions of the final rule, (2) include an explicit statement in the final rule that it is not intended to apply, and should not be applied, to creditors and servicers not covered by the FDCPA, and (3) state that the definition of "debt collector" in the final rule is not intended to expand the FDCPA's coverage to creditors and servicers.
  • Making clear that the proposal's telephone call frequency limits are not designed or suited for application to creditors, and that a creditor's telephone contacts should be evaluated for harassment based on the facts and circumstances of each case under UDAAP principles rather than a "one-size-fits-all" frequency limit.
Read more at JD Supra, LLC


4 Alternatives to Consider Before Taking a Payday Loan

It's surprisingly easy to land in a spot where a payday loan might seem like the only way out. Imagine you're halfway to payday when disaster strikes. Your car breaks down, your mother-in-law moves in, and your kid's baseball just broke your neighbor's car window. Then, for a moment, things look up. As you're flipping through a pile of past-due notices, a nondescript envelope catches your eye. You have been pre-approved for a payday loan of up to $1,500. It won't solve all of your problems, but it might get your car started and your neighbor speaking to you again.

Yet a payday loan is a dangerous proposition for the borrower. Many states prohibit or heavily regulate them due to their exorbitant fees and interest rates. Borrowers frequently end up repaying two or three times the amount they borrowed in the first place. In addition, your first several payments may only go toward interest; many months could go by before your principal goes down at all.
Read more at THE MOTLEY FOOL


The drip, drip, drip of bad news for the US economy continues

That is the sound of lowered economic growth forecasts and warnings that the president's trade war with China will stagnate the US economy.

Yes, the economy is growing and the unemployment rate is at a 50 year low. But business leaders and economists are growing increasingly alarmed that the president's trade war with China spread beyond manufacturing sector.

A survey released overnight from the National Association for Business Economics lowered growth expectations for next year to below 2%, citing protectionism, trade uncertainty and slowing global growth. NABE's forecasts matter. These are the economists who work for companies. Their forecasts go straight to their bosses in the C-suite who make spending and hiring plans.

Drip. Read more at CNN.COM



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