August 29, 2019
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Here is a list of the largest banks in the United States by assets

The Federal Reserve has rolled out a list of top US banks by assets, and we've broken down exactly how these banking giants manage to stay ahead of the competition. For decades banks have been merging, partnering, and expanding - so much so that the top four banks now account for 50% of all US banking assets.

Here are the top 10 banks in the US by assets, with key insights as to how they got there, where they plan to go in the future, and how smaller banks can compete in the industry.

1. JPMorgan Chase - $2.74 Trillion
By targeting digitally-savvy consumers and introducing artificial intelligence to its offerings, JPMorgan Chase has been able to outperform its competitors. JPMorgan is playing the long-game by acquiring millennials through digital channels - and hopes to convert them to higher-value customers later on.

Additionally, JPMorgan is investing heavily in banking technology, and boasts the biggest tech budget of all banks in 2019 with $11.4 billion. A key focus of these funds is identifying use cases to implement artificial intelligence, such as enabling investment banking clients to access analyst reports and stock information through voice assistants.



WASHINGTON, D.C. - The Consumer Financial Protection Bureau (Bureau) today released its fourth biennial report on the state of the credit card market for the period 2017-2018. In 2009, the Credit Card Accountability Responsibility and Disclosure Act (Act) made substantial changes to the legal requirements applicable to the credit card market, with Section 502 of the Act also requiring that a report be issued every two years with respect to the market.

Credit cards remain central to Americans' financial lives, constituting the largest U.S. consumer lending market (measured by the number of users). Market conditions remain stable as a result of low unemployment, modest wage growth and high consumer confidence. Consumer satisfaction with credit cards remains high and debt service burdens are near the lowest level in more than a decade. Late payment and default rates have risen modestly but remain below pre-recession levels. Since 2015, consumers have more than doubled spending with credit cards with only modest balance growth. The great majority of credit card spending results in consumers obtaining rewards, and surveys indicate rewards are the primary factor consumers consider in choosing a credit card.

The report also includes a section evaluating the academic scholarship examining the Act's effects. The scholarship review suggests that the Act's effect on consumer welfare is mixed, with some scholarship suggesting the Act may have had unintended consequences. The Report also outlines the challenges that exist in clearly articulating how the market continues to be impacted by the legislation, particularly with the passage of a decade. The market is rapidly evolving, particularly as new technology provides a wider spectrum of choice to consumers.
Read the report at CFPB


Mortgage Defaults Rise First Time Since Financial Crisis

Defaults are up for the first time since the great financial crisis. But as rates fall, a refi surge will help millions.

The Black Knight Mortgage Monitor shows the first annual rise in defaults since the crisis.
  • An estimated 243K borrowers defaulted on first lien mortgages in Q2 2019
  • While the quarter ending on a Sunday certainly played a factor in the rise in defaults, a noticeable overall slowdown in the decline in default activity has been observed.
  • The national default rate rose by 3% compared to Q2 2018, the first such annual rise since the financial crisis (adjusting for the 2017 hurricane season)
  • The national delinquency rate fell by 7% in July, offsetting the bulk of June's calendar-related spike
  • At 3.46%, July 2019's delinquency rate is the lowest of any July on record (dating back to 2000)
  • Serious delinquencies (all loans 90 or more days delinquent but not in active foreclosure) fell below 445,000 for the first time since June 2006
  • Despite the Q2 year-over-year rise in defaults, overall seriously delinquent inventory (loans 90 or more days past due) is down by 17% from last year due to continued strong cure activity
Read more at ZERO HEDGE


More Californians are taking loans with 3-digit interest rates. Will state restrict them?

As California borrowers move away from small payday loans, new data from a state agency show they've shifted to larger and more expensive credit with triple-digit interest.

Larger loans increased by 9 percent last year to a total 1.6 million loans, with a third falling between $2,500 and $4,999, according to an August report from the state Department of Business Oversight.

The state does not regulate interest rates on those loans, and 55 percent of the borrowing in that range carried triple-digit rates in 2018.

"There continues to be a lot of predatory lending happening and the targeting of consumers for the lending are those who can least afford it," said Marisabel Torres, the California policy director for the advocacy group Center for Responsible Lending. "These loans are carrying an average (rate) of 100 percent or more, making them incredibly expensive products. And the people who are buying these products aren't making a lot of money."



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Debt Collectors Keep Credit Market Flowing

Debt collecting is a profession that gets little love, but given the social good done by debt collectors who operate ethically and follow the rules, maybe it's time that we show them some affection. If not that, we should at least give them reasonable rules to play by-rules that would also benefit consumers and entrepreneurs who participate in the credit market.

This is the message my former colleague Daniel Press and I sent to the Consumer Financial Protection Bureau in our comments on its proposed debt collection rule. This wil be the first major update to implementation of the Fair Debt Collection Practices Act (FDCPA) in more than 40 years. We began the comments by pointing out:

In a market economy that is based on private property and the rule of law, the efficient and effective enforcement of contracts is indispensable. Without the ability to enforce the promises made between individuals and businesses, any type of transaction, especially concerning credit products, would be more difficult and more expensive, if possible at all.

Therefore, services and mechanisms to settle debts are a vital aspect of a market economy. They are a part of the 'plumbing'-the underlying architecture-that makes our modern credit markets possible. Whether it is a bank, a local gym, or a medical facility, a creditor's ability to offer services is dependent upon enforcement mechanisms that allow them to pursue a defaulting borrower's income or assets. Read more at Competitive Enterprise Institute


Debt, Homeownership Driving Participants to Withdraw Retirement Funds

Data about retirement plan participant loans and hardship withdrawals supports the need for better financial wellness programs, especially for Millennials and Gen Xers.

Approximately 52% of respondents admit to tapping their retirement savings account early for a purpose other than retiring, according to a survey by MagnifyMoney.

The MagnifyMoney survey was fielded among 1,029 Americans. The Investment Company Institute's (ICI's) larger database shows around 1% of participants taking withdrawals quarterly and around 15% taking loans quarterly. The percentage can be higher or lower depending on the quarter.

No matter what percentage are withdrawing money through their retirement savings it is likely for the reasons MagnifyMoney found. The two main reasons respondents cited for withdrawing money from their retirement savings are home ownership and personal debt. According to the survey, 23% of those making an early withdrawal did so to help pay down non-medical debt, while 17% needed the money for a down payment on a home.
Read more at PLAN SPONSOR

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CFPB announced its first enforcement action involving the Remittance Rule yesterday. The consent order explains that the company at issue did not comply with a number of the Rule's key requirements. The company was fined $500,000 and required to improve its compliance and change certain practices.

The consent order notes that the company:
(1) disclaimed liability for certain errors (and that this was also a deceptive practice because it could mislead consumers);
(2) did not have appropriate error resolution polices (company had only 1.5 pg policy copied from CFPB website);
(3) did not properly investigate error claims;
(4) did not use language mandated by the Rule (or substantially similar terms); and,
(4) did not properly treat international bill payments as remittances subject to the rule.

Given the lack of other Remittance Rule enforcement actions, remittance companies should use this consent order to review their own practices to see how they match up with the Bureau's findings in this matter. Read more at CFPB


Virtual valuables? Consider your digital footprint as you prepare for the future.

As technology changes rapidly and we spend more time online and on technology devices, we accumulate digital assets. One way to define a digital asset is something of value or significance created online or on your mobile phone, laptop, or tablet. When preparing for your future you might want to transfer your digital assets to someone else. It might also include something related to your financial life that you may need to refer to later. Examples of digital assets might include the funds in your PayPal account or the downloadable PDF of your yearly tax filing from online tax preparation software.

Now that you know what a digital asset is, consider your digital footprint.

Here are tips to help you create a plan for your digital assets:
Take an inventory. Note and describe each digital asset. Make sure to note those that have a named beneficiary and those that you would like to transfer to someone else. Record website addresses (URLs) used to access accounts and usernames, passwords, secret questions, PINs, or other information you use to log in. Write it up in a document or type it up if your handwriting is bad.
Since the document will include sensitive private data, use a password to protect it or use a paid password management system to keep the inventory secure. Consider saving a printed hard copy in a locked fireproof box. Make sure you print a new copy each time you update the document.
Read more at CFPB


When Disaster Strikes, Digital ID Is Front And Center

Hurricanes, wildfires, tornados, earthquakes and floods - disasters of all types tend to bring out the best and the worst in people. Generous donations. Ripped-off funds. Faulty grant applications and truckloads of supplies sent to the impacted areas. Whatever the angle - honest or fraudulent - the rise of the digital economy can amplify the actions of both good and bad actors in the aftermath of tragedy.

Dealing with the online aspect of disaster relief requires a new, tighter approach to ID verification and authentication. That was the main message from a fresh PYMNTS discussion with Zac Cohen, general manager at Trulioo - a discussion that took place as the PYMNTS New Orleans bureau prepares for the riskiest part of the 2019 hurricane season, and as other areas hope calamities don't befall them in a year that has already seen too much of wildfires, flooding and severe weather.

Complex Process
A disaster sets off a complex flow of donations and disbursements, a complex process that involves disaster victims, individual donors, private charities and other nonprofits, financial institutions, private and public companies (including retailers and payment service providers) and local, state and federal governments. Read more at PYMNTS.COM


Email from the IRS? Watch out for this new scam

Don't be fooled. The IRS will never send you any unsolicited email or email you about the status of your tax refund.

Officials this month warned taxpayers to watch out for a new scam after receiving an uptick of reports about unsolicited emails from imposters claiming to represent the IRS.

Some of the recent scam emails included subject lines like "Automatic Income Tax Reminder" or "Electronic Tax Return Reminder," officials said. They include links to websites that look like, but aren't the actual IRS website. When a user clicks to access files purportedly about their refund, electronic return or tax account, they inadvertently download malware.

The scammers can then gain control of the computer or track every keystroke, learning passwords and other sensitive data, officials warned.

"The IRS does not send emails about your tax refund or sensitive financial information," IRS Commissioner Chuck Rettig said. "This latest scheme is yet another reminder that tax scams are a year-round business for thieves. We urge you to be on guard at all times."
Read more at FOX BUSINESS

Dreher Tomkies LLP
At Dreher Tomkies LLP, we concentrate on the areas of banking and financial services, with an emphasis on financial services provided by creditors to consumers. Our Firm's partners have over 100 years of combined experience advising on banking and financial services matters.

Dreher Tomkies LLP

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Your Go-To Guide to the Big 3 Credit Bureaus

What are the national credit bureaus? The big three -- Equifax, Experian and TransUnion -- collect and maintain data about your financial life that is contained in your credit report. They use this data to assign you a credit score. Your credit score can affect everything from your odds of approval for credit cards to your interest rates for loans.

Equifax, Experian and TransUnion track many of your financial transactions, as well as your:

-- Credit card and loan balances
-- History of payments on credit cards and loans
-- Number and type of accounts
-- Bankruptcy filings

Each major credit bureau uses this information to determine your credit score.
Read more at U.S.News & World Report


American taxpayers paid over $90 billion more under Trump tax law

Despite the majority of Americans receiving a tax cut, the IRS pulled in an additional $93 billion for 2018 from taxpayers on individual income taxes than it did for 2017, according to new data from the IRS. This is in part thanks to the Treasury Department processing 1.5% more individual returns for 2018 than 2017.

After the passage of Tax Cuts and Jobs Act (TCJA), the IRS encouraged taxpayers to update their withholdings, but few did. More than halfway through 2018, after the law took effect, the Government Accountability Office (GAO) warned that more Americans would owe money to the IRS under the new law while those receiving refunds would decrease. In the end, many Americans saw modest increases in their paychecks throughout the year, but didn't notice.

Instead, as people filed, many bemoaned getting smaller-than-anticipated refunds or even being hit with a "surprise" tax bill.

The IRS collected $1.97 trillion in gross collections (the amount before refunds) for 2018. That figure stood at roughly $1.87 trillion for 2017.
Read more at YAHOO FINANCE


Reasons You Should Rent a Home Instead of Buying One

Homeownership used to be part of the American dream, but times - and costs - have changed.

The percentage of U.S. households renting has increased dramatically since the Great Recession, and today there are more households renting than at any time since 1965, according to a recent study by the Pew Research Center. Young people continue to dominate the rental market, with 65 percent of households headed by people younger than 35 renting. But rental rates have increased across all demographic groups, according to the Pew study, because there are good reasons why you should rent your next home.

Click here to read about a realtor's experience with home-buying mistakes.

One reason millennials lean toward rentals could be the high costs in the housing market, especially for millennial buyers. In the first quarter of 2018, 41 percent of housing markets were less affordable than their historic averages according to ATTOM Data Solutions, a real estate data company. On the other hand, more people might choose to rent instead of buy simply because they want to, said Todd Barton, managing director of property management company Renters Warehouse Atlanta. "The American dream has changed," he said.
Read more at YAHOO FINANCE


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