March 26, 2020
AFSPA Partner


"community financial services providers and their services have been deemed as "essential" by governing authorities nationwide"

In response to the COVID-19 pandemic and its impact on the consumer financial services industry, the Community Financial Services Association of America (CFSA) and the Financial Service Centers of America (FiSCA) jointly issued the following statement on behalf of FiSCA Executive Director, Ed D'Alessio, and CFSA Chairman, D. Lynn DeVault:

"During this difficult period, it is critical that the 60 million unbanked or underbanked Americans in this country have ready access to basic financial services through companies and people they trust, in the communities where they live. Reflecting this fundamental need, state and local governing authorities from New York to San Francisco have deemed community financial service providers and their services as 'essential.' We applaud these local elected officials working tirelessly to serve the public and ensure access to critical services.

"As a result, financial service providers are endeavoring to deliver a full line of products and services to countless Americans who truly need it, ensuring liquidity and the ability to meet needs such as grocery and prescription purchases, bill payments, and access to benefits. Financial Service Centers of America (FiSCA) and Community Financial Services Association of America (CFSA) members, in accordance with state and local jurisdictions, are cooperating with authorities to remain open in a safe and responsible manner with the health and well-being of our employees and customers as the highest priority

"Moreover, it is critically important that such regulated services, the likes of which we provide every day to millions of Americans, remain operational so that consumers can have the confidence in the financial services they seek, complete with disclosure and transparency requirements pursuant to state and federal statutes.

"Our regulated financial service providers across 20,000 locations in the U.S. will continue to work extremely hard and in the safest, most responsible manner to serve our communities and customers during this uncertain economic period."

AFSPA Partner


Statement from The Online Lenders Alliance (OLA) CEO Mary Jackson on COVID-19 Crisis

As countries, companies, and consumers continue reacting to the ongoing COVID-19 pandemic, Online Lenders Alliance CEO Mary Jackson issued the following statement:

"The Online Lenders Alliance (OLA) continues to monitor the spread of COVID-19 and urge its members to work with consumers by providing them with flexibility, allowing them to defer or skip payments, and delaying sending delinquency notices or negative credit reports to credit bureaus. We've also recommended extending payment terms, restructuring existing loans, or easing terms for new loans when possible.

With many Americans facing stress or strained income due to work reductions or illness, it is important that they have options when seeking legal, regulated, and safe forms of credit. Many of these consumers are already excluded from many financial services offerings due to non-prime credit scores. Efforts to cap interest rates on short-term, small-dollar credit options would only eliminate financial products at a time when these options are more important than ever.

Our organization will continue working to protect these products and the consumers who use them by enforcing OLA's best practices, using the OLA seal as a way to let consumers know they are working with a trustworthy company, and working to eliminate fraudsters from the marketplace. Our members are working with us on these initiatives as well as following the interagency guidance on loan modification released last night.

Our thoughts are with everyone who has become ill from the COVID-19 virus as well as those who are facing economic hardship as a result of virus-related measures."


Unsurprisingly, Coronavirus Has Increased Usage and Need for Digital Banking Services

This would be a terrible time to be a laggard in offering digital services to customers. This American Banker article suggests that online banks are winning new customers due to coronavirus concerns.

If true, it suggests that existing banks have failed to implement a full digital stack, which seems very odd in this day and age. Both my small bank and large credit union have everything I need to bank online while staying home, but this is surely more difficult for the unbanked and underserved:

"Online and mobile banking has grown increasingly popular, lessening the traditional role of branches. The industry's total branch count declined by more than 1,500 over the 12 months that ended Feb. 29, according to data compiled by S&P Global Market Intelligence.

Early signs indicate the pandemic could hasten the digital banking trend.

Bankers, generally, are reporting that digital usage is rising alongside the proliferation of the virus. In some cases, it is surging.


Banks cutting back on branch services to contain spread of coronavirus

Banks across the country have been closing branches or scaling back retail operations as part of efforts to curb cases of the novel coronavirus. Yet others are adamant about staying open to foster public confidence in the banking system's stability during the global health crisis.

Numerous banks as of Monday had said they would restrict branch services to drive-through only in order to comply with health experts' recommendations of distancing people from each other in public places. Epidemiologists have stressed that limiting human interaction in the early weeks of the outbreak is crucial to slowing the disease's spread and preventing the health care system from becoming overwhelmed.

"If we're going to prevent a really bad outcome, really the only tool we have right now is to emphasize keeping people safe and away from each other as best as we can," said Philip Flynn, president and CEO of the $32 billion-asset Associated Banc-Corp in Green Bay, Wis. "It's all about reducing the odds of spreading this."



Behind The Apply Button Episode 11 - "The Next 90 Days: Women are the real victims of Covid19". with Timothy Li

When it comes to household finances, women traditionally are the ones responsible. Today, I helped a few of our clients planning ahead their marketing and credit risk strategies in light of Covid19. I can't but think of this important statistic.

Women are the real victims of Covid19
Schools, daycares are all closed. Every household has their kids at home and yet we ask our women to keep on working their day time jobs telephonically. The double standard is buried again, no one is talking about the silent victim in this crisis. We expect them to work twice as hard, again.

Where are the men?
Men are hiding in their offices because we can't deal with kids. We can't spend more than 10 minutes around kids without getting agitated and Covid19 is the perfect excuse. We don't think of the burden our women are carrying/suffering through this crisis, maybe we are willfully ignorant of the additional burden they are carrying for the past two weeks.


Banks need to push digital offerings during COVID-19 pandemic, experts say

"As we saw in the last recession, if you take the pedal off, you can wake up in a couple of years and have a lot of fintechs nibbling away at your business," one analyst said.

As the population practices social distancing in response to the COVID-19 pandemic, financial institutions need to emphasize their digital offerings, said John Stockamp, a director in West Monroe's financial services practice.

"The last thing you want to have happen is that [customers] find some other technology or virtual channel that would be better fitted for them and you end up losing their business," he told Banking Dive.

A Lightico survey of 1,000 consumers, conducted Sunday, found that 82% are concerned about visiting their local bank because of the coronavirus pandemic. The customer experience platform's study also found 63% of respondents said they were more inclined now to try a new digital app or website than before the coronavirus.
Read more at BANKING DIVE



Payment Instrument Risk Score

Analyzing risks
Payment Instrument (PI) Risk Score identifies good and bad borrowers, as well as the compliance risks associated with processing payments.

This non-credentialed service analyzes thousands of attributes to enhance the financial profile of the consumer, helping to mitigate fraud, reduce defaults and reduce returns. The attributes evaluated include transactions, behaviors, and characteristics associated with debit cards, pre-paid cards, credit cards, bank accounts, contributory databases, payment platforms, and payment processors.

What the Payment Instrument (PI) Risk Score means?
The PI Risk Score is a number that predicts the likelihood that a consumer will pay their bill on time, payback a loan, or other credit obligations, in a timely fashion. The higher the score, the lower the risk. Using a mathematical algorithm, the PI Risk Score looks at a consumer's credit activities and behaviors, account length and history, new account creation velocity, payment instrument transaction history, and the characteristics of the financial institutions issuing the accounts.
Read more at ValidiFI

Dreher Tomkies LLP

Regulators ease loan modification rules amid coronavirus pandemic

  • Institutions that work with borrowers negatively affected by the coronavirus pandemic will not be directed to categorize loan modifications as troubled debt restructurings (TDRs), U.S. financial regulators said in an interagency statement Sunday.
  • "Short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs," the regulators said. "This includes short-term - for example, six months - modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant."
  • The joint statement was issued by the Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, National Credit Union Administration and the Conference of State Bank Supervisors.

Read more at BANKING DIVE


Banks nearly took down the economy in 2008. Now the industry hopes to redeem itself

For people who have been around long enough, the upheaval in markets being caused by the global covid-19 pandemic reminds them of nothing more than the 2008 financial crisis.
Now banks, fortified with capital, are hoping to serve as a buffer for the hardships about to hit millions of customers and businesses.
"Banks should be able to step in and give people breaks," said one bank executive. "The wild card is that every day is crazier than the next, and there is no roadmap here."

Investors glued to their screens as stocks tumble day after day. Central banks around the world injecting trillions of dollars into the financial system. Talk of bailing out entire industries.

For people who have been around long enough, the upheaval in markets being caused by the global covid-19 pandemic reminds them of nothing more than the 2008 financial crisis. Now, more than a decade later, one of the primary culprits of that period - the banking industry - is hoping to serve as a buffer for the hardships about to hit millions of customers and businesses.
Read more at CNBC


Now more than ever we need fintechs to lead on consumer transparency

As the U.S. flirts with extreme market volatility and the possibility of its first recession since the 2008 financial crisis, it's amazing to think how much consumer financial services have changed in that time. For the last ten years, fintechs have relentlessly democratized financial products by lowering the barriers to use them.

But democratization brings its own risks. To truly improve the lives of their users and guarantee long-term customer loyalty, fintechs should add guardrails and adopt their own version of medicine's Hippocratic Oath.

Financial institutions and fintechs of the last decade brought unbanked and underbanked consumers onto the 'financial grid' in a way that empowered many for the first time. Now, there is a big opportunity to give consumers not only access, but also guidance for how to use financial products in a responsible way. While the first phase in fintech innovation was defined by users' financial access, this second phase will be defined by their financial health.
Read more at TECH CRUNCH



WASHINGTON, D.C. - The Consumer Financial Protection Bureau (Bureau) released today the annual report to Congress on the administration of the Fair Debt Collection Practices Act (FDCPA). The report highlights the continued efforts by the Bureau and the Federal Trade Commission (FTC) to stop unlawful debt collection practices, including vigorous law enforcement, consumer education and public outreach, and policy initiatives. Additionally, the Bureau announced today that it is extending the comment period on its Supplemental Notice of Proposed Rulemaking (SNPRM) implementing the Fair Debt Collection Practices Act (FDCPA). The SNPRM, which proposed to require debt collectors to make certain disclosures when collecting time-barred debts, provided a 60-day public comment period that was set to close on May 4, 2020. Given the challenges posed by the COVID-19 pandemic, the comment period will be extended to June 5, 2020.
Read more at CFPB


Coronavirus and dealing with debt: Tips to help ease the impact

Dealing with debt can be a stressful experience. Coupling that with the coronavirus pandemic may make it even harder to address. As you plan for the potential economic impact of coronavirus, there are a number of steps that you can take to help manage debt in these difficult times.

You can look to your state's unemployment policies to identify current options for benefits. Your state's public health office may also have information.

Steps to take if you have trouble paying your bills during the COVID-19 coronavirus pandemic.

Has a debt collector contacted you?
If you currently have a debt in collections, you can work with collectors to identify a realistic repayment plan. We have a number of resources for contacting and negotiating with debt collection companies. Read more at CFPB


Alternative Financial Service Providers Association

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