ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

Norfolk, Virginia council members rejected a business they don't like. So the company sued.

City Council members don't hide their dislike of title-loan businesses.

During recent public meetings, Mamie Johnson said they "prey on our citizens," and Angelia Williams Graves called the industry "legal loan sharking."

So when LoanMax sought permission to rebuild a store that was demolished after a fire last year, the outcome wasn't in much doubt.

After less than 10 minutes of discussion, the council voted 8-0 to deny LoanMax's application.

Now the company is suing the city and all eight council members, arguing that the decision was arbitrary and that it wasn't given a fair chance to present its case. LoanMax also says it should be able to rebuild and reopen without getting council permission.

Though the city government defends legal claims frequently, court records show it's rare for council members themselves to be sued.

In a lawsuit filed May 24 in Norfolk Circuit Court, LoanMax says members' comments show their vote was based on their disdain for the industry as a whole - not on anything this business did wrong.

"City Council created a de facto ban on all new title loan establishments," LoanMax lawyer Bryan Plumlee wrote in a filing, adding that Norfolk officials "take every opportunity to impede the legal operation of undesirable businesses by whatever means possible." Read more at VIRGINIAN-PILOT

Reduce Employee Financial Stress

More American workers are living paycheck to paycheck than ever before, just making ends meet. Nearly three-fourths have less than $1,000 saved; and 34 percent have nothing in savings. Student loan debt totals over $1.3 trillion among some 44.2 million borrowers in the U.S. Unexpected expenses are not budgeted for and people are placing themselves at great financial risk.

As HR practitioners, we need to recognize that people are struggling financially - and that it is taking a toll not only on them personally, but also in the workplace. There are innovative benefit options and strategies that can help relieve financial stress on employees:

Student loan assistance. Today's Millennials are challenged to get their lives going despite the crushing burden of student loan debt, and trust their employers for advice on how to manage it. Doing so can make you stand out in attracting the best talent and help win loyalty. Programs are available that not only assist Employees in refinancing and managing their debt, but also allow you to make contributions to loan balances, and assist Employees in setting up a 529 savings plan.

Employee Purchasing Programs (EPP). When people are experiencing financial stress and are confronted with unexpected expenses, they may take on high interest credit card debt or a payday loan. Employee purchasing programs are a great way for them to avoid amassing high interest rate charges when purchasing consumer goods. Read more at SHRM

Poll: Voters Support CFPB, Strict Financial Regulation

As Republicans push to overhaul Dodd-Frank, a new poll shows that voters favor strict regulation of financial institutions and the goals of the controversial CFPB.

The poll was sponsored by Americans for Financial Reform and the Center for Responsible Lending-two pro-regulation groups. However, it was conducted by bipartisan polling companies, Republican Chesapeake Beach Consulting and Democratic Lake Research Partners.

The Center for Responsible Lending is an affiliate of the Self-Help Credit Union.

"By wide margins, voters want to see tough oversight of Wall Street banks, financial service providers, payday and mortgage lenders and debt collectors," the two polling groups said, in releasing the report.

The poll of 1,000 likely 2018 voters was conducted between June 24 and June 29. It has a margin of error of 3.1%. The poll did not separate banks from credit unions.

The poll found that:

91% of the respondents believe that it is important to regulate financial services, with 71% said it is very important.

-When Dodd-Frank was explained to respondents, 74% of the respondents said they support the law, including 67% of Republicans.

-When the CFPB was explained to voters, 77% said they favored continuation of the agency's activities, including 80% of Democrats, 77% of independents and 66% of Republicans.

-When the CFPB's arbitration rule was explained, 66% of the respondents said they favored the rule, with 19% saying it would result in frivolous law suits. CREDIT UNION TIMES

CFPB Proposes to Ease HMDA Reporting Requirements for Community Banks and Credit Unions

On July 14, 2017, the Consumer Financial Protection Bureau ("CFPB") issued a proposal to ease, at least temporarily, the reporting requirements for community banks and credit unions under the Home Mortgage Disclosure Act ("HMDA"). The proposed rule would raise the threshold at which financial institutions have to report on home equity lines of credit for the years 2018 and 2019.

In October 2015, the CFPB issued a final rule implementing the HMDA amendments in the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"), which updated many HMDA reporting requirements. Among other things, Dodd-Frank required some lenders to report home-equity lines of credit and other open-end lines of credit secured by a dwelling in their HMDA reporting.

The final rule exempted lenders that originated fewer than 100 dwelling-secured open-end lines of credit in each of the preceding years from the new reporting requirements for open-end lines of credit. Based on concerns raised by community banks and credit unions about the substantial compliance burden this creates, the CFPB is now proposing to raise the exemption threshold.

Under the new proposal, for the years 2018 and 2019, all lenders that originated fewer than 500 home-equity and other dwelling-secured open-end lines of credit in the previous two calendar years would be exempt from the reporting requirement. The CFPB estimates that this would exempt roughly 25% of the home-equity lending market. Although the proposal contemplates a temporary change, the CFPB indicated that it would use the intervening period to determine if it should make the higher threshold permanent. Read more at NATIONAL LAW REVIEW

Congress can and should kill the CFPB's arbitration rule

The Consumer Financial Protection Bureau is moving forward with its costly arbitration rule, which would limit the use of class-action waivers in various consumer agreements.

What does that mean? First announced in 2016, the new mandate effectively punishes banks and financial institutions by making them more susceptible to class action lawsuits, which often carry millions of dollars in costs. The proposed rule would bar these financial institutions from using arbitration agreements that prevent consumers from filing or joining class action lawsuits in court in certain situations.

The proposal encompasses credit card companies, traditional banks, and different types of lenders, which are disproportionately prone to costly class actions. It could open the door to widespread class-action litigation risk for almost all consumer finance companies that currently utilize arbitration language in contracts with customers, leaving these companies vulnerable to significant legal fees and damages-justified or not. In some cases, companies can face months of legal battles even if they're not at fault for anything. Read more at WASHINGTON EXAMINER

Staff wellness vital to business success

Whether it's the provision of a psychologist or a gym, investing in employee wellness can bring a wealth of good to a company.

Many employers are becoming increasingly aware of this, offering employees a range of wellness related services which might include psychology or counselling services, wellness days where blood pressure and body mass index are checked, medical services such as nurse or doctor, financial advisers and gyms.

Analysing the benefits of employee wellness, international firm PricewaterhouseCoopers (PwC) suggested that employers could reduce costs by investing in the health and wellbeing of their employees.

According to a press release posted on their website in August 2015, PwC said many employers recognise the wider potential benefits of investing in wellness, using it to promote the achievement of other important objectives.

Investing in wellness initiatives is said to lead to improved employee engagement, strengthening the employee value proposition, enhancing the value of people within the organisation and building both the organisation's reputation and brand.

"Despite the growing evidence base to motivate investment in employee wellness, many employers do not have a clear and complete picture of their health and wellness experience and its drivers, nor a targeted and integrated strategy for improving it," the press release reads.

Read more at DISPATCH LIVE

Credit & Decisioning. by Walt Wojciechowski

Extending credit to customers is a regular aspect of business operations and vital to expanding operations. However, extending credit has its risks. Accepting payment at a later date means a business has less money on hand to finance its own operations. What's more, if the customer does not have the funds or files bankruptcy, the loaner has few options to recover its money.

How do businesses decide to extend credit?

The U.S. Small Business Administration lists best practices to help businesses make smart credit loan decisions. The second step - the credit check - is arguably most important. This process uses a credit scoring system to determine whether or not an applicant qualifies as a good candidate for a loan.

Who needs to be careful when extending credit?

Essentially, any company that extends credit through invoices or personal checks needs to carefully manage risk. As American Banker detailed, lending leaves little margin for error. A few miscalculations can drive you into financial ruin, while strong credit offers allow you to remain afloat or even thrive.

How do businesses assess an applicant's creditworthiness?

The three major credit scoring systems - Experian, TransUnion and Equifax - are the primary resources businesses use to assess the likelihood of recouping a loan. With MicroBilt, you have the option to view these reports in their original form or use our customized format, which aligns data from each bureau and makes it easier to compare specific data points. Read more at MICROBILT

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