July 25, 2019

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House bill would reform credit reporting agencies

Legislation introduced in the U.S. House of Representatives last week seeks to reform the supervision of credit reporting agencies.

The bill, introduced by Rep. Patrick McHenry (R-NC), is designed to ensure that credit files are accurate and transparent and personally identifiable information is protected.

"The credit reporting industry is ripe for reform," McHenry said. "Credit reporting agencies have failed to protect consumers' most sensitive, personal information and have been allowed to operate as an oligopoly. While Republicans and Democrats agree it's time for change, my colleagues across the aisle have taken a one-sided approach, which will ultimately decrease Americans' access to credit. Instead, my legislation combines bipartisan solutions that provide thoughtful oversight and examination of this industry, helping achieve our goal: protecting American families."

Specifically, the bill would address the process used by credit reporting agencies for a parent to request a security freeze of their child's credit.
Read more at Financial Regulation News

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FTC Imposes $5 Billion Penalty and Sweeping New Privacy Restrictions on Facebook

FTC settlement imposes historic penalty, and significant requirements to boost accountability and transparency

NOTE: The FTC hosted an IN-PERSON press conference at FTC Headquarters, 600 Pennsylvania Ave, NW, Washington D.C., at 11 am ET TODAY (July 24). Watch archival video of the press conference.

Participants included: FTC Chairman Joe Simons, FTC Commissioners Noah Joshua Phillips and Christine S. Wilson, and Gustav W. Eyler, Director of the Department of Justice Civil Division's Consumer Protection Branch.

Facebook, Inc. will pay a record-breaking $5 billion penalty, and submit to new restrictions and a modified corporate structure that will hold the company accountable for the decisions it makes about its users' privacy, to settle Federal Trade Commission charges that the company violated a 2012 FTC order by deceiving users about their ability to control the privacy of their personal information.

The $5 billion penalty against Facebook is the largest ever imposed on any company for violating consumers' privacy and almost 20 times greater than the largest privacy or data security penalty ever imposed worldwide. It is one of the largest penalties ever assessed by the U.S. government for any violation. Read more at FEDERAL TRADE COMMISSION


Restricting Small-Dollar Loans Hurts Consumers' Financial Well-Being.

Why is financial confidence among women on the decline?

According to a recent study by Allianz Life Opens a New Window. financial confidence among all women is on the decline. The fact that women are living longer than men seems to be putting stress on their ability to plan their finances for sometimes decades longer than men.

"These findings were quite surprising because women have come a long way when it comes to our roles in work and family, yet we don't feel prepared financially," said Aimee Lynn Johnson, vice president of financial planning strategies for Allianz Life, in released comments. "This begs the question, at a time when women are accomplishing so much, why aren't they feeling more empowered about their financial future?"

Johnson discussed with Fox Business what women can do to have more confidence about their financial future. Here is what you need to know.

Boomer: What contributes to the fact that financial confidence among women is on the decline?
Read more at FOX BUSINESS

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How Financially Lit(erate) Is Your State?

What causes some of us to make good financial decisions while others make poor ones? In many cases, it's the level of financial literacy we have.

But what is financial literacy? There's no single, agreed-upon definition. But it essentially refers to the knowledge of and familiarity with the key categories related to personal finance. That includes things like:
  • budgeting,
  • investing,
  • insurance,
  • college funding,
  • saving for retirement, and
  • tax planning.
Financially literate people make better choices in all these areas.

While it's easy to understand the concept of financial literacy, attaining it is another story. In fact, about two-thirds of American adults can't pass a basic financial literacy test. And the U.S. is tied for 14th in the world in the percentage of adults who are financially literate.
Read more at THE MOTLEY FOOL

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Based in Irvine, California and Salt Lake City, Utah. Our lending experts and engineers are hard at work to deliver the best lending operating system to launch FinTech verticals such as Construction Loans, Private Student Loans as well as small business and personal lending solutions. We are uniquely positioned to deliver analytics and portfolio management services through our lending platform. Together we call our full offering, "Lending as a Service".
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A report on the CFPB's Building a Bridge to Credit Visibility Symposium

On September 17th, 2018, the Bureau convened its first fair lending symposium, Building a Bridge to Credit Visibility, to address the issue of access to credit. Bureau research has found that one-in-ten adults in the U.S., or 26 million people, are "credit invisible," and that another 19 million adults in the U.S. have "unscorable" credit records. Together, this accounts for almost 20 percent of the entire U.S. adult population.

The symposium took place at CFPB Headquarters in Washington, D.C. Panelists who attended the symposium discussed strategies and innovations for overcoming barriers faced by credit invisible and unscorable consumers and expanding credit access. Major topic areas included:

Exploring entry products that address credit invisibility while preparing the consumer for future financial success.
Identifying barriers and solutions to accessing credit in microenterprise and small business lending.
Considering the role that alternative data and modeling techniques can play in expanding access to traditional credit.

In an effort to better understand credit invisibility, in conjunction with the symposium, we published our latest data point, The Geography of Credit Invisibility , which takes a closer look at the relationship between geography and access to credit. This latest research report on geography and access to credit builds on our earlier work exploring credit invisibility and transitioning to credit visibility.
Read more at Consumer Financial Protection Bureau

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New York City could become latest to punish cashless businesses

New York's City council will vote on a bill Tuesday that would prohibit most shops and restaurants from refusing to accept payments in cash amid concerns that cashless policies could discriminate against lower-income patrons or those without bank accounts.

The council's Committee on Consumer Affairs and Business Licensing voted to approve the bill on Monday. Committee chair Rafael Espinal, a co-sponsor of the bill, said cashless polices disproportionately impact unbanked New Yorkers who are much more likely to rely on payday loans and check cashing facilities.

"I'm happy that we can draw attention to some of the unintended consequences of new cashless technologies and how they impact marginalized populations," Espinal said at a hearing on Monday. "When attitudes toward cash equate it with being dirty, antiquated, or unsophisticated, we risk stigmatizing the communities who rely on it."

About 12% of New Yorkers in 2013 did not have bank accounts, Espinal said, highlighting domestic violence survivors who don't wish to be traced and undocumented immigrants as some of those who may face significant challenges when opening bank accounts.
Read more at ABC NEWS

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

Bank of America CEO on the importance of digital banking: 'The numbers are just rolling'

Digital banking is a key strategy to appeal to millennial consumers, Bank of America CEO Brian Moynihan told CNBC on Thursday.

He estimates the bank serves 16 million millennial customers, ranging between the ages of 25 and 41, who have about $200 billion worth of deposits, investments and loans with the bank.

"They have, you know, $60-70 billion of checking deposit ... and then Gen Z adds another chunk on top of that," Moynihan said in a one-on-one with "Mad Money's" Jim Cramer. "As a millennial-only bank, it would be one of the biggest banks in the country."

Technology has transformed the way that most industries operate, and the financial industry is particularly feeling the heat with the growing popularity of digital peer-to-peer payment services. Mobile banking, with the rise of app-based financial technology services such as PayPal's Venmo and Square Inc.'s Square Cash, has forced traditional banks to adapt in the past decade.

Last year, BAC's then-digital banking head Michelle Moore said leadership wants to "get cash out of the system." Later in 2018, Moynihan said the bank was able to cut 100,000 jobs in less than a decade since it began focusing on a digital strategy in 2008 to reduce costs.
Read more at CNBC

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How Quickly We Forget: Financial Regulations Continue To Fall Behind The Times

The U.S. public was up in arms a decade ago with the financial industry. As the economic crisis of 2008 unfolded, it became clear that the then current financial regulations - or lack thereof -- designed to protect consumers had failed to do their job.

Nine years to the month after lawmakers enacted the Dodd-Frank Act in an attempt to shore up those weaknesses, conditions are forming again that could negatively impact our economy. You can debate whether Dodd-Frank is effective or not; it's a moot point now as many of its rules are ineffective in correcting the largest failure - too big to fail.

The more troubling takeaway is that we haven't learned from past mistakes. We continue to take actions after the fact to fix problems rather than look ahead to prevent the next series of financial challenges and threats.

This rear-view mirror approach to financial regulation is even more flawed today as the financial industry is under constant change. Fintech companies are entering the market with little or no oversight. Lawmakers and regulators aren't keeping up with these new technologies, and consumers don't understand the risks associated with them. Read more at FORBES

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Virtual banking to gain ground in emerging markets

VIRTUAL BANKING in emerging markets (EM) is seen to pick up as large unbanked populations and greater adoption of technologies present opportunities for the success of digital banks, S&P Global Ratings said.

In a report titled "The Future Of Banking: Virtual Banks Chase The Dream In Asia-Pacific," the global debt watcher said the underbanked population in EMs is a key factor in driving the growth of digital banking in the region.

"Primarily a factor in emerging markets, virtual banking facilitates the introduction of simple banking products through accessible means other than branches," S&P said in the report published Tuesday.

"Emerging market nations in Asia-Pacific are home to vast numbers of 'underbanked' customers, which provides opportunities for virtual banks to gain a foothold and scale up their business models," it added. Read more at BusinessWorld

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Equifax Data Breach Settlement: What You Should Know
July 22, 2019
by Alvaro Puig
Consumer Education Specialist, FTC

In September of 2017, Equifax announced a data breach that exposed the personal information of 147 million people. Under a settlement filed today, Equifax agreed to spend up to $425 million to help people affected by the data breach. If you were affected by the Equifax breach, you can't file a claim just yet. That's coming. But you can sign up for FTC email alerts about the settlement at

(Not sure that you were affected? The breach claims site will have a tool to let you check. Sign up for an FTC email update to find out when that tool is up and running.)

Here's what you need to know about the settlement.

Benefits Available To You
If you were affected by the breach, you may be eligible for benefits.

1. Free Credit Monitoring or $125 Cash Payment
You can get at least 4 years of free credit monitoring of your credit report at all three credit bureaus (Equifax, Experian, and TransUnion). On top of that, you can get up to 6 more years of free credit monitoring of your Equifax credit report. That's a total of 10 years of free credit monitoring. (Minors affected by the breach are eligible for even more free credit monitoring.)

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What the FEDERAL TRADE COMMISSION - FACEBOOK settlement means for consumers
July 24, 2019
by Lesley Fair
Attorney, Division of Consumer & Business Education, FTC

The next time users visit Facebook, things might not look different, but big changes are brewing behind the scenes. The FTC's record-breaking $5 billion settlement requires Facebook to conduct a massive overhaul of its consumer privacy practices. The settlement also makes major changes to Facebook's operations and CEO Mark Zuckerberg no longer has sole control over privacy.

First, some background. Facebook is a social networking site, but it makes money by serving up targeted ads based on users' personal information. Many consumers are hesitant about sharing certain data, so Facebook calms that concern by promising that people can control the privacy of their information through the platform's privacy settings.

The FTC sued Facebook in 2012 for making misleading promises about the extent to which consumers could keep their personal information private. For example, Facebook told users they could select settings to make information available just to "friends." But despite that promise, Facebook allowed apps used by those friends to access consumers' information, a decision that put money in Facebook's pocket. The 2012 FTC order put penalties in place if Facebook made misleading statements in the future about consumers' control over the privacy of their personal information.

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