July 19, 2018

* 4,879 AFSPA Members own over 64,000 locations and online operations

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

Who watches the 'watchdog?' It's time for accountability for the Bureau of Consumer Financial Protection

Enshrined in our Constitution is one of Congress' most important responsibilities-the power of the purse. This requires lawmakers in Washington to review each and every dollar spent to ensure that the federal government is accountable to the American people. The most common way for Congress to exercise this power is through the annual appropriations process, in which lawmakers allocate money to agencies and programs. Unfortunately, there is one federal agency that operates with little or no public accountability, bypassing our system of checks and balances while collecting massive amounts of financial data on taxpayers: the Bureau of Consumer Financial Protection (BCFP), formerly known as the Consumer Financial Protection Bureau (CFPB).

The Federal Reserve gets most of its funding from interest on U.S. government securities. After paying its expenses, the Fed turns the rest of the earnings over to the U.S. Treasury which is appropriated by Congress - meaning the Fed turns all funds in except for money carved out by law for one entity, the BCFP. Since its inception in 2010, unlike every other financial regulator, the BCFP has operated completely outside of the regular congressional appropriations process because 100 percent of its funding comes directly from the Federal Reserve. This means a BCFP director can request up to 12 percent of the Federal Reserve's expenses and Congress has absolutely no say in how this "watchdog" agency spends taxpayer money. There is little that elected representatives can do to oversee the unelected bureaucrats in charge of BCFP's operations, except to ask questions and hope to get answers. The agency essentially runs on autopilot, unaccountable to any branch of government. Read more at THE HILL

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Bipartisan group introduces retirement savings legislation in Senate

A bipartisan group of senators on Tuesday introduced a package of bills designed to make it easier for Americans to save for retirement.

The four senators behind the legislation - Cory Booker (D-N.J.), Tom Cotton (R-Ark.), Heidi Heitkamp (D-N.D.) and Todd Young (R-Ind.) - span the political spectrum, boosting the prospects for advancing the measures.

"Our work on these bills shows a bipartisan commitment to improving economic security for workers and families, and I hope we can move them forward as they will make a difference for so many Americans who deserve to live with dignity both as workers and retirees," said Heitkamp.

One measure would pave the way for pooled employer plans, allowing smaller businesses to more easily offer retirement savings schemes for their workers.

Another bill would make more retirement savings automatic, requiring workers to opt out rather than opt in.

About one-third of private sector workers don't have access to a workplace retirement plan, according to the U.S. Bureau of Labor Statistics, which also found that smaller businesses are significantly less likely to offer defined retirement plans compared to larger companies. Read more at THE HILL


Dems call for hearings on Trump's CFPB nominee to be put on hold

Democrats on the Senate Banking Committee are calling on the panel's chairman, Sen. Mike Crapo (R-Idaho), to delay Thursday's hearing for President Trump's nominee to lead the Consumer Financial Protection Bureau (CFPB) if the administration does not respond to requests for information in time.

In a letter sent Tuesday night, which The Hill obtained, the panel's Democrats said the administration has not responded to requests for relevant documents and other information in advance of Thursday's hearing. Senators are scheduled to consider the nominations of Kathleen Kraninger to lead the CFPB and Kimberly Reed to be the president of the Export-Import Bank.

Sen. Sherrod Brown (D-Ohio) and Sen. Elizabeth Warren (D-Mass.) sent Kraninger a letter in June asking for information on what role she played in the Trump Administration's policy of separating children from their families at the southern border.

And Sen. Bob Menendez (D-N.J.) sent Kraninger a letter last week, which Brown, Warren and Sen. Catherine Cortez (D-Nev.) joined, asking for a full accounting of Kraninger's role in the administration's botched response to Hurricane Maria in Puerto Rico. Read more at THE HILL

Dreher Tomkies LLP
Dreher Tomkies LLP is a law firm concentrating in the areas of Banking and Financial Services law.
OHIO: House to vote on payday lending reform on July 24

After languishing for more than a year, strict new regulations on the payday lending industry could reach Gov. John Kasich's desk next week.

Ohio House Speaker Ryan Smith (R., Gallipolis) on Tuesday announced that the Republican-controlled chamber will interrupt its summer recess for a single day on July 24.

House Bill 123, sponsored by Reps. Kyle Koehler (R., Springfield) and Michael Ashford (D., Toledo) will return to the chamber for a simple up-or-down concurrence vote on changes made last week by the Senate.

Should the House reject the amendments, it would force a bipartisan conference committee to hammer out a compromise capable of passing both chambers.

Mr. Ashford said he and Mr. Koehler have been working the phones in each caucus to line up votes.

"When you look at the bill, the Senate made it a lot better," Mr. Ashford said. "These were concessions that we asked for up front when negotiating, and some of the things we wanted came back in the Senate. We have (an interest) cap of 28 percent. Read more at TOLEDO BLADE
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.

Mortgage bonanza: Major home loan trends of 2018. by Philip Burgess

There had just been $262 billion in mortgage originations to purchase new homes and $153 billion spent on refinanced mortgages by the end of 2017's fourth quarter, according to Statista. 2018 has been widely predicted to follow a similar trend, particularly because of the expected decline in home prices and increase in houses for sale during the year. NerdWallet noted that this could be good motivation for first-time buyers, which would notably increase overall originations even among underbanked and unbanked purchasers.

What isn't quite as clear is whether the types of loans homebuyers choose have changed or not, as well as the outlets prospective buyers patronize when seeking such financing. Let's take a look at some of these factors and how they may come into play within the mortgage market during the year:

Summer causes spikes in activity, as expected
Historically, spring and summer have been the most robust seasons of the year in terms of home-sale volume, and 2018 is no exception thus far. According to Bankrate, this might cause a flurry of homebuying activity through the first half of July until the Federal Reserve's hikes in benchmark interest rates go through. Before the hike, there will likely be plenty of 15- and 30-year fixed-rate mortgages agreed upon based on the security this provides - both of which currently have rates below 5 percent. By contrast, after the increase, borrowers might be more willing to take a chance on an adjustable-rate home loan. Read more at MICROBILT

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Can a New Kind of Payday Lender Help the Poor?
Oakland's Community Check Cashing offers an unusual alternative for the underbanked.

Nestled in a taupe stucco shopping plaza in East Oakland, Community Check Cashing's unassuming storefront blends in between the beauty salon and the immigration-law office.

A neon sign blinks in the front window as customers stream in and out, the door chiming for each arrival: a middle-aged landscaper eager to cash a check before heading back to work; an elderly woman joking with the teller as she preps a wire transfer to a friend; a young father and son in matching Raiders gear getting a money order.

Three other check-cashing and payday lending shops in the neighborhood boast larger stores, bigger crowds, higher fees, and more impressive neon. But unlike its neighbors, the tiny, quiet CCC, which is now entering its 10th year of operations, is designed to run without turning a profit.

"We face both being ignored and the occasional hostility," said Community Check Cashing's founder and executive director, Daniel Leibsohn.

With only 1,300 square feet and a $230,000 annual budget, CCC serves the same customer base as its for-profit counterparts, but to no great reward, with fees and interest rates adding up to less than half those of the competition. The organization has had, in Leibsohn's words, "four near-death experiences" since its opening in May 2009. In the nearly nine years of operation since, there's only been enough revenue to pay his salary-$60,000 a year, no benefits-less than half the time.
Credit Union Group: Payday Lending Bill Raises Consumer Protection

Credit unions are disagreeing with claims that they will directly benefit from a new bill that's written to crack down on the payday lending industry. As the credit unions argue, they're already operating from a different, tough set of rules.

Payday lenders have claimed the Senate's version of the payday lending crackdown would create an unlevel playing field.

But Emily Leite with the Ohio Credit Union League says they're exempted from the bill because they already work under a different section of code. Leite adds that strong consumer protections create a positive ripple effect.

"So if folks in communities are financially healthy you'll start to see local communities blossoming you'll start to see stronger job creation opportunities crop up in those communities, having a handle on your finances and in control of that will help lead to all those other things," says Leite.

The payday lending industry complains that credit unions benefit from membership fees and overdraft charges, but credit unions counter that interest rates and fees can be much higher for payday lenders. Read more at STATEHOUSE NEWS

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If a debtor is employed, we will find them!

New Regs Open New Markets For Credit Unions

The credit union (CU) market has long argued that rules intended for larger, more traditional banks have unjustly been applied to their industry, stifling their growth and pace of innovation. However, recent changes in regulations could open new doors for the credit union market to more efficiently serve its members.

The July/August Credit Union Tracker looks at how the credit union market is pushing back against regulation and pursuing new innovation strategies, how regulatory changes are creating opportunities for credit unions to expand into new markets, and how one credit union is stepping up to assist members displaced by a natural disaster.

Around The Credit Union World

Every interaction that a member (or potential member) has with a credit union, both in-person and online, can inform their overall impression of the financial institution (FI). That's why one credit union is working to overhaul its customer experience.

Texas Tech Federal Credit Union (FCU) of Lubbock, Texas, recently announced a collaboration with omnichannel solutions provider NCR. Under the partnership, NCR will provide Texas Tech FCU with interactive teller machines (ITMs) and access to an online appointment-booking service that can manage customer experiences, interactions and perform additional functions.

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.

House Passes Hensarling's 'JOBS Act 3.0'

Rep. Maxine Waters says the bill doesn't "weaken Dodd-Frank's financial reforms, harm consumers, or provide giveaways to Wall Street."

The full House on Tuesday night passed by a 406-4 vote the JOBS and Investor Confidence Act of 2018, also known as House Financial Services Committee Chairman Jeb Hensarling's "JOBS Act 3.0," which includes a package of 32 bills, some of which make changes to the Dodd-Frank law.

"What we're trying to do, and do it on a bipartisan basis, is ensure that our entrepreneurs at least don't face the challenge of having the capital they need to launch their companies," said Rep. Jeb Hensarling, chairman of the House Financial Services Committee, lead sponsor of the bill, during comments on the House floor.

"The small businesses of today become the Amazons, Googles and Microsofts of tomorrow," he continued. "Thanks to the hard work of members on both sides of the aisle - especially Ranking Member Maxine Waters who worked so strongly and fervently on a bipartisan, cooperative basis - this bill will make a difference for economic growth for all Americans."

Hensarling and Waters, D-Calif., announced Monday that they had reached an agreement on the JOBS Act 3.0. Read more at THINKADVISOR

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WASHINGTON, D.C. - Bureau of Consumer Financial Protection (Bureau) Acting Director Mick Mulvaney today announced he has selected Paul Watkins to lead the Bureau's new Office of Innovation.

"I am delighted that Paul Watkins is bringing his deep expertise, track record of protecting consumers, and commitment to innovation to the Bureau," said Acting Director Mulvaney. "I am confident that, under his leadership, the Office of Innovation will make significant progress in creating an environment where companies can advance new products and services without being unduly restricted by red tape that belongs in the 20th century."

Acting Director Mulvaney recently created the Office of Innovation to focus on encouraging consumer-friendly innovation, which is now a key priority for the Bureau. The work that was being done under Project Catalyst will be transitioned to this new office. The Bureau intends to fulfill its statutory mandate to promote competition, innovation, and consumer access within financial services. To achieve this goal, the new office will focus on creating policies to facilitate innovation, engaging with entrepreneurs and regulators, and reviewing outdated or unnecessary regulations.
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