December 27, 2018
2018 edition: 102 / 102
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LendingTree Survey Finds More Than Half of Americans Can't Cover a $1,000 Emergency with Savings

CHARLOTTE, N.C., December 19, 2018 - LendingTree®, the nation's leading online loan marketplace, today released its survey on how Americans would pay for an emergency expense and how they've paid for them in the past. The survey found that more than half of Americans can't cover a $1,000 emergency with savings.

Key points
  • Only 48 percent of Americans say they could handle a $1,000 emergency expense using cash or savings in their bank accounts. Tapping savings was the most common strategy for handling an emergency, followed by borrowing from friends or family.
  • Six in 10 Americans have had an emergency in the past year that cost them $1,000 or more.
  • One-third of Americans are currently in debt from an emergency expense they couldn't cover.
  • Of Americans who had to go into debt to cover a past emergency, a third still owe $5,000 or more for this expense and about 18 percent have emergency debt balances of $10,000 or more.
Read more at LENDINGTREE

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GAO issues fintech data use, lending compliance recommendations

The Government Accountability Office (GAO) recently issued recommendations to the Bureau of Consumer Financial Protection (BCFP) and banking regulators regarding fintech underwriting data use and fair lending compliance.

While the GAO said fintech, or financial technology, can be useful in connecting lenders and borrowers online, information received from some fintech lenders revealed they use alternative data to help determine borrowers' creditworthiness.

Using alternative data could make loans available to more people, but could also have an unintended impact, such as fintech lenders being unaware of how to use the data and still comply with fair lending laws.

The GAO said BCFP had supervisory authority over some fintech lenders and noted the three fintech lending segments that GAO reviewed are personal, small business and student loans.

The GAO is recommending BCFP and the federal banking regulators communicate in writing to fintech lenders and banks that partner with fintech lenders, respectively, on the appropriate use of alternative data in the underwriting process. Read more at Financial Regulation News

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The Ten Best Personal Finance Resolutions for 2019

It is wise, from time to time, to stop and evaluate our lives as we seek to make the most of them.

The start of a new year provides a natural opportunity to look back and offers an extra push toward new adjustments going forward. That's why New Year's resolutions are so popular.

If you are looking for some changes in your financial circumstances, here are the ten best personal finance resolutions to consider. Choose just one or two to accomplish in 2019 and you'll be surprised at the difference in your life:

The Ten Best Personal Finance Resolutions for 2019

1. Save $1,000. Less than 40% of Americans have one thousand dollars in savings, but almost every successful financial wellness plan available today includes the creation of a $1,000 Emergency Fund. Finding that much money overnight might be difficult. But if you can find $83/month to put away, you'll complete this resolution by the end of the year... and be in better financial position than 60% of the country!

2. Make one extra payment (over the course of the year) on your mortgage. One extra monthly payment per year on your mortgage shortens the length of your loan by 4-5 years. You can spread this out over the course of the year or plan now to direct an expected windfall toward it (tax refund, year-end bonus, etc.). Read more at FORBES

CFSA Conference _ Expo

AFSPA encourages  AFSPA MEMBERS to attend the 
March 18-21, 2019 in MIAMI

This is your chance to meet the movers and shakers of the industry. 
Find out where the industry is going in 2019, and how you can help. 


Long live the CFPB: Kraninger kills bureau name change to BCFP

Tells bureau staff: I care much more about what we do than what we are called

Just one day after Sen. Elizabeth Warren, D-Mass., called for an internal investigation into the Consumer Financial Protection Bureau's mission to change its name to the Bureau of Consumer Financial Protection, new CFPB Director Kathy Kraninger is putting an end to the whole affair.

In what amounts to Kraninger's first official act as the CFPB director, she told bureau employees that she is suspending any efforts to change the bureau's name from the CFPB to the BCFP.

"As of December 17, 2018, I have officially halted all ongoing efforts to make changes to existing products and materials related to the name correction initiative," Kraninger said in an email to bureau employees, which was obtained by HousingWire.

According to Kraninger, the bureau will use the BCFP name and seal on "statutorily required reports, legal filings, and other items specific to the Office of the Director," but for all other materials, the bureau will still be the CFPB. Read more at HOUSING WIRE

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OCC Issues Notice of Proposed Rulemaking Amending Stress Testing Rules for National Banks and Federal Savings Associations

WASHINGTON-The Office of the Comptroller of the Currency (OCC) today issued a notice of proposed rulemaking to amend the OCC's stress testing rule at 12 CFR 46 (which implements the stress testing requirements of section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act), consistent with requirements imposed by section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act.

The proposed rule would revise the minimum threshold for national banks and federal savings associations to conduct stress tests from $10 billion to $250 billion, revise the frequency by which certain national banks and federal savings associations would be required to conduct stress tests, reduce the number of required stress testing scenarios from three to two, and make certain additional facilitating and conforming changes to the stress testing requirements Read more at OCC.GOV

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

Drowning in Debt: 74 % of Americans said they failed to budget properly for the holidays

CLEVELAND - We're just 5 days away from Christmas, but there's still plenty of time to rack up holiday debt. In fact, a report from Magnify Money says last year the average shopper went more than a thousand dollars over budget. And for many, it could take months to pay down that tab.

One shopper told us, "I've even gone so far as to actually get a loan for my Christmas shopping."

But there are some crafty ways to cut down that credit card bill. Take it from someone like Amanda Sharratt. She and her husband were in the hole for $140,000 dollars after college.

"We financed a TV. Couches. We weren't afraid of debt," she said.

Three and a half years later, after working with finance guru Dave Ramsey, they don't owe a dime. And Amanda now blogs about saving money.

One way she broke free from debt was by selling stuff on online...everything from purses and car speakers, to a motorcycle.

"They might think it's $20 or $50 dollars...'what's that going to do for my debt?'...especially if they have a lot of debt. But the reality is, how did we get into debt? Probably the $20, $50 or $100 dollar purchases at a time," she explained. Read more at WKYC3

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Five challenges facing new CFPB chief

Kathy Kraninger faces a slew of daunting challenges as the new director of the Consumer Financial Protection Bureau (CFPB).

Kraninger was confirmed by the Senate on Dec. 6 in a 50-49 party-line vote, and began her five-year term atop the polarizing financial regulator on Tuesday. She promised a fresh start at an agency where many employees have felt demoralized during more than a year of turmoil under acting Director Mick Mulvaney, who was recently named acting White House chief of staff.

Former Director Richard Cordray, a Democrat, oversaw the agency at a time when it issued strict rules intended to curb risky financial products and when it took aggressive legal actions against firms accused of defrauding consumers.

Mulvaney, appointed by President Trump to replace Cordray after he resigned in November 2017, drastically changed the CFPB's course by curtailing its enforcement actions, slashing industry fines, freezing new regulations and reducing the bureau's budget. Read more at THE HILL

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Who Are You? Identity Verification and Authentication. by Philip Burgess

The digitization of commerce and finance has introduced new levels of efficiency and convenience into the economic landscape, but with these benefits come a number of unique challenges. The improved (and extensive) connectivity offered by modern systems has created unfamiliar points of failure, leading to greater concern about the risks of engaging with online marketplaces. While consumers, businesses, financial institutions and government organizations have always had to contend with monetary risk, a fully networked economic system has created a need for stronger security and assessment tools.

To help mitigate the possibility of fraud and identity theft, organizations in every sector have had to develop more extensive identiification, verification and authentication techniques. While these terms are often used interchangeably in common discourse, they do have noticeably different meanings in practice.

What is identification?
Identification seeks to answer the question, "who is this person?" Often referred to as a 1-to-n matching system, the process of identification attempts to discover the identity of an unknown person through the analysis of captured biometrics, which are then compared to a database of thousands (even millions) of possible identities. The Department of Homeland Security defines biometrics as "unique physical characteristics that can be used for automated recognition," including data points like: Read more at MICROBILT

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Even Bill Gates says U.S. tech companies need more regulation

The majority of Americans want better privacy laws

The majority of Americans believe technology companies have gone too far with their personal data - and Microsoft Corp. MSFT, +3.73% co-founder Bill Gates is one of them.

Legislators should be doing more to rein in the privacy reach of companies, the tech veteran said in a FOX News Sunday interview this week.

"The government should be talking to these companies about what they do," he said.

Gates - who testified in front of Congress in 1998 to justify Microsoft's policies and power after the U.S. Department of Justice filed an antitrust lawsuit against his company - said tech executives today should strive to work with Congress.

"I was naive," Gates also told Fox. "I didn't have an office in Washington, D.C. I thought that was a good thing and I even bragged about it." Read more at MARKETWATCH

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Financial Literacy and Financial Wellness Are Two Different Things

Financial literacy and financial wellness are not the same thing. Surprised? This author was, too. But it turns out there's a major difference between being financially literate and achieving financial well-being.

Essentially, there are some of the fundamental differences between financial literacy and financial wellness. Financial literacy means the education component - a term a lot of people (including this author) have confused with financial wellness. Some use them interchangeably (again, guilty as charged!). However, financial literacy means gaining awareness and understanding how money works and how to handle it responsibly. It generally includes topics such as how to create a budget, how to manage and pay off debt, and how to create savings for long-term goals, i.e., buying a home or building a retirement nest egg.

On the other hand, financial wellness differs from financial l­­­­iteracy in that the former is the actual implementation of what you know. It's one thing for individuals to know what they're supposed to do. Don't spend more money than you earn, live on a budget, don't take on debt to purchase items you don't have the cash to pay for now and save to build wealth for long-term goals such as retirement or a child's college Read more at 401KTV

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IRS issues standard mileage rates for 2019

WASHINGTON - The Internal Revenue Service today issued the 2019 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2019, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

58 cents per mile driven for business use, up 3.5 cents from the rate for 2018,

20 cents per mile driven for medical or moving purposes, up 2 cents from the rate for 2018, and

14 cents per mile driven in service of charitable organizations.

The business mileage rate increased 3.5 cents for business travel driven and 2 cents for medical and certain moving expense from the rates for 2018. The charitable rate is set by statute and remains unchanged.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Notice-2019-02.
Read more at IRS.GOV

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Sweet Success: Owner Of Growing Richmond Bakery Offers Zero-Interest Loans To Employees

Inside Richmond's Rubicon Bakers, 200 employees create, bake, and decorate cakes, cupcakes, and cookies that are shipped to 2,500 grocery stores around the country.

Still, it was something happening much closer to home, literally down the street, that made owner Andrew Stoloff realize there was more he could be doing to benefit his employees.

That was quite a goal for someone who had already done so much for them.

Nine years earlier, Stoloff had purchased the bakery from a non-profit that was losing money on the job-training venture. At the time, the bakery had just 14 part-time employees.

Under Stoloff's leadership, Rubicon Bakers is now a thriving Certified B Corporation (a for-profit company with a mission to do social good) employing 200 workers, many of whom have recently come out of prison or drug treatment programs.

So, what more could Stoloff be doing? Well, as Stoloff saw it, he could stop them from heading down the street when in need of financial help. Read more at NBC BAY AREA

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