January 16, 2020

The world is drowning in debt

New York (CNN Business)The world's already huge debt load smashed the record for the highest debt-to-GDP ratio before 2019 was even over.

In fact, it broke that record in the first nine months of last year. Global debt, which comprises borrowings from households, governments and companies, grew by $9 trillion to nearly $253 trillion during that period, according to the Institute of International Finance.

That puts the global debt-to-GDP ratio at 322%, narrowly surpassing 2016 as the highest level on record.

More than half of this enormous number was accumulated in developed markets, such as the United States and Europe, bringing their debt-to-GDP ratio to 383% overall.

There are plenty of culprits. Countries like New Zealand, Switzerland and Norway all have rising household debt levels, while the government debt-to-GDP ratios in the United States and Australia are at all-time highs.

In emerging markets, debt levels are lower, for a total of $72 trillion, but they have risen faster in recent years, according to the IIF. Read more at CNN


Fed's Beige Book reports 'modestly favorable' 2020 economic outlook

Almost all of the Fed's 12 districts reported modest growth, the Fed said in its region-by-region roundup of anecdotal information

The U.S. economy is starting off 2020 in a solid place, after economic activity continued to expand "modestly" over the last six weeks of 2019, according to the Federal Reserve's Beige Book.

"Expectations for the near-term outlook remained modestly favorable across the nation," the Fed said.

Almost all of the Fed's 12 districts reported modest growth, the Fed said in its region-by-region roundup of anecdotal information known as the Beige Book. The report, prepared by the Federal Reserve Bank of St. Louis, was based on information collected through Jan. 6. It was released on Wednesday.

Although manufacturing remained "essentially flat" across most districts, a strong U.S. consumer continued to power the record-long economic expansion. The U.S. central bank said that consumer spending grew at a "modest to moderate pace," with a number of districts recording some increases from the previous reporting period. Solid holiday sales, particularly online, also helped offset some weakness. Read more at FOX BUSINESS


CFPB 2019 Year in Review and What to Expect in 2020

Renewed Vitality but Self-Inflicted Wounds on Constitutionality

The Consumer Financial Protection Bureau (CFPB or Bureau) had an active 2019, and we review the most significant stories here. Likewise, we discuss the likely major developments expected in 2020, leading with the upcoming Supreme Court battle over CFPB constitutionality.

Lead Story: CFPB Constitutionality

Is the CFPB constitutionally structured? We may very well receive a definitive answer in 2020.

Back in 2018, the "en banc" U.S. Court of Appeals for the District of Columbia Circuit issued a divided ruling in PHH Corp. v. CFPB, holding that the structure of the Bureau is indeed constitutional because it reflects the legislative goal of creating a truly independent agency. The opinion reversed an earlier panel decision finding the CFPB unconstitutional. But neither PHH nor the CFPB sought Supreme Court review, and thus the case did not further serve as a vehicle for resolving the Bureau's structure on a constitutional basis.
Read more at JD SUPRA

Dreher Tomkies LLP

Can California's mini-CFPB pick up slack left by federal agency?

An effort by California to create a powerful state consumer protection bureau could have a significant impact on banks, debt collectors and other financial firms as Gov. Gavin Newsom seeks to fight against the Trump administration's regulatory rollback.

The new agency, modeled on the federal Consumer Financial Protection Bureau, is being pushed by former CFPB Director Richard Cordray and several other former agency officials. If approved by California's legislature, it would create a new office of innovation within the agency and subject more financial firms to state oversight.

In part, the state agency appears designed to guard against the ebbs and flows of policy in Washington, where Republicans have put less emphasis on exercising the federal CFPB's powers. Read more at AMERICAN BANKER



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What Percent of Your Salary Should Go Toward Retirement

How much money you need to live financially comfortable during retirement varies widely depending on the individual. There are plenty of proposals on how much retirement savings you should have. Meanwhile, many of the free online calculators will show little agreement with one another. And while it's difficult to forecast exactly what you'll need during retirement there are benchmarks to aim for.

The ideal savings rate varies by expert or study because making plans for the future depends on many unknown variables, such as, not knowing how long you'll be working, how well your investments will do, or how long you will live, among other factors.

Eric Dostal, J.D., CFP®, advisor at Sontag Advisory says that any calculation for retirement is an educated guess. "Saving for retirement is likely not the only financial goal you have on your plate," where there's things like opening a business or buying a home that you might be considering, he says. Read more at Investopedia



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KANSAS: Payday loan reform bill making its way to legislature

TOPEKA, Kan. (KSNT) - Money problems are common, but for some people making ends meet each month, it's nearly impossible. Because of this, payday loan businesses have become common.

Lenders give people a lump sum of money that they are required to pay back, with interest, by their next payday. For many, this is the beginning of a crippling financial cycle.

Dalton Wells was just 19 years old when he went to a Kansas payday loan business for help paying his rent. He only needed to borrow $100, however, the interest on his loan ended up nearly doubling his payback cost. When he was required to pay back his loan plus interest just two weeks later, he found himself in an even worse financial spot.

"It was like taking my whole check away from me and then I would have to be expected to live for the next couple of weeks without a paycheck," said Dalton.
Read more at KSNT



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The New Year Brings New Data Breach Laws

Complying with changing state-level privacy laws will be a business priority in 2020. Because the United States does not have a uniform Federal privacy law, a patchwork of state rules based on where customers live poses new challenges to companies in the New Year.

Here are seven (7) data breach updates in 2020 you should know:


The California Consumer Privacy Act ("CCPA") went into effect on January 1, 2020 and applies to companies that do business in California and collect personal information from California residents. Considered to be one of the broadest state-level privacy laws in U.S. history, the CCPA creates four primary consumer rights: (1) the right to know what information a company has on you; (2) the right to request companies delete information about you; (3) the right to opt-out of the sale of your information; and (4) the right to receive equal service and pricing from a business if you exercise your CCPA rights. However, the Attorney General is prohibited from initiating an enforcement action until July 1, 2020. Read more at JD SUPRA


16 Key Signs That You Will Always Be In Debt

Getting into debt is easy - and the numbers prove it. About 80% of Americans across generations are currently in debt, a 2019 Nitro survey found. And the total amount of household debt in America is nearly $13.95 trillion, according to the Federal Reserve Bank of New York's most recent report on household debt and credit.

There are plenty of ways people fall into debt, way too easily. The hard part can be getting out of debt, especially if you don't recognize - or resist admitting - how you racked up debt. Here are 16 reasons you might have fallen into debt and how to avoid being stuck with it forever.

You Believe Debt Is Part of Life
One of the biggest reasons people get stuck in debt is because they believe that debt is just a part of life, said Debbi King, owner of the personal finance coaching firm The ABC's of Personal Finance. In fact, a 2015 Pew study found that 7 out of 10 people said debt is a necessity in their lives. "However, debt is a result of wanting or needing something that you don't have the cash to buy at the moment," King said. Read more at YAHOO FINANCE

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Robocalls hit 58.5 billion in 2019, up 22%. Residents in some states get 2 or more daily

The robocalls kept coming in 2019.

Americans were hit with 58.5 billion robocalls last year, an increase of 22% from the 47.8 billion received in 2018, according to YouMail, a company that provides a service to block such messages.

"We've now had well over 100 billion robocalls in the past two years," said YouMail CEO Alex Quilici in a statement accompanying the report. "It's no wonder that an anti-robocall bill passed Congress overwhelmingly and was signed by the president on Dec. 31, 2019."

Earlier this month, President Donald Trump signed into law the Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act, which gives the FCC more time to take action against robocallers and fine them for up to $10,000 per call.
Read more at USA TODAY


Where have all the CFPB fair-lending cases gone?

Despite assurances by the Consumer Financial Protection Bureau that it is serious about cracking down on fair-lending violations, the dearth of CFPB enforcement actions regarding redlining and other discriminatory practices in two years worries consumer and civil rights advocates.

Under Director Kathy Kraninger, the CFPB has filed barely any fair-lending enforcement orders, in sharp contrast to the Obama administration. In the past year, the agency issued only one action related to fair lending, fining Freedom Mortgage $1.75 million for alleged violations of the Home Mortgage Disclosure Act.

But neither Kraninger, nor her predecessor, Mick Mulvaney, filed any other orders or referred possible Equal Credit Opportunity Act violations to the Department of Justice in the past two years.

Industry lawyers say the CFPB is still focused on fair-lending exams, and Kraninger told lawmakers in October that the agency was conducting investigations. Yet the lack of much public enforcement activity over such a long stretch concerns agency critics who say discrimination in the financial services sector still exists and is a barrier to minorities' financial well-being.


Dropping 'digital' from digital banking: 5 trends for 2020

Tech companies that want to bank could have a breakout year. Meanwhile, businesses will continue to go paperless, people cashless, and banking-as-a-service will court greater buy-in.

A couple of years ago, Mastercard dropped the uppercase "C" in its name. The change was made to reflect its evolution from physical cards to a technology company pioneering payments beyond a piece of plastic.
The same evolution is happening with "digital banking." It turns out, we don't need the "digital" anymore because it's largely inherent to banking. Regulations might have impeded things for a while relative to other sectors, but banking has finally joined the online and offline fusion.
People in 2020 won't be talking about whether a bank is digital enough or not. The concern will be whether a bank is digital for a reason, or just for the sake of it. Banking will emphasize digital presence with a purpose: to expand digital capabilities to serve consumers better and more securely.
Here are five ways this is expected to happen in 2020.
Read more at BANKINGDIVE


28 ways companies and governments can collect your personal data and invade your privacy every day

It's devilishly difficult to keep anything private anymore.

As Wired pointed out, data is this century's oil. Just as oil made corporations rich in the 20th Century, personal data is now making companies billions. And that comes at the cost of people's privacy.

In modern life, privacy is relinquished in so many ways - from your daily commute, to how productive you are at work, to what you search on Google, to what you buy in a store. Almost nothing is truly private anymore.

But the concept is still important. As columnist Peggy Noonan wrote in the Wall Street Journal, "Privacy is connected to personhood. It has to do with intimate things - the innards of your head and heart, the workings of your mind - and the boundary between those things and the world outside." Read more at BUSINESS INSIDER


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