September 6, 2018
2018 edition: 71/104

Britain: Wonga Goes Belly-Up

The U.K.'s largest payday lender is shutting down after a surge in complaints from former customers.

According to Financial Times, Wonga confirmed on Thursday (Aug. 30) that its board had decided to shut down, appointing Grant Thornton as administrator.

The news isn't a complete surprise. This week, the company stopped accepting new loan applications, and also met with the Financial Conduct Authority (FCA) to figure out the impact shutting down would have on its customers.

While the company received a £10m emergency cash infusion earlier this month, it also saw a new rise in compensation claims, with one source saying that complaints had risen 80 percent since the funds were received. Each complaint costs Wonga £550 in fees before any compensation is even issued, which is more than the lender's average loan size. Read more at PYMNTS.COM



Confirm Judge Kavanaugh for the betterment of the CFPB

Supreme Court nominee, Judge Brett Kavanaugh, is no fan of the Consumer Financial Protection Bureau (CFPB).

While serving as a Judge on the Court of Appeals for the District of Columbia Circuit, Kavanaugh was an outspoken critic of the CFPB's centralization of power and overall dubious constitutionality. The Judge even went on so far to publicly rename the title of the CFPB Director to the "President of Consumer Finance" due to the unilateral power and lack of oversight and accountability that the director has.

If appointed to the Supreme Court, Justice Kavanaugh could do much more than implement a simple title change.

Since its formation after the financial crisis in 2008, the CFPB has had enormous, unilateral control over American businesses, consumers, and the overall U.S. economy. The Bureau's sole director has the power to regulate just about any consumer product within the financial industry, including mortgages, credit cards, personal loans, and other consumer products. In just the first six years of its inception, the Bureau managed to create over $2.8 billion in regulatory costs from only 26 regulations; proving how costly and burdening the Bureau can be.

During his tenure with the D.C. Court of Appeals, Kavanaugh had a strong history of siding with free market policies over the overreaching government. One way-which Judge Kavanaugh demonstrated by stating in a previous district court ruling-is that cost-benefit analysis should be conducted in all agency rulemakings. Read more at THE HILL

Compete in the data-driven lending era.

Identity theft affected 16.7 million Americans in 2017. Learn how businesses can help consumers avoid fraud

Fraud on the rise in late 2017, early 2018

Multinational enterprises can withstand a data breach, but small- to medium-sized businesses - and, even more so, their customers - often cannot. Companies in the latter category must labor even more diligently to protect the personal and financial information of the people who keep them running.

Reports such as Javelin Strategy's study on the uptick of finance-related fraud and identity theft through 2017 and into 2018 should be sobering to all. But business owners in particular should be mindful of this cybersecurity issue, whether they rely on alternative credit data, traditional scores or a mixture of both.

Breaking down the report
The Javelin study found that identity theft affected 16.7 million Americans during 2017, continuing a trend of steady increases that has taken place since 2014, when this type of fraud befell 12.7 million residents of the U.S. The number of Americans touched by identity theft last dropped between 2013 and 2014.

Interestingly, Javelin's data also found that between 2012 and 2015, the cost of such breaches fell from year to year - from $22.1 billion to $15.5 billion. Only after 2015 did the dollar value of identity theft start rising again, reaching $16.8 billion in 2017, the most recent year for which data is available. Read more at PRBC NEWS

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CFSA and its members have a long history of standing ready to serve as a resource to policymakers and regulators. In addition to the resources on this website, CFSA can answer questions about other policy issues or potentially connect you with an appropriate expert. If you or your staff have questions or comments about CFSA membership activity in your state, or would like to meet with one of our representatives, please contact us at or at 888.572.9329.

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.

U.S. Banks Need To Be Safer For The Sake Of Main Street

The 2008 financial crisis continues to adversely hurt millions of people in the United States. Anat Admati, Mehrsa Baradaran, and Jennifer Taub have contributed a significant body of research to design needed changes to the U.S. banking system for the sake of ordinary people. Together, we brainstormed what the necessary next steps should be to make banking safer for Main Street.

Stanford Business School Professor Anat Admati, author of The Bankers New Clothes, and one of Time Magazine's 100 Most Influential People in 2014 agrees with the U.S. Financial Inquiry Commission that the 2008 crisis was avoidable, since it was caused by weak corporate governance and policy failures. According to Admati, ten years after the crisis "the financial system remains fragile, inefficient and dangerous." Her concern is that "Despite reforms put in place after the crisis, bankers, politicians and regulators consistently overstate the system's health and the effectiveness of new rules."

Admati believes policymakers still lack "the political will to address the underlying flaws in the system." These problems are due to the failure of markets to produce efficient outcomes when the interests of people with better information and control conflict with the broader public interest. She has focused in particular on trying to ensure that banks use more equity funding, a cause that has support from both sides of the political spectrum. Read more at FORBES

assess the creditworthiness and ability to pay of the 100 million people who have no traditional credit history

Millennials: The leasing generation. by Walt Wojciechowski

For people looking to buy a new car and wondering about whether to buy or lease, there's no right or wrong answer. It all depends on goals, needs and expectations. But based on data compiled by Edmunds, millennials' car ownership interests lean toward leasing.

In 2015, the most recent year for which data is available, nearly 30 percent of 18- to 35-year-olds opted to lease their new-car purchases rather than purchase, Edmunds reported from car registration data put together by Polk. That's up by approximately 46 percent tracing back to 2010, which over the same period saw a 41 percent increase in leasing among all car shoppers.

Sometimes referred to as "Generation Y" and born between the early 1980s and the mid-to-late 1990s, millennials represent a substantial portion of the American populace, currently outnumbering the baby boomer generation. Indeed, according to Census Bureau data reviewed by the Pew Research Center, more than one-third of the labor force fall into the millennial category. That's the equivalent of 56 million individuals. In other words, the trends found among millennials help shape the economic marketplace in terms of what sells and resonates with the consumer public.
Read more at MICROBILT


Analytics is your competitive advantage

The share of bankruptcy filers who are older than 65 is the highest it's ever been

The share of bankruptcy filers who are older than 65 is the highest it's ever been.

As the cost of living outpaces incomes, healthcare costs rise and debt swells, there's been more than a two-fold increase in the rate of older Americans filing for bankruptcy, according to a new study. "For an increasing number of older Americans, their golden years are fraught with economic risks," it reads.

Debt among older Americans is rising fast. In 2016, the average debt in families in which the head of the household is age 75 or older was $36,757. That is up from $30,288 in 2010, according to a recent report by the nonprofit Employee Benefit Research Institute in Washington.

When Fay was laid off from her job in her 70s, she contemplated retirement. A painful reality hit when she realized she didn't have a nest egg that could cover her expenses or current debt.

"I see myself with no house," said Fay, who agreed to be interviewed only if her last name was not used because she is afraid of collection agencies hunting her down. "Living on the street."
Read more at CNBC

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

MaxDecisions, Inc. Releases 5th Generation Debt Settlement Response and Conversion Model 9/4/2018.

In this ever-changing world of machine learning, artificial intelligence and abundance of consumer credit information, debt settlement or debt resolution industry is become ever more advanced with ways to educate and resolve consumers with issues fulfilling their debt obligations.

We are at an all-time high in terms of consumer debt since the Great Recession of the past decade. Ever since the market downturn, the United States economy has experienced an unprecedented recovery. Job opportunities, wage growth and home equity are at an all-time high.

Similarly, the availability, access and abundance of credit have been free-flowing for the past five years. With the advent of online lending (prime, near prime, subprime and future prime), consumers can get up to $75,000 worth of personal loans all over the internet.

However, with the ever-changing economy, from time to time, consumers are having a difficult time managing their credit. And thus an industry of financial educators, debt resolution consolers and attorneys that are specialized in getting consumers back on the right path are now using sophisticated technology and analytics to serve this ever-growing need. Read more at MaxDecisions
Decision Cloud is a black box platform, which allows users to build decision waterfalls, utilizing Insight's services, as well as a plethora of third party vendor services.

Private Loans or Banks - The Better Car Financing Option?

Do you know that in the very first year, the value of a car depreciates by $1,500? Many people consider a car to be an investment while in reality, it is just an asset which will depreciate with time.

Apart from the financing costs, this so-called investment also requires to be maintained, repaired, and insured. Even the registration with the state hikes the cost manifold.The average interest rate of used and independent cars is 7.68% and 11.48% as compared to 5.11% for a new car.

As per, in a course of five years, a $25,000 car will cost around $33,604, thus, making the loss higher. When the cost of the car is already going to be this high, why not try to save some money in the financing process?

What Does Choosing a Bank Mean?
Typically, banks offer lower rates as compared to private lenders but you will be able to get only 60 to 80 percent of the vehicle cost covered. The additional costs of registration etc. are also not included in it.

Also, the banks are never as flexible as a private leasing company. This is ideal for people who are looking for a standard term as this will help in completing the loan term steadily. However, those people who need certain flexibility should never opt for banks. Read more at EQUITIES.COM

  National Debt Holdings
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.

US Consumers Owe $1.15 Trillion in Car Loans

Whether U.S. consumers are purchasing a new car or a used model, chances are that an auto loan is involved. More than 86% of all new car buyers and nearly 55% of used car buyers financed vehicle purchases in the second quarter of this 2018.

The average loan amount to purchase a new vehicle reached $30,958, up $724 (about 2.4%) compared to the same period last year. Loans to purchase a used car averaged $19,536, up $520 (about 2.7%) year over year. Second-quarter used car averages hit a record high, according to data reported last week by Experian Automotive.

Auto analysts at Kelley Blue Book have estimated that the average price of a new vehicle at the end of June had reached $35,640. The average transaction price on a midsize sport utility vehicle rose 1% year over year in June to $38,249, while the average for full-size luxury SUV rose 8.3% to a whopping $88,013.

The better a car buyer's credit rating, the lower the available interest rate on a car loan. No surprise there, but the gap between the top and the bottom is vast. A super-prime buyer (credit score of 781 or higher) paid an average of 3.47% interest on a new car purchase in the first quarter. A deep-subprime buyer (credit score of 300 to 500) paid an average interest rate of 14.93% on a new car. Read more at 247WALLST

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