May 12, 2020
AFSPA Partner


A National Interest Rate Cap Has No Place in the Next Coronavirus Relief Package

As the economic fallout from the COVID-19 pandemic continues to wreak havoc, it's crucial that struggling Americans have access to affordable short-term credit. While bank loans and credit cards may offer financial relief to some, it's more important than ever that the millions of underbanked and unbanked consumers in this country have the option to take out small-dollar loans, including payday loans. In fact, a number of states with mandatory stay-at-home orders have deemed these lenders so vital to the economy that they've been declared essential businesses.

It's for these reasons that Congress should reject calls from Americans for Financial Reform (AFR) and other special interest groups to include a nationwide interest rate cap of 36 percent annual percentage rate (APR) in the next COVID-19 relief package. Setting such an arbitrary limit on interest rates would inevitably put lenders out of business and prevent millions of already struggling Americans from getting credit.
Read more at Competitive Enterprise Institute

AFSPA Partner


Credit card use dropped alongside coronavirus shutdowns, job loss in March

Americans stopped using their credit cards in March just as the coronavirus was hitting the U.S. economy, a new report found.
On Thursday, the Federal Reserve released consumer credit data that showed revolving credit, like credit cards, fell at a 30.9 percent annual rate in March, which is the "biggest percentage decline since January 1989," according to MarketWatch.

The financial website reported that revolving credit fell $28.2 billion in March.

Meanwhile, non-revolving credit rose by 6.2 percent, or $16.1 billion. Non-revolving credit includes auto and student loans, but doesn't include mortgage loans, MarketWatch reported.

Overall, total consumer credit fell at a 3.4 percent annual rate in March.
Read more at FOX BUSINESS


Consumer Financial Protection Bureau Issues Final Remittance Rule

WASHINGTON, D.C. - The Consumer Financial Protection Bureau (Bureau) issued today a final rule covering remittances transfers. The Remittance Rule imposes requirements on entities that send international money transfers, or remittance transfers, on behalf of consumers. Among its requirements, the Rule mandates that remittance transfer providers generally must disclose the exact exchange rate, the amount of certain fees, and the amount expected to be delivered to the recipient. The Rule also allows for depository institutions to estimate certain fees and exchange rate information under certain circumstances, but by statute, this provision expires in July 2020.

The final rule allows certain banks and credit unions to continue to provide estimates of the exchange rate and certain fees under certain conditions. This could preserve consumers' ability to send remittances from their bank accounts to certain countries or recipient institutions.
Read more at CFPB

Dreher Tomkies LLP

U.S. household debt reached $14.3 trillion, credit standards tightened in first quarter

(Reuters) - American households added $155 billion of debt in the first quarter and overall debt levels rose to a new record at $14.30 trillion, the Federal Reserve Bank of New York said on Tuesday in a report that provides a snapshot of where household balance sheets stood before the coronavirus pandemic brought much of the economy to a halt.

Mortgage balances rose by $156 billion from the fourth quarter to $9.71 trillion. But access to credit overall tightened slightly in the first quarter and other types of debt declined.

The report provides a snapshot of consumer data as of March 31. But since credit accounts are updated once a month, the data may not fully reflect the effects of the pandemic, which led to widespread shutdowns and job losses in the second half of March.
Read more at REUTERS



Expanded Payment Options Improve Auto Loan Performance. by Kristen Hoyman

Are you using payment technology to manage your loan portfolio effectively? A 2019 Experian study shows auto loan debt is at a record high. As an auto lender, your first thought might be, "Well, of course. Cars are more expensive, and more people finance them now."

And you're right. But the statistic leads to more critical questions. How are you managing that debt? How is your loan portfolio performing?

Whether you own all your paper or other investors and institutions do, portfolio performance is one of the most important metrics of your business.

According to, the average loan balance from an independent dealer is $17,002, with an average monthly payment of $348. These numbers are slightly higher for a franchise dealer. Finder also states that there are over 100 million auto loans in the market, and according to the Experian study, new cars average a $32,000 loan balance with a $554 monthly payment.
Read more at REPAY


Coronavirus drives record number of complaints to CFPB

The Consumer Financial Protection Bureau (CFPB) received a record-breaking number of complaints about banks and lenders in April as millions of Americans struggle to navigate the economic toll of the coronavirus pandemic, the bureau's director said Friday.

CFPB Director Kathy Kraninger told reporters during a Friday press call that the financial watchdog agency received more complaints from consumers in April than any other month since the agency began tracking and cataloguing them in December 2011.

The bureau received 42,774 complaints in April compared to 36,690 in March, Kraninger said, a 15 percent increase that rose along with the number of Americans who contracted COVID-19 or lost their jobs because of the measures to slow its spread.
Read more at THE HILL


LoanPaymentPro™ (LPP) is a fintech leader in payment acceptance technology. LoanPaymentPro™ (LPP) is a revolutionary merchant services and technology firm servicing the debt repayment industry. LPP was developed by experienced lenders for lenders utilizing proprietary patent pending technology to develop the only compliant and cost effective Bankcard, ACH and RCC/Check21 acceptance platform for brick and mortar and online lenders.

Servicing the short-term consumer and alternative lending industries for: Installment Loans, Title Loans, Personal Loans, Pawn Loans, Personal Lines of Credit, Student Loans, Military Loans, Subprime Loans, Lease-to-Purchase and Rent-to-Own (RTO).

LPP is introducing an advanced form of its Zero-Dollar Authorization (ZDA) technology. Putting the "control" back into the hands of lenders by allowing them to perform a bankcard validation and/or account verification prior to storing a bankcard or processing a payment. When lenders utilize our new validation technology, it significantly decreases fraud and increases their chance of a successful payment.
Read more at LoanPaymentPro


Do bank branches have a future? Pandemic reveals ultimate 'A/B test'

As the coronavirus pandemic upends the traditional way many industries have have operated over the years, some banking and fintech leaders say a lasting impact on the banking sector could be the disappearance of branches.

"I think everything that's happened over the last 60 days or so is probably accelerating a trend that's already happening, which is the reliance on traditional bank branches will continue to go away," Chime CEO Chris Britt said during a webinar hosted by FT Partners.

Britt said the digital bank's more than 8 million customers don't want to go into a bank branch and are comfortable with a mobile-first relationship.
Read more at BANKING DIVE


'The floor was taken out from under them': April's massive job losses are hitting these Americans more than others

The economy lost 20.5 million jobs last month, according to the Labor Department's nonfarm-payrolls report

The April jobs report on Friday revealed the coronavirus outbreak's widespread economic wreckage - but it's even worse when you dig into the demographics.

That's because some of the hardest-hit workers can least afford losing their job, observers say.

Friday's numbers showed 20.5 million jobs were gone in one month, bringing the unemployment rate to 14.7%. This represents a remarkable surge from March's 4.4% jobless rate to the highest point since World War II. Read more at MARKETWATCH


Working at home had a positive effect on productivity during the pandemic, survey says

Almost everyone seems to hate getting stuck in an office cubicle next to a co-worker who won't shut up.

Bosses who call too many meetings can be even more annoying.

And traffic jams on the way home from work might be the worst way to cap the day after that.

So perhaps it's not exactly shocking to learn that working from home during the COVID-19 pandemic has had a positive effect on workers' productivity, according to 54% of respondents in a recent survey of professionals ages 18-74.

The reasons for this, they said, were time saved from commuting (71%), fewer distractions from co-workers (61%) and fewer meetings (39%).
Read more at USA TODAY


More businesses file for bankruptcy amid coronavirus; experts describe options

NEW ORLEANS, La. (WVUE) - Gold's Gym, Borden Dairy and J.Crew all recently filed for bankruptcy and many say things are only going to get worse.

As people struggle to make ends meet, many businesses will look for protection from mounting debts.

These are not the kind of parking lots that spell business prosperity and after nearly two months of stay home orders, the lack of foot traffic is expected to force many businesses to file for bankruptcy.

"We haven't seen an uptick but it's coming, especially in the energy sector," bankruptcy attorney John Landis, with Stone Pigman Law, said.
Read more at FOX8



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