July 12, 2018


CFPB further under fire with Kavanaugh pick for Supreme Court

WASHINGTON - There's a plausible scenario by which Brett Kavanaugh's confirmation to the Supreme Court leads to the hobbling, if not wholesale dismantling, of the Consumer Financial Protection Bureau.

Kavanaugh has made no secret of his view that the consumer watchdog - the brainchild of Sen. Elizabeth Warren, D-Mass., and the most prized liberal achievement of the Dodd-Frank Act - is unconstitutional. He spelled out his thinking in a 101-page opinion he wrote in 2016. "Within his jurisdiction, the Director of the CFPB is even more powerful than the President," Kavanaugh wrote in a finding for the Court of Appeals for the District of Columbia Circuit that was overturned in January by the full D.C. Circuit.

Thanks to the agency's structure, he argued, its director wields more relative authority than the Federal Reserve chairman, the Supreme Court's chief justice, the defense secretary and the Senate majority leader. And that concentration of power "poses a far greater risk of arbitrary decision-making and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency." Read more at SFGATE

The Community Financial Services Association of America (CFSA) modernizes industry-leading 'BEST PRACTICES"

The Community Financial Services Association of America (CFSA) today released a modernized set of best business practices to further enhance consumer protections and address the evolving credit needs of small-dollar loan customers. CFSA member companies are licensed and regulated in each state in which they operate, and these mandatory Best Practices ensure they continue to hold themselves to a higher standard of responsible lending and help consumers make informed financial decisions. Additionally, these modernized best practices are intended to cover all small-dollar loans provided by CFSA member companies, including automobile title and installment loans.

"We are excited to release our modernized Best Practices, which help ensure CFSA member companies continue to provide their customers with superior service, offer customers the best resources available to make informed financial decisions, and deliver unparalleled transparency," said CFSA CEO Dennis Shaul. "Small-dollar loans are a vital form of credit for millions of American households, and these Best Practices will further protect consumers as they look to small-dollar loans to fulfill their financial needs."

CFSA's new set of mandatory Best Practices include 15 lending requirements for member companies - up from the CFSA's previous 13 Best Practices. The two new provisions of the modernized Best Practices are:      Read more at CFSA

OHIO: Senate approves payday loan regulation bill by 21-9

Looking to fix a failed 2008 law and address what are among the highest rates in the nation for small-dollar loans, the Ohio Senate convened a rare summer session Tuesday and passed new payday lending restrictions.

The 21-9 Senate vote was the latest in the surprising journey of House Bill 123. Over the past four months, it has gone from stalled for more than a year to almost watered down by the House, to suddenly passed by the House with no changes, to nearly watered down again by the Senate, to passed by the Senate with high praise from consumer advocates.

If the House approves it with a concurrence vote, the bill that one Republican senator said was fought by 41 lobbyists will go to Gov. John Kasich for his signature.

In the end, most lawmakers said they don't want the payday industry to disappear, clearly are not buying the industry argument that the bill will drive them out of business.

Sen. Scott Oelslager, R-Canton, drafted the latest changes and was noticeably frustrated with some of the comments made by payday executives in committee hearings this week. He said the bill compares favorably to a Colorado law passed in 2010 that did lead to payday store closures, but some also remained operational. About 650 payday stores operate in Ohio.

FactorTrust®, a TransUnion company, provides alternative credit data, analytics and risk scoring information to help lenders make more informed decisions.

OHIO: Payday Lending Bill Heads Back To Ohio House After Senate Approves Changes

A bill to overhaul the payday lending industry in Ohio is heading back to the House after the Senate approved the legislation with some changes. Consumer advocates are touting this as sensible reform while lenders argue this will put them out of business.

What seemed like an issue that was stuck in neutral has moved through the Ohio Senate. Now, the payday lending bill has one more step before getting sent to the governor's desk.

In a surprise move, the Senate rolled out new language to the payday lending bill that only made minor changes to the legislation. The bill is labeled by supporters as a comprehensive overhaul to the industry.

Leading the charge for the bill is the Pew Charitable Trusts, which advocates for better financing situations for low-income people.

The group's Nick Bourke says the bill as passed would make Ohio a role model on this issue.

"You need to have affordable payments, a reasonable time to pay, and prices that, yes, are higher than what you might see on credit cards but lower than what you tend to see in payday loan markets and definitely much lower than what you see in Ohio today," Bourke says.


What Employees Really Want At Work

Throughout the years, employees' desires and demands have evolved, and it can be challenging for companies to keep up. Employers are bombarded with a wide range of trendy tips for keeping different generations of workers happy. But when it comes to attracting and retaining top talent, employers need to understand what employees really want from a company. While we all know that competitive pay and good benefits factor into an employee's decision to join and stay at a company, there are many other overlooked desires that are more important than a paycheck.

To truly enjoy their jobs, employees must feel like their employers respect them and will provide them with what they need to be successful in both their professional and personal lives. The 2018 Global Talent Trends study by Mercer revealed a few employee desires that many organizations seem to be missing.

The study took a multi-perspective approach and collected input from 800 business executives and 1,800 HR leaders, as well as 5,000+ employees across 21 industries and 44 countries around the world. Mercer gathered these voices to analyze how both employers and employees are reimagining the future of work. The study identified top talent trends, which can be useful for companies who are trying to stay ahead of the game when it comes to employee satisfaction.

Among the findings, Mercer identified three factors that employees and job candidates are looking for in a company. This included permanent workplace flexibility, a commitment to health and well-being and working with a purpose. Read more at FORBES

We are transforming lending with innovative payment instrument data and technology, increasing credit access to the financially underserved, and reducing fees for borrowers and creditors.

The Power of Payment Instrument Data. by Adam DiVeroli & Tara Kumar

What if you had an unparalleled, full-detail view of the consumer with visibility into their bank account, including expenses and transactions? Payment instrument data provides this powerful and indispensable access, integral for decisioning, underwriting, verification, and payment processes. This live data fills the gap in credit information, instantly revealing who the consumer is today and goes a step further, revealing how they will behave in the future. Payment instrument data is derived from the transactions and attributes associated with debit cards, pre-paid cards, credit cards, bank accounts, and payment processors.

With live payment instrument data, you can:
  • Eliminate fraudulent prospects.
  • Authenticate account ownership, status and income.
  • Discover how your prospect spends, including where they are spending and debts
  • Acquire crucial data missing from credit reports, providing visibility into the last 60 days. View the income, expense and balances to date for the account, there is no gap in the history of the account.
  • Generate predictive power to how a consumer will behave and determine their risk level.
Payment instrument data provides you with the power to better identify fraudulent applicants. One of the key pieces of data to verify when an applicant provides a payment instrument is its ownership. Identifying if the payment instrument is not owned by the applicants helps reduce the unnecessary defaults and payment processing expenses. Read more at MERCHANTBOOST
Decision Cloud is a black box platform, which allows users to build decision waterfalls, utilizing Insight's services, as well as a plethora of third party vendor services.

Americans' Financial Regrets: Surprisingly, only 5% regret taking out payday loans - the same percentage that regret mortgage debt.

Do you have any regrets in life? You've probably done a few things you wish you hadn't, like adding sour milk to your coffee or washing your new red sweater with your good white shirts.

Those regrets can be painful, but the effects are short-lived. Financial regrets can have longer-lasting consequences - and, according to a recent survey from Student Loan Hero, 76% of Americans have some form of financial regret.

Most financial regrets come from the same basic principle - spending too much money instead of saving it.

In the past year, not saving enough was the top regret of 46% of survey respondents. Half of respondents regretted not saving more for retirement, and just over one-third would contribute some of their spending to a 401(k) plan or IRA if they could recover the funds.

Says Miranda Marquit, a financial expert who works with Student Loan Hero, "It's clear from Americans' regrets that they know what they should be doing. However, knowing is only part of the battle. You also need to act on it." Read more at PANTAGRAPH


OHIO: New version of payday loan bill could make Ohio a national model, reform advocates say

COLUMBUS, Ohio - Senate Republicans who had hoped a new version of the payday lending bill would satisfy the industry became frustrated late Monday afternoon when store owners told them it needed more work.

"You and your people have been involved in this bill for over a year since it was introduced," Sen. Scott Oelslager, chairman of the Senate Finance Committee, told Ted Saunders, CEO of Checksmart's parent company. "So to sit there and say that you weren't part of the process, to sit there and say that you were cut out is ridiculous. Because the facts show otherwise."

"You and your people and your numerous, numerous, numerous, numerous lobbyists have been very much involved in this from the very beginning," Oelslager added.

Oelslager later said that he had asked the industry three times to meet with the Pew Charitable Trusts -- which is advocating for changes to protect consumers -- but the two sides never got together. Oelslager said that Senate Republicans decided to push ahead, wanting to pass a bill for consumers. Senators and their staffs talked with Pew and came up with a substitute version of House Bill 123, which is friendlier to lenders. Read more at CLEVELAND.COM

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

U.S. must completely rethink financial regulations, academics say.

The US must completely rethink how it regulates investing instead of focusing on the question of whether there is a need for more or less regulation in order to prepare for the next big crash, according to a pair of academics.

In an article for The Conversation, West Virginia University law professor Jena Martin and public administration professor Karen Kunz argue that regulations set in place are not enough to protect the US in the future. Additionally, the writers say that Democrats and Republicans are both missing the point when it comes to regulation.

"If we had our way, the whole system of financial regulation would be burned to the ground and replaced with something entirely different," the authors said.

Their comments follow the recent rollback by Republicans of certain regulations on Wall Street passed following the 2008 financial crisis. Although the changes did not fully repeal regulations, the Dodd-Frank modifications are the first legislative overhaul since 2010.

Know the who, what, when and where of all 240 million smartphones in the U.S.

Online lenders upping qualification standards in response to default wave. by Walt Wojciechowski

Over the past 10 years or so, the rapid rise in online lending has opened doors for millions of small businesses, providing them with the funds they need to compete and pay for their key operational functions. Indeed, from 2015 to 2017, online lenders furnished thousands of companies in the United States with close to $10 billion in funding, according to the Electronic Transaction Association.

Unfortunately, the swift speed at which online lenders approve loan requests, in part, has led to an uptick in borrowers defaulting, forcing lenders to ratchet up their qualification standards.

LendingClub, Avant, Social Finance and Prosper are just a few of the online lenders that have stiffened the credit approval requirements their customers must meet to gain approval for various loan products, Bloomberg reported. These stricter underwriting rules have also included shorter maturity periods and timelines in which borrowers have to pay off their loans in full.

Henry Song, a Columbus, Ohio-based portfolio manager who owns securities in several online-lending platforms, told Bloomberg that bond investors - which largely provide the money FinTech firms use to lend - are the ones calling for the credit crackdown.

"They all had a pretty tough time and took losses a lot more than expected," Song explained. "Some dropped certain grades and the mentality of grabbing market share to be profitable has shifted."


Financial Wellness Programs May Not Be Right for All Companies

Among employers that do not offer a financial wellness program, reasons cited in a survey were: have not thought about it, need more resources to execute, need to focus on other organization priorities, do not perceive any financial benefits, and do not want to get involved in employees' personal finances.

Just over half of employers are familiar with the topics that a financial wellness program should cover, Strategic Benefit Services learned in a survey of employers conducted in February.

While they are growing in popularity, financial wellness programs may not be the right fit for all companies, the provider of retirement services to health care and other not-for-profit organizations says. There may be a moral imperative that drives commitment for some, while others require a business imperative to justify the investment. Regardless of the rationale, a logical starting point would be for an organization to survey its employees and assess the need.

Finally, the firm says, it is challenging to calculate the return on investment from financial wellness programs. Read more at PLANSPONSOR

Employment Skip Tracing
If a debtor is employed, we will find them!

A Record Number of Americans Are Quitting Their Jobs

Americans' confidence in employment prospects is soaring as the labor market tightens. The latest proof: A record number are voluntarily quitting to seek better jobs.

Some 3.56 million workers left positions in May, the most in data back to 2000, and up from the prior month's 3.35 million, Labor Department data showed Tuesday. That pushed up the quits rate, which measures quitters as a share of employed people, to a 17-year high of 2.4 percent from 2.3 percent. With more workers feeling assured of finding better employment, sustained wage gains may soon follow.

The latest jump is sure to be closely watched by Federal Reserve policy makers as they monitor for signs of upward pressure on worker pay that may feed overall inflation. In another bullish sign, the gap between vacancies and the number of unemployed widened to 573,000 in May, a sign there's potentially work available for every jobless person in America. Read more at BLOOMBERG

National Debt Holdings
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.

CFPB Remains Unconstitutional

Just as no single person can be judge, jury, and executioner, no single bureaucratic agency head may create rules and enforce them, and do so without meaningful oversight from Congress or the president. In a case before the U.S. Court of Appeals to the Fifth Circuit, Cato has filed a brief arguing that the director of the Consumer Finance Protection Bureau has been granted both rule-making and rule-enforcing powers far beyond what is constitutionally permissible-and the vague and arbitrary way in which he's been using them violates the due-process protections of the Fifth Amendment.

Because the structure of the Constitution is so important in preserving the checks and balances between branches of government, courts have looked harshly on schemes that "delegate" those powers away from where constitutional text places them. The president, for instance, may appoint someone to execute his powers over a certain area of law, such as the attorney general as head of the justice department. This doesn't violate the "nondelegation" doctrine because the president maintains control; he can direct a general policy of prosecution or non-prosecution and he can fire the AG. So long as the president has the power to remove an officer, the power delegated remains ultimately in presidential hands. Read more at CATO INSTITUTE

AFSPA helps our members grow their Alternative Financial Services business by providing them with the best information, research, data, support, relationships and by vetting and presenting the best available product and service providers for the Alternative Financial Services Industry. 

Alternative Financial Service Providers Association

315 Tuscarora St., Lewiston, NY 14092