June 4, 2019

Fed study: Fewer people are unbanked, underbanked

Reducing the number of Americans who are "unbanked" or "underbanked" has been a recurring topic of discussion among advocates for both financial trade associations and consumer protection groups for several years. The Federal Reserve's annual report on the Economic Well-Being of U.S. Households indicated that there is progress being made in that respect.

Economic growth during 2018 occurred alongside with a continuing decline in the amount of unbanked Americans. Since 2015, the number of unbanked citizens has dropped from 8 percent to 6 percent, according to the report.

The Fed's findings uncovered a greater drop in the number of "underbanked" Americans - those with a bank account but who also use alternative financial services. Underbanked Americans decreased from 21 percent in 2015 to 16 percent in 2018.

"Although the majority of U.S. adults have a bank account and rely on traditional banks or credit unions to meet their banking needs, gaps in banking access remain," the report states. "Six percent of adults do not have a checking, savings, or money market account (often referred to as the 'unbanked'). 
Read more at Dodd Frank Update


Texas federal court again continues stay of CFPB payday loan rule and stay of compliance date. Ballard Spahr LLP

The Texas federal district court hearing the lawsuit filed by two trade groups challenging the CFPB's final payday/auto title/high-rate installment loan rule (Payday Rule) entered an order yesterday that once again continues the stay of the lawsuit and the August 19, 2019 compliance date for both the Payday Rule's ability-to-repay (ATR) provisions and its payment provisions. The order directs the parties to file another joint status report by August 2 "informing the court about proceedings related to the Rule and this litigation as the parties deem appropriate."

The court had entered an order on March 19 continuing both stays and, in that order, directed the parties to file a joint status report by May 17. The joint status report filed on May 17 stated that that the comment period for the Bureau's proposals to rescind the Payday Rule's ATR provisions and to delay the compliance date for the ATR provisions closed on, respectively, May 15 and March 18. The status report also stated that "the Bureau is continuing to make progress on both rulemakings but has not yet issued a final rule in either rulemaking."

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ALABAMA: A look at what passed and failed in the Alabama Legislature


PAYDAY LOAN: The proposal would have extended the time that people have to repay a payday loan to 30 days. The proposal was designed to give borrowers more opportunity to raise the funds needed to repay a loan.

Read more at AL.COM

Alternative Credit Reporting

ACH Payment Processing: Four Ways to Streamline Operations

Without an electronic payment model such as ACH payment processing, fund disbursal can be a lengthy and cumbersome process. The ACH network provides a cost-effective framework where lenders can quickly and efficiently deliver funds to borrowers and collect repayments.
ACH payment processing not only empowers lenders to quickly send funds to borrowers but is also generally a lower cost option than debit card, delivering a cost-effective and streamlined payment solution. ACH processing empowers lenders to streamline business operations in these four important ways:

Same-Day ACH
Same-day ACH credits* allow lenders to provide funds to borrowers in the same banking day that a loan is approved. Same-day ACH enables lenders to quickly deliver borrowers funds on short notice at a lower cost than a wire or card payment, streamlining the lending process in emergencies.

This important to lenders in a variety of ways:
Read more at PAYLIANCE

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

Battle Brewing over CFPB's Authority to Monitor MLA Compliance

Does the Consumer Financial Protection Bureau (CFPB) have the authority to monitor compliance with the Military Lending Act (MLA)? Senate Democrats insist that it does, but CFPB Director Kathy Kraninger believes it does not.

This complicated legal question first emerged last August when Mick Mulvaney, then acting director of the CFPB, argued that "the MLA was not a federal consumer financial protection statute and therefore Dodd-Frank did not grant the CFPB supervisory authority." Mulvaney insisted that Congress must pass legislation providing the federal agency with supervisory authority before it could monitory MLA compliance.

Kraninger, the new head of the CFPB, agrees with Mulvaney. In January, she transmitted a legislative proposal to Congress that would authorize the CFPB to monitor MLA compliance.

"The Bureau is committed to the financial well-being of America's service members. This commitment includes ensuring that lenders subject to our jurisdiction comply with the Military Lending Act so our service members and their families are provided with the protections of that law," said Kraninger. "That's why I have asked Congress to explicitly grant the Bureau authority to conduct examinations specifically intended to review compliance with the MLA."
Read more at Native American Financial Services Association

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



In a Facebook live video earlier this month, Senator Bernie Sanders advocated for allowing the more than 31,000 post offices across the United States to offer basic banking services to underserved communities.

The proposal from Sanders, which he made while announcing the Loan Shark Prevention Act along with Representative Alexandria Ocasio-Cortez, is intended to benefit Americans without easy access to banks. Post offices would only provide basic financial services, rather than serving as full-stop financial institutions.

"The Postal Service already cashes Treasury checks and issues money orders. The USPS should fully exercise its existing statutory authority and implement pilot programs offering affordable financial services, including ATMs, paycheck cashing, bill payment and electronic money transfers in post offices," Sanders and Representative Alexandria Ocasio-Cortez said in a statement.

The proposal, which Sanders has previously floated, has drawn attention from both Republicans and Democrats. Conservatives have scorned the idea, and Fox News recently ran an opinion article depicting the idea as an intrusive big government program.
Read more at NEWSWEEK

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Nearly 25% of Americans are going into debt trying to pay for necessities like food

American have an average of $6,506 in credit card d e b t, according to a new Experian report out this week. But which expenses are adding to that balance the most?

A full 23% of Americans say that paying for basic necessities such as rent, utilities and food contributes the most to their credit card d e b t, according to a new survey of approximately 2,200 U.S. adults that CNBC Make It performed in conjunction with Morning Consult. Another 12% say medical bills are the biggest portion of their debt.

That makes sense, given that day-to-day costs continue to soar. Middle class life is now 30% more expensive than it was 20 years ago. The cost of things such as college, housing and child care has risen precipitously: Tuition at public universities doubled between 1996 and 2016 and housing prices in popular cities have quadrupled, Alissa Quart, author and executive director of the Economic Hardship Reporting Project, tells CNBC Make It.
Read more at CNBC

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.

Raw Data: Unbanked Households in the United States and the World

This chart shows the percentage of unbanked households in the US. The dark red dots are from the Fed's triennial Survey of Consumer Finances. The light red dots are from the FDIC's biannual Survey of Unbanked and Underbanked Households:

With the exception of the odd outlier in the 2016 SCF, we seem to be approaching a long-term unbanked level of about 6 percent. That compares to about 8 percent in Europe. Unsurprisingly, the unbanked rate is higher for low-income families and the young. Also unsurprisingly, it's much, much higher for people of color:


Read more at MOTHER JONES

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96% of borrowers find small-dollar loans useful

Only 1.5% of all consumer complaints submitted to the CFPB concern small-dollar loans - far below other financial products like mortgages, credit cards, and student loans

CFPB complaints about small-dollar loans consistently fell for 22 straight months

CFPB and Better Business Bureau (BBB) data indicates that a majority of complaints about small-dollar loans are likely related to scams, not regulated lenders

Nearly half of Americans cannot afford a $400 unanticipated expense
Read more at CFSA

Payliance: Powerful Payment Processing Technology

New college grads see health insurance as best employee benefit at job, survey shows

Paid time off, a 401(k) Opens a New Window. match and help with paying off student loans are nice work perks Opens a New Window. , but the majority of new college grads say health insurance is the best employee benefit, a recent survey showed.

About 54 percent of new grads said medical coverage is the top workplace benefit when it comes to looking for a job, according to a survey conducted by the American Institute of CPAs Opens a New Window. . The association conducted the poll in September 2018 on more than 500 people who recently graduated from college.

The respondents said paid time off was the second benefit they most desired, followed by student loan forgiveness - a surprising statistic considering nearly two-thirds of young job seekers have student debt, the survey revealed. Another 38 percent of young job seekers said working remotely was a work perk they looked for.
Read more at FOX BUSINESS

Redefining how financial service businesses measure risk and process payments.

Keep industry insiders out of the payday loan rulemaking process.

The Consumer Financial Protection Bureau (CFPB) has been an effective watchdog for consumers. However, since President Trump was elected, it has increasingly been protecting financial predators rather than financial consumers.

The CFPB's recent announcement that it was overhauling the payday lending rule is the latest example of that transformation. Better Markets recently detailed how the CFPB's proposal would create a debtors' prison without bars for millions of Americans who were trapped in an endless cycle of payday loans that they could not repay.

That's because, as the CFPB admitted, two-thirds of payday lender customers could not afford to repay the loan when they received it.

Thus, as the CFPB also admitted, if the "ability to repay" test was not eliminated as it is proposing, then nine out of every 10 payday loan storefronts would shut down. In other words, the CFPB is protecting financial predators, not victimized consumers.
Read more at THE HILL

Compete in the data-driven lending era

Preventing Fraud through Technology

According to the 2018 Association of Certified Fraud Examiners Report, U.S. businesses lose five percent, on average, of their revenue each year to fraud. The report goes on to say that private companies and small businesses rank highest among fraud occurrences, with 42 percent of fraud frequency compared to larger corporations and non-profits which often have better internal controls and fraud prevention tools in place.

CNBC goes on to put these numbers into dollars and cents, stating that employee crimes, such as theft and fraud, cost U.S. businesses nearly $50 billion each year with small businesses bearing the brunt of these costs, accounting for roughly 68 percent of employee theft and embezzlement instances. The two most common types of fraud perpetuated by employees, often trusted employees within the organization were funds theft, accounting for more than one-third of the cases according to CNBC followed by check fraud, ringing in at 22.1 percent of fraud occurrences.

Preventing Fraud in Your Small Business

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Our Best Plan To Avoid A Recession? Simple, Boring Banks

Here are two facts about Australia. One, it's our ally. And two, it's really, really far away, so it's likely that most Americans ignored its election earlier this month. The Australian outcome could teach us something about making our economy more secure against a future recession, which may not be as far off as we like to think.

In a case of "Dewey Defeats Truman Down Under," conservative Prime Minister Scott Morrison defied the polls to upset his Labor Party opponent. Morrison is an evangelical with an anti-immigrant bent who's made no bones of his jones for Donald Trump. So his triumph partly owed to the populist stench stinking up our own politics.

But Morrison's victory also reflected an economic miracle that would bolster any incumbent: His nation hasn't had a recession for 28 years. (For perspective, the current American expansion will become our longest-ever boom this summer, at a runtish-by-comparison 10 years.) The global financial collapse a decade ago barely grazed Australians, in large measure because banks - culprits in our Great Recession - are more smartly regulated there than here.
Read more at WBUR

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

New Fed consumer survey and updated TransUnion data refute subprime stereotypes

The narrative sometimes pushed by critics of subprime auto finance is that consumers who encounter financial problems in part because of their substantial vehicle payment turn to personal loans with interest rates sometimes higher than the ones connected to the risk associated with their retail installment contract.

Well, information from the Federal Reserve Board's latest Report on the Economic Well-Being of U.S. Households showed personal loan usage for a $400 emergency would be the route used by just 5% of the consumers surveyed.

And the latest personal loan metrics from TransUnion indicated personal-loan growth is originating from the opposite end of the credit spectrum from subprime.

The Federal Reserve asked 11,000 adults in 2018 this question: "Suppose that you have an emergency expense that costs $400. Based on your current financial situation, how would you pay for this expense?" Read more at AUTOREMARKETING

Lending as a Service

5 reasons your employees are unhappy

Most workers Opens a New Window. go through periods where they're less than content. But if your employees are overwhelmingly unhappy, that's a problem that you, as a business owner or manager Opens a New Window. , need to address. If your staff is largely disgruntled, you're apt to find that a large percentage of your workforce jumps ship or starts lagging performance-wise. Neither situation is ideal. Therefore, you'll need to think about why your workers aren't satisfied and aim to address those issues as best as you can. Here are a few possible reasons to explore.

1. They're underpaid
When you don't pay your workers what they deserve, they can easily grow disgruntled and feel unappreciated. If you suspect that lackluster salaries are driving your employees to a place of unhappiness, it may be time to review your compensation strategy and take steps to pay more competitively. That could mean shifting resources around or even downsizing some dead weight on your staff to better compensate your most valuable players.

2. They don't get enough time off Read more at FOX BUSINESS


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