NEWS: 1 in 3 workers broke before payday

ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

February 25, 2020

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Nearly 1 in 3 American workers run out of money before payday - even those earning over $100,000

Going extra light at the grocery store. Cutting down on medical supplies. Buying clothing and household supplies secondhand.

These are just some of the many ways many Americans are making it work when money is tight. For about a third of Americans, this is a regular financial stress, with 32% running out of money before their next paycheck hits, according to a new survey fielded by Salary Finance of over 2,700 U.S. adults working at companies with over 500 employees.

Amy,* 36, is intimately familiar with running short on cash and using these workarounds, especially during tax season. That's in spite of the fact that she and her husband make about $50,000 a year, just short of the average household income in the U.S.

"Tax time hurts for us because we don't get a refund, we get a bill," she tells CNBC Make It. Her husband, the primary earner, works for a company in a different state, so state income taxes aren't taken out, she says. While they typically get a federal refund, they end up owing the state more than the federal refund.
Read more at CNBC

* Approximately 12 million households use small-dollar loans each year.

LendingClub's Radius deal paves the way for more fintech purchases, experts say

Industry experts say the deal could be a tipping point, ushering in more fintech-bank purchases. But it won't come without its complexities.

LendingClub wanted a quicker route to becoming a bank, so it opened up its wallet and decided to buy one.

The online credit marketplace announced Tuesday it is buying Boston-based Radius Bank in a cash-and-stock transaction valued at $185 million. The fintech, which had been mulling various paths to a banking charter for the last year, says acquiring the online bank will provide greater regulatory clarity and cheaper funding for its loans.

Industry experts say the deal could be a tipping point, paving the way for more fintechs to make their own bank purchases.
Read more at BANKING DIVE

Consumer Privacy and Legal Risk: What to Look for in the Decade to Come

As the new year and decade begins, consumer privacy issues have never been more top of mind - especially with the impending enactment of the California Consumer Privacy Act (CCPA). This groundbreaking and sweeping legislation could be the gold standard around which other state and federal privacy laws are formed, but many corporations are taking a "wait and see" approach before addressing their data security and sharing issues and implementing changes. Although there may be a six-month grace period before California starts enforcing CCPA compliance, that doesn't stop individuals and other federal agencies from filing lawsuits to protect consumer privacy.

Many credit the EU's General Data Protection Regulation (GDPR) for sparking this new wave of privacy awareness in America, but that's only part of the story. New laws that require compliance by certain dates get a lot of media attention, but they work in tandem with enforcement of older laws as they cover new technologies and new data breaches. Over the last 10 years, consumer privacy-related federal lawsuits for violations of the Fair Credit Reporting Act (FCRA) have increased by 150%. Similarly, there were eight times as many cases alleging a violation of the Telephone Consumer Protection Act (TCPA) - regulating infamous "robo-calls" - in 2018 than in 2009.
Read more at CPO Magazine

Meet John Cullen, CEO at Payliance

Many merchants, both large and small count on Payliance to secure their cash flow in an efficient, reliable way. Payliance provides best-in-class solutions to payments and treasury challenges across several industries and implementation models. We are laser focused on serving our merchants.

Just as important is my role in creating opportunities for our team. We're not punching a time clock, we're getting after it. The reward is a fast-paced day and meaningful, career-advancing work for our team members. And the opportunity to work with like-minded people who get up every day working to create something better. We keep each other honest. If it's not good enough we say it.

We're serial entrepreneurs with a 20-year track record. 3 companies, 2 public exits with Payliance being the 3rd. We ran a PE fund and have done several buy-side transactions. I learned a ton from smart people at Accenture and JP Morgan Chase earlier in my career.
Read more at PAYLIANCE

The CFPB's economic army to promote consumer welfare

Last October, the Consumer Financial Protection Bureau (CFPB) announced its intention to create a Task Force on Federal Consumer Financial Law. Inspired by the 1972 National Commission on Consumer Finance, the task force is intended to examine the whole of consumer finance law academically, something that hasn't been done since the 1972 commission. Wasting no time, early this January, CFPB Director Kathleen Kraninger announced the members and chairman for the Task Force, putting an exclamation point on her goal of ensuring that the CFPB's efforts are razor focused on promoting consumer welfare.

The announcement follows two other major efforts designed to inject more rigorous economic analysis into the CFPB, reestablishing the Academic Research Council (ARC) and creating Office of Cost-Benefit Analysis (OCBA). ARC, staffed with professors of economics, finance and law, is tasked with advising the CFPB on the strategies used to quantify the cost and benefits of regulatory actions. Meanwhile, the OCBA will vet all rules and enforcement actions through a small army of economists. Read more at THE HILL

Dreher Tomkies LLP

Dreher Tomkies LLP is a law firm located in Columbus, Ohio providing services to financial institutions nationwide. We concentrate in the areas of banking and financial services law. The Firm's practice encompasses all aspects of financial services provided by creditors to consumers and business entities. The Firm's clients range from Fortune 500 companies and foreign-owned enterprises to small businesses, including diversified companies, banks and bank holding companies, investment bankers, investment funds, finance companies, credit and charge card issuers, mortgage bankers, retailers, debt purchasers, manufacturers, industry and trade associations, and coalition and issue groups.

Our attorneys routinely advise clients on consumer lending, home equity lending, first and second mortgage lending, private label and general purpose credit card lending, student lending, retail sales financing, payday lending, title lending, RAL lending, agricultural lending, wholesale financing, inventory financing, business revolving credit and charge programs, factoring, health care and medical financing, deposit taking, home banking, annuity and insurance sales, GAP programs, reinsurance, debt cancellation and suspension, debt collection compliance, money transmitting, state and federal regulatory compliance, and the licensing and chartering of institutions. Such counseling can include the rendering of advisory opinions, state law outlines and summaries, product design and development and the identification of appropriate product delivery vehicles, as well as program planning, implementation and maintenance.
Dreher Tomkies LLP

2020 election: Where the candidates stand on banking

Former Mayor Michael Bloomberg

Bloomberg's financial regulation proposal, which he unveiled ahead of his first debate, shows the former New York mayor plans to implement tougher regulations for big banks.

Straying from a September 2018 interview with The New York Times where he specifically singled out fellow candidate Elizabeth Warren's push to break up Wall Street banks as a bad idea, Bloomberg's proposal seems to align the Democrat more closely with the likes of Bernie Sanders and Warren.

Bloomberg's financial regulation proposal includes merging Fannie Mae and Freddie Mac into a single, fully government-owned mortgage guarantor, as well as instituting a 0.1% financial transactions tax. His proposal also aims to restore Volcker Rule restrictions that were weakened under the Trump administration, toughen bank stress tests and restore payday-lending and mandatory arbitration rules at the Consumer Financial Protection Bureau (CFPB).
Read more at BANKINGDIVE

36% APR. In Defense of Payday Loans: Academics, Legislators, Banks, Tribes. By Jer Ayles

Professor Lisa Servon [watch her interview positioned at the bottom of this Post] got off her butt and worked for months in the trenches "behind the counter" for RiteCheck, a check casher located in the Bronx and for an Oakland based payday loan lender.

Rather than pontificating like the majority of anti-payday loan commentators and academics do, Professor Servon reported to work in a "live" storefront and talked to real people!

She wanted to learn, "Why do these folks CHOOSE payday loans, car title loans, installment loans, and check cashers to help them solve their financial problems. Why not simply pull out their credit card, tap into their savings, click their bank's smartphone app - or visit their local branch IF one exists - ask friends, family, their church... "

The results of her experience resulted in a balanced, fair-minded book, The Unbanking of America and the Video Interview below. Yep! Shocks the hell out of me!!
Read more at The Business of Lending.com

The right way to improve retail banking using mystery shoppers

The goal isn't to catch frontline staff doing something wrong, but to provide a picture of what good performance looks like.

Banks that deploy mystery shopping to evaluate their customer service can get more useful results if they prepare their staff ahead of time, rather than make it a game of gotcha, retail bank specialists said in ABA Bank Marketing.

"You may think you get better results if you're catching them unawares," but that approach can backfire if it makes employees feel tricked and vulnerable to punishment, says Shelly Loftin, senior vice president of retail banking, lending and payments at the American Bankers Association (ABA).

It's better to bring staff in on what you're doing to make it clear the practice is about helping them build on their strengths. "They need to know that this is about learning what the customer is experiencing," she said.
Read more at BANKING DIVE

How fintech has reshaped the business lending process

Fintech is a short form of financial technology. It's a wave that has turned the financial industry services on its head. Developments in this space have gathered pace in recent years. PWC predictions for 2020 show a wave that's not about to slow down anytime soon.

Nearly every facet of business has been a victim of this disruption: commerce, money transfers, mobile banking, insurance, stock trading, budgeting, to name but a few. Fintech has made inroads in the business lending process too. Software technologies and tech inventions like artificial intelligence (AI), progressive mobile and web apps, online business lending marketplaces, digital applications, and alternative credit data, have changed the way businesses access loans and funding.

Massive opportunities have opened up for small, medium, and large businesses due to these developments. Many of them are better off, thanks to the new lending environment.

How has Fintech transformed the business lending process? Let's find out.
Read more at WIRE19

Republican-backed bill targets banks who refuse to do business with ICE

A group of Republican senators introduced a bill that would go after big banks that refuse to serve firms with active federal contracts, such as those that do business with the Immigration Customs and Enforcement Agency (ICE).
The bill, which was introduced by Sen. Marco Rubio, R-FL, would amend the Federal Deposit Insurance Act to remove Federal Deposit Insurance Corp. (FDIC) insurance from banks with assets over $50 billion and refuse to serve federal contractors.
"Some of our nation's largest banks have decided to cater to the radical left's 'woke' agenda by abusing their systemic influence in our economy to deprive law-abiding federal contractors of banking services critical to their business," Rubio said in a statement. "Banks have a right to deny funds to certain businesses, but they shouldn't enjoy taxpayer-provided guarantees if they are undermining the public policy of the United States."