January 3, 2019
2018 edition: 001 / 102
Happy New Year
GET INVOLVED with your industry in 2019!
Make this year your BEST YEAR YET!

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Payday loans, student loans and 401(k)s: The top 5 money questions of the year answered

Medical symptoms, obscure facts or who your favorite Hollywood star is dating - we often turn to Google with these burning questions. But when we're not searching for the latest on say, Kim Kardashian, many of us are using the internet to make sense of money.

Student loans, 401(k)s and payday loans were among the top five most-Googled financial topics nationwide, according to a report issued earlier this year by Chicago-based Liberty Bank. Leading the pack, the question "How do student loans work" garnered almost 2.5 million searches on average, according to the bank's analysis.

At the state level, Californians were most interested in cash advances, Texans looked for budgeting tips and both New York and Illinois residents wanted to know how much money you need to open a savings account.

1. How do student loans work? (2.5 million searches)
* The gist: Student loans are funds borrowed to pay for higher education, which you pay back to the lender upon graduation, with interest. With the standard federal student loan repayment plan, you'll make equal monthly payments on your student loans for 10 years. There are other kinds of repayment plans, depending on your income, job and other factors. Read more at USA TODAY

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Dennis Shaul, CEO of the Community Financial Services Association of America (CFSA), 
today released the below statement following the confirmation of Kathy Kraninger as Bureau of Consumer Financial Protection (BCFP) Director:

"CFSA congratulates Kathy Kraninger on her confirmation as BCFP Director. The BCFP deserves a Director who will listen to consumers and rely on unbiased data and research to guide its work. Ms. Kraninger is a longtime public servant and we hope that under her leadership the Bureau fulfills its intended mission as a truly independent, non-partisan agency that serves American consumers.

"Since its creation, the Bureau's agenda has been guided by partisan politics, which has led to harmful, biased rulemaking - notably its rulemaking that led to the Bureau's seriously flawed small-dollar lending rule. CFSA looks forward to working with Ms. Kraninger as the Bureau reconsiders - and hopefully repeals - this harmful rule, and to craft commonsense regulations that appropriately balance consumer protection with access to credit moving forward." Read more at CFSA

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2019 Outlook: CFPB Innovation Policies May Face State Challenges

The Consumer Financial Protection Bureau is aiming to launch the first federal sandbox in the new year and roll out other policies to encourage financial services innovation.

The goal of the "regulatory sandbox" and no-action letter policies is to spur innovation in lending and payments by exempting participating companies from some consumer finance laws. In exchange, the CFPB would ease up on enforcement actions against companies for potential violations of consumer finance laws.

For some fintech proponents, the CFPB's sandbox is a critical initiative to help regulators learn more about innovative products. The proposals are expected to be finalized in the first half of 2019, after which companies could apply for enforcement exemptions.

The proposals call for federal and state regulators to collaborate to help make companies' participation in the programs more seamless. "You're only as innovative as your least innovative regulator," Rob Morgan, vice president of emerging technologies at the American Bankers Association, told Bloomberg Law.

Financial institutions are cautious of falling afoul of their multiple regulators. The program's success could hinge on whether other regulators take the CFPB up on its coordination offer.

But with the CFPB pulling ahead of other federal and state regulators in offering the programs, the agency is also teeing up potential conflicts down the line. Read more at BIGLAWBUSINESS

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Fintech Predictions for 2019. Where We Have Been & Where We Are Going.
by Timothy Li

As we head into a market correction, 2019 and beyond will be very interesting for the evolving Fintech industry. This sector of finance saw significant M&A activity and massive fundraising during the 2nd half of 2018 and I predict that we will see more of it again in 2019.

But first, before I share my outlook for the coming year, let's first review what I forecasted 12 months ago and see if we can stump the chump. See my complete 2018 predictions here.

10. New Asset Class - New Asset Backed Lending for Crypto
The likes of Nexo, SALT, CoinLoans & Unchained Capital have emerged in the recent months unlocking the value of your cryptocurrency. There is a list of crypto lending sites here.

Technically speaking, loans backed by assets always outperform personal loans, however, that's yet to be seen given the heavy correction in the cryptocurrency market this year. It would be interesting to see if any of these companies will find the right balance between asset valuation and credit risk. Given the number of token backed lending platforms out there since my last article, I'd say I am spot on with this prediction.

9. The Alternative Internet
We didn't see an introduction of an alternative internet designed specifically for entertainment, banking, social networking etc. But I still think it's inevitable that the internet, as we know it, will split. If it's not by providers but by nations influenced by geopolitical events.

We are transforming lending with innovative payment instrument data and technology, increasing credit access to the financially underserved, and reducing fees for borrowers and creditors.

Racecar driver must pay $1.3 billion award in payday loan suit

A U.S. appeals court on Monday upheld a nearly $1.3 billion award against a pro racecar driver who was sent to prison following a conviction for cheating consumers through his payday loan businesses.

Information Scott Tucker's companies provided consumers did not accurately disclose the loans' terms, a unanimous three-judge panel of the 9th U.S. Circuit Court of Appeals ruled.

The judges also said a lower court did not abuse its authority when it ordered Tucker and other defendants to pay back nearly $1.3 billion.

The case was brought by the Federal Trade Commission, which accused Tucker of deceiving consumers across the U.S. and illegally charging them undisclosed and inflated fees.

An attorney for Tucker, Paul C. Ray, said he was reviewing the decision, but he noted that one of the judges said a larger 9th Circuit panel should rehear the case. Read more at FOX NEWS

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Wells Fargo to pay $575 million in settlement with U.S. states

NEW YORK Dec 28 (Reuters) - Wells Fargo & Co will pay $575 million to settle claims made by U.S. states that the bank created phony accounts and committed other customer abuses, according to a statement by the Iowa attorney general's office.

Two years ago, Wells Fargo agreed to pay $190 million to settle federal government claims that the bank created phony customer account, and improperly referred and charged customers for various financial services products. The deal announced on Friday will settle similar claims by attorneys general from all 50 states and the District of Columbia. The settlement was reported earlier by Reuters.

"This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank," Chief Executive Officer Tim Sloan said in a statement.

As of the end of the third quarter of 2018, Wells Fargo had set aside $400 million of the settlement amount and expects to allocate the remaining $175 million by the end of this year, the company said in the statement.

As part of the settlement, Wells Fargo will create a customer restitution review program to refund customers who have not gotten compensation from remediation efforts already in place. The bank will also create a website outlining the existing remediation programs. Read more at REUTERS

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Dreher Tomkies LLP is a law firm concentrating in the areas of Banking and Financial Services law.

How to build up your business credit profile. by Walt Wojciechowski

Consider the following scenario: Two individuals recently established a business that they are operating as partners, and to do so, they needed an initial infusion of capital. They acquired those funds by applying for a loan with a regional bank that offered business financing backed by the Small Business Administration, providing evidence of their entrepreneurial wherewithal to the lender that included a reasonable business plan and their personal credit profiles, both of which were very good. All of this is perfectly reasonable and quite plausible. But after that initial loan, the likelihood of these owners receiving financing for other company needs solely on the strength of their individual credit drops considerably. And any loan they do qualify for with their own credit may not have an amenable term length or interest rate.

Lenders will begin wanting to see quantified analysis of the business's credit as an entity apart from its two founders - clear proof that the company is fiscally responsible in dealing with its own debt accounts. This is commonly represented as a business credit profile and score, which is what banks or other institutional lenders hope to see when they receive applications for equipment financing, operating capital or other essential expenses.

Understanding the ins and outs of business credit and learning how to establish it won't be an instantaneous process, but the value it will offer in the long run is well worth the time and effort. Let's delve right into the thick of this process: Read more at MICROBILT

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VIRGINIA: In Richmond, a high-powered lobby stalls new rules on high-rate loans

Del. David Yancey stood before a panel of his colleagues as they considered one of his bills.

The legislation aimed to tackle high-interest-rate open end lines of credit, which use a decades-old loophole in Virginia's usury law originally intended to allow stores to offer charge cards. They charge triple-digit interest rates, and debt can balloon if borrowers only make their basic monthly payments.

Within five minutes, the members of the House of Delegates' Commerce and Labor Committee voted against the bill. It wouldn't make it to the full House for any consideration.

To Yancey, a Newport News Republican, the January 2015 vote was a small victory.

"The first time I tried, I couldn't even get a motion," he told the Daily Press at the time. "Last year, I got a motion, but no second. This year, at least they voted."

He continued, "I'm just going to keep on trying. Read more at the DAILY PRESS

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Resolve to take control of your debt in the New Year

Many people make it their New Year's resolution to get a handle on debt and improve their finances. Here are six steps you can take to make that resolution a reality.

1. Budget
Creating a budget will help you figure out how much money you have to pay down your debts, while also covering your needs and obligations. Knowing what you owe on a monthly basis, and where you actually spend your money, can help you prioritize so you can pay your bills on time, get control of your debt, and start saving for the future.

2. Track your spending
Once you have a budget in place, it becomes easier to find areas where you can cut back on spending. Track your spending for a week, and compare it to your budget on a regular basis. Are you actually spending more-or less-than you originally planned? Adjust your budget as needed to make sure you still have money left over to pay off debt.

3. Strategize
There are two basic ways to reduce your debt: the snowball method and the highest interest rate method. Read more at CFPB

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The CFSA Conference & Expo offers you, your business and employees the opportunity to "Plug-In" to top-notch networking opportunities and connect with key industry players. Our conference agenda, with well thought-out session content, will provide unique and valuable insights to keep you well informed on the latest industry developments impacting your business.

6 Things Employees Should Know About the Family and Medical Leave Act

Experiencing personal health problems ranks near the top of the list of life's stressors. But according to the Holmes-Rahe Stress Inventory, a major change in the health of a family member isn't far behind. Dealing with these medical issues, meanwhile, can cause complications for employees.

While employers generally offer workers some form of sick leave that they can use in case of their own illness, what can you do if a close family member is having health difficulties? This is the purpose behind the Family and Medical Leave Act, a federal law that was passed in 1993 to help employees balance their work responsibilities with family demands.

Here's what to know about the FMLA
-- The FMLA allows for 12 weeks of leave during a 12-month period -- but the leave is unpaid.

-- You may be able to use paid leave while on FMLA leave.

-- You're only eligible to take FMLA leave under certain circumstances.

-- Not every employer -- or employee -- is covered. Read more at YAHOO FINANCE

National Debt Holdings is a professional Receivables Management Company that partners with creditors to purchase and/or manage receivables at all stages of the account life cycle.

3 things small business owners should know for 2019

NEW YORK (AP) -- Now that the new year is here, small business owners may find themselves trying to understand changes brought about by federal and state laws. Here are three things owners need to know for 2019:

- Tax filing season. Business owners will learn what impact the new tax law is having on their finances. Many owners who are sole proprietors, partners and shareholders in S corporations will be trying to figure out if they can claim the 20 percent deduction for qualified business income. The computations for the deduction can be complex, and depend on an owner's income, and a spouse's income as well, and how much they pay their employees. There are other big changes - for example, companies like manufacturers that can now use the cash accounting method instead of the previously required accrual method will be reconfiguring their ledgers.

Owners who didn't do year-end tax planning may want to consider getting an extension of the filing deadline for their returns to give themselves breathing room. You can learn more about the new tax law and how to get an extension on the IRS website, .

- Internet sales tax. The majority of states have enacted laws requiring retailers who sell in their states to collect sales tax even if they have no physical location like a store or distribution within the state. Most of the laws exempt retailers who have $100,000 or less in revenue and 200 or fewer transactions in a given state. Some of the laws are already in effect, while others go into effect during 2019. Some states have not acted yet. Read more at YAHOO FINANCE

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How Long Should You Keep Your Tax Records?

In the immortal words of Reverend Lovejoy, "short answer, yes with an if. Long answer, no with a but." This is going to be one of those articles.

How long should you keep your tax records? Forever. That's the safe answer. Never throw out a 1040 and you'll be just fine. Your additional records, such as receipts and W-2s, those you can toss after seven years. Never get rid of the return itself, however.

How should you store those tax records? Keep one paper file and one digital version. Print out a copy of each year's tax returns and put it wherever you keep your other vital hard copy documents. Then save the PDF version and put it wherever you keep your backed up digital files.

These are small files. They won't take up much space, and they might just save your bacon in case of an audit.

Okay, for those who are interested (or just a little bit masochistic), now let's get to the complicated stuff. Read more at THE STREET

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