November 14, 2019
You Grow as We Grow!

Google to offer checking accounts in partnership with banks starting next year

Google is the latest big tech company to make a move into banking and personal financial services: The company is gearing up to offer checking accounts to consumers, as first reported by the Wall Street Journal, starting as early as next year. Google is calling the projected "Cache," and it'll partner with banks and credit unions to offer the checking accounts, with the banks handling all financial and compliance activities related to the accounts.

Google's Caesar Sengupta spoke to the WSJ about the new initiative, and Sengupta made clear that Google will be seeking to put its financial institution partners much more front-and-center for its customers than other tech companies have perhaps done with their financial products. Apple works with Goldman Sachs on its Apple Card credit product, for instance, but the credit card is definitely pretend primarily as an Apple product.
Read more at TECH CRUNCH


Online Lenders Alliance CEO Mary Jackson Statement on Garcia-Grothman Legislation to Eliminate Consumer Credit Choices

Legislation Introduced by Reps. Garcia and Grothman will leave 100 million Americans much less likely to be able to cover 'one or more unexpected essential expenses.'

Following the news that Rep. Jesus "Chuy" Garcia (D-Ill.) and Rep. Glenn Grothman (R-Wisc.) introduced legislation that would eliminate safe access to credit for millions of Americans and make it harder for non-prime consumers to find loans, Online Lenders Alliance CEO Mary Jackson issued the following statement:

"It's disappointing that Reps. Garcia and Grothman would use the sacrifice and dedication of America's veterans as political cover for their legislation to eliminate credit options for people who need safe and reliable access to loans. Many Americans who lack prime credit scores depend on safe, regulated, short-term credit products to avoid bouncing checks, skipping bill payments, or otherwise falling behind-all of which can lead to drastic outcomes.
Read more at OLA


On consumer credit and unintended consequences.
by Bill Himpler, CEO of the American Financial Services Association

It's always interesting when consumer advocates use confusing arguments to make points about consumer credit issues that otherwise undercut worthy messages. That's what occurred earlier this week in an opinion piece in Military Times. This approach doesn't help achieve the worthy goal of providing greater economic security to our service members or the broader consumer marketplace that depends on access to credit for emergencies or every-day needs.

Let's be clear: there are predatory lenders who offer "payday loans" or "title loans" that place consumers of all stripes - military service members included - in very rough financial straits with exorbitant interest rates and aggressive business practices. Credit companies and their trade groups, such as the one I lead, the American Financial Services Association, that advocate for and practice responsible lending have made it clear that such predatory lenders are pariahs.

To protect military personnel from such unscrupulous businesses, Congress passed the Military Lending Act (MLA), which put in place protections for various extensions of credit. The MLA is well intended but, has led to unintended consequences.


Ignoring female consumers costs financial industry $700B a year

The financial services industry is losing out on an estimated $700 billion in annual revenue by failing to cater to female customers, according to a report from management consulting firm Oliver Wyman.?
The Women in Financial Services 2020 report, released Tuesday, found the industry's products are not consistently designed for women's financial lives, while some products that appear to be gender-neutral default towards men.

"Women are arguably the single largest under-served group of customers in financial services," Jessica Clempner, principal and lead author of the report, said in a statement."Firms are leaving money on the table by not listening to and understanding their women customers."

The $700 billion figure is greater than the annual revenue of the largest financial institutions globally, Oliver Wyman claims.

In order to capture this revenue, the report's authors say firms should not treat women as a single customer segment.

"[F]irms must understand the needs of their women customers, and create products and services tailored to those needs - resulting in better products overall for all customers," the report states.
Read more at BANKING DIVE


Auto Lenders Can Decrease Delinquencies by Offering Multiple Ways to Pay. by Kristen Hoyman

Auto loan originations have hit an all-time high of $584 billion. At the same time, the Motley Fool reports that 7 million Americans are more than 90 days late on their auto loans, which accounts for almost 6.5% of all auto loans across all credit grades. Bloomberg describes the problem as the highest auto delinquency levels since 2012. More people are now behind on their auto loan payments than during the Great Recession.

The bottom line: bringing the deals in is no problem, but making sure your portfolio stays current might be.

If you are an independent auto lender, you need to proactively manage your portfolio, or it could get away from you. REPAY has the tools to help you - you don't have to go at it alone.

Not All Credits Are Impacted
The Motley Fool article states that only 1% of credit union held auto loans are delinquent. On the other hand, 6.5% of those held by all private auto finance companies are delinquent. How can this be? Credit unions usually have older and more credit savvy borrowers with higher credit scores. Everyone isn't getting hurt equally. The Bloomberg article breaks it down by credit grade with a chart from the NY Fed: Read more at REPAY


This map shows Americans' average credit score in every state

Minnesota residents can brag about more than their 10,000 lakes - they typically have the country's best credit scores too. As in previous years, the midwestern state has America's highest average credit score, according to Experian.

Those living in Minnesota have an average score of 713, which falls into the "good" range of scores between 670 to 739, according to Experian. The company's annual State of Credit report and state ranking is based on Vantage Scores, which range from 300 to 850. South Dakota, Vermont, New Hampshire and Massachusetts round out the top five states with the highest average credit scores for 2018.

At the other end of the spectrum, residents in southern states had the lowest average credit scores. The lowest score, 652, belonged to those living in Mississippi. Louisiana, Nevada, Georgia and Texas are all in the bottom of Experian's ranking as well, with scores of 659 or below.
Read more at CNBC


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Payday Loans can be a very good thing. Millions of people use them on a daily basis.

There is a lot of negative media coverage but payday loans have thousands of content customers who have used their loans correctly and found an ideal solution for the right reason.

There are many occasions when a payday loan really does work to improve a person's life.

When the Car Breaks Down

There are many times when we rely on our cars. We need them to drive to work and to provide for our families. When our cars break down, it really can be an emergency. Although the cost of maintaining a car has been coming down steadily, the costs can still be too high.

With so many of us living paycheck to paycheck, big expenses like these can often cause a crisis. If we don't have enough money to get our cars serviced what can we do? Instead of relying on a friend or family member, a payday loan can be the best way to smooth out the costs.


11 States Join Supreme Court Challenge to CFPB's Core Structure

A coalition of 11 state attorneys general have joined a complaint challenging the core structure of the Consumer Financial Protection Bureau (CFPB), arguing that its leadership structure is unconstitutional. This is according to a brief filed with the United States Supreme Court which was obtained by RMD.

The coalition of states - Texas, Arkansas, Indiana, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, Utah, and West Virginia - is motivated to participate due to their contention that the enforcement authority and director structure of the Bureau encroaches on the states' own abilities to enforce its own consumer protection laws, according to the brief.

"If Congress wishes to permit federal agencies to assist or preempt States in protecting consumers, it must do so in a manner consistent with Article II of the Constitution," the brief reads in part. "The CFPB's structure violates the Constitution whether its director was (at any given point) temporary or permanent. The CFPB thus had no authority to bring or to continue the enforcement action."
Read more at Reverse Mortgage Daily


Fiscal 50: State Trends and Analysis

Insights From Fiscal 50's Key Measures of State Fiscal Health
November 12, 2019

In 10th year of recovery, states' fiscal and economic prospects improve
After years of slow progress, states have benefited from a more promising economic and fiscal environment. Pressure on state finances eased as the U.S. economic recovery became the longest on record and revenue upswings led many states to post budget surpluses. Still, not all states have fully recovered from the shocks of the Great Recession more than a decade ago. Some are in a stronger position than others as they try to gauge how long the recovery will last.

A surge in tax receipts provided budget relief for many states, though some of the extra money was due to short-lived effects from the 2017 federal Tax Cuts and Jobs Act. Tax collections in 41 states had surpassed their recession-era peaks in early 2019, after adjusting for inflation. The extra revenue led many states to add to their rainy day funds, which could cover a bigger share of spending than before the recession in at least half the states.

The economy and employment rates were on the upswing. Economic growth measured by state personal income rose in every state over the first half of 2019.
Read more at The Pew Charitable Trusts

Dreher Tomkies LLP


WASHINGTON, D.C. - The Consumer Financial Protection Bureau (Bureau) issued a report today with state-by-state comparisons of financial well-being scores. The scores are based on Bureau analysis of the Financial Industry Regulatory Authority Foundation's 2018 National Financial Capability Study. The report shows that the average financial well-being scores for all adults (ages 18 and older) in the United States ranged from a low of 50 in Mississippi to a high of 54 in California, the District of Columbia and Hawaii. For the United States, the average financial well-being score was 52.

The scores are standardized numbers between 0 and 100 that quantified a person's underlying level of financial well-being. They are calculated by an individual's responses to the ten questions in the Bureau's Financial Well-Being Scale. Financial well-being is defined as the state wherein an individual has a sense of: control over day-to-day and month-to-month finances; capacity to absorb a financial shock; being on track to meet financial goals; and ability to make financial choices to enjoy life. Read the report at CFPB


Critics say it's time to change payday loans in Kansas

TOPEKA, Kan. (AP) - Maria Galvan used to make about $25,000 a year. She didn't qualify for welfare, but she still had trouble meeting her basic needs.

"I would just be working just to be poor and broke," she said. "It would be so frustrating."

When things got bad, the single mother and Topeka resident took out a payday loan. That meant borrowing a small amount of money at a high interest rate, to be paid off as soon as she got her next check.

A few years later, Galvan found herself strapped for cash again. She was in debt, and garnishments were eating up a big chunk of her paychecks. She remembered how easy it was to get that earlier loan: walking into the store, being greeted with a friendly smile, getting money with no judgment about what she might use it for.


1 in 4 Americans defaulted on their student loans, study finds

A quarter of borrowers who take out student loans end up defaulting within five years, while many of the people who pause or defer payments due to hardships end up paying more than they originally would've owed, according to a study from the Pew Charitable Trusts.

With total college debt at a record high $1.5 trillion, the findings highlight the challenges millions of Americans face in paying off their loans.

"We really need a repayment system that addresses this complexity and effectively leads to more positive outcomes," said Sarah Sattelmeyer, manager of Pew's project on student borrower success.

The report focuses on student loan borrowers in Texas, but reflects what is happening more broadly across the U.S., Pew said. Of 400,000 residents in the state who took out a student loan between 2007 and 2011, roughly 24% defaulted within five years. Nationwide, 26% of borrowers defaulted, Pew said. Read more at CBS NEWS


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