ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

A public comment period has begun and will continue through September 14th.

Our goal is to generate as many different comment letters from our member companies, including you, your employees, business associates, contacts and customers. 

We need to count on you to get involved to protect

your business,  your customers, and our industry.

Trade group (OLA) promises stricter scrutiny of payday loan ads: LA TIMES

A trade group for online payday lenders has started to comb the Internet for sites making misleading claims, part of an effort to clean up the reputation of an industry beset by complaints from consumer groups and regulators.

The Online Lenders Alliance, which represents short-term lenders and the companies that steer customers to them, started the new monitoring project after The Times reported in May that many websites advertising online loans say customers are not subject to a credit check - a claim that's usually not accurate.

Last month, OLA hired an outside firm to build a program that will search the Web for sites using the term.  The group is now picking out sites that are controlled by lenders or loan advertisers and asking them to take down any credit check claims and fix other problems.

OLA Chief Executive Lisa McGreevy said the group has done similar monitoring work before, but only manually - typing various terms into Web searches, browsing sites and looking for misleading language or other bad practices.

This is the first time that the group has tried a more systematic approach.

"We're trying to be the cop on the beat," McGreevy said. "We're not interested in having bad actors or people who do fraudulent business giving our good lenders a bad name."

The Times story that sparked the move focused on a lawsuit that illustrated increased regulatory interest in the online and payday lending industries, as well as the potential consequences for lenders or advertisers that make misleading claims. Read the story at LA TIMES

10 Million Americans Want Payday Loans This Year, The CFPB Doesn't Want Them To - Who Should Win? by Tim Worstall at FORBES

One of the great political dogfights at present is over the payday loan industry. Purely from watching what people do, what economists call revealed preferences, we can see that 10 million or so Americans want to gain access to payday loans in any one year. We've also got the Consumer Financial Protection Bureau, that brainchild of Senator Elizabeth Warren via the monstrosity that is the Dodd Frank bill, laying down new rules which will restrict much of that access. The CFPB head as actually said that he expects the new rules will stop 84% of the current market. So, in this battle between expressed consumer preferences and those who simply know better than we do what we should be doing who should win?

My own preference would be that people get to do whatever they wish to do as long as it doesn't harm others. But then that's because I'm a liberal not a progressive and that's a political argument. What we need to do is look at the economics here and work out what public policy should be from there.

The first and most salient fact comes from the Federal Reserve:

Except for the ten to twelve million people who use them every year, just about everybody hates payday loans.

The people who actually take out payday loans rather like taking out payday loans. That's why they take them out. And this activity might even harm them but it doesn't harm anyone else. Thus we've got to think very hard and deep before we stop them from doing whatever the heck it is they want. Thus this may or may not be justifiable:

When federal regulators last week took their first ever step to protect consumers who use payday lenders, many experts described the move as a fatal blow to the industry. The payday trade association said "thousands of lenders" would be forced to "shutter their doors."

Read the story at FORBES

Black-owned banks get rush of new depositors

A black-owned Atlanta bank is experiencing a sudden surge of deposits, powered by a campaign aimed at bolstering black-owned financial institutions after multiple high-profile police killings raised awareness of institutional inequality.

Citizens Trust Bank - anchored in metro Atlanta, Columbus, Ga., Birmingham, Ala. and Eutaw, Ala. - said it has received about 8,000 new applications for depositors in recent days.

One of the catalysts: Rapper Killer Mike called in to a town hall meeting on MTV and BET on July 8 to implore the black community to deploy "a portion" of its financial resources to make a difference.

He wants 1 million people to deposit $100 apiece in small black-owned banks or credit unions, believing that those financial institutions will be more likely than other banks to make loans to black citizens and businesses - and more likely to treat them fairly in general.

"We cannot go out in the street and start bombing, shooting, and killing," the rapper said during the town hall. "I encourage none of us to engage in acts of violence that will cause more peril to our community and others that look like us. I encourage us to take our warfare to financial institutions."

Other supporters have posted similar remarks on Twitter, Instagram and Facebook, urging people to consider shifting their money to black-owned institutions. Read the entire story at USA TODAY

CFPB to hold July 28 debt collection field hearing

The CFPB has announced that it will hold a field hearing about debt collection on July 28, 2016 in Sacramento, California. We expect the field hearing to coincide with the CFPB's release of an outline of the proposals it is considering in preparation for convening a small business review panel required by the Small Business Regulatory Enforcement Fairness Act (SBREFA) and Dodd-Frank. The outline will be a strong indicator of the approach the CFPB is likely to take in a proposed debt collection rule.

When developing rules that may have a significant economic impact on a substantial number of small businesses, the CFPB is required by SBREFA and Dodd-Frank to convene a panel to obtain input from a group of small entity representatives (SER) selected by the CFPB in consultation with the Small Business Administration. Before meeting with the panel, the SERs will receive the outline of the CFPB's proposals, together with a list of issues on which the CFPB seeks input. Within 60 days of convening, the panel must issue a report that includes the input received from the SERs and the panel's findings on the proposals' potential economic impact on small business. However, the CFPB will not make the "issued" report public until such later time as it releases a proposed rule. The CFPB has previously convened SBREFA panels in connection with its mortgage loan, arbitration, and payday loan rulemakings. Read the article at JDSUPRA

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