November 26, 2019
Happy Thanksgiving

Director Kraninger's Remarks at TCH-BPI Conference
NOV 22, 2019

Thank you, Rob, for that kind introduction. I'm honored for the invitation to speak at your conference. You've had a great line up, including some of my government colleagues, Jelena McWilliams, Justin Mzunich, and Joseph Otting.

While Treasury, the FDIC, and the OCC have been around for decades-the youngest of the three being 80 years old, the Bureau is the new kid on the block with roughly 8 years under our belt. Further, the Bureau went through its first leadership transition within the last two years. As we continue to mature the agency, we are focused on using all of the tools that Congress gave us to carry out our mission of protecting consumers. I also believe that in carrying out our mission, our focus should be to prevent harm in the first place. This saves consumers the headaches of trying to get their money back after they have been harmed and avoids the very injuries that consumer finance laws seek to address.
Read more at CFPB

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80% of financial app users admit not fully realizing their banking credentials are shared: survey

A new study makes a strong case for us to question the way we use financial apps.

Right now, millions of bank customers are using third-party apps like Acorns and PayPal's Venmo to help them manage their money, invest, borrow and send payments to people they know and trust.

These kinds of apps help make our financial lives easier but they usually aren't owned by banks. For the digital services to work, they need your banking data and often require you to share the keys to your most important digital portal: your bank account. But there is a big disconnect. Most bank customers who are using these popular apps aren't aware of what they're giving away, according to a new report from The Clearing House.

Of the 54 percent of bank customers who used outside apps at least once in the past year, the survey found that the vast majority (80 percent) of consumers do not realize that the fintech app or third-party data aggregator may store their bank account username and passwords. Total sample size for the survey was 3,967 U.S. banking customers - 1,999 financial app users and 1,968 non- financial app users. Read more at WTSP


Rise of Cashless Retailers Problematic for Some Consumers

Cash remains important payment option for many

Restaurants, stores, and stadiums around the country have stopped accepting cash as payment and instead are requiring patrons to pay with cards or digital devices, although some have already abandoned the practice in response to a public backlash.

Businesses that have gone cashless say they did so in response to concerns about security (theft of cash), a desire for greater efficiency (faster transactions), and consumer demand as most of their clientele pays electronically. Opponents, however, cite the possible discriminatory impact of this practice, saying that it violates the Civil Rights Act because unbanked consumers-meaning those who do not have a bank account-are more likely to be members of minority groups.

According to the Federal Deposit Insurance Corporation, just 6.5 percent of households are unbanked, but research by Pew shows that these Americans are more likely than those with bank accounts to pay primarily with cash. These households also tend to have the fewest payment alternatives. Read more at Pew Charitable Trusts


The CFPB's debt collection proposal empowers consumers

Consumer Financial Protection Bureau (CFPB) Director Kathleen Kraninger recently made her way up to Capitol Hill for her semiannual testimony on CFPB operations. During the hearing, few subjects drew as much congressional ire as the CFPB's proposed debt collection rule. Numerous members of Congress expressed deep concern that the proposal would neglect consumer interests in favor of debt collectors.

Rhetoric, however, doesn't match reality. The CFPB's proposal empowers borrowers by putting them in control of how their debt is collected. This is good policy, and consumers should benefit from it.

The proposal introduces new consumer protections governing communications and mandated disclosures, dragging debt collection communications into 2019 by authorizing the use of electronic messaging, beefing up opt-out mechanisms and establishing strict limits for phone conversations. The straightforward rules also bring clarity to ambiguous statutes, establishing clear lines for appropriate behavior by debt collectors.
Read more at THE HILL

Dreher Tomkies LLP

Trust Science Nominated as AI Company of the Year. USA Inc., Credit Bureau 2.0™, a leading provider of AI-Powered Credit Scoring, announced today that it was nominated as AI Company of the Year by the Canadian FinTech & AI Awards.

Trust Science drives the adoption of explainable AI and machine-learning credit underwriting with its FinTech solution. The offering automates credit decisioning for sub-prime lenders.

According to Gartner's 2019 CIO survey "between 2018 and 2019, organizations that have deployed artificial intelligence (AI) grew from 4% to 14%". Gartner also stated that explainable AI is one of the emerging technologies.

Trust Science's explainable AI is open source-based and a key differentiator. Sub-prime customers are provided with decision reasoning without black box vendor lock-in. 
Read more at TRUST SCIENCE


Here's the formula for paying no federal income taxes on $100,000 a year

The question of how much can we earn without paying federal income taxes is relatively easy to answer for most people.

The standard deduction for a married couple is $24,400 in 2019 (if both are under 65 years old) and the top of the 0% capital-gains tax bracket, is $78,750. So we can make a total of $103,150 a year, provided that our ordinary income stays below the standard deduction and the rest comes from long-term capital gains and/or qualified dividends.

Those who aren't married should halve these dollar amounts. Note that the IRS is increasing these numbers slightly for 2020.

With our daughter, we also qualify for the child tax credit ($2,000), so we could actually generate another $13,333 per year in dividends or capital gains, taxed at 15% The tax liability of $2,000 exactly offsets the tax credit, for a zero federal tax bill.
Read more at MARKETWATCH


Not Your Father's Bank Aggregation Solution

What if I told you that you are using bank aggregation inefficiently? As the technological landscape evolves and more data is readily available, having access to data is not enough. You need to know your data, the technology that creates it and how to use it, to really harness the full power.

Bank Account Aggregation

Bank account aggregation is the process of gathering data from one or multiple bank accounts into a single place. Once the data is aggregated, there are many uses for it, depending on the purpose of the aggregation. The majority of financial service providers historically use bank aggregation technologies for KYC and the decisioning stage of a consumer application. The data is typically used to verify income, employment, creditworthiness and ownership. But should you really use it to verify ownership? On the rare occasion you might receive the actual name of the person who owns the bank account provided. However, the name provided is rarely accurate, as these solutions were not designed for ownership verification but to simply extract the consumer's bank account transaction history. While the consumer's transaction history is important to knowing customer's characteristics and traits, it cannot be used for verification and KYC purposes.
Read more at VALIDIFI


2 in 3 consumers uncomfortable with financial apps' level of access to data

  • More than half (54%) of U.S. banking consumers use apps to manage their finances or make person-to-person payments, but most are unaware how their personal data is stored and shared, or even which data is used, according to a study released this week by payments infrastructure firm, The Clearing House.
  • About 70% of the nearly 4,000 people surveyed in July and August said they were confident their information was private and secure. But four in five users were not fully aware that apps or third parties may store their bank account username and password. "Once they realize this, more than two-thirds of users (68%) are uncomfortable with the apps' level of access," the study's authors wrote.
  • Banks or non-bank financial apps should be responsible for consumers' education and awareness surrounding data use and access, more than half of the survey's respondents said.

The disconnect surrounding consumers' assumptions about how financial apps handle their personal data comes down to reading the fine print - literally.
Read more at BANKING DIVE


At Dreher Tomkies LLP, we concentrate on the areas of banking and financial services, with an emphasis on financial services provided by creditors to consumers.

Our Firm's partners have over 100 years of combined experience advising on banking and financial services matters.

Such counseling can include the rendering of advisory opinions, state law outlines and summaries, product design and development and the identification of appropriate product delivery vehicles, as well as program planning, implementation and maintenance.

Dreher Tomkies LLP also provides advice regarding all aspects of the purchase and sale of receivables, the negotiation of credit programs among financial institutions, retailers and others, securitizations and participations of receivables, litigation and amicus briefs in connection with credit issues, creditor representation in bankruptcy and legislative and regulatory solutions.

We frequently assist in long-term strategic planning, issue identification and the implementation of plans for financial institutions, other types of clients and their affiliates with respect to providing financial services on an interstate and nationwide basis.
Read more at Dreher Tomkies LLP


How to Cash a Check (and Don't Be Embarrassed If You Don't Know)

Checks are valuable pieces of paper, and they come in almost as many varieties than Skittles. You might encounter personal checks, cashier's checks, certified checks, traveler's checks - and when you receive any check, you want to turn that slip of paper into real money.

That's called cashing the check.

You can do that at a bank, a credit union, a check cashing business or a few other places. But you can't just walk into any bank and expect the teller to magically poof! your check into cash.

Not all banks cash checks if you aren't a customer - and most check cashing services will charge you a fee. Here's how to cash a check quickly, and pay little or nothing at all.
Read more at MONEYWISE



How to tell the difference between a legitimate debt collector and scammers

Dealing with debt collection issues can be challenging-especially when you're not sure if the person you're being contacted by is legitimate or trying to scam you.

When an account like a credit card, auto loan, or cell phone bill becomes past due, the original creditor may attempt to collect the amount owed. The creditor may also hire a debt collector or sell the debt to someone who may try to collect the debt. While there are many legitimate debt collectors in the financial marketplace, there are also scammers who may try to get you to pay on debts that you don't owe or on debts that don't even exist.

Warning signs of debt collection scams

Withholds information from you
A debt collector must tell you information such as the name of the creditor, the amount owed, and that if you dispute the debt the debt collector will have to obtain verification of the debt. If the debt collector does not provide this information during the initial contact with you, they are required to send you a written notice within five days of that initial contact.
Read more at Consumer Financial Protection Bureau


Millennials Most Likely to Outspend Other Generations This Holiday Season

RIVERWOODS, Ill.--(BUSINESS WIRE)-- Over a third of millennials plan to spend more money this holiday season compared to last year, and they will likely outspend other generations this gift-giving season, according to Discover's annual Holiday Shopping Survey.

Millennials say higher income and more people on their shopping list are two reasons for their boost in spending. And they also will overwhelmingly use their mobile devices to shop.

Results from the survey, which polled Generation Z, millennials, Generation X and baby boomers on their previous holiday shopping habits and upcoming plans to purchase, also show:
  • 35 percent of millennials said they would spend more this holiday season than last. Following them are 26 percent of Gen Z, 23 percent of Gen X and 16 percent of baby boomers.
  • 39 percent of millennials plan to spend $750 or more on gifts, followed by 35 percent of baby boomers, 33 percent of Gen X and 11 percent of Gen Z who said they will spend the same amount.
  • 45 percent of millennials said they expected increased income to boost their holiday spending compared to 28 percent of Gen X, 26 percent of baby boomers and 20 percent of Gen Z; meanwhile, 49 percent of millennials reported they have more people to shop for, followed by 43 percent of Gen Z, 37 percent of Gen X and 36 percent of baby boomers.
  • A majority of millennials, 73 percent, will use a mobile device to shop for gifts while 58 percent of Gen X, 48 percent of Gen Z, and 32 percent of baby boomers plan to do the same.

Read more at DISCOVER.COM


CFPB Aims to Ease Process to Escape Monitoring

The Consumer Financial Protection Bureau is working to streamline the process for companies to get out from under enforcement actions.

CFPB Director Kathleen Kraninger on Nov. 21 said the bureau only wants companies to operate under consent orders and bureau monitoring for as long as necessary to make sure that improper conduct has stopped.

Companies that enter CFPB consent orders can be forced to stay under bureau monitoring indefinitely, although since 2014 consent orders have lasted five years, Kraninger said.
Read more at BLOOMBERG LAW


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