ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

August 14, 2018

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.

Mulvaney Looks to Weaken Oversight of Military Lending

The Trump administration is planning to suspend routine examinations of lenders for violations of the Military Lending Act, which was devised to protect military service members and their families from financial fraud, predatory loans and credit card gouging, according to internal agency documents.

Mick Mulvaney, the interim director of the Consumer Financial Protection Bureau, intends to scrap the use of so-called supervisory examinations of lenders, arguing that such proactive oversight is not explicitly laid out in the legislation, the main consumer measure protecting active-duty service members, according to a two-page draft of the change.

The agency's move comes as a Senate committee prepares to vote on the nomination of Kathleen Kraninger to succeed Mr. Mulvaney as chief of the consumer watchdog, which is responsible for protecting consumers from financial abuse.

The proposal surprised advocates for military families, who have urged the government to use its powers to crack down harder on unscrupulous lenders. The consumer bureau conducted dozens of investigations into payday and other lenders during the Obama administration without any significant legal opposition, and no lenders are currently challenging its oversight based on the law, according to administration officials. Read more at NEW YORK TIMES

FactorTrust®, a TransUnion company, provides alternative credit data, analytics and risk scoring information to help lenders make more informed decisions.

Bureau of Consumer Financial Protection (CFPB) Updates Regulation P To Implement Legislation Amending Gramm-Leach-Bliley Act

Changes Will Ease Burden on Financial Institutions and Reduce Risk of Consumer Confusion

WASHINGTON, D.C. - The Bureau of Consumer Financial Protection (Bureau) today finalized amendments to implement legislation that allows financial institutions that meet certain requirements to be exempt from sending annual privacy notices to their customers.

The Gramm-Leach-Bliley Act (GLBA) generally requires that financial institutions send annual privacy notices to customers. These notices must describe the privacy practices of financial institutions, including whether and how they share customers' nonpublic personal information. If the institution shares this information with unaffiliated third parties in ways other than specified by the GLBA, the institution typically must notify customers of their right to opt out of having their information shared and inform them how to do so.

In December 2015, Congress amended the GLBA as part of the Fixing America's Surface Transportation Act (FAST Act). This amendment to the GLBA provides financial institutions that meet certain conditions an exemption to the requirement under the GLBA to deliver an annual privacy notice. A financial institution can use the annual notice exception if it limits its sharing of customer information so that the customer does not have the right to opt out, and has not changed its privacy notice from the one previously delivered to its customer. The rule issued by the Bureau today implements this legislation and establishes deadlines for institutions resuming annual privacy notices if their practices change and they therefore cease to qualify for the exemption. Read more at CFPB

The voice for the small-dollar, short-term lending industry.

Lobbyists, letters and money: How banks are taking aim at a post-financial crisis regulation with help from Congress. by Lydia Moynihan, Charles Gasparino

Wall Street spent millions of dollars in campaign cash while enlisting some of the most powerful Republican congressmen and women in the banking industry's latest effort to neuter a key post-financial crisis regulation, FOX Business has learned.

The rule - known as the G-SIB surcharge - is a seemingly arcane bank law that has been a thorn in the side of the big banks since it was implemented by the Federal Reserve as part of a series of regulations to protect the banking system after the 2008 financial collapse.

But a FOX Business investigation shows that the rule may be in jeopardy of being significantly watered down or possibly eliminated - a casualty of intense lobbying from the big banks, and a steady stream of campaign cash from the financial industry to bank-friendly politicians.

Leading the effort to neutralize the rule is a lobby group known as the Financial Services Forum, an organization representing the nation's biggest banks that are directly affected by the surcharge. The Forum recently convinced 29 top Republicans to sign a letter to Fed Vice Chairman Randal Quarles demanding that the agency "recalibrate" the rule, according to senior executives at the banks the Forum represents, and a copy of the letter obtained by FOX Business. Read more at FOX Business

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

Lower Payday Loans May Still Be Usurious, California Justices Say

Interests rates on consumer loans of $2,500 or more can be deemed unconscionable under California's lending laws, the state's high court ruled Monday.

The California's Supreme Court's affirmative answer to a question posed by the Ninth Circuit sends back to the appellate court a decade-old federal lawsuit with the potential to drastically alter California's lending landscape.

Thirty years ago, state lawmakers passed a deregulation bill that removed interest rate caps on loans of at least $2,500, but also gave courts the authority to find the rates unconscionable.

Lawyers for CashCall argued that the Legislature intended to exempt loans of $2,500 or more from any interest rate regulation, otherwise they would not have removed the caps.

The Supreme Court disagreed. When state Sen. Rose Ann Vuich introduced the deregulation bill in 1985 it did not contain that unconscionability protection. But two weeks after receiving a letter from then-Attorney General John Van De Kamp expressing concern about the lack of consumer protections from unreasonably harsh interest rates, Vuich added the protection now contained in Section 22302 of the Financial Code. Read more at COURTHOUSE NEWS

As Auto Shopping Season Heats Up, it's Clear that Some Consumers Refinance Their Loans within Days of Purchase

Insights from TransUnion suggest some consumers may save approximately $50 on their monthly payment through refinance

Late summer usually means big business for auto dealerships. In fact, TransUnion (NYSE: TRU) found that auto loan originations between 2015 and 2017 spiked 5.5% in the third quarter compared to the yearly quarterly average. A new analysis by the TransUnion auto business found that many consumers actually refinance their initial auto loans just a few days after securing them, often resulting in a lower monthly payment.

To learn more about recent consumer credit trends and what they mean for consumers and lenders, please register for TransUnion's Q2 2018 webinar. Consumers interested in learning more about their credit score and credit reports can click here.

"The end of summer is generally a key time for the auto industry, as better weather means more consumers are shopping for vehicles. It's also a time of year when some consumers can find a deal before automakers roll out new models in the fall. This year, the prospect of rising automotive tariffs has also made it a hot time to buy," said Brian Landau, senior vice president and automotive business leader at TransUnion. "TransUnion found that a number of consumers are taking advantage of the opportunity to refinance their new purchases, despite the rising interest rate environment. Consumers who might be paying a somewhat higher interest rate on the loans they obtained through the dealership may find that refinancing can lower those interest rates or extend the loan term - in other words, help those same consumers manage their monthly cash flows." Read more at TRANSUNION

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.

The unbanked world is bigger than you think. by Philip Burgess

With the explosion of online banking, you'd think that just about everybody has a bank account or utilizes traditional banking services. But as the most recent data available from the Federal Deposit Insurance Corporation shows, over 23 million Americans are underbanked or unbanked, a figure that includes children.

But if you think that number is big, you may be surprised by how many people in the world go without these traditional financial services, a potential consumer market that may present new business opportunities for companies that use alternative credit data in their lending decisions.

More than 28 percent of the world is unbanked

Globally, 2 billion individuals - specifically those who are 18 years of age or older - are unbanked, according to statistics compiled by the World Bank. With a worldwide population of 7.4 billion, this means that nearly 28.5 percent of the world's population doesn't have a checking account, or use other financial services that banks traditionally offer.

Any number in the billions is hard to wrap your head around, but thanks to the speed with which mobile technology is advancing and becoming cheaper to produce, the unbanked world is smaller than it once was. Indeed, in 2011, the total was closer to 2.5 billion, making the 2014 total a drop of 20 percent over three years. Read more at MICROBILT

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.

Kansas City based payday lenders will pay civil fine of just $1

A Kansas City-area father and son who prosecutors say ran a fraudulent $227 million payday loan scheme will pay a civil fine of just $1.

Richard Moseley Sr. and Richard Moseley Jr. will pay the fine as part of a settlement reached Friday with the Consumer Financial Protection Bureau.

Federal officials say the Moseleys operated a group of companies, referred to as the Hydra Lenders, that made $227.7 million in loans, generating $69.6 million in gross profits, since January 2008, according to a consent order. A bureau complaint alleges that the Hydra Group made loans to consumers that the borrowers had not authorized and charged biweekly "finance charges" indefinitely.

Moseley Sr. was found guilty in November of racketeering, fraud and identity theft and sentenced in June to 10 years in prison and ordered to forfeit $49 million.

The consent order entered into Friday calls for the Moseleys to forfeit approximately $14 million in frozen assets. A $69 million order to pay defrauded borrowers was suspended. According to the order, the suspended judgment and $1 civil fine were set because of the "defendants' limited ability to pay." Read more at BIZ JOURNALS

If a debtor is employed, we will find them!

Employee financial wellness is smart business

Workers stressed about their finances don't get as much done

Last month, we announced a partnership to provide financial wellness benefits to employees of small businesses. Through the Best for NYC program, business members can provide Trusted Advisor, a workplace financial wellness benefit, free of charge to their employees. This means 1,500 businesses with more than 65,000 workers now have access to financial counseling, helping workers get better control of their finances and make the most of their wages.

Why would New York City provide this service? Because employee financial wellness is essential to quality jobs and a healthy economy-and is smart business.

Having a job used to equate to financial security, but not anymore. Wages were only 10% higher in 2017 than in 1973, with annual real wage growth just below 0.2%. New business models have shifted the risk onto workers, with nearly 60% of the workforce working hourly and three-quarters of early career adults experiencing variable schedules, contributing to greater income volatility, or variable income, each month.

Stagnant and variable wages mean many workers are struggling to make ends meet. According to the United Way's ALICE Project, 1.2 million households in New York City earn income above the poverty line, but below the cost of living, with 51% of them unable to afford basics such as housing, child care and food. Four in 10 Americans could not afford a $400 emergency expense. And these struggles are hurting the workplace; 53% of employees are stressed about their finances, with nearly half distracted and spending three hours or more each week handling personal finances at work.  Read more at CRAIN'S NEW YORK

Let me know what AFSPA can do for you

Dan at 757.737.4088

[email protected]

Federal judge rules Wyoming ban on robocalls unconstitutional

A federal judge in Wyoming has struck down a state law that bans the use of automated phone calls - commonly known as "robocalls"- by political operatives, capping off more than a year of litigation in federal court.

In a judgment handed down Monday in U.S. District Court in Cheyenne, Judge Alan Johnson ruled that Grand Rapids, Michigan-based polling firm Victory Processing LLC was justified by gathering information and polling by way of robocalling. Johnson concluded the state's ban was "over inclusive" in that it "completely prohibits political speech through robocalls while allowing commercial speech under certain circumstances."

The initial complaint, filed in June 2017, argued the ban violated the firm's right under the First and Fourteenth amendments, arguing "'the First Amendment has its fullest and most urgent application to speech uttered during a campaign for political office.'" Read more at CASPER STAR TRIBUNE

ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

 Members own over 64,000 locations and online operations

 

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.