December 29, 2020
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The more short-term, small-dollar credit options, the better

The COVID-19 pandemic continues to damage many people’s personal finances and has compelled them to seek relief through any number of options, from home equity loans to skipping mortgage payments and more. As the incoming Biden administration makes plans to put America on a path to sustainable economic recovery, it’s critical that lawmakers carefully consider the long-term unintended consequences of measures that are designed to help. One worrisome example is the notion that we can help the underbanked by taking “unaffordable” alternative credit options away from them, which will do more harm than good and isolate millions of already struggling Americans.

Indeed, the need for consumer credit alternatives is probably greater than many people recognize: 42 percent of people have non-prime credit scores and are ineligible for traditional credit products. Three in 10 adults have inconsistent family income that varies monthly. One in 10 adults struggles to pay bills because of monthly changes in income. Consequently, about 15 million Americans use small-dollar loans each year.

Paving the Payments Future
Ohio House leader confirms his calls intercepted by feds

Cincinnati Republican state Rep. Bill Seitz said he received notice that federal authorities conducting electronic surveillance of others picked up his communications.

“I was never wiretapped; they simply said that in the course of tapping others’ phones they picked up communications with me,” said Seitz, who is the House GOP majority floor leader. “This happened from October 2017-March 2018, and from the numbers they gave me, it was all related to payday lending issues.”

The FBI has been investigating former Ohio House speaker Cliff Rosenberger, R-Clarksville, and a payday loan reform bill for more than two years. An FBI spokesman on Tuesday said the investigation is ongoing.

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Sens. Brown, Warren and Smith Question FDIC’s ‘Alarming Move’ to Remove ‘Underbanked’ From Report

In letter, senators say report was shifted away from division designed to protect consumers after 2008 financial crisis

Key Democratic senators in the banking policy realm are pressing the Federal Deposit Insurance Corp. on the exclusion of the term “underbanked” from an agency report, a decision they say makes it difficult to understand a group of financially vulnerable people, and may have been driven by “political considerations.”

In a letter sent to FDIC Chair Jelena McWilliams on Wednesday afternoon and provided exclusively to Morning Consult, Sens. Sherrod Brown (D-Ohio), Elizabeth Warren (D-Mass.) and Tina Smith (D-Minn.) criticized the “alarming move” to hand off a biennial report that studied the unbanked and underbanked to the Division of Insurance and Research instead of the Division of Depositor and Consumer Protection, which was created in the aftermath of the 2008 financial crisis.

The difference, the senators say, has had a “meaningful impact” on the report’s “substance, focus and conclusions.”

Credit applications remain depressed for credit cards and auto loans

During the month of March, credit applications for auto loans, mortgages, and credit cards fell by 30 to 50 percent as we reported in a May report . We extend the credit applications series in this blog post through September to better understand how consumer credit markets have evolved in response to the pandemic. We find that consumer credit markets are still far from normal. Credit card inquiries were still 30 percent below their pre-pandemic levels in September. Inquiries for auto loans returned to pre-pandemic levels in June but slipped between then and September. However, inquiries for new mortgages have more than recovered since May.

The analysis in this blog follows the original May report . We use the Bureau’s Consumer Credit Panel (CCP), a deidentified sample of credit bureau records. As in the original report, we show how the actual volume of inquiries compare to the usual volume of inquiries predicted based on historical seasonal trends and observed inquiry volumes in the first week of March. The original report contains additional details on the methodology.

6 Predictions for Banking in 2021

The coronavirus pandemic turned the world on its head, and some aspects of the way consumers conduct their financial lives will likely be changed forever. If there's any silver lining to it all, though, some of those changes will be positive as we head into the next year.

From policy improvements to advances in digital banking, here is what banking experts predict for 2021.

Over the past four years, several major policy changes were enacted that impacted the banking industry. Overall, the new Biden administration will likely exert greater scrutiny of the financial services industry at the federal level, according to Catherine Brown, advisor at advisory and investment firm Klaros Group.

However, the economic issues resulting from the pandemic will continue into 2021. The administration will likely be immediately focused on additional financial relief for individuals and small businesses, followed by a comprehensive infrastructure package, she says. Priorities will likely include undoing some of the changes made by the Trump administration, such as moves to hobble the Consumer Financial Protection Bureau and the reversal of certain payday loan rules.

Advance America: The Pros and Cons of Title Loans vs Registration Loans

LOS ANGELES, Dec. 23, 2020 /PRNewswire/ -- When an emergency situation arises and you need money fast, using a vehicle as collateral for a loan can be a good solution.

But if you're considering a title loan or a registration loan, it's essential to understand what defines these very different loan types. While both are related to using a vehicle in exchange for funds, these two types of loans have their own pros and cons.

What is the Difference Between a Title Loan and a Registration Loan?

First, it's critical to distinguish between a vehicle's title vs. its registration. The title is used to indicate ownership of the car. When a vehicle is sold, the title will be transferred from the existing owner (often a dealership, bank or private seller) to the buyer. On the other hand, a registration signifies that the vehicle can be legally driven.

CFPB dings Discover, Santander in year-end enforcement actions

Data migration issues will cost Discover $35 million, while Santander will pay $4.75 million for errors in reporting loans' date of first delinquency.

The Consumer Financial Protection Bureau (CFPB) issued a pair of enforcement actions Tuesday: one ordering Discover to pay $35 million over issues with its student loan servicing program, and a second requiring Santander's U.S. consumer lending arm to pay $4.75 million for knowingly giving inaccurate consumer credit data to credit reporting agencies.

The penalties come amid a flurry of year-end regulatory and legal actions from agencies that oversee banking activity.

In 2021, here's why you and your spouse both need to be informed about your family's finances

Leaving money management entirely up to your spouse is risky business. If you don’t know the basics about your finances – the passwords and account numbers to your retirement and bank accounts or the contact information of your family’s financial adviser -- that’s a problem. A big one. You can’t control whether the stock market goes up or down, but you can control how knowledgeable you are about your own finances, especially the basics. Being left out of the financial loop is daunting -- even in good times. But what happens if tragedy strikes, as it has for so many throughout 2020? Dealing with job loss, chronic or debilitating health problems, separation, divorce or worse yet a spouse passing away, are you informed enough to keep your household financially afloat?

20 striking findings from 2020

The global coronavirus pandemic upended life in the United States and around the world in 2020, disrupting how people work, go to school, attend religious services, socialize with friends and family, and much more. But the pandemic wasn’t the only event that shaped the year. The videotaped killing of George Floyd by police officers in Minneapolis sparked an international outcry and focused new attention on the treatment of racial and ethnic minorities in the U.S. And November’s presidential election appears to have shattered turnout records as around 160 million Americans cast ballots and elected Joe Biden the 46th president.

As 2020 draws to a close, here are 20 striking findings from Pew Research Center’s studies this year, covering the pandemic, race-related tensions, the presidential election and other notable trends that emerged during the year.

User Consent is Here for Good by Shmulik Fishman

At Argyle, we provide the technology to enable people to have more control over their employment data. By building the first user-consent-based gateway to employment data, we’re helping real people avoid situations where their personal information is sold or used without their consent or knowledge (an all-too-common practice).

A Consent-Based Model Gives Individuals Control and Visibility Over Their Employment Data

According to Europe’s General Data Protection Regulation of 2018—a piece of legislation we steadfastly respect and believe in—personal data, including employment data, is owned by the individual it represents, and consent to process and share that data must be “freely given, specific and informed.”

The Biden Administration and New Congress Have Opportunities to Modernize Financial Regulation and Strengthen Our Economy

Since 2008, important reforms have helped the financial sector to meet the needs of its customers. The financial sector’s bedrock foundation was a source of strength that has helped to support businesses and consumers when the pandemic hit. As we emerge from the devastation of that crisis, the financial services industry will play a key role in leading a strong economic recovery and allowing the American economy to reach its full potential.

To achieve that goal, the Chamber’s Center for Capital Markets Competitiveness recently released The Growth Engine, a report with over 100 recommendations to modernize financial regulation and spur growth on main street. The report details collaborative opportunities the incoming Biden Administration and the 117th Congress have in enacting forward looking policies.

Top recommendations in the Growth Engine include:

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