ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

CFPB's Mulvaney shows lighter touch with tribal lenders

As the Consumer Financial Protection Bureau takes a visibly lenient approach toward payday lenders, legal experts also see a softer stance on lenders claiming sovereign protection from affiliation with Indian tribes.

In one of his first actions as acting CFPB director, Mick Mulvaney voluntarily dismissed a lawsuit against Golden Valley Lending and three other payday lenders owned by the Habematolel Pomo of Upper Lake tribe, near Sacramento, Calif. The move followed the agency's announcement that it would reconsider the CFPB rule cracking down generally on the payday loan industry.

Last year, the agency under former Director Richard Cordray had alleged that the four lenders engaged in "unfair, deceptive, or abusive acts or practices" by collecting on loans voided by state usury and licensing rules. The CFPB argued the linkage between those lenders and the tribe was not sufficient to provide the same exemption from state laws afforded to other tribal lenders.

But observers say Mulvaney's decision signals a more liberal interpretation of such linkages, paving the way for payday and installment lenders affiliated with Indian tribes to receive far less scrutiny.

Several lawyers said dropping the case made sense because the four lenders were not a front for another outside company. Read more at AMERICAN BANKER

OHIO: New 'payday' loan regulations hit snag

COLUMBUS - Ohio Attorney General Mike DeWine last week rejected a petition for a Constitutional amendment that would cap interest rates and monthly payments on short-term or "payday" loans, along with other regulations.

The AG's office cited several instances of conflicting or omitted language in the summary of the Short-Term Loan Consumer Protection Amendment petition, which was submitted for the office's initial November ballot approval late last month by members of the Ohioans for Payday Loan Reform Coalition.

"For these reasons, I am unable to certify the summary as a fair and truthful statement of the propose amendment," DeWine said in a release.

Local and state coalition members, however, said the rejection notice is a routine occurrence and revision work is underway.

"We are already working on the edits suggested by the Attorney General and will resubmit our application as quickly as we obtain the necessary signatures," said Carl Ruby, a Springfield pastor and coalition leader, adding the coalition was able to garner 2,000 signatures for the first submission - double the amount needed - within two weeks. Read more at STAR BEACON

BillMo And Walmart Do Money For People Who Don't Trust Banks

Moving money across country lines is rarely easy or cheap, and that's especially true in countries with large un- and under-banked populations, like Mexico. In a country where 60 percent of people choose not to bank due to a cultural mistrust of financial institutions, how can a payments app gain trust and bring value to those citizens by sending money cross-border for $0.99?

It's a question that Steve LaBella, CEO of BillMo, can answer, having learned over the past year since launching BillMo as a remittance wallet for receivers and a new remittance business model for funds being sent from the U.S. to Mexico.

With more than 300,000 customers, and 500 new accounts being opened each day, LaBella told Karen Webster that BillMo has evolved to include P2P capabilities, along with the ability for wallet holders to add their own money to the account through a brand-new partnership with Walmart Mexico - a retail and financial services brand that the Mexican consumer knows and trusts.

With 11,000 Google Play store reviews, over 300,000 customers and 500 new accounts being opened each day, no one is accusing BillMo of trying to take their money anymore, LaBella said. Here's how the platform got from Point A to Point B. Read more at PYMNTS.COM

Opinion: Under Mulvaney's Leadership, the CFPB Can Finally Live Up to Its Name

Acting director is steering agency away from unlawful legislating and toward protecting consumers

Mick Mulvaney and I served on the House Financial Services Committee together for nearly four years before President Donald Trump selected him to run the Office of Management and Budget. In that time, we worked together to ensure transparency and accountability across the financial sector.

The Consumer Financial Protection Bureau was created by the Obama administration and Sen. Elizabeth Warren, D-Mass., with the promise of being a "strong, independent agency that levels the playing field and protects American families, seniors, students and veterans." But in practice, the CFPB has been an unaccountable, unconstitutional, politically driven agency that has punished consumers and pushed them to riskier, unregulated financial products.

The crown jewel of the agency was a single director, accountable to no one. Mick Mulvaney now serves on a temporary basis in the very role the previous administration created, as the sole director of the CFPB. It's a role with powers that would "frighten most of you," he said during his first day on the job in November. Over the past four months, he has proved himself an exceptional leader, steering the agency away from unlawful legislating and toward its statutory mandate to protect consumers. Read more at ROLL CALL

• 10 seats on the Consumer Advisory Board will become vacant in the fall of 2018.
• 15 seats on the Community Bank Advisory Council will become vacant in the fall of 2018.
• 12 seats on the Credit Union Advisory Council will become vacant in the fall of 2018. 

THE FACTORTRUST UNDERBANKED INDEX

Taking the time to understand each customer segment can reap benefits for companies wanting to earn or keep a foothold in the alternative financial services (AFS) industry. Gaining insights into underbanked consumers, in particular, helps financial providers and lenders gain a more complete, thorough perspective of loan applicants, who may otherwise go overlooked, and they can subsequently tailor their lending products toward this underserved segment-a potential $89 billion market. FactorTrust's Demographic Edition of the Underbanked Index examines the living, earning and spending habits of installment and online consumers, providing insights from the FactorTrust national credit database. Also available is the Non-Prime Auto Edition, outlining consumers seeking non-prime auto credit.

Who Are the Underbanked?

There are 113 million U.S. consumers with FICO credit scores under 700 today who should be recognized as Underbanked - consumers determined to improve credit scores in order to advance their situation and access more credit options.

This is a massively underserved population that, when taking alternative credit data into account, deserve credit options. We've seen people improve their credit scores - at every scoring level - by having alternative credit data factored in during the underwriting process. Using alternative credit data, lenders can grow their business by strategically evaluating and marketing to the Underbanked. More data is better for both the consumer and the lender. Read more at UNDERBANKED INDEX

Millennials Doubt Happy Retirement Will Exist

The majority believe they will have to work much longer than previous generations, Prudential learned in a survey

Millennials don't share the confidence of Baby Boomers and Gen Xers that they will be financially better off than their parents, Prudential Financial learned in a survey.

Eighty-eight percent of Millennials say that people in their 20s and 30s will need to work much longer than previous generations to retire with the same level of financial security. Even if they do work longer, 79% believe that by the age of 80, a comfortable retirement will be a thing of the past. Seventy percent say that is because they are unable to save as much as retirement planning tools recommend.

"Millennials are at an important crossroads, having experienced some of the most significant economic booms in history-but also the Great Recession," says Vishal Jain, Prudential's Workplace Solutions Group financial wellness officer. "It's incumbent on financial services companies-and any company that seeks to meet the financial and personal wellness needs of these constituents-to understand the changes that are driving behaviors within this generation."

Nearly two-thirds of the Millennials surveyed agree that in the future "traditional full-time employment will largely disappear, and freelancers will make up 75% or more of the U.S. workforce." While the gig economy offers workers flexibility, it also creates instability with regards to financial wellness, Prudential says. Read more at PLANADVISOR

ALABAMA: It's 'wait and see' on payday lending bill

MONTGOMERY - An Alabama House committee chairman said the committee will "wait and see" if it takes up a bill to give payday loan customers more time to repay their debts.

Sen. Arthur Orr's Senate Bill 138 cleared the Senate last week. It now moves to the House Financial Services Committee, chaired by Rep. Ken Johnson, R-Moulton.

Orr last week called that committee the "Bermuda Triangle" for payday lending reform. Asked Tuesday if the committee would take up the bill, Johnson said "maybe."

"We'll just have to wait and see where it is," he said. "Possibly next week, we didn't have a committee meeting this week."

"There needs to be cooperation from both sides and communication to come up with a good piece of legislation that can really move, and it's very difficult when it's just one side to push it through this late in the session because there's a lot of obstacles that can get in the way," Johnson said.

This legislative session is expected to end later this month.

Orr on Tuesday said he's not giving up on Senate Bill 138. It would give borrowers 30 days to repay the loans instead of the current 10 to 14 days. The change would cut customers' yearly interest rates from about 450 percent APR to 220 percent APR. Read more at TIMES DAILY

Employment Blog March 2018. by Stephen Singer

This Employment Blog for March is from the U S Labor Department Bureau of Statistics. Nonfarm payroll employment increased by 313,000 in February, and the unemployment rate was unchanged at 4.1 percent. Job gains occurred in construction, retail trade, professional and business services, manufacturing, financial activities, and mining. Incorporating revisions for December and January, which increased nonfarm payroll employment by 54,000, monthly job gains have averaged 242,000 over the past 3 months. This information is detailed in Charts 1 and 2 below.

Construction employment increased by 61,000 in February and has grown by 185,000 over the past 4 months. Job growth in February occurred among specialty trade contractors (+38,000) and in construction of buildings (+16,000), with these increases split about evenly between the residential and nonresidential components. Read more at EMPLOYMENTSKIPTRACING

Some perspective on 'payday loans'. by Abdul Hakim-Shabazz

Let's say you needed to borrow $100 from me, and you'd give me my money back tomorrow. I told you, yes, but you could only do it if you paid me back $101. You'd probably say sure. Paying $1 to get the $100 you need; no big deal, right? Well, guess what? When you pay me back that dollar, you are fundamentally paying me back at a 365 percent APR. Say what? Yup. Now let's say I was the bank and you wrote a bad check for $100 (yes, people still write checks), and I charged you a $35 overdraft fee. Guess what? You just paid me a 135 percent increase over the original amount. Why am I playing ECON 101? Because I think when it comes to what some have labeled as "payday" loan legislation, we need to take a step back from the histrionics and have a grown-up conversation.

Lawmakers debated House Bill 1319, which would have allowed for small installment loans for these folks of limited means who don't use banks and credit unions the way we do. Now save your "payday loan" outrage, because I'm not a fan of them either, but I do think there needs to be a way for these folks to get access to credit because I doubt if you're going to see them at the drive-thru window of the credit union. Read more at INDIANAPOLIS RECORDER

The Alternative Credit Data Difference:

'How to View Your Applicants in High Definition'

Join Andy Sheehan, General Manager of Clarity Services, as he presents the 

2018 Subprime Lending Trends during the General Session at this year's CFSA, April 16-19. 

George Coutros, Clarity's Chief Analytics Officer, will follow up with his

Breakout Session titled,  "How to Retain Your Evolving Storefront Customers."

Clarity Services, a part of Experian, shows you the person behind the statistics.

Visit us at booth #205 at the CFSA Conference & Expo

to get the complete picture  of your applicant from the largest subprime credit bureau.

Full House OKs three more financial reform bills

The week the Senate approved its financial regulatory reform bill, the House passed three bills which could become part of House-Senate conference committee talks on regulatory reform.

First, the House passed H.R. 1116, the TAILOR Act of 2017, sponsored by Rep. Scott Tipton (R-Colo.) by a 247-169 vote. The bill moves financial regulatory agencies away from the current one-size-fits-all approach to instead consider additional factors such as an institution's risk profile, unintended potential impact of implementation of such regulations, and underlying policy objectives of the statutory scheme which led to the regulation.

"As our small banks and credit unions go, so goes the American dream," Financial Services Committee Chairman Jeb Hensarling said in a press release. "At a bare minimum, let's tailor the rules and regulations to the size and complexity of the institution so our credit unions, so our banks can thrive and thus our constituents can thrive and meet their economic goals and responsibilities."

The next day the House passed two more bills, H.R. 4545, the Financial Institutions Examination Fairness and Reform Act of 2017, and H.R. 4263, the Regulation A+ Improvement Act.

"By cutting the red tape that's causing our community financial institutions to go out of business or holding companies back from growing, we are bringing relief to our community financial institutions and businesses - relief that will help promote job growth and boost our local economies," Hensarling said.

H.R. 4545 increases transparency and accountability for financial institutions by improving the timeliness of feedback from examinations and by creating a new, more independent regulatory examination appeals process. It passed 283-133. Read more at RESPA NEWS

Why rising rents in 2018 may not be problematic. by Philip Burgess

With home prices in the U.S. having risen each month on an annual basis for several years uninterrupted, rental units are in high demand for would-be buyers as well as those who have no intention of becoming homeowners. Due to dwindling supply, it's looking like 2018 could bring further increases in rent prices, a potential issue for the unbanked and underbanked, both of whom rely on regular rent payments to shore up their alternative credit reports.

The median rent in the U.S. currently stands at roughly $1,437 per month, according to newly updated figures from real estate listings firm Zillow. That's an increase of 2.4 percent over the calendar year.

Conveniently - or not, depending upon how you look at it - incomes are also rising, based on government data. Stretching back to November 2017, personal income levels are up 2.5 percent and hourly earnings a more moderate 0.2 percent, the Labor Department reported.

Rents climbing high in the West

With both incomes and rents increasing - and at roughly the same rate - many renters are taking advantage of their raises by reaching further into their pockets to make up the difference. However, in some parts of the country, rents are moving at a pace that's far faster than the national median. This is particularly true in the West. Rents are up 7.5 percent in California's capital city, 6.2 percent in Riverside and 5.4 percent in Seattle. Read more at MICROBILT NEWS

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.