December 23, 2021
Paving the Payments Future
New Study from the UH Law Center Finds Racial and Ethnic Disparities in Lending Industry Advertising

A new study authored by University of Houston Law Center Professor Jim Hawkins and student Tiffany Penner and published in the Emory Law Journal indicates that the payday lending industry often targets Black and Latino communities in advertising their products, while the mainstream banking industry targets white consumers.

In “Advertising Injustices: Marketing Race and Credit in America,” Hawkins and Penner present two empirical studies they conducted on lenders in Houston, which verified these disparities in online advertising.

“Everyone knows that advertising affects behavior, so we were interested in how banks and payday lenders advertise,” the authors said. “Social scientists have shown that people buy goods and services when they see other people who look like them buying those products. We wanted to know if banks and payday lenders were depicting their customers in a way that represented the general population or only some races.”

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5 Crucial Ways Fintech Paves the Road to Economic Inclusion

The world is entering a new era of cash displacement, where digitisation will lead to better economic inclusion, driven by innovative fintech companies.

Emerging economies, particularly those across Asia and Africa, are leapfrogging advanced economies by going straight from cash to digital and mobile access, providing new opportunities to countless people around the world.

This process has already made a difference: over the past decade, 1.2 billion previously unbanked people have gained access to financial services, with the unbanked population around the world falling by 35 per cent, according to the World Bank. 

But there’s still a long way to go, with an estimated 1.7 billion adults remaining unbanked.

New Lending and Credit Restrictions Will Hurt the Poor the Most

Lower income Americans often live paycheck to paycheck and lack access to quick cash or credit in an emergency. 

That can mean not paying the rent or going without meals or waiting for the next paycheck with only a few dollars left in the wallet. It’s a stressful and not that uncommon a predicament.

According to the Federal Reserve, more than one out of every ten American adults cannot cover even a $400 expense by cash or credit. Nearly 30% of Americans are unbanked or underbanked.

This means that millions of Americans can find themselves in a financial pinch and have to rely on unsecured personal loans to help them move forward. They run up their credit cards--if they have one--or in dire circumstances, rely on old-fashioned loan sharks. That’s rarely a good option.

Should you use a personal loan to fund your holiday shopping? Here are the pros and cons

Select breaks down some advantages and disadvantages of personal loans, and some alternatives.

The holidays are right around the corner — and they might be at the forefront of your mind if you haven’t already checked off everything on this year’s holiday shopping list.

Spending around the holidays tends to increase as you’re buying gifts for loved ones, traveling to be with your family and even spending for your holiday meals. In fact, according to a report from the National Retail Federation, Americans may expect to spend an average of $998 this year on holiday shopping, food and decorations.

Holiday shopping for many people can be expensive, and even borderline unaffordable. However, there are some options that can help make preparing for the holidays feel like less of a financial burden this year. One option is taking out a personal loan, which can be used to cover just about any expense. Borrowers typically use a personal loan to pay for a wedding, vacation, home improvement, funeral, debt consolidation and more.

Only 42% of Consumers Say Username/Password is Their Preferred Login Method

When logging in to perform a business transaction, consumers prefer modern authentication approaches. They often consider the username and password method and knowledge-based authentication (KBA) measures to be clunky.

A new study, the Monetizing Digital Intent Tracker, a PYMNTS and Neuro-ID collaboration, found that usernames and passwords are used by nearly 75% of respondents who interact with their banks through an online or mobile platform, yet just 42% of customers labeled it as their preferred login method.

Get the study: Monetizing Digital Intent

KBA methods, while still preferred by some consumers, as losing favor as users adopt more seamless verification methods.

Statement of CFPB Director Rohit Chopra Member, FDIC Board of Directors December Open Meeting of the Board

Today, I am pleased to join my first public meeting as a Member of the Board of Directors of the Federal Deposit Insurance Corporation.

The Federal Deposit Insurance Corporation has long been a point of pride for the United States. This is not simply because the Corporation ensures the safety of trillions of dollars of insured deposits, but because of the pivotal actions that the Board has taken – sometimes in the middle of the night during crises – to ensure stability and confidence in the financial system.

The FDIC Board must be ready and able to act with decisiveness, especially in times of stress. This requires that the Board invest in meaningful consultation, and deliberate together in closed and open sessions, like the one we will have today.

Competition in Financial Services

Federal Regulator Says Credit Unions Can Partner With Crypto Providers

The new guidance will allow them to support the buying and selling of cryptocurrencies.

Federally insured credit unions (FICUs) can partner with third-party digital asset service providers, the National Credit Union Administration (NCUA) announced Thursday.

“This includes facilitating member relationships with third parties that allow FICU members to buy, sell and hold various uninsured digital assets with the third-party provider outside of the FICU,” according to the statement from the NCUA. The NCUA is a U.S. regulator that oversees credit unions, acting as a counterpart to the Office of the Comptroller of the Currency (OCC), which regulates national banks.

The NCUA said it wants to offer clarity around the existing authority that FICUs have when it comes to building relationships with third-party digital asset providers. The NCUA said further guidance may be necessary as digital assets and technologies evolve, and the association will continue to study and address issues that arise.

DFPI reaches agreement to end high-interest rate loans marketed by LoanMart for 21 months

The California Department of Financial Protection and Innovation (DFPI) today announced it entered a novel consent order with Los Angeles-based Wheels Financial Group, Inc., doing business as LoanMart, that prohibits the company from marketing or servicing automobile title loans of less than $10,000 with rates greater than 36 percent in California for the next twenty-one months.

The agreement comes on the heels of an investigation the Department launched last year to assess whether the company was evading California’s newly enacted interest rate caps through a partnership with an out-of-state bank. LoanMart stopped marketing the high-interest loans in November 2020 while the DFPI investigation of its partnership with Utah-based bank, Capital Community Bank was pending.

“The DFPI is committed to ensuring that out-of-state banks do not exploit Californians,” said DFPI Commissioner Clothilde V. Hewlett. “The DFPI will continue to combat any effort to evade California’s Fair Access to Credit Act and will work closely with state and federal regulators to monitor and respond to practices that hurt consumers.”

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