AFSPA
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

January 16, 2018

NEVADA: State Supreme Court rules Nevada payday lenders can't sue borrowers on second loans

Nevada's highest court has ruled that payday lenders can't sue borrowers who take out and default on secondary loans used to pay off the balance on an initial high-interest loan.

In a reversal from a state District Court decision, the Nevada Supreme Court ruled in a 6-1 opinion in December that high interest lenders can't file civil lawsuits against borrowers who take out a second loan to pay off a defaulted initial, high-interest loan.

Advocates said the ruling is a win for low-income individuals and will help prevent them from getting trapped on the "debt treadmill," where individuals take out additional loans to pay off an initial loan but are then trapped in a cycle of debt, which can often lead to lawsuits and eventually wage garnishment - a court mandated cut of wages going to interest or principal payments on a loan.

"This is a really good outcome for consumers," said Tennille Pereira, a consumer litigation attorney with the Legal Aid Center of Southern Nevada. "It's one thing to be on the debt treadmill, it's another thing to be on the garnishment treadmill."

The court's ruling focused on a specific area of Nevada's laws around high-interest loans - which under a 2005 state law include any loans made above 40 percent interest and have a bevy of regulations on repayment and renewing loans. Read more at THE NEVADA INDEPENDENT
Dreher Tomkies LLP
Supreme Court agrees to review decision on Tribal Sovereign Immunity

On Dec. 8, The U.S. Supreme Court granted the petition of the Upper Skagit Tribe to review the Washington Supreme Court's decision in Lundgren v. Upper Skagit Tribe, 389 P.3d 569 (Wash, 2017). The Tribe, in 2014, had purchased certain fee simple land, outside the Tribe's reservation, adjoining land owned by the Lundgrens. The Lundgrens, who had owned their land since 1947, had long treated a fence that had been on the property since at least 1947 as the boundary of their property. When the Tribe informed the Lundgrens that the fence actually encompassed land owned by the Tribe, the Lundgrens sued to quiet title, arguing they had acquired title to the disputed property by adverse possession or by mutual recognition and acquiescence long before the Tribe bought the land. The Tribe moved to dismiss under CR 12(b)(1) for a lack of subject matter jurisdiction based on the sovereign immunity and the rule that requires joinder of a necessary and indispensable party, which the Lundgrens could not satisfy because of the Tribe's immunity. The trial court denied the Tribe's motion, holding that sovereign immunity did not protect the Tribe from a suit brought in rem. Relying on the U.S. Supreme Court's 1992 decision in County of Yakima v. Confederated Tribes & Bands of Yakima Indian Nation, 502 U.S. 251 (1992), the....

Insight.tm
New Netflix series 'Dirty Money' features KC racecar driver Scott Tucker

"Do you think you're a moral person?" asks a documentary filmmaker to a lounging Scott Tucker. Tucker pauses, looks off into the distance, and replies, "I'm a business person."

You may remember Tucker as the Leawood racecar driver and businessman who last year was convicted in a $2 billion payday loan scam he operated out of Overland Park.

He was sentenced on Friday to 16 years, 8 months in prison.

Tucker, 55, was a competitive racecar driver before he was arrested in Kansas City, Kan. in 2016.

An indictment accused Tucker and a lawyer of exploiting over 4.5 million people in a predatory loan business, targeting people "struggling to pay basic living expenses" with loans charging interest rates as high as 700 percent and using deceptive and misleading communications and contracts.

Prosecutors said Tucker claimed falsely that the business was owned and operated by Native American tribes.

Tucker and his lawyer were eventually found guilty in a New York federal court of 14 charges including money laundering and racketeering. Read more at FOX4KC

microbilt
CFPB Needs a Professional 21st Century Regulator. by
Lisa McGreevy, President and CEO of the Online Lenders Alliance
January 11, 2018

We expect President Donald Trump to announce the appointment of a new leader of the Consumer Financial Protection Bureau in the coming weeks. After years of being driven by partisan politics and political agendas, the CFPB now has a chance instead to focus on its original mission: driving fact-based, unbiased research and regulation that supports the growth of the financial services industry while appropriately protecting consumers.

That's the CFPB that our nation deserves, and it's one that will be made possible by the appointment of a qualified, professional regulator who is committed to bringing consumers and industry leaders together to drive solutions that work for all Americans.

Our financial system has changed drastically even since the CFPB was first imagined. We now have sophisticated, proven fintech firms working alongside banks, new technologies opening access to credit to millions of Americans and an opportunity to drive more innovation.

There are some who will try to position the fintech community as anti-regulation or insist that protecting consumers via disciplined, fact-based regulation is no protection at all. Neither are true. The fintech community (namely, online lenders who use data and analytics to enable fast, appropriate lending) has a long track record of supporting strong and sensible rules to both protect consumers and punish bad actors. Read more at MORNING CONSULT
CFSA Conference
Elizabeth Warren's bill would fine the next Equifax for data breach

A proposed law in the Senate requires credit reporting agencies to protect the data it amasses on American consumers from hackers -- or pay the price.

Two Democratic senators want to make the law tougher on credit reporting agencies that get breached by hackers, like Equifax did in 2017.

Sen. Elizabeth Warren of Massachusetts and Sen. Mark Warner of Virginia introduced a bill Wednesday that aims to make data breaches hurt companies' bottom lines. The bill addresses problems the lawmakers say let credit reporting agencies collect consumer data without doing enough to protect it from hackers.

"The financial incentives here are all out of whack," Warren said in a statement. "Equifax allowed personal data on more than half the adults in the country to get stolen, and its legal liability is so limited that it may end up making money off the breach."

If passed into law, the bill would give the US Federal Trade Commission the authority to inspect the companies that collect vast amounts of financial data on consumers to make sure they're protecting that information. It would also let the agency fine them in the event of a data breach, to the tune of $100 per affected consumer as a minimum. Half of that money would be redistributed to the consumers caught up in the data breach. Read more at CNET
O_Keefe _ O_Malley
Discover Study Finds Millennials Are Saving More Than Other Generations

Nearly Half of Consumers Who Save are Using More than One Savings Resource

RIVERWOODS, Ill.--(BUSINESS WIRE)-- According to a new survey from Discover, millennials are outperforming older generations when it comes to saving for their future. In a national study of 2,205 people, Discover finds that 81 percent of millennials are currently saving in some capacity, compared to 74 percent of Generation Xers and 77 percent of baby boomers.

Interestingly, 35 percent of millennials say they saved more in 2017 than the prior year. This compares to 25 percent of Generation Xers and 22 percent of baby boomers who saved more in 2017 compared to 2016.

Forty percent of millennials who saved more in 2017 compared to the year prior attribute the increase to a better understanding of how to set up a budget, followed by 26 percent saying that they cut a recurring luxury expense.

For comparison:    Read more at INVESTOR RELATIONS

MerchantBoost
How Much Money did Financial Literacy Shortfalls Cost Americans in 2017? recommended by David Kilby, President at FinFit

SOURCE National Financial Educators Council

LOS ANGELES, Jan. 4, 2018 /PRNewswire/ -- Not knowing how to manage one's personal finances carries a high cost. In 2017, the National Financial Educators Council sought to find out how much money people estimated they had lost across the year due to a lack of financial knowledge. In a one-question online survey, U.S. residents were asked, "During the past year (2017), about how much money do you think you lost because you lacked knowledge about personal finances?"

A total of 1,515 participated in the survey, representing six age groups across the country. Among this diverse group, respondents estimated that lacking knowledge about personal finances cost them an average of $1,171 in 2017. This figure was calculated by averaging the total number of respondents selecting each category, using the lowest number in each spread.

For the complete survey results, click here: https://www.financialeducatorscouncil.org/financial-illiteracy-costs/

Reported financial losses over $2,500 in 2017 were reported by 18% of respondents. 41% of people reported losses above $500 for the year as a result of lacking knowledge about personal finance.

If we extrapolate these results across the 240 million adults residing in the U.S., we can estimate that - collectively - lack of financial knowledge cost Americans more than $280 Billion dollars in 2017.

This survey was the second installment in a broader research effort designed to define the cost and risks associated with lack of money management knowledge. By gathering and analyzing these data, the NFEC gains deeper understanding of how financial illiteracy hurts our country's citizens individually, and helps clarify its potential impact on the national economy. Read more at FOX34

SURECARE SERVICES
Tests Find Bias Persists in Auto Lending

A set of eight tests at auto dealers in Virginia found that just over half the time white buyers were offered better financing than non-whites even though the white buyers had worse credit scores, a consumer group reported Thursday.

The National Fair Housing Alliance (NFHA) based in Washington, D.C., said its investigation shows the persistence of practices that create and sustain racial and ethnic wealth gaps in the United States.

The test design was modeled after one long used in the housing market. For each pair of tests, the shoppers were the same gender and close to the same age. In seven tests, the non-white shopper had a higher income. In the eighth test the non-white tester had a lower income, but also a lower debt-to-income ratio.

In five cases, the non-whites ended up with offers that would have had them paying more than their white counterparts.

"This report is disheartening but not surprising," said Mike Calhoun, president of the Center for Responsible Lending. "Years of data show that unfair, racially discriminatory treatment of consumers is a growing problem in the auto lending industry. This is especially true for low-income families of color, where a car is often one of the biggest purchases made by a household."

Calhoun said the report shows the need for the Consumer Finance Protection Bureau to maintain its indirect auto lending guidance designed to prevent discriminatory pricing in auto lending.
Secure Check Cashing Systems
FactorFacts

1. Forty-six percent of underbanked consumers seeking subprime auto credit are married.

2. Among consumers seeking subprime auto credit, loan amounts of males are higher by 22.62 percent than females.

3. For underbanked consumers in the "less than $2,000" monthly income category, the average loan amount is $461.

4. Of the top 10 largest US employers in the FactorTrust database, four are top 10 quick serve restaurants, with default rates from 28-32 percent.

5. Approximately 45 percent of underbanked consumers who graduated high school went on to earn a bachelor's degree or higher

A_S Management
I.R.S. Paid $20 Million to Collect $6.7 Million in Tax Debts

When Treasury Secretary Steven Mnuchin was asked at his confirmation hearing what he thought about using private companies to collect money owed to the government, he replied that it "seems like a very obvious thing to do."

It may have been obvious, but it certainly was not economical.

Private debt collectors cost the Internal Revenue Service $20 million in the last fiscal year, but brought in only $6.7 million in back taxes, the agency's taxpayer advocate reported Wednesday. That was less than 1 percent of the amount assigned for collection.

What's more, private contractors in some cases were paid 25 percent commissions on collections that the I.R.S. made without their help, according to the annual report by Nina E. Olson, who heads the Taxpayer Advocate Service, an independent office within the I.R.S.

While Republicans have been the most vocal proponents of privatizing public services, congressional Democrats are equally responsible for the I.R.S.'s program. Despite the pointed failure of similar efforts in the past, Congress passed a law in 2015 requiring the I.R.S. to use outside contractors to make a dent in the $138 billion that taxpayers owe the government.

The outsourcing began last April. Since then, the report stated, "the I.R.S. has implemented the program in a manner that causes excessive financial harm to taxpayers and constitutes an end run around taxpayer rights protections." Read more at NEW YORK TIMES
CFSA Conference
AFSPA
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION 
AFSPA helps our members grow their Alternative Financial Services business by providing them with the best information, research, data, support, relationships and by vetting and presenting the best available product and service providers for the Alternative Financial Services Industry. 

Alternative Financial Service Providers Association
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