August 6, 2020
AFSPA Partner


Postal banking pilot included in House-passed appropriations bill

  • An appropriations bill passed by the House of Representatives on Friday includes an amendment to allocate $2 million for a postal banking trial program.
  • The amendment was introduced by Reps. Bill Pascrell, D-NJ, and Marcy Kaptur, D-OH, who say a banking system run by the U.S. Postal Service would aid the country's "30 million unbanked and underbanked Americans."
  • "[I]t is clear the free market banking sector has left too many working families behind, especially communities of color," Kaptur said in a statement. "As our Nation reels from the dual COVID-19 public health and economic crisis, financial resilience and interconnectivity are more important than ever."

Read more at BANKING DIVE


Personal Loan Statistics for 2020

  • The average new personal loan amount is $6,825.
  • Personal loan interest rates are near an all-time low, with a 24-month loan averaging 9.5% in May 2020.
  • In early 2020, above-prime borrowers held around 40% of outstanding loan balances; an increase from around 33% in 2013. This trend will continue as stricter underwriting practices are enacted.
  • In June 2020, 20% of Americans with personal loans were concerned about their ability to pay their personal loan.
  • The number of personal loans in hardship increased from 3.58% in April 2020 to 6.15% in May. Only 0.28% of personal loans were in hardship in May 2019.
  • As of 2019, there were 33 states that still allowed payday loans and did not regulate the interest rate.

Read more at The Ascent


States' lawsuit alleges OCC rule enables 'rent-a-bank' schemes

New York, California and Illinois sued the Office of the Comptroller of the Currency over a new rule making it easier for banks to sell loans to acquirers in states with interest rate caps, alleging the change will increase predatory lending.

The suit, filed Wednesday in federal court in Oakland, California, claims the change finalized in May by the OCC undermines state laws intended to protect consumers. The change is "arbitrary and capricious" and violates the federal Administrative Procedure Act, according to the lawsuit. The rule is set to take effect Aug. 3.

"This is a case about federal overreach," the states' Democratic attorneys general said in the complaint. "The rule is beyond the OCC's power to issue, is contrary to statute, and would facilitate predatory lending through sham 'rent-a-bank' partnerships designed to evade state law."


Rep. Waters Slams CFPB Chief For 'Betraying Consumers'

The chairwoman of the House Committee on Financial Services unleashed a withering attack on the Consumer Financial Protection Bureau (CFPB) on Thursday (July 30), accusing the agency of failing to protect consumers during the COVID-19 pandemic and accusing its director of committing "a betrayal of consumers."

U.S. Rep. Maxine Waters (D-CA), according to an advance copy of remarks prepared for delivery at a hearing on the CPFB's COVID-19 performance, said she "would like to welcome Director Kraninger to what I hope will be her last appearance before this Committee as CFPB director."

"Ten years after we passed the Dodd-Frank Act to end the predatory and discriminatory practices that caused the financial crisis, we find ourselves in the midst of an economic and health crisis caused by incompetence and exacerbated by narcissism, [which] will once again hit the most vulnerable Americans the hardest," Waters said.
Read more at PYMNTS.COM


NEBRASKA: Owner of Paycheck Advance seeks change to ballot language on proposed cap of payday loan interest rates

The owner of Paycheck Advance has filed a lawsuit seeking to keep a ballot initiative, which would cap the rate cash advance businesses such as hers can charge, off the ballot as currently worded.

If put on November's general election ballot and approved, the measure would cap payday loan rates at 36%, rather than up to 400% as currently allowed under state law.

In a complaint filed this week in Lancaster County District Court, Trina Thomas says the ballot title and explanatory statement prepared by the Nebraska Attorney General's Office is "insufficient and unfair." Read more at NORFOLK DAILY NEWS

Dreher Tomkies LLP

COVID-19 has disrupted cybersecurity, too - here's how businesses can decrease their risk

COVID-19 is changing everything. Along with social distancing, obsessive sanitisation, broken supply chains, fragmented workforces and the rise of video meetings, the pandemic is driving acute systemic changes in consumer and business behavior. These changes are causing an outbreak of new and unanticipated business moments. The resolve to transform is palpable.

Businesses know they must rapidly innovate, take advantage of new digital tools and leverage cloud services to emerge from the crisis ahead of their competitors with momentum for the long-term transformation of their business in the altered global landscape.

This innovation is good news, but it is coming at a cost. As digital spreads its roots deeper, it also increases the risk and impact of cyberattacks.
Read more at World Economic Forum


Tax Hikes in a Pandemic: Some States, Cities Say Yes

Nashville City Councilman Bob Mendes tried unsuccessfully for two years to get his booming city to raise property taxes to address its growing municipal needs.

Then came COVID-19. The City Council last month approved a 34% increase.

What changed?

"We're broke," said Mendes, who identifies as a Democrat though the council is nonpartisan.

Cities such as Nashville, Tennessee, and states from New York to California have raised taxes or are considering it amid a pandemic that has crushed the economy and thrown state and city budgets deep into the red.
Read more at Pew Charitable Trusts


CFPB Announces Plan to Issue ANPR (advance notice of proposed rulemaking) on Consumer-Authorized Access to Financial Data

Washington, D.C. - The Consumer Financial Protection Bureau (Bureau) today announced that it plans to issue an advance notice of proposed rulemaking (ANPR) later this year on consumer-authorized access to financial records. The announcement follows a symposium the Bureau held earlier this year on the topic, which included experts from consumer groups, fintechs, trade associations, financial institutions and data aggregators. The Bureau is releasing a summary report of the symposium proceedings.

The purpose of the Bureau's February symposium was to hear from stakeholders and to review the Bureau's approach to consumer-authorized third-party access to financial records, which has been largely identifying and promoting consumer interests-in access, control, security, privacy, and other areas-and allowing the market to develop without direct regulatory intervention. The ANPR will seek information that will help the Bureau understand and address competing perspectives.
Read more at The Consumer Financial Protection Bureau


GDP shrinks by record amount in second quarter amid virus lockdowns

The U.S. economy shrunk at a seasonally adjusted annualized rate of 32.9 percent during the second quarter of 2020 as the first wave of the coronavirus pandemic spurred an economic collapse of record-breaking speed and size, the Commerce Department reported Thursday.

Between April and June, U.S. gross domestic product (GDP) shrunk at a pace that would have wiped out roughly a third of the value of the economy if extended over 12 months, according to the Commerce Department's advance estimate of second-quarter growth. It is the largest one-quarter plunge in economic growth since the federal government began reporting quarterly GDP data.
Read more at THE HILL


Pandemic could leave 43.6 million people at risk of exclusion in cashless US

  • 43.6 million people are at risk of digital exclusion in the US due to a decline in cash use during the pandemic, including the elderly, unbanked and homeless.
  • Restrictions put in place during the Covid-19 pandemic have seen a widespread closure of banks and rise in large cash withdrawals,
  • There are an estimated 553,747 homeless people in the US, along with 14.1 million unbanked adults and 52.5 million residents over 65 years of age.




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