ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

New York's Attempt to Regulate Online Lenders is Losing Steam

The Governor's budget bill has encountered resistance up in Albany, sources say, specifically Part EE that aimed to amend New York's banking law and impose sweeping licensing restrictions on all types of lending and finance. Analysts felt that the language could have vast unintended consequences beyond just online lenders, including factoring, commercial lenders and brokers, merchant cash advance and the securitization markets.

The passage of this proposal now looks doubtful. The Assembly, one of two branches of the State's legislature, introduced their own version of the budget on March 13th and removed the language.

"The Assembly rejects the Executive proposal granting DFS regulatory authority over any online lenders doing business in New York State," the bill says. Notably, they also rejected "the Executive proposal to authorize enforcement of Insurance, Banking, and Financial Services Law against unlicensed individual or businesses, including bringing a civil action."

Read more at DeBANKED

Trial for Scott Tucker, Leawood payday loan businessman, delayed until September

The criminal trial for Leawood payday loan businessman Scott Tucker, which had been set to begin April 17 in Manhattan, N.Y., has been delayed until Sept. 11.

The latest delay comes after a hearing last week before Kevin Castel, a federal judge for the U.S. District of Southern New York, who set new deadlines for Tucker's attorneys and federal prosecutors to address ongoing pretrial issues.

Tucker is accused of running payday loan businesses that were registered with American Indian tribes to escape state regulations on interest rates for short-term consumer loans.

A federal indictment issued against Tucker and his attorney Tim Muir accuse their businesses of extending loans with deceptive terms. The U.S. attorney for the Southern District of New York described Tucker's businesses as a $2 billion enterprise that exploited 4.5 million consumers.

Tucker and Muir have pleaded not guilty and deny any wrongdoing.

Read at THE KANSAS CITY STAR

IS YOUR TRADITIONAL BUREAU HOLDING YOU BACK? by Paula Green, FactorTrust director of ApproveData Credit Marketing Services

Lots of lenders believe there is no difference between credit bureau prescreens. If you're a large traditional lender that uses large traditional bureau prescreens, you're probably right.

But if you're a smaller lender, or a larger lender looking to gain ground in the nonprime consumer market, your selection of credit providers could play a critical role in your success.

Do you want to get more for your marketing dollar?

If you see yourself as a lender who seeks credit qualified nonprime customers, and you define these potential candidates as:

Those who have low to moderate incomes

Those who rent, rather than own a home

Those who have a FICO score of <679 - or no FICO score

Then you might want to consider switching to an Alternative Credit Data bureau.

Don't get me wrong - I think big bureaus are great.

But, for the most part, traditional bureau prescreens serve a core population of lenders who appeal to consumers with deep credit files, higher incomes and an appetite for more diverse credit products.

Alternative data prescreens serve a specific segment of consumers who may have robust alternative credit data experience, but not necessarily a robust presence on major credit bureau databases.

A study conducted by FactorTrust, an alternative credit bureau, in conjunction with a major bureau, revealed that, on average, for every one trade line the major bureau had on their file for a consumer, FactorTrust had three. Read more at FACTORTRUST

Oklahoma House advances payday loan bill

OKLAHOMA CITY - A bill that could allow annualized interest of up to 204 percent on some small loans made it through the Oklahoma House of Representatives on Monday despite the opposition of some religious groups and advocacy organizations and a less-than-glowing recommendation from its author.

"I don't like this type of loan any more than you do," Rep. Chris Kannady, R-Oklahoma City, told the other members as he summed up House Bill 1913.

But, Kannady said, the bill is an improvement on current law and better than sending desperate borrowers to unregulated loan sharks.

Several members, for and against HB 1913, related their own experiences with payday loans. Read more at TULSA WORLD

Do you have the right consumer reports to score credit invisibles?

There are about 26 million credit invisible consumers throughout the U.S., according to a report from the Consumer Financial Protection Bureau. While these individuals represent an untapped market, engaging them in the lending process is difficult because loan officers, underwriters and others have no traditional credit data to reference in the approval process.

The absence of credit data doesn't leave enterprises with many options. How can they provide loans to credit invisible consumers without increasing overall risk to their operations?

Using the data that's available

While one in 10 U.S. adults may not have credit cards or outstanding loans, many of them likely do pay rent.

The CFPB's report noted the majority of credit invisibles consisted of people living in low-income neighborhoods, Blacks, Hispanics and young adults. A study from Trulia discovered older millennials and Hispanics rent more today than they did before the Great Recession, when they were more likely to own their own homes.

Rental payments represent a tenant's willingness to maintain a contractual agreement between himself and his landlord. To ensure he has a place to live, the tenant organizes his finances so that he can pay his monthly dues on time and in full. Given that the data suggests those who are more likely be credit invisible also rent at higher rates than those with traditional credit histories, enterprises may reference consumer rent payment histories to determine how diligently they stay on top of this fiduciary obligation. Read more at MICROBILT

How your wallet will suffer if this consumer agency is gutted

If you care about your personal finances, be warned: There's a battle brewing in Washington that will reach your wallet.

The new Congress and the Trump administration are taking aim at a young federal bureau that arguably has done as much to change the financial lives of consumers as any other government agency in history.

Most every American who has a credit card or mortgage or bank account or personal or student loan, or who cares about their credit rating, has benefited in some way from the Consumer Financial Protection Bureau.

The agency says some 29 million of them, or about 1 of every 8 adults, are receiving direct financial relief -- money returned to them -- as a result of its work since it opened in 2011.

Collectively, for every $1 in federal spending on the agency, more than $4 has been placed back in consumers' pockets, a review by NerdWallet found. The agency has saved or returned to Americans $12 billion, while costing taxpayers $2.9 billion to operate over that period.

Other improvements, felt by virtually all consumers, have come in the form of lower costs, a more stable economy and new power to resolve individual disputes with financial institutions.

"We know exactly what the landscape would look like without the CFPB," Sen. Elizabeth Warren, D-Mass., told NerdWallet. "We saw it in the 1990s and in the 2000s in the run-up to the biggest financial crash since the Great Depression." Read more at DALLAS NEWS

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