March 3, 2020
AFSPA Partner


Intelligent technology. Realtime payments.

Fed signals potential rate cut as US banks respond to coronavirus threat

Regulators including the Federal Reserve are expected to discuss the implications of the COVID-19 outbreak, a potential pandemic on the economy and financial markets, during a meeting Wednesday of the Financial Stability Oversight Council's systemic threat panel. The planned meeting comes as U.S. stocks suffered their worst week since the 2007-08 financial crisis last week amid growing coronavirus fears.

Federal Reserve Chairman Jerome Powell released a statement Friday, saying the regulator "is closely monitoring developments" of the coronavirus and "will use our tools and act as appropriate to support the economy."

The statement comes as the U.S.'s top financial regulators are expected to meet to discuss the infectious disease's potential impact on the country's financial services industry, sources told Reuters on Friday.

Read more at BANKINGDIVE

AFSPA Partner


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

Bank-friendly regulator troubles lenders with redlining law rewrite

A few banks are satisfied with the proposal, but "they're in the very small minority," said one industry official.

Comptroller of the Currency Joseph Otting is an unusually pro-bank regulator who once ran a California lender and understands the business. But his proposed overhaul of landmark anti-redlining rules is causing the industry a lot of angst.

The reform of the 1977 Community Reinvestment Act, jointly put forward by Otting's agency and the FDIC, aims to address a slew of long-standing complaints from banks about the law, which encourages them to lend to lower-income borrowers in the neighborhoods where they do business.

But industry representatives warn that the proposal would hike their costs and in some cases actually dim their incentive to lend to people who don't already have access to credit. Especially concerning to bankers: They don't have time to crunch the numbers on what the new regime would mean for their bottom line since Otting is moving ahead with what amounts to sprint speed for a rule change.
Read more at POLITICO


ARIZONA: House OKs bill hiking pawn shop loan interest to 20% per month

PHOENIX - Anyone seeking to borrow money from a pawnbroker could soon end up having to pay more.

On a party-line vote Wednesday the state House agreed to set the maximum interest and fees at 20% per month, the equivalent of 240% annually. That compares with current law setting the cap at 13% for the first month and 11% for each subsequent month.

The vote came over the objections of several Democrats who said the government has a role in protecting consumers. Rep. Isela Blanc, D-Tempe, said the interest rate amounts to "predatory lending."

But Rep. Anthony Kern, R-Glendale, who crafted the measure, said the measure is "consumer friendly." He said HB 2240 is designed to promote transparency.
Read more at TUCSON.COM


The Number of People in The Average U.S. Household Is Going Up for The First Time in Over 160 Years

Over the course of the nation's history, there has been a slow but steady decrease in the size of the average U.S. household-from 5.79 people per household in 1790 to 2.58 in 2010. But this decade will likely be the first since the one that began in 1850 to break this long-running trend, according to newly released Census Bureau data. In 2018 there were 2.63 people per household.

Households are increasing in size mathematically because the growth in the number of households is trailing population growth. The newly released data indicates that the population residing in households has grown 6 percent since 2010 (the smallest population growth since the 1930s), while the number of households has grown at a slower rate (4 percent, from 116.7 million in 2010 to 121.5 million in 2018).
Read more at The Pew Charitable Trusts


Behind The Apply Button Episode 7 - "Opportunity Cost" by Timothy Li

This week has been a hectic week. We exhibited at the InsideCredit conference, formally known as CFSA in the beautiful city of San Antonio Texas.

What I've learned this week was two folds and further strengthened my vision to offer flexible, low-cost solutions to the greater financial industry.

As all industries transform themselves using technology, the financial industry must go through a period of a golden age before embarking on another stage of its revolution. Think of rotary phones vs. mobile technology or blockbuster vs. Netflix.

The Simple Stuff:
As it turned out, the landscape is bleak for many lenders and point of sales providers. Their existing tools are old and out of fashion. From simple things such as a custom workflow or interfaces to interact with other tools. The only solutions out there are tools built from the late 90s. And there are solutions that must be installed on a window server.
Read more at ALCHEMY

Dreher Tomkies LLP

What are the states with highest minimum wage?

24 states will see a minimum wage increase over 2020

As it stands, the majority of hourly workers in the United States are paid at least $7.25 an hour.

Since the bill mandating a minimum wage was passed on June 25, 1938, and signed by President Franklin D.Roosevelt, coming under the Fair Labor Standards Act, has been a regular bone of contention for politicians, unions and the general population.

The federal minimum wage has remained unchanged since 2009 when it was raised from $5.15 per hour. However, several states and many individual cities have raised that benchmark.

Leading the pack with the highest minimum wage is Washington, D.C., whose minimum wage is $14 per hour. That benchmark is slated to climb to $15 per hour in mid-2020, according to a report by US News, which analyzed the states with the highest minimum wage.
Read more at FOX BUSINESS


Consumer bureau launches webpage on using tax refunds for savings

The Consumer Financial Protection Bureau (CFPB) launched a webpage this week to with resources to help taxpayers save their refunds.

"Tax time is a great opportunity to take that first important step of building your savings," a CFPB official said in a statement Wednesday. "Increased savings can enhance a consumer's financial well being."

The webpage includes information encouraging taxpayers to save their refunds, and details various types of accounts in which taxpayers can deposit their refunds for savings.

"For many people, making ends meet throughout the year is tough, and saving regularly may seem unrealistic," the CFPB said on the page. "The money you get in your tax refund could help you build or replenish your rainy day fund."

The webpage also includes information about options for free and affordable tax filing and tips for people to protect themselves from tax fraud.
Read more at THE HILL


Evan Chrapko
Meet Evan Chrapko, Founder, Chairman & CEO at Trust Science

Evan started Trust ScienceĀ® with his brother Shane. Evan is a serial entrepreneur and investor having served as CEO or advisor for numerous innovative start-ups including FloNetworks (acquired by DoubleClick for $80 Million) and PlateSpin (acquired by Novell for $205 Million).

Prior to Trust Science, Evan and Shane founded and, within 30 months, sold cloud storage pioneer DocSpace for $568 million. Evan is a CPA, CA and holds a Juris Doctor (Law Degree) from Columbia University. He is a Henry Crown Fellow and member of YPO and has been named to the Real Leaders Global 100 (alongside Bill Gates, Richard Branson, Elon Musk, Peter Diamandis and others.)


Financial services industry stands to lose $1T in climate change-related costs

  • Major policy shifts related to climate change such as a carbon tax could cost the financial industry up to $1 trillion, according to a study by management consulting firm Oliver Wyman.
  • The study states that banks, insurers and asset managers can reduce risks and increase earnings potential by reallocating capital to greener companies and investments. The report found that, while a growing number of banks are taking these steps, less than 10% of the industry has a "robust data-driven approach" to do so.
  • The report comes as major banks such as JPMorgan Chase and Goldman Sachs, as well as asset management firm BlackRock, have unveiled their own commitments to combat climate change.

Read more at BANKINGDIVE


4 Fintech Trends to Watch For in 2020

The fintech industry is one of the most visibly disruptive sectors since it can dramatically impact everyday consumers as well as the business of all sizes. It's also potentially a highly regulated sector, with governments and regulators well aware of the need to both protect consumers and businesses, and to provide a fair, competitive environment for industry players.

At the same time, governments don't always agree on how exactly to regulate this rapidly changing industry. Coupled with intense competition from traditional, established banks and financial services providers, along with constant technological developments, this makes for a volatile, exciting sector to watch.

So what do 2020 and the coming decade have in store for fintech and traditional banking and financial services?

1. The growing push for a level playing field
The largest banks are products of consolidation starting in the 1980s, and they enjoy a dominant position to this day. In 2020 and onwards, fintech players could increasingly push for a level playing field to prevent banks from taking advantage of their size and market share to crush rather than compete fairly with new market entrants. Read more at Business 2 Community


Consumer Financial Protection Bureau Issues Supplemental Notice of Proposed Rulemaking on Time-Barred Debt Disclosures

WASHINGTON, D.C. - The Consumer Financial Protection Bureau (Bureau) today issued a Supplemental Notice of Proposed Rulemaking (Supplemental NPRM) regarding the collection of time-barred debt. The Bureau proposes to prohibit collectors from using non-litigation means (such as calls) to collect on time-barred debt unless collectors disclose to consumers during the initial contact and on any required validation notice that the debt is time-barred. Consumer research conducted by the Bureau found that a time-barred debt disclosure helps consumers understand that they cannot be sued if they do not pay. That can help consumers make better informed decisions whether to pay the debt or not.

In May 2019, the Bureau published a proposal (May 2019 NPRM) to implement the Fair Debt Collection Practices Act (FDCPA).


CRA overhaul plan finds few supporters on any side

Banks, low-income advocates, the Federal Reserve and some members of Congress suggest the OCC slow down in its effort to overhaul the law intended to get more bank credit into underserved areas.

A proposal to overhaul how banks meet lending requirements under the Community Reinvestment Act (CRA) is running into headwinds among banks, regulators, members of Congress and advocates of low-income communities.

Banks say the proposal released in January by the Office of the Comptroller of the Currency (OCC) would increase their compliance costs and force them to hold more loans in portfolio rather than securitize them for sale to investors, while community advocates say it will lead to a drop in the number of loans to low-income households and businesses.
Read more at BANKINGDIVE


Alternative Financial Service Providers Association

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