ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION | |
edition: January 28, 2025 | |
Will Trump 2.0 Be Revolutionary or Evolutionary for the Banking Industry?
Banks anticipate a softer regulatory touch and the chance to undo some Biden-era moves. But an innovation-friendly Trump II will also lighten up on competitors.
The first batch of changes in Washington have been underway even before President Trump’s inauguration. The nominee for Treasury Secretary, Scott Bessent, had already been through his confirmation hearing before the new president had even been sworn in. And a steady trouping of tech chieftains arriving to kiss the presidential ring has made this a transition period to remember.
The transition is now over and the second Trump presidency has officially begun, along with slim Republican majorities in both the House and Senate.
Beyond a new head of state, new chairs head the House and Senate committees handling banking and new heads will be picked and confirmed for two of the three prudential banking regulators as well as for the Consumer Financial Protection Bureau — as well as other departments and agencies important to financial services.
Read more at The Financial Brand
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Paving the Payments Future
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Email: jose.l.santiago@irs.gov
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Nearly 60% of Americans Shun Automatic Bill Payments, Study Reveals
When it comes to payments, the “set it and forget it” option certainly has its allure.
Providing card or account details to a provider ensures that the service being provided — say, a utility, or streaming media (or, separately, even an outstanding bill that’s being paid over time) — continues uninterrupted.
But there are reasons why the option’s not universally embraced, and much has to do with income levels, and specifically the reliability (or lack thereof) of having funds on hand to meet those recurring obligations when they’re paid through cards or debited from bank account.
Read more at PYMNTS.COM
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Understanding the Small Dollar Lending Rule (SDLR): from PAYLIANCE
Lenders offering short-term, high-cost loans have seen the Small Dollar Lending Rule (SDLR) looming on the horizon for years. Now, with the March 31, 2025 deadline set, the time to act is here. Whether you’re a seasoned lender or relatively new to the space, the SDLR is set to disrupt traditional practices, creating challenges—but also opportunities.
What’s Driving the SDLR?
The Consumer Financial Protection Bureau (CFPB) introduced the SDLR to protect borrowers by limiting harmful lending practices. But for lenders, it means rethinking operational processes, especially around payment attempts and borrower communications.
Here’s the core of the SDLR:
- Lenders can no longer make more than two consecutive failed payment attempts—across any payment channel.
- Following any such two consecutive failed payment attempts, a Lender must first secure a new authorization from their Borrower before any new or subsequent payment attempts are made.
Read more at PAYLIANCE
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New Overdraft Rule Could Impact Earnings — Unless It Gets Spiked
A drastically low cap on big-bank overdraft charges — with two alternative options that may or may not matter — could eat into profits. But that's assuming the overdraft rule doesn't go the same way as the credit card late fee rule seems to be headed.
How much pain will the Consumer Financial Protection Bureau’s final rule on overdraft fees have on bigger banks? Keefe, Bruyette & Woods analysts have calculated that it will pull down earnings per share by 2.7% overall in calendar 2026, the first full year that the rule would be effective.
The securities firm considers this "relatively modest exposure," per a report issued Dec. 12, when the CFPB published its rule. However, the figure is a median. Among the 13 institutions analyzed, five institutions will be hit more severely:
Read more at The Financial Brand
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Enabling organizations to streamline payment acceptance,
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Nearly 3 in 4 workers say they can only meet their basic living expenses
And just shy of 3 in 10 workers have assumed debt to cover their living expenses, Resume Now found.
Dive Brief:
- A gap between workers’ wages and the rising cost of living is creating financial stress among U.S. workers, Resume Now’s 2025 Wage Reality Report, released Jan. 21, found. Seventy-three percent of workers struggle to afford anything but their basic living expenses, according to the report.
- Of the more than 1,000 workers surveyed, 12% can’t always afford their basic living expenses, and 24% fight to cover essentials.
- One-third of workers say their salary hasn’t kept pace with inflation, and 55% don’t think their salary is as high as it should be.
Read more at HRDIVE
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Banks Want Customers to Take Security Seriously. Here’s How They’re Doing it.
Most consumers overlook cybersecurity — until they are the victim of an attack themselves. That’s why it’s essential for banks to weave security measures naturally into the customer experience.
Trust plays a key role in driving decision making for consumers. Just about half (49%) of consumers say that a brand’s reputation is a more important factor than price when it comes to making a decision to purchase, according to a recent survey from marketing firm Marigold.
Trust is an even more vital value proposition for banks, which must demonstrate their ability to protect customers’ most sensitive information from the growing threats of cyberattacks and fraud.
Read more at CUSTOMEREXPERIENCE
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Merchant Service Provider for Your Business
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How Alternative Data is Transforming Credit Access for the Unbanked Population
In a world where access to financial services is often determined by credit scores, millions find themselves on the outside looking in. The unbanked population—those without traditional banking relationships—struggles daily with barriers that prevent them from achieving financial stability. Imagine trying to secure a loan or even rent an apartment without a credit history. For many, this scenario isn’t just hypothetical; it’s their reality.
The need for innovative solutions has never been more pressing. Traditional credit scoring methods leave countless individuals marginalized and underserved. But what if there was a way to bridge this gap? Enter alternative data—a revolutionary concept poised to change how we assess creditworthiness and open doors for those who have long been excluded from the financial system.
Read more at TECHBULLION.COM
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How MasterCard, Visa, AmEx Will Lean into Innovation in 2025
As newcomers and big techs flood into payments, the "classic" providers aim to keep ahead of the pack.
As the payments business keeps evolving, the four main U.S. card companies remain in a class by themselves.
Two — Mastercard and Visa — develop and maintain payment methods and technologies offered by member financial institutions via the providers’ networks. American Express and Discover work with both sides of the equation — issuing cards and also maintaining the networks that enable merchants to accept their cards. The pending acquisition of Discover — once part of Sears — by Capital One, treated in our recent roundup payments issues for 2025, will bring new wrinkles as the bank, which is an issuer of both Mastercard and Visa, takes advantage of Discover’s own credit card and debit card networks.
Read more at The Financial Brand
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6 Key Payments Issues in 2025: Digital Wallets, Instant Payments, Debit Cards, Fraud, Megamergers, CFPB’s Fate
Waves of change keep on hitting the vibrant payments business, from new channel opportunities to an uncertain whipsawing regulatory atmosphere. Here's a review of what the industry will face this year.
You just can’t blink if you’re going to monitor the payments business. Challenges come from every direction and surprises lurk in all corners. Fresh competition can arise from without and within.
Six trends and expectations will be front and center in 2025, based on conversations with payments industry people.
Read more at The Financial Brand
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What student loan borrowers should know about plans to restart collections
- For roughly the past five years, federal student loan borrowers who fell behind on their bills didn't need to worry about the usual consequences, including the garnishment of their wages and retirement benefits.
- That will soon change.
- Here's what borrowers struggling to pay their bills need to know.
For roughly the past five years, federal student loan borrowers who fell behind on their bills didn't need to worry about the usual consequences, including the garnishment of their wages and retirement benefits.
That will soon change.
Read more at MSN.COM
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The Most Advanced Self-Service Check Cashing ATM
Check Cashing, Money Transfer, Bill Payment, Mobile Reload, ATM and more.
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Expanding opportunities in banking and financial services: FEDERAL RESERVE
Federal Reserve's ninth annual Minorities in Banking Forum focused on career enhancement for emerging leaders in the industry.
In October 2024 the Federal Reserve Banks of Kansas City and Cleveland hosted the ninth annual Minorities in Banking Forum, a Federal Reserve System event aimed at broadening advancement opportunities in the financial services field.
This 2024 event, held in Cleveland, brought together 107 mid- to senior-level industry leaders who are people of color. Attendees represented 25 states and 57 financial institutions.
Read more at Federal Reserve Bank of Kansas City
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How In-Person Banking Can Survive the Digital Age
In the U.S., most efforts to re-invent the branch experience have been tentative, piecemeal, or me-too. (The bank as coffee shop, anyone?) Banks searching for fresh inspiration and more far-reaching ideas should look beyond our borders.
Over the past six months, 539 bank branches closed in the U.S.. It’s just the latest statistic in a well-known trend as banking moves into the digital realm. It’s been happening for more than two decades and shows no sign of slowing.
But this shift to digital should not spell the end of physical banking as we know it. Instead, there is an opportunity for banks to innovate. If they can get it right, this innovation may help banks to tackle the host of ongoing challenges they face, from Gen Z mistrust to a new generation of digital disruptors.
Read more at The Financial Brand
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Watch Your Business Skyrocket.
More Visibility. More Customers. More Loans
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Trump airs conservative complaints that Bank of America, JPMorgan deny services
Jan 23 (Reuters) - U.S. President Donald Trump on Thursday accused the CEOs of Bank of America (BAC.N), opens new tab and JPMorgan Chase (JPM.N), opens new tab of not providing banking services to conservatives, echoing Republican complaints about the industry.
The broadside against Wall Street banks comes after some institutions have been accused by both congressional Republicans and Republican-led states of "woke capitalism" as well as de-banking gunmakers, fossil fuel companies and others perceived to be aligned with the political right.
Read more at REUTERS
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CFPB Targets Large Digital Payment Apps, But Will It Stick?
President Trump and the Consumer Financial Protection Bureau have a complicated history. The bureau's recent move to supervise and examine the largest big tech and fintech payments services may irritate the innovation-friendly administration, but it may also see some appeal to more oversight of digital players.
Subjecting the largest nonbank companies that provide digital funds transfer and payment wallets to federal examinations similar to banks: At first blush, the idea caters to the banking industry’s longstanding goal of a level regulatory playing field with big tech and fintech competitors. So the Consumer Financial Protection Bureau’s issuing such a rule after almost a year’s deliberation might seem cause for celebration amid banks and credit unions.
Read more at The Financial Brand
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Trump crypto plans have Wall Street CEOs ready to jump into digital assets
Key Points
- Wall Street’s top CEOs told CNBC from Davos, Switzerland, this week that they’re ready to go bigger in crypto if the Trump administration rolls out favorable policies.
- As part of Trump’s sweeping promises to the digital asset sector, he has nominated multiple pro-crypto names to critical positions.
- “For us, the equation is really around whether we, as a highly regulated financial institution, can act as transactors,” Morgan Stanley CEO Ted Pick said.
Just days into President Donald Trump’s second administration, Wall Street is singing a different tune on crypto.
Read more at CNBC
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ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION | |
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