January 23, 2020


Two Powerful New State CFPBs? California, New York Proposals May Rock the Financial World. 
Manatt, Phelps & Phillips, LLP

Joining Pennsylvania, California looks to be the next state to create a state version of the federal Consumer Financial Protection Bureau. And with recent pronouncements from New York that may place greater authority with its prudential regulator, will that state be far behind? We discuss both news stories below.

What happened

Back in July 2017, Pennsylvania Attorney General Josh Shapiro announced the formation of a Consumer Financial Protection Unit within his office, and appointed a former Consumer Financial Protection Bureau (CFPB) enforcement lawyer, Nicholas Smyth, to run the unit. Although this led to speculation that other states would quickly follow with their own mini-CFPB agencies, little meaningful activity followed after the Pennsylvania announcement, and the Pennsylvania unit continues to function within the AG's office.
Read more at Manatt, Phelps & Phillips, LLP

AFSPA Partner


Banks that shun risky borrowers offer rosy view of U.S. consumer

With most U.S. households spending more and paying their bills on time, their creditors are feeling more confident than ever. To hear the CEOs of the nation's largest banks tell it this week, rarely has the American consumer been in better shape.

But look deeper and it's clear that view of the broad U.S. economy has its limits. They're basing their assessments on clients lucky enough to bank with eight of the biggest lenders, with a combined $11 trillion in assets.

Roughly a decade after being burned by the most punishing financial crisis since the onset of the Great Depression, it's increasingly clear that the nation's largest lenders are targeting a narrower slice of consumers: The wealthy and those with excellent credit.

At JPMorgan Chase, which on Tuesday reported the most profitable year of any bank in American history, executives anticipate a paltry 1.76% loss rate on their $504 billion of household loans, filings show. Read more at AMERICAN BANKER


Head of U.S.' largest bank says central banks are fueling a sovereign debt bubble, negative-rates won't 'end well'

Jamie Dimon doesn't have much positive to say about negative interest rates in Europe and Japan or public policy in the United States during the past decade.

The JPMorgan Chase & Co. JPM, -0.07% Chairman and CEO blasted the policy of negative interest rates adopted in Europe and Japan during an interview Wednesday with CNBC, while arguing that economic growth in the U.S. could have been nearly double its actual rate if the government policy had been better.

Dimon took aim at fiscal and other economic policies in place at the U.S. federal level. "Over the last 11 years, we had, like, 23% growth," he said. "We should have had 40 plus, which would have been normal. It was our own bad infrastructure policy, work skill policy, litigation, regulation, taxation, some of which got fixed," that led to such sluggish growth, he said.
Read more at MARKETWATCH



       Behind The Apply Button Episode 6 - "Secret Sausage" - Alchemy Technologies

Fine, not "Secret Sausage"... let's go with "Secret Sauce"...

According to Urban Dictionary, Secret Sauce is defined as: noun The sauce that Jack-in-the-box put on their burgers starting in the 1980s. It's the color of thousand island dressing. This "secret" was encouraged by Jack as a way to differentiate itself from the other fast food chains.

However according to wikipedia, secret sauce (redirect) is defined as: A secret ingredient is a component of a product that is closely guarded from public disclosure for competitive advantage.

So what's really your competitive advantage?

Many people argue that technology is their secret sauce and that their tech stack is superior in any and every way. That might be the case if you are Google, Microsoft or Intel, or in other words, if you are a technology company by definition.
Read more at ALCHEMY

Dreher Tomkies LLP

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

The Financial Services Committee of the U.S. House of Representatives will have a full committee hearing on January 30th at 10:00 AM EST on "Rent-A-Bank Schemes and New Debt Traps: Assessing Efforts to Evade State Consumer Protections and Interest Rate Caps." The witness list for the hearing has not been announced. The hearing will be broadcasted live on
In November, a group of 61 consumer advocate groups sent letters to the FDIC, OCC and the Federal Reserve expressing their "deep concern" that banks are involved in "rent-a-bank schemes" that help high-cost and predatory lenders avoid state interest rate limits. The consumer advocate groups sent these letters after three pubic companies supporting consumer loan programs shared with investors how the companies plan to handle a new California law that places interest rate limits on loan amounts that previously did not have a rate cap.


State Payday Loan Reform

Pew's research has found that when states do not implement standards around pricing and affordability, payday and auto title loans cost three to four times more than is necessary to have widespread access to this credit. State legislators who want a well-functioning market for small loans can establish strong but flexible safeguards to protect constituents, save them millions of dollars each year, and maintain access to credit. Pew has published recommendations for making small loans safer and more affordable, and regularly provides analysis and technical assistance to state policymakers.

Virginia's Payday and Title Lending Markets Among the Nation's Riskiest

Read more at The Pew Charitable Trusts



TransUnion: 2020 Predictions: Consumer Credit, Balance and Delinquency Rates

Another year is coming to a close, and now is the ideal time for lenders to look forward to 2020 and the opportunities the new year may bring. To help lenders prepare for a successful year ahead, TransUnion has put together our annual consumer credit forecast for the auto, credit card, mortgage and personal loan markets.

In the report, we take a look back at the 2019 consumer credit market and how it performed against our 2019 forecast. We also offer our predictions for consumer debt levels, originations, delinquency rates and credit performance in 2020.

Overall the U.S. consumer credit market is set to do well in 2020, buoyed by low unemployment rates, continued growth in GDP and high consumer confidence. We project serious delinquency rates will either decline or remain about the same for auto loans, credit cards, mortgages and unsecured personal loans.

Five-Year Trend Shows Serious Consumer Delinquency Levels Continue to Remain Low**
Read more at TRANSUNION


A Paid Leave Update, and a Bill to Improve Feds' Due Process Rights

A weekly roundup of pay and benefits news.

The nation's largest federal employee union announced this week that it has received increased clarity regarding which federal workers will and will not be covered by recently enacted legislation authorizing up to 12 weeks of paid parental leave.

The American Federation of Government Employees said Monday that although employees hired under Title 38, which includes health care workers at the Veterans Affairs Department, were not explicitly included in the paid parental leave provision of the fiscal 2020 National Defense Authorization Act, department leadership provided union officials assurances that all VA employees will receive the new benefit.

Although federal employee advocates lauded the landmark inclusion of 12 weeks of paid leave per year following the birth, adoption or foster placement of a child after it was signed by President Trump, officials quickly realized the language of the bill did not cover all federal employees. Among those excluded from the new benefit were Federal Aviation Administration employees and non-screener Transportation Security Administration workers, as well as Washington, D.C., courts employees and public defenders.
Read more at Government Executive


More Firms Will Now Be Eligible for Government Small Business Contracts

A final rule took effect on Monday to implement a 2018 law.

More companies will be eligible to compete for federal contracts reserved for small businesses, due to the recent implementation of a 2018 law.

On Monday, the Small Businesses Administration's final rule to implement the 2018 Small Business Runway Extension Act took effect, increasing the period of measuring small businesses' annual revenue from three to five years in the contract evaluation process. This is "going to increase the pool of eligible participants and make a lot more companies eligible to participate for small business set asides," said Daniel Snyder, director of contract analysis at Bloomberg Government.

The act was signed into law on Dec. 17, 2018. Snyder said there was a delay in implementation because there were "a small fraction" of companies put at a disadvantage by the change, so the agency wanted to figure out how to best mitigate any negative impact. The compromise was to "give small businesses the option to choose either three or five years and then there will be a phase-in period, so companies will be allowed to choose...whichever one puts them at a greater advantage until the phase-out period concludes." The transition period ends on Jan. 6, 2022.
Read more at Government Executive


42% of people say this is why they aren't investing in the stock market

The stock market is continuing its decade-long bull run, with all three of the major indices ending Friday's trading session at record closes. So why are some potential investors staying on the sidelines? A recent JPMorgan Chase survey of about 1,200 investors and non-investors says it boils down to liquidity.

The survey found that 42% of those who weren't investing yet were staying out of the stock market because they believed they didn't have enough money to invest.

Kelli Keough, digital wealth management head at JPMorgan Chase, tells Yahoo Finance's "The First Trade" non-investors, those who are not in the stock market, say it's a struggle to save enough money to invest.

"76% said that their everyday living expenses are too high," according to Keough. "Secondly, 49% are still paying off a student loan. So that is an inhibitor for people to really start to invest."
Read more at YAHOO FINANCE


Small businesses overwhelmed by employee absences

If some people are out sick, others have to come in earlier'

NEW YORK (AP) - As this winter's flu outbreak intensifies, small business owners try to keep their companies from being overwhelmed by employee absences.

At Gold Medal Wine Club, any surfaces people are likely to touch, including the coffee machine, water dispenser and door knobs, are wiped down and there's hand sanitizer on every desk. The 11 staffers are expected to sub for one another when someone's sick, something that's critical when orders for wine pour in.

"We want to be sure our phones are answered," says Kelsey Chesterfield, marketing manager for the Santa Barbara, California, company. "If some people are out sick, others have to come in earlier."

The flu can be devastating for small businesses. If a company with just a handful of employees has two or more out at once, it can be difficult or impossible to get the work done. So owners pay for flu shots and use disinfectants in hopes of keeping everyone healthy and urge sick staffers not to come to work. And, as Gold Medal Wine Club does, they train and reassign staffers to cover for sick colleagues. Read more at FOX BUSINESS


Why Bosses Should Let Employees Surf the Web at Work

Employers tend to see "cyberloafing" as a waste of time, but a new study suggests it serves an important function for workers.

If you're like most workers, you don't spend 100% of your time at the office doing what you're supposed to be doing.

In fact, on average, U.S. workers spend about 10% of their work day surfing the internet, emailing friends or shopping online. This so-called cyberloafing costs employers up to US$85 billion a year.

But it turns out, these behaviors may not be a sign a worker is lazy or just wasting time. New research I conducted with several colleagues suggests cyberloafing can help workers cope with an exceptionally stressful work environment.

Cyberloafing and stress
Read more at Government Executive


  • CENTRAL TEXAS: 5 Financial Services
  • TEXAS: 15+ Payday, ATL and Installment Lender Operations
  • MICHIGAN: 20+ Location PDL Operation
  • CHICAGO area: Small Dollar Installment Lender
  • SOUTHERN CALIFORNIA: 1 Payday Loan Store


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