May 30, 2019

Here are 5 things the CFPB will focus on in 2019

The Consumer Financial Protection Bureau recently published its spring 2019 rulemaking agenda, showing the regulatory matters it reasonably anticipates having under consideration during the period of May 1, 2019 to April 30, 2020.

The CFPB explained that the new permanent Director Kathy Kraninger is now ready to begin rulemaking activities after having recently completed a listening tour.

"A permanent director of the Bureau took office in December 2018," the CFPB said in a statement. "The director recently completed a listening tour to engage with bureau stakeholders, employees and outside experts, building on feedback submitted through more than 88,000 public comments in response to the Bureau's 2018 Call for Evidence initiative."

"The bureau expects to communicate further information about future planning and priorities in the coming months," the bureau continued. "In the meantime, this Spring 2019 Agenda reflects ongoing rulemaking activities, including initiatives to implement statutory requirements and to address the potential sunset of statutory and regulatory provisions."
Read more at HOUSINGWIRE

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A 36% Lending Cap: When Consumer Protection Means Consumer Prohibition. by Mary Jackson, CEO of the Online Lenders Alliance (OLA)

When the Trump administration decided to revisit how short-term small-dollar loans are regulated, the debate about how to provide access to credit for Americans who use these loans started anew. Part of this debate involves elected officials who are seeking to cap what lenders can charge, claiming that you can borrow money and pay less.

There's one problem with these claims about how much credit costs - they don't reflect the truth for lenders. For countless borrowers with nonprime credit ratings, a 36% rate cap doesn't mean cheaper loans; it means losing access to credit. Lenders are demonstrably unable to serve nonprime borrowers at rates that won't cover the cost of providing credit and responsibly managing risk.

For me, this topic is a personal one, and not just because I run an association for lending, technology and innovation that represents the online lending industry. Like many Americans, I had no choice but to rely on nonprime credit early in my life. As a young, working mother with two small children and a credit score that barred me from accessing traditional credit options, I turned to the nonprime market to make ends meet. I knew that meant paying more for access to credit, but alternatives didn't exist or would be more costly - a problem that continues to this day for many consumers who need funds in a pinch.

Faced with a $400 emergency expense, 40% of American families don't have the necessary savings to cover it out of pocket. Credit cards aren't an option for everyone. And the small-dollar amount needed doesn't come close to meeting the minimum threshold for most bank loans, which are also not an option for many Americans. Read more at FORBES

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

Alchemy Lending Operating System Integrates with Experian

Alchemy Technology, Inc., industry-leading lending as a service organization today announce the full integration with Experian, a leading consumer credit reporting agency.

Experian collects and aggregates information on over one billion people and businesses including 235 million individual US consumers and more than 25 million US businesses. Based in Dublin, Ireland, the company operates in 37 countries with headquarters in the United Kingdom, the United States, and Brazil. The company employs approximately 17,000 people and reported revenue for 2018 of US $4.6 billion. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. Experian is a partner in the UK government's Verify ID system and USPS Address Validation. It is one of the "Big Three" credit-reporting agencies, alongside TransUnion and Equifax.

Best In Class
Alchemy is constantly integrating with the best in class data providers for our clients. From identity verification, banking transaction verification to consumer credit reporting agencies, we always on the lookout for the best sets of data available for underwriting and risk management for our clients.
Read more at ALCHEMY

Introducing AI Lift, the AI-powered credit risk web service that leverages uncorrelated alternative data to identify the 20-30% of today's thin-file and no-file borrowers ready to be creditworthy customers.

Consumer Financial Protection Bureau (CFPB)  Should Drop Flawed Enforcement Actions

While the Consumer Financial Protection Bureau's role in enforcing consumer protection laws is important, there are times when it oversteps the mark and brings frivolous cases based on weak factual grounds or obscure legal theories. Two well-documented examples are the PHH case and the Ally Financial consent order, both pursued under the Obama administration.

During her confirmation hearing, Director Kathy Kraninger testified that she would pursue an enforcement strategy based on the rule of law. This is similar to the position taken by her predecessor, Acting Director Mick Mulvaney. Nevertheless, despite Director Kraninger's testimony, the bureau continues to pursue another deeply flawed Obama-era enforcement action, CFPB v. Navient. The director should move swiftly to terminate that case and any others that lack clear evidence of wrongdoing.

In January 2017, the bureau brought suit against Navient for allegedly steering student loan borrowers into worse repayment plans, such as forbearance, as opposed to allegedly superior repayment plans, such as an income-driven repayment (IDR), by failing to adequately inform them of their options. The bureau alleges that Navient had a profit motive in doing so, as forbearance is quicker and easier for the firm than IDR. This allegedly caused borrowers to pay much more than they had to for their loans. As then-Director Richard Cordray said at the time:
Read more at The Competitive Enterprise Institute

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.

Three Things They Don't Tell You About Bank Verification

Not all bank verification solutions are the same, they might not even have the same function. If your business is using ACH transactions, odds are you are utilizing some sort of bank verification solution. Verification is a term thrown around casually to describe products that perform various functions, such as to confirm a bank account's status, affirm balance, authenticate reputation, and to establish ownership. These generalizations focus on the result of verifying, rather than the process.

However, it's important to consider the different aspects of bank verification to understand what the available methods are and how they work, ensuring that you are using the correct tool for your needs. Here are three factors to keep in mind when selecting a solution to fit business' needs.

1. Credentialed or non-credentialed?
Credentialed Verification: A credentialed log-in process requires consumers to provide their internet banking credentials (username and password). This method provides a plethora of information including the current balance, transaction information, verification of ownership, income verification, and more. Read more at VALIDIFI

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

CALIFORNIA: Assembly OKs cap on consumer loan interest rates

SACRAMENTO, Calif. (AP) - The California Assembly voted Thursday to cap the interest lenders may charge on loans that can carry rates spiraling into the triple digits.

Backed by civil rights groups, religious organizations and some trade associations, the proposed law would cap annual rates at around 38% for loans between $2,500 and $10,000.

The bill comes as legislators across the country seek to reign in a storefront lending industry critics accuse of preying on low-income consumers in need of cash and trapping them under mounds of debt for years.

But even as the bill advanced, some California lawmakers expressed concern that it will limit choices for consumers with credit or little access to banks and other financial products. And the lending industry, which wields significant influence in legislatures as well as in Washington, has launched an advertising campaign in California attacking the bill as it heads to the state Senate, where observers expect a tougher fight. Read more at Scripps TV Station Group

Redefining how financial service businesses measure risk and process payments.

Combating The Payday Loan With On-Demand Wages

FinTech firms that provide workers with wages on demand (i.e., before payday) emerged with the cash flow challenges of low-wage, hourly workers in mind. Yet, in the U.K., rising costs of payroll administration, intensifying compliance requirements and complex tax rules have led companies of all industries and sizes to rely on monthly paydays, rather than weekly or biweekly payouts - a shift that has spread the cash flow crunch to employees beyond the shift work space.

Peter Briffett, CEO of U.K. FinTech Wagestream, told PYMNTS in a recent interview that the cash flow constraints of having to wait for a single day to receive wages every month can be dangerous to the financial wellness of professionals. A single, expensive incident can force these professionals into debt via bank overdrafts or credit cards - or worse, Briffett said, into the payday loan cycle.

"In the U.K., 85 percent of employees are paid monthly," Briffett said."That's probably because payroll is expensive, administrative-intensive and the fewer times you can do it, the better - from an employer point of view. But that tends to not help the employee."
Read more at PYMNTS.COM

Payliance: Powerful Payment Processing Technology

Trust Science: Why Do We Talk About Patents?

Technology companies around the world are investing in artificial intelligence (AI) and machine learning (ML) at a breakneck speed. From health to telecommunications and transportation to finance, both technologies are becoming table stakes in a data-driven world.

Unsurprisingly, AI is also the fastest growing section of patent requests in the world, with universities and tech giants accounting for the largest percentage of patent applications and patents being granted. However, smaller tech companies like Trust Science are also researching and developing new, useful AI related inventions that help industry (specifically lenders) move forward.

What do you have to do to get a patent?
As with any other invention, to get a patent for AI, the AI has to be novel (patent lawyer preferred wording for a new idea), useful, and non-obvious, and it has to be applied enough in a specific area that you can demonstrate how it works.

For Example:
Trust Science has created AI specific to identity matching and entity resolution for gathering data in 'the wild'. Read more at TRUST SCIENCE

Lending as a Service

Federal Trade Commission Launches Merchant Cash Advance Probe

The Federal Trade Commission has launched an investigation into the merchant cash advance industry just days after FTC Commissioner Rohit Chopra called on the watchdog to tackle unfair small business lending practices.

The Washington Post reported late last week that the FTC has opened an investigation into potentially unfair contract terms imposed on small business borrowers by merchant cash advance companies and other small to medium-sized business (SMB) lending companies.

The district attorney of Manhattan has also launched a criminal investigation into the industry, while the New York State attorney general's office is in the midst of a civil probe into the matter that revealed last year, reports said.

According to the news outlet, law enforcement's initiatives are "an unprecedented level of government attention" for the sector, which has evaded regulators by classifying merchant cash advances as non-loans and, therefore, exempt from personal loan protections under state and federal law. Read more at PYMNTS.COM

Alternative Credit Reporting

Accelitas, Inc. Expands Executive Team and Moves to New Office

NOVATO, Calif., March 19, 2019- Accelitas, Inc., a leading provider of AI-powered credit risk and identity intelligence services that enable lenders to say "yes" to more good customers, today announced that the company has expanded its executive team, appointing Mark Smith as Senior Vice President, Product Development, and Scott Mullins as Senior Vice President, Marketing.

Smith has over 20 years' experience delivering product solutions to corporate and government customers. He has an extensive background in finance, operations, and IT management including work in IT consulting, software application development, and IT support for public sector companies and utilities. For over 20 years, he worked in management roles involved in planning, implementation, IT infrastructure, software deployment, and managed services for ERP applications. Most recently, he served for three years as director of government solutions for First Data, a role that gave him an opportunity to work on initiatives leveraging artificial intelligence (AI).

"It's obvious to me that Accelitas has the AI expertise and the data it needs to solve critical problems in lending," said Smith. "At First Data, I had the opportunity to see how AI could be applied to specific use cases in the Fintech market. Accelitas, with its expertise, uncorrelated alternative data, and commitment to working closely with customers is in an excellent position to solve pressing problems in the financial services industry-problems that larger, less agile competitors will have trouble addressing." Read more at ACCELITAS

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

US problem banks at lowest level since 2007

The number of U.S. banks Opens a New Window. deemed problematic by a key federal regulator Opens a New Window. decreased in the first quarter of 2019 to its lowest levels in over a decade.

Currently, 59 banks are listed on the Federal Deposit Insurance Corporation's confidential "problem bank" list, the smallest number since the first quarter of 2007, according to data released by the agency on Wednesday.

Lenders are added to the list if they have financial or operational weaknesses that could threaten its overall viability. In 2010, the list included over 800 banks.

Despite the decrease, chairman Jelena McWilliams called on financial institutions to pursue "prudent risk management in order to support lending through this economic cycle."

"With the recent stabilization of interest rate hikes, some institutions may face new challenges in lending and funding," she said in a statement.
Read more at FOX BUSINESS

Compete in the data-driven lending era

REPAY Reports First Quarter 2019 Financial Highlights and Reaffirms 2019 Outlook. by Kristen Hoyman

ATLANTA, May 21, 2019 - Repay Holdings, LLC, a leading provider of vertically-integrated payment solutions, together with its parent, Hawk Parent Holdings, LLC (together, "REPAY"), today reported financial highlights for the three months ended March 31, 2019.

"Our first quarter results performed ahead of our expectations, with a year-over-year increase in card payment volume and total revenue of approximately 32% and 20%, respectively," said John Morris, CEO of REPAY. We believe our results demonstrate that we have a competitive position in a growing market that has historically been under penetrated by card payments. We expect to take advantage of this large and growing market by expanding usage of our existing clients while also targeting new clients in existing verticals. In addition, we look to broaden our addressable market through both strategic M&A and expansion into new verticals."

"We remain excited about the pending merger with Thunder Bridge, and are grateful for the commitment and support we have received from our new PIPE investors," continued Morris. "We are on track to complete the proposed transactions in the second quarter of this year."
Read more at REPAY

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

American employers need to improve in these 5 areas, data shows

Many companies have shortcomings. Some don't offer ample vacation time. Others don't do a good enough job of supporting career development Opens a New Window. . If you're an employer, it's important to know what areas you're falling down in to avoid losing talent when better opportunities present themselves.

To this end, financial Opens a New Window. technology Opens a New Window. company Self Lender enlisted the help of OnePoll to ask 2,000 Americans how their companies could improve. Based on that survey, these are the top five ways U.S. companies are letting workers Opens a New Window. down.

1. Salary
Of the various ways American employers are falling short, salary tops employees' list: A good 54% of workers feel that they're not paid fairly.

If you can't remember the last time you did an internal salary review, carve out some time to do some research and see how your compensation holds up to what competitors are paying. It may be worth allocating more resources to salary if it means retaining key talent you don't want to lose.

2. Benefits
Benefits are an essential component of compensation, yet 43% of workers aren't happy with the benefits package offered by their companies. Read more at FOX BUSINESS


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