May 7, 2020
AFSPA Partner

REPAY solutions are tailored to the unique needs of each industry and its customers.

Lenders slash credit limits, tighten standards as Americans lose jobs in the pandemic

As the coronavirus pandemic wears on, costing tens of millions of jobs, lenders are worried Americans won't be able to pay back their loans.

That's leading to stricter qualification requirements and lower credit limits, making it more difficult for Americans to access cash at a time when they may really need it.

One in 4 credit cardholders said their lenders reduced their credit limit, closed their card altogether, or both in the past last month, according to a new report from that surveyed 1,039 credit cardholders.
Read more at YAHOO MONEY

AFSPA Partner


Can SBA Deny Loans to Payday Lenders? Judge Asks for Its Rules

A U.S. judge is expected to rule soon on whether payday lenders can tap Paycheck Protection Program loans disbursed by the Small Business Administration under the $2.2 trillion pandemic rescue bill.

Payday Loan LLC, which engages in lending and check cashing in 22 stores in California, sued the SBA on April 25 after its request for a $644,000 forgivable loan was denied. The application was rejected on the grounds that PPP funds can't be distributed to companies that profit mostly from making loans.

U.S. District Judge Amy Berman Jackson on Sunday asked the SBA to file a copy of its standard operating procedures before she can rule on the agency's motion to dismiss the case. Payday Loan has asked her to deny the request and instead rule that the SBA cannot block the industry's PPP loans. Read more at BLOOMBERG

Dreher Tomkies LLP

U.S. banks tightened loan standards in first quarter as coronavirus outbreak took hold

WASHINGTON (Reuters) - Loan officers at U.S. banks reported significantly tightening standards and terms on business loans in the first three months of the year as the coronavirus outbreak in the United States began to shutter large parts of the economy and millions became newly unemployed.

The officers also said in the Federal Reserve survey released on Monday that there was greater demand for business loans from medium- and large-sized firms, but that business loan demand from small businesses was roughly unchanged.

Banks reported tightening standards across all three consumer loan categories - credit card loans, auto loans, and other consumer loans - but saw weaker demand for them during the same period. Read more at REUTERS


Where To Cash Your Stimulus Check Without A Bank Account

The IRS is rapidly issuing the CARES Act recovery rebate of $1,200 per adult and $500 per child. While many are getting their checks by direct deposit, millions will be receiving a paper check in the mail.

The IRS is mailing paper stimulus checks when the agency can't make an electronic deposit. An FDIC survey in 2017 estimated that 25% of U.S. households are "unbanked" or "underbanked."

If this describes you or someone you know, what can you do? Where can you cash your stimulus check if you don't already have a checking account?

You have several local options to cash your stimulus check without opening a bank account.
Read more at FORBES

MaxDecisions, Inc. founded in 2016 by two analytics and software engineering veterans dedicated to the integrity and excellence in analytics, marketing and risk management consulting for the online lending industry.

The founders of MaxDecisions, Inc. have decades of banking, financial services and online lending experience, both in consumer and small business lending. We have carefully cultivated a team of software engineers, data scientists, statisticians and mathematicians with specific knowledge in marketing analytics, fraud and credit risk management and portfolio and operational optimization.

"Service to our clients is the most important aspect of our company. We don't succeed until our clients achieves the best result. We have build up a client base solely based on referral. Our dedicated team is what defines us."



In The News: Listen to History, Borrowers to understand impact of proposed rate caps.
by D. Lynn DeVault

When developing policy, it's common sense to listen to those who stand to be the most impacted. Yet attempts to enact a 36 percent annual interest rate cap on short-term, small-dollar loans are being guided by outside interest groups with little regard for the consequences or the financial realities of many Americans. Policymakers should examine history and reflect on how their proposals will impact those who use these loans, rather than let themselves be guided by those with no experience with the product.

Consumer financial services providers serve tens of millions of Americans every year, offering access to a broad range of credit products and financial services that customers value, including short-term, small-dollar loans. Regulating the annual percentage rate (APR) of these loans, which often have terms of two to four weeks, is misguided, as APR is a measure of annual interest and therefore is only meaningful for longer term loans of a year or more.

In addition, efforts to impose a 36 percent annual interest rate cap on these types of loans will restrict access to legal and responsible lenders, while at the same time doing nothing to address the underlying need for them or tackling the very real problem of unlicensed, illegal or otherwise unscrupulous lenders trying to take advantage of consumers. In fact, such poorly written proposals could have the unintended consequence of forcing millions of people to seek out dangerous alternatives from these unregulated lenders. Read more at CFSA

Dreher Tomkies LLP

Dreher Tomkies LLP is a law firm located in Columbus, Ohio providing services to financial institutions nationwide. We concentrate in the areas of banking and financial services law. The Firm's practice encompasses all aspects of financial services provided by creditors to consumers and business entities. The Firm's clients range from Fortune 500 companies and foreign-owned enterprises to small businesses, including diversified companies, banks and bank holding companies, investment bankers, investment funds, finance companies, credit and charge card issuers, mortgage bankers, retailers, debt purchasers, manufacturers, industry and trade associations, and coalition and issue groups.

Our attorneys routinely advise clients on consumer lending, home equity lending, first and second mortgage lending, private label and general purpose credit card lending, student lending, retail sales financing, payday lending, title lending, RAL lending, agricultural lending, wholesale financing, inventory financing, business revolving credit and charge programs, factoring, health care and medical financing, deposit taking, home banking, annuity and insurance sales, GAP programs, reinsurance, debt cancellation and suspension, debt collection compliance, money transmitting, state and federal regulatory compliance, and the licensing and chartering of institutions.

Dreher Tomkies LLP


CFPB critics moving swiftly to challeng new payday lending rule

The Consumer Financial Protection Bureau is poised to deliver a big victory for payday lenders, following through on a three-year effort to gut underwriting requirements for high-cost loans.

Yet the CFPB's final payday rule, which was expected as early as this week, has already spurred critics of the agency to prepare legal challenges to the plan even before Director Kathy Kraninger releases it.

Analysts widely expect consumer groups to sue the CFPB claiming it did not follow correct procedures in reversing underwriting standards established by former Director Richard Cordray. Kraninger also faces a likely backlash from House Democratic leaders, who could try to repeal the rule under the Congressional Review Act.


FinTech Lenders Are Adapting, Protecting Customers During COVID-19 Crisis.
by Mary Jackson, CEO of the Online Lenders Alliance

There has been a lot of coverage detailing the various ways that many industries are responding to the COVID-19 pandemic sweeping its way across the globe. The millions working in the financial services industry are not free from disruptions, and now more than ever we understand that our customers are facing greater economic insecurity. Consumers already deemed high-credit risks deserve access to credit in the good times as well as the bad.

Today, Americans with non-prime credit scores are most at risk of losing access to credit. Companies that primarily offer loan products are reducing originations, in part, because of tighter credit standards and stricter income verification requirements put in place by lenders.

Lenders are also experiencing higher delinquencies as borrowers are experiencing loss of income. While five federal financial regulatory agencies recently issued a statement encouraging banks, savings associations and credit unions to offer this type of small-dollar credit, it will take time for those programs to be created and implemented, if they happen at all.


Coronavirus Bankruptcy Tracker: These Major Companies Are Failing Amid The Shutdown

Some of the biggest names in corporate America are in danger of going the way of Sears, Blockbuster and RadioShack.

The coronavirus pandemic has accelerated the demise of companies that were already in trouble as Americans (and their dollars) stay home amid lockdowns and economic shutdowns. Oil and gas drillers like Whiting Petroleum and Diamond Offshore filed for bankruptcy last week, and J.Crew became the first major U.S. retailer to do the same on Monday morning. More are on the way.

"It has been a poorly-kept secret that a number of the big-box retailers were struggling," says Scott Williams, a bankruptcy attorney at RumbergerKirk. "There has not been a dramatic uptick in the last 45 days. What I think you've seen is lots of people being forced into, 'I'm going to get there at some point.'" Read more at FORBES


14 million American adults don't have a bank account. They're still waiting for a stimulus payment.

A historic $2 trillion government bailout has given cash to millions of working Americans and delivered payments to businesses large and small.

But though the Coronavirus Aid, Relief, and Economic Security (CARES) Act has distributed money to millions of bank accounts, there are still 14 million Americans who don't have one.

"I live check to check, and right now I need more groceries," Akeil Smith, a 35-year-old health aide worker without a bank account, told the Associated Press outside a check-cashing store in Brooklyn.

"Unbanked" Americans are disproportionately poor, black, and Hispanic, according to a 2017 survey from the Federal Deposit Insurance Corporation (FDIC).



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