April 30, 2019

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CFPB Announces Policy Change Regarding Bureau Civil Investigative Demands (CIDS)

WASHINGTON, D.C. - Today the Consumer Financial Protection Bureau (Bureau) announced changes to policies regarding Civil Investigative Demands (CIDs) to ensure they provide more information about the potentially wrongful conduct under investigation.

Consistent with the updated policy, CIDs will provide more information about the potentially applicable provisions of law that may have been violated. CIDs will also typically specify the business activities subject to the Bureau's authority. In investigations where determining the extent of the Bureau's authority over the relevant activity is one of the significant purposes of the investigation, staff may specifically include that issue in the CID in the interests of further transparency.

The new policy takes into account recent court decisions about notifications of purpose, and is consistent with a 2017 report by the Bureau's Office of Inspector General that emphasized the importance of updating Office of Enforcement policies to reflect such developments. The new policy is also consistent with comments the Bureau received in response to the Requests for Information it issued in 2018, seeking feedback about various aspects of its operations, including its use of CIDs in enforcement investigations. Read more at Consumer Financial Protection Bureau

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IRS stats are in: Here's how tax refunds look compared to last year

The average tax refund for the week of April 19 was $2,725 - down 2% from last year's levels.

The final stats are in from the IRS - and it looks like the average tax refund check isn't all that different from last year.

The average refund check for the week ended April 19 was $2,725, according to the tax agency. That's down 2% from a year ago.

In all, the federal government paid $260.9 billion in refunds to taxpayers, compared to $265.3 billion in 2018.

Tax returns are in the public eye as filers and accountants grapple with the Tax Cuts and Jobs Act, the 2018 overhaul of the tax code.

Under the new law, the standard deduction has been nearly doubled to $12,000 for single filers ($24,000 for joint) and a number of key itemized deductions have been curtailed. The personal exemption - once valued at $4,050 for each filer, spouse and dependent - has been suspended. Read more at CNBC

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U.S. consumer protection just got even worse

The Consumer Financial Protection Bureau, known as the CFPB, announced a fairly esoteric-sounding policy change on Wednesday, changing the way it issues investigational subpoenas.

But consumer advocate groups are very concerned that this is another kneecapping of the agency that was supposed to have the backs of ordinary Americans.

When investigating a company, the CFPB sends a Civil Investigative Demand, known as a CID, which is a type of subpoena that asks the company to turn over information and documents the company has. As one financial services lawyer put it to Yahoo Finance, all the incriminating evidence is typically in the defendant's possession.

The new change will require the CFPB to provide more information to companies that are being investigated as to what exactly they are being investigated for, a measure that consumer advocates fear will result in the destruction of evidence from below-board companies.

The "FPB," said F. Paul Bland, executive director at consumer group Public Justice, dropping the "Consumer" in disgust, "is setting itself up to be one of the weakest investigative agencies in the country by showing all of its cards to a target at the outset."
Read more at YAHOO FINANCE

Alternative Credit Reporting

Understanding How eChecks Work

The easiest way to think of an eCheck is that it's just like a paper check - without the paper. An eCheck is a promise of payment, authorizing a merchant to draw money from the customer's bank account, either on a one-time or recurring basis. However, because eCheck transactions are conducted electronically, funds are debited and transactions are settled much faster than with paper checks.

How Do eChecks Work?

A business with an Automated Clearing House (ACH) merchant account can draw money from a customer's bank account directly, avoiding network dues and fees associated with debit and credit card networks. Transactions are routed through the ACH network, which provides the infrastructure for electronic transactions in the U.S.

Avoiding debit and credit card networks make eChecks a lower-cost option versus other forms of payment. eChecks are not only less expensive than other forms of payment, but they are also easy, convenient, fast and secure. Regularly scheduled payments, such as rent or mortgage payments, membership fees, or loan repayments are often set up via eCheck due to this ease and convenience. eCheck's reduce the administrative burden of initiating new transactions for recurring payments while improving customer satisfaction.

To conduct an eCheck transaction, the merchant requests authorization for payment from the customer and then initiates the transaction on the ACH network. Funds are transferred directly from the customer's bank account to the merchant account. Read more at PAYLIANCE

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OHIO's new payday loan law started Saturday. What's changing and what it means for you

One in 10 Ohioans has taken out a so-called "payday loan," traditionally where money is borrowed against a post-dated check.

But starting Saturday, the traditional payday loan will disappear from Ohio, thanks to a law passed last year intended to crack down on sky-high interest rates and sneaky fees.

It will be replaced with "short-term loans" that have a longer loan repayment period, a cap on interest and fees and limits on how much can be borrowed. The changes are estimated to save Ohioans $75 million a year.

House Bill 123 took effect in October, but businesses had 180 days to transition to the new rules and regulations. Payday and other small loan lenders said the law would shut down their businesses, but more than 200 locations have registered to operate under the new rules, including 15 in Cincinnati.

CheckSmart announced Thursday it would stop lending money but continue to offer check cashing and other services as well as collect payments on outstanding loans.

Another big Ohio payday lender, Cincinnati-based Axcess Financial, questioned whether it would be able to keep its Check 'n Go stores open under the new rules.

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T-Mobile gets into banking, offering 4% interest and no fees on its free checking account

T-Mobile is jumping into the banking business with a splash.

The wireless carrier on Thursday introduced a mobile checking account that offers an interest rate thousands of times higher than the national average.

Called T-Mobile Money, the new service has no minimum balance requirements and no monthly, overdraft, transfer or late-payment fees. It also offers a potential 4% interest rate on balances up to $3,000 - compared with the industry average of 0.06%. After that, the rate is 1%.

T-Mobile is partnering with BankMobile, a division of Pennsylvania-based Customers Bank, on the new service. The move comes after the self-proclaimed "un-carrier" recently announced plans to also take on home television and home broadband.

"We don't want to be a bank, we don't aspire to be a bank," Tiffany Minor, director of marketing for T-Mobile's financial services business, tells USA TODAY. Minor says that BankMobile is handling "all the compliance" while T-Mobile is "delivering the customer experience in the wireless space."
Read more at USA TODAY




CFPB Notice of Proposed Rulemaking (NPRM) on "Payday, Vehicle Title, and Certain High-Cost Installment Loans"

Deadline to submit comments is May 15

In 2017, the CFPB issued a rule on on "Payday, Vehicle Title, and Certain High-Cost Installment Loans" that was needlessly complex and overbroad. It would have caused irreparable harm to industry businesses and eliminated an important form of credit to consumers.


Comments can be submitted now through May 15, and can be sent electronically, via email or through regular mail.
1) Submit electronically via at

2) Submit via email to
Include Docket No. CFPB-2019-0006 in the subject line of the message.

3) Submit via regular mail or hand deliver to:
Comment Intake
Bureau of Consumer Financial Protection, 
1700 G Street, NW,     Washington, DC 20552 
 Include Docket No. CFPB-2019-0006 in the letter. 
Must be mailed by Friday, May 10, to ensure arrival by deadline.

If you have questions or would like additional information, please email


Postal Banking Is Back -- On Democratic Party Platforms -- But Is It Viable?

Postal Banking, which Elizabeth Warren promoted back in 2014, is back on the Democratic Party agenda, or at least on the platform of several of its presidential candidates.

The revival of postal banking - the Post Office dropped savings account in 1967 because of a decline in deposits - has been based on two not always compatible concepts. In 2014 the Postal Service suggested it could make money from banking while still undercutting the usurious rates of payday lenders.

Democrats are advocating it as a way to help people who don't have bank accounts and often fall victim to the high fees charged by payday lenders.

Kevin Wack of The American Banker reported last April that Sen. Kirsten Gillibrand, D-New York, has proposed making the country's Post Office into financial service centers with small low-cost loans, payments, checking and savings accounts and online services. Senator Bernie Sanders has also proposed postal banking and it was a little-noted part of the Democratic Party's platform in 2016, although, as Wack dryly noted: "Hillary Clinton, whose candidacy was hurt by her paid speeches to Goldman Sachs, was undoubtedly a poor vessel for the idea." Read more at FORBES

Compete in the data-driven lending era

How a Debt Collection Agency Can Preserve Customer Relationships

Traditional debt collection only focuses on the actual process of recovering money. It has nothing to do with customer relationships. But in the modern business era, customer relation is valuable to grow a business and gain a foothold in the industry. This has made hiring a debt collection agency imperative to maintain customer goodwill and ensure them that the company believes in harmony, and not blackmail.

Personalised debt recovery
The first step to improving customer relationship while opting for personal debt collection services is to offer personalised debt recovery options. Customers who genuinely have problems while paying back a loan will find these options helpful. You can introduce flexibility in payments such as paying through net banking or their debit or credit cards.

Sometimes, increasing the debt recovery time can work wonders for the customers. They will be in a better position to pay when funds arrive. Apart from flexibility in payment time, you can also waive off the interest rates for a particular period. For example, if your customer owes $1,000 and the repayment date is 3 months from the date of lending, you can increase the time for a month and specify that no interest will be charged in the fourth month, but if there is a delay in payment after that, the customer will have to pay an increased rate of interest.

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GE's Subprime Loan Business Files Chapter 11

WMC Mortgage sought bankruptcy protection to resolve remaining legal liabilities over defective loans it originated before the 2008 financial crisis.

General Electric has put its defunct subprime mortgage business into bankruptcy to help resolve remaining legal liabilities over defective loans.

WMC Mortgage has already settled 13 lawsuits in which investors alleged it misrepresented the quality of the mortgages it sold, agreeing to pay a total of $870 million in compensation.

But a suit filed by TMI Trust Co., a successor to the Law Debenture Trust of New York, is still pending, with the plaintiff seeking about $980 million. WMC said in bankruptcy court papers filed on Tuesday that it may also face indemnification claims from large financial institutions that were sued over toxic mortgages.

The WMC board "has determined that the commencement of this chapter 11 case ... will enable WMC to maximize the value of its remaining assets, resolve disputed and unliquidated claims that might be asserted against it, and make a fair and equitable distribution to its creditors," the company's CEO, Mark Asdourian, said. Read more at CFO MAGAZINE

Payliance: Powerful Payment Processing Technology

REPAY Expands into Canada. by Kristen Hoyman

ATLANTA, April 25, 2019 - Repay Holdings, LLC, a leading provider of vertically-integrated payment solutions, together with its parent, Hawk Parent Holdings LLC (together, "REPAY"), announced today expansion of its integrated payment processing services into Canada. REPAY will now offer its suite of payment processing solutions to the Canadian personal loans and automotive loans markets. REPAY's expansion into Canada allows Canadian lenders and finance companies to access REPAY's integrated payment technology platform, which reduces the complexity of electronic payments for merchants while enhancing their customers' overall experience.

With REPAY's payment products, merchants can accept payments anytime, anywhere via consumer-facing online payment portals, SMS/text pay, IVR/phone pay, and white-labeled mobile apps. The proprietary payment platform easily integrates with our clients' enterprise management systems and enables merchants to simplify and automate their payment and reconciliation processes. Merchants who use REPAY's payment services will have access to dedicated implementation teams, 24/7/365 customer service, and professional risk management resources.
Read more at REPAY

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


Small-dollar loans are available and highly regulated in 35 states

Approximately 12 million households use small-dollar loans each year

The average fee for a single payment small-dollar loan is $15 per $100 of the loan.

The monthly payment for an installment loan depends on the term of the loan.

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
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America Scores an Average 'C' Grade for Financial Literacy Month

Ten years after the financial crisis and Great Recession, WalletHub measured the financial literacy of each state.

The average grade? No higher than a B, with most states falling in the D+ to B- range. The reason? Little to no financial education.

"We don't learn personal finance anywhere in school -some schools have very limited financial education - so for those going through the education system, they're not much they're learning in terms of practical life skills," Tony Steuer, a financial expert and author of "GET READY!: A Step-by-Step Planner for Maintaining Your Financial First Aid Kit," told InsideSources. "Most school systems don't even touch financial skills."

According to WalletHub's data, those who don't finish high school or complete a bachelor's degree are even more financially illiterate than those who do.

Financial literacy extends beyond mere understanding of how credit cards and budgets work. Most employees choose a health insurance plan through their employer, and most Americans mortgage their homes and take out loans to buy cars. The problem is, insurance plans, loans and mortgages can be confusing if you don't have some background in finance.

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Low-tax states top among best places to make a living in 2019

While the overall U.S. economy Opens a New Window. is strong, conditions Opens a New Window. for residents in different states can vary dramatically.

American workers and retirees, for example, are starting to leave states where a larger share of their hard-earned dollars are being consumed by tax obligations - like New York and New Jersey.

But taxes aren't the only reason people are relocating. Americans are also looking for places with more temperate climates, plentiful job opportunities and lower costs of living.

So where can workers make the best living in the U.S.?

Personal finance website analyzed median incomes, cost of living, unemployment rates, state income taxes, among other factors, to determine where the dollar stretches the furthest.

Wyoming topped the rankings out of all 50 states, earning it the title of the best place to make a living in 2019.

The factors that gave it top marks include no state income tax and a cheap cost of living. Meanwhile, it also has the 15th highest median income across the U.S.
Read more at FOX BUSINESS

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