April 25, 2019
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Trump's regulatory rollback boosts odds of a financial crisis

What will trigger the next financial crisis? Economists have been raising alarms about high-risk debt, but the real danger may be closer to home.

Since taking over, Trump's administration has been wiping out measures designed to prevent consumers from being ensnared in unsustainable debt and, at the same time, eliminating borrowers' ability to seek court-ordered relief when they are.

Consumers are the engine of the economy, accounting for 6 to 7 cents of every dime spent, so these policies put everyone, including taxpayers, at risk. It's a scenario eerily reminiscent of events that drove the U.S. into a ditch in the Great Depression of the 1930s and the Great Recession 10 years ago.

Lenders who created the more recent mess and reaped hundreds of billions of dollars in fees weren't held accountable, leaving consumers and taxpayers to pay the consequences of loans that never should have been made. Read more at THE HILL

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Say "yes" to thin-file and no-hit borrowers with REAL alternative data and a fully compliant, AI-powered score, customized for your business.

Lawmakers embrace significance of financial literacy

Sens. Bill Cassidy (R-LA) and Tim Scott (R-SC) introduced a resolution this week declaring April as Financial Literacy Month, highlighting the importance of learning and maintaining fiscally responsible habits.

The resolution has garnered bipartisan support.

"Learning healthy habits is crucial for long-term financial security," Cassidy said. "Financial Literacy Month is about giving families the tools and knowledge needed to take control of their financial futures."

A Federal Deposit Insurance Corporation (FDIC) report generated in 2017 showed, approximately 25 percent of the nation's households are unbanked or underbanked and have limited or no access to savings, lending, and other basic financial services.

"We live in an America where there is a deep divide between many of our working class who live in distressed communities and the rest of the country," Scott said. "Financial literacy is one of the bridges to closing these gaps and encouraging economic prosperity in our communities. I am excited that I've been able to pass legislation that creates real tangible results for the American people."

Sen. Jack Reed (D-RI) said the nation needs to encourage and support Americans in developing the knowledge and skills to be informed consumers and sound managers of their own financial lives. Read more at Financial Regulation News

We are a revolutionary merchant service and technology firm servicing the debt repayment industry.

CEI Leads Coalition Supporting Reformed Payday Loan Rule

Today, the Competitive Enterprise Institute led a coalition of eighteen free market organizations in support of the Consumer Financial Protection Bureau's decision to rescind portions of the small-dollar loans rule, such as the "ability to repay" underwriting requirement.

As we wrote in the letter, the original small-dollar loan rule, which was finalized in 2017 by then-director Richard Cordray, is one of the most detrimental regulations ever issued by the bureau. While it was put forward under the guise of consumer protection, the rule would have stripped valued financial services away from some of the most vulnerable people in society.

For example, payday loan volume and revenues were predicted to decline between 60 and 82 percent under the rule, meaning that billions of dollars of consumer credit would be wiped out. But eliminating the supply of credit does not eliminate its demand. Instead, the 12 million Americans who take out a payday loan each year may lose access to legitimate credit altogether, perhaps even forcing them into the hands of black market loan sharks.
Read more at Competitive Enterprise Institute

Payliance: Powerful Payment Processing Technology

Alchemy Lending Operating System Releases Personal Income & Stacking Detection Algorithm Powered By Plaid

Alchemy Technology, Inc., industry-leading lending as a service organization today announces the launch of personal income and stacking detection technology and algorithms power by Plaid, Inc.

"Plaid has been one of the foundation blocks of next FinTech evolution, integrating Alchemy Lending Operating System extends both of our companies vision to support the greater financial services community. We, at Alchemy, are constantly deploying new, innovative products to the market. Leveraging banking transactional data to accurately detect personal income and stacking behaviors will enable our clients to avoid credit risk and offer more affordable products to their clients." - Timothy Li, Founder, Alchemy Technology Inc..

Income Detection
Plaid has been the forefront of providing one of the fundamental building blocks of many FinTech companies in the past. The power of banking information adds another step in the applicant's income verification process. Read more at ALCHEMY




CFPB Notice of Proposed Rulemaking (NPRM) on "Payday, Vehicle Title, and Certain High-Cost Installment Loans"

Deadline to submit comments is May 15

In 2017, the CFPB issued a rule on on "Payday, Vehicle Title, and Certain High-Cost Installment Loans" that was needlessly complex and overbroad. It would have caused irreparable harm to industry businesses and eliminated an important form of credit to consumers.


Comments can be submitted now through May 15, and can be sent electronically, via email or through regular mail.
1) Submit electronically via at

2) Submit via email to
Include Docket No. CFPB-2019-0006 in the subject line of the message.

3) Submit via regular mail or hand deliver to: Comment Intake
Bureau of Consumer Financial Protection, 
1700 G Street, NW, 
Washington, DC 20552 
 Include Docket No. CFPB-2019-0006 in the letter. 
Must be mailed by Friday, May 10, to ensure arrival by deadline.

If you have questions or would like additional information, please email


How Financial Institutions Can Hit Back at Fraudsters

Today's financial institutions are deploying top online and mobile banking systems to offer their customers a wide range of capabilities, from opening an account to setting up automatic bill payments, mobile check deposits and more. Despite these comprehensive feature functionalities, the fraud detection and dispute process remains rather outdated for many financial institutions.

PwC's 2018 Global Economic Crime and Fraud Survey reports that 49 percent of organizations across the globe have experienced fraud, with an increase from 36 percent the previous year. As fraudsters increase and evolve their attacks on the financial services, it's apparent that fraud isn't going away any time soon. With that being said, financial institutions must take steps to up the dispute process to protect customers and their hard-earned funds.

Most financial institutions are meeting their customers' expectations by offering a traditional online cash management system that allows account holders to view transactions; however, this is the extent of its ability. To exceed these expectations, financial institutions must change the role of the customer. Read more at PAYMENTS JOURNAL

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Bank of America Hires 4,700 Employees From Low, Moderate-Income Areas

Bank of America Corp. hired 4,700 people from low- and moderate-income areas in the last 18 months, putting it on track to meet a goal of 10,000 by 2023.

Almost 30 percent of the consumer unit's staff now come from so-called LMI neighborhoods, the Charlotte, North Carolina-based lender said Tuesday in a statement. The bank's Pathways program, which works with nonprofits that provide professional skills training, has helped bolster the initiative.

"We're adding to these communities with jobs, financial literacy and financial services," Dean Athanasia, the bank's president of consumer and small business, said in an interview in his Boston office.

Bank of America announced on April 9 that its minimum wage would rise to $17 this year and to $20 in 2021. The next day, Chief Executive Officer Brian Moynihan was among the heads of the largest U.S. banks to be grilled by lawmakers on everything from income inequality to diversity.

Bank of America's hires in LMI areas should rise to about 7,000 people for the consumer unit by the end of the year, according to Moynihan's written testimony to the House Financial Services Committee. Read more at BLOOMBERG

Alternative Credit Reporting

Auto Lenders Can Decrease Delinquencies by Offering Multiple Ways to Pay. by Kristen Hoyman

Auto lenders are facing a big problem: credit quality is deteriorating. Private lenders and buy here pay here lenders are getting hit the hardest. If you haven't suffered yet, higher than average delinquencies are probably coming your way.

Auto loan originations have hit an all-time high of $584 billion. At the same time, the Motley Fool reports that 7 million Americans are more than 90 days late on their auto loans, which accounts for almost 6.5% of all auto loans across all credit grades. Bloomberg describes the problem as the highest auto delinquency levels since 2012. More people are now behind on their auto loan payments than during the Great Recession.

The bottom line: bringing the deals in is no problem, but making sure your portfolio stays current might be.

If you are an independent auto lender, you need to proactively manage your portfolio, or it could get away from you. REPAY has the tools to help you - you don't have to go at it alone.
Read more at REPAY

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.

IRS unveils modernization plan

Department of the Treasury and Internal Revenue Service (IRS) officials have unveiled a six-year modernization plan.

The effort is designed to provide taxpayers with excellent service, aid in meeting tax obligations and equitably enforce the law with integrity and fairness.

"The IRS supports one of the largest and most complex business operations in the world, proudly serving millions of individual filers, small businesses, tax-exempt organizations, and large corporations," Treasury Secretary Steven T. Mnuchin said. "Technological innovation is vital to the IRS successfully executing its mission, including protecting taxpayer data, enhancing services to taxpayers and ensuring the health of the nation's tax system."

The plan is organized around four Modernization Pillars critical to the IRS's mission and future development.

First is the Taxpayer Experience, which states that the IRS will deploy a range of new and enhanced technology solutions to help taxpayers understand the law and resolve issues quickly and efficiently. Second, the Core Taxpayer Services and Enforcement where the IRS will evolve core tax systems to provide quicker and easier tax filing services. The third is the Modernized IRS Operations, under which the IRS will improve operational efficiencies by reducing system complexities, which will accelerate the pace of change and the adoption of emerging technologies to reduce costs and manual effort. Lastly, the Cybersecurity and Data Protection introduces unparalleled data and refund fraud protections, protecting against approximately 1.4 billion cyberattacks annually and proactively responding and anticipating the changing threat environment.
Read more at Financial Regulation News

Merchant Boost Announces Name Change to ValidiFI
Redefining how financial service businesses measure risk and process payments.

3 ways your small business can break the hiring mold

Labor Opens a New Window. -- at least in certain professions -- has become hard to find. The job market has been suffering from a shortage of qualified workers, and that's a challenge that can hit small businesses Opens a New Window. harder.

To work around that, as a small-business owner or manager, you have to be more clever than your counterparts at bigger firms. The good news is that you won't have to deal with the roadblocks and red tape that are often in the way at big firms.

You can work at filling open positions by being more clever than your larger rivals, and by throwing aside some traditions. That's not always an easy path to follow, but it may lead to the hires you need to keep your company running.

1. Hire skills, not degrees
While some large employers are willing to look at whether employees can do the job instead of whether they have the right degree, that has certainly not become the norm. But as a small business owner or manager, you're not bound by those requirements. Someone who gained skills in a nontraditional way (or has the ability to learn them) might not be a candidate elsewhere.
Read more at FOX BUSINESS

Lending as a Service

Consumers Still Have Much To Learn To Reach Financial Literacy

April is Financial Literacy Month, a congressionally-backed effort to educate Americans about healthy financial practices and habits.

Consumers tend to overestimate their financial literacy, according to a survey by research provider Raddon; 44 percent said they were "very" or "extremely" literate, but when given a financial quiz only 6 percent scored an "A." Overconfidence can lead to costly mistakes.

The good news according to a February 2019 PYMNTS and Unifund study, Financial Invisibles, is that many consumers were eager to learn more, though. In Q3 2018, 28.0 percent were "very" or "extremely" interested in financial education, higher than in the previous two quarters.

In the PYMNTS and Unifund study, those who indicated they had experience with living paycheck-to-paycheck had higher interest in financial education; 44.0 percent of this group were "extremely" interested in becoming more financially literate. Most consumers (52.3 percent) expressed an interest in hints and tips as far as financial education was concerned rather than attending in-person or online classes. Read more at PYMNTS.COM

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

CFPB to launch symposia series exploring consumer protections

The Consumer Financial Protection Bureau will host a series of symposia exploring consumer protections in the financial services market.

The series is designed to stimulate dialogue and assist the bureau in its policy development process. The bureau will host a discussion panel of experts at each symposium with a variety of viewpoints on the topic.

"There are a number of outstanding, challenging issues the Bureau is facing - some of which Congress directed us to address. I believe that the best way to address these issues is with proactive dialogue," CFPB Director Kathleen Kraninger said. "The symposia series is building on the approach we took last year in convening experts on access to credit issues and credit invisibles. These types of proactive efforts are precisely how we intend to engage. Our symposia series will facilitate a robust discussion by experts on a variety of topics related to the Bureau's mission in a public forum. As the Bureau has an open mind on where the process will go, any appropriate next steps would come after the Bureau has had time to digest the discussion at the given symposium."
Read more at Financial Regulation News

Compete in the data-driven lending era

A threat to payday lenders: Personal finance classes

Requiring high school students to take a personal finance course reduces their likelihood of taking out expensive payday loans down the road.

That's the takeaway from research being released by the FINRA Investor Education Foundation in conjunction with April financial literacy month.

The short-term loans, typically due by your next payday, can come with interest rates as high as 400%, the Consumer Financial Protection Bureau has found. For comparison, that's more than 10 times the rate on more pricey credit cards. It takes borrowers roughly five months to pay off the loans and costs them an average of $520 in charges, according to Pew Trusts.

"Consumers should use alternative financial services as a last resort," said Melody Harvey, author of the study and a fellow at the Institute for Research on Poverty at the University of Wisconsin-Madison.

Yet younger people may have few other borrowing options, Harvey said. "It's difficult to secure credit by mainstream means if you don't have the sufficient history."
Read more at CNBC

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3 ways your small business can reach new customers

Grow or die.
It sounds like the title of a rap song, but it's actually the business idea that if your company doesn't grow, it's probably not going to make it. The reality is that you don't need to get bigger. What you need is a stream of customers to replace the ones that move, buy from you a little less, or have other life circumstances that change the level of business they do with you.

Yes, it's nice to add business and grow. It's more important, however, to make sure you stay on target. You may have a small business Opens a New Window. , but it can get a lot smaller if you don't build a pipeline to keep the customers flowing.

Fortunately, that's not as hard as it seems. In fact, you have many of the resources you need already available to you.

1. Leverage your existing customers
Your most loyal customers should be willing to tell their friends and family about how great your business is. It's OK to ask them to do that and even better if you give them an incentive to do so (like an extra discount). Read more at FOX BUSINESS

We are a revolutionary merchant service and technology firm servicing the debt repayment industry

Alternative Financial Service Providers Association

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