January 28, 2020

AFSPA Partner


Usage Doubled for Online Lenders in 2019:
  • In 2018, 10% of consumers used an online lending organization; In 2019, 18% of consumers did
  • No single lender accounted for the increase and no single lender was used by more than 6% of consumers
  • Consumers between the ages of 18-34 accounted for 67% of usage
  • Men are more likely to use a non-bank lender, 23% of male consumers received a loan in 2019 & 13% of women
  • 29% of consumers who received a non-bank loan earned over $100K a year
  • 43% of men cite "lower interest rates" as a reason to use an online lender, only 27% of women do so
  • Men found online lenders more appealing than women across every option in the study
Read more at PaymentsJournal

AFSPA Partner


Google Ban Fails to Stamp Out Short-Term Payday Lending Apps

(Bloomberg) -- In August, Google announced a global crackdown on Android apps that offer short-term loans, saying it wanted to protect consumers from what it called "deceptive and exploitative" terms.
But five months later, payday-style applications offering fast money for one or two weeks are still easy to find in many countries on Google Play, the company's marketplace for Android apps. Some charge interest rates that can exceed 200% annualized.

Lending apps are particularly popular in developing nations such as Nigeria, India and Kenya, where millions of people don't have bank accounts or credit cards but do have mobile phones. The epicenter is Kenya, where an explosion in mobile lending and little government oversight has effectively made Google the arbiter of which apps customers can choose.

Despite the ban on loans that have to be repaid in fewer than 61 days, many apps available through the Google Play store are offering shorter terms to Kenyans. Some lenders appear to be ignoring the rule, hoping Google, a division of Alphabet Inc., doesn't notice. But there's also confusion about whether the policy really prohibits short-term lending.
Read more at BLOOMBERG



Small business lending and the Great Recession

The Consumer Financial Protection Bureau released a data point on the evolution of small business lending before, during, and following the Great Recession. Small businesses are an important engine for growth within the American economy, and this report shows how their access to credit from traditional sources has declined during the Great Recession and has recovered somewhat and unevenly since the end of the Great Recession.
This report details the evolution of small business lending across geography and sources of lending. It utilizes data from the Community Reinvestment Act (CRA) on small business lending at the county level from 2004-2017 and Census data on the number of employer and non-employer firms.

Some of the primary findings from the report are:

Following the Great Recession, small business lending has increased, but lenders in the median county still made only one-half the number of small business loans per business in 2017 as they had made in 2004.
Read more at The Consumer Financial Protection Bureau


U.S. regulators closing in on additional 'Volcker Rule' easing

WASHINGTON (Reuters) - U.S. financial regulators are wrapping up work on a proposal that would ease restrictions around relationships banks can have with companies like hedge funds and private equity funds, according to a top bank regulator.

A new proposal simplifying the rules around how banks invest in those so-called "covered funds" is expected to come in the first quarter of 2020, according to U.S. Comptroller Joseph Otting.

Otting told reporters that the five regulators charged with implementing the "Volcker Rule," a post-crisis rule aimed at curbing risky activity by banks, have struck an agreement on the upcoming proposal, which could be unveiled in weeks.

"There is unity amongst the five regulatory agencies on this topic," he said on Wednesday.
Read more at REUTERS



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How new FICO changes may lower - or boost- your credit score

The newest version of the FICO credit score unveiled on Thursday will have a broader view of how you manage your debt and will boost as many scores as it will hurt.

Instead of relying on just a snapshot of your financial behavior, the new score, called FICO Score 10, will be able to peer into your financial habits for the past 24 months and determine - based on that history - if you're a risky borrower.

About 40 million Americans will see their FICO score increase by 20 points or more because of the change, while another 40 million will experience a decline by at least 20 points, said Dave Shellenberger, vice president of product management at FICO. Another 30 million will notice smaller changes either way.

"These are the most predictive scores FICO has developed to date," Shellenberger told Yahoo Money. "They really do an excellent job of reinforcing good consumer financial habits - making payments on time, not running up balances, taking out credit only when you need it. Those types of behaviors are rewarded strongly."
Read more at YAHOO MONEY



MaxDecisions, Inc. approaches every client's business as if it were our own.

We believe a consulting firm should be more than an advisor. We put ourselves in our clients' shoes, align our incentives with their objectives, and collaborate to unlock the full potential of their business. This builds deep and enjoyable relationships.

The right approach is necessary for the right outcome. MaxDecisions, Inc. approaches work by applying its external knowledge to your organization's internal way of doing work. We know that in order to maximize the potential of success for your company we need to shape our expert advice in a way that applies to your way of doing business. This allows us to create rich relationships with our clients.

Credit Risk Modeling
Data, analytics and credit risk modeling serve as our client's advantage. We help our clients to truly understand causation of their profitability and not unexplained correlation.

Compliance and Operations
We service lenders with all lending structures. However, federal, state laws must be followed and we offer credit policy creation, monitoring and audit services to maintain a good standing with all aspect of your lending activity. We have chief compliance offer services that can help you stay on top of every changing compliance landscape.

Read more at MaxDecisions




WASHINGTON, D.C. - The Consumer Financial Protection Bureau (Bureau) today issued a policy statement providing a common-sense framework on how it intends to apply the "abusiveness" standard in supervision and enforcement matters. The Dodd-Frank Act is the first Federal law to broadly prohibit "abusive" acts or practices in connection with the provision of consumer financial products or services. However, nearly a decade after the Act became law, uncertainty remains as to the scope and meaning of abusiveness. This uncertainty creates challenges for covered persons in complying with the law and may impede or deter the provision of otherwise lawful financial products or services that could be beneficial to consumers.

Through this policy statement, the Bureau is providing clarification on how it intends to apply abusiveness in order to promote compliance and certainty. Commencing immediately the Bureau intends to apply the following principles during supervision and enforcement work by:
Read more at The Consumer Financial Protection Bureau



LeadSherpa: "Adding Online Lending to Storefront Operations"

LeadSherpa provides a fully managed online lending program for traditional storefront lenders interested in extending their lending operations online. Our team of experienced professionals will customize the appropriate online workflow, establish performance metrics and work with you to achieve measured results.

Our team can be engaged to manage the entire online lending process or as a resource to assist in your current online lending efforts. Leveraging online lending Best Practices, we'll map out all facets of a successful online lending strategy.

Highlights include:
  • Development and implementation of online lead filters and target consumer profiles
  • Online lead generator evaluations, integrations and price point management
  • Implementation and management of third-party data providers through the use of custom waterfalls and scorecards
  • Automated tracking and measurement of lead performance
  • Analytics, Analytics and more Analytics

Read more at LEADSHERPA


Congress Passes Bill to Increase Worker Access to Retirement Savings Plans

Measure shows promise, but state automatic enrollment programs may represent the next step forward

As part of an end-of-year spending deal, Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which President Donald Trump signed into law on Dec. 20. A significant advance in federal retirement policy, the package combines an array of long-discussed proposals intended to boost savings by private sector workers.

The changes should help narrow gaps in access to employer-sponsored plans, but additional actions, such as those already being undertaken at the state level, would give more workers-particularly those at small to midsize employers-opportunities to save for retirement. Before final passage in the Senate on Dec. 19, the House voted 417-3 in favor of the measure May 23.

Perhaps the most important provision of the SECURE Act is the endorsement of "open" multiple employer plans (MEPs), also referred to as pooled employer plans or PEPs, which allow unrelated businesses to join a single shared plan.
Read more at The Pew Charitable Trusts.


Federal Trade Commission

New FTC Data Shows that the FTC Received Nearly 1.7 Million Fraud Reports, and FTC Lawsuits Returned $232 Million to Consumers in 2019

Imposter scams take top spot in 2019 fraud reports

New data released by the Federal Trade Commission shows that FTC actions led to more than $232 million in refunds to consumers across the country in 2019.

A core part of the FTC's mission is to return money to consumers who are harmed by illegal business practices. Over the last four years, consumers have cashed more than $1 billion in FTC refund checks.

In addition to refunds, the newly released data also shows that the FTC received 3.2 million reports to its Consumer Sentinel Network in 2019. Reports from around the country about consumer protection issues are a key resource for FTC investigations that stop illegal activities and, when possible, provide refunds to consumers.

The most common type of fraud reported to the FTC in 2019 was imposter scams; government imposter scams, in particular, were the most frequently reported, and up more than 50 percent since 2018. Of all reports received, the top categories were identity theft, imposter scams, telephone and mobile services, online shopping, and credit bureaus.
Read more at Federal Trade Commission


4 Ways to Improve Borrower Experience to Meet Fintech Challenges

Busy consumers won't settle for slow financial institution personal loan application and approval processes when they can have easier experiences and quicker answers with fintech lenders. Taking these critical steps can make the difference between staying in the personal credit game and surrendering to more-agile newcomers.

Today's financial services account holders don't compartmentalize. Every facet of their digital lives blends into a single workflow - how they buy things, how they communicate, how they seek entertainment, and how they obtain data to make decisions. Those interactions are constantly evolving. When one experience consistently lags the rest, the consumer will ditch the laggard. Think about being forced to visit a Blockbuster to rent a movie in 2020 - not likely!

One leader's innovation changes consumers' expectations of all other providers. Account holders expect better experiences than their traditional financial institutions provide. At many banks and credit unions, no area more desperately needs modernization than lending.

Dreher Tomkies LLP

Top US bankers don't want to lead the climate fight

London (CNN Business)America's most powerful bankers don't want to lead the way in tackling the climate crisis.

While professing deep concern about global warming, top executives at the World Economic Forum this week expressed reluctance to act as referees in financial markets to reduce global emissions of greenhouse gases.

That, they said, is not their role, despite calls from activists to stop funding carbon-intensive industries.

"What I say to our clients is: I don't want to be the sharp end of the spear, meaning I don't want to have to be the [one] telling you, or enforcing standards in your industry or in your business," Citigroup (C) CEO Michael Corbat told a panel at WEF's annual meeting in Davos, Switzerland. "You should set those." Read more at CNN BUSINESS

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