ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

NEWS: May 9

NEWS is brought to you by AFSPA Endorsed SUPPLIERS

FactorTrust

Why Republicans Want to Declaw the Nation's Consumer Financial Watchdog Agency

A new bill aims to dismantle the powers of the Consumer Financial Protection Bureau, the independent watchdog that protects consumers and investors and has saved Americans almost $12 billion since it was created six years ago.

Supporters say the Financial CHOICE Act will undo the regulatory burdens that have harmed financial service companies and provide Congress with much-needed oversight. But consumer advocates insist the bill would eliminate the CFPB's independence and greatly reduce its ability to regulate.

Republicans in Congress are focused on eliminating regulations - including many put in place by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act following the financial crisis that peaked in 2008. The Financial CHOICE Act, which passed the House Financial Services Committee on a 34-26 party line vote last week, is the first attempt to do that.

The CHOICE Act would do more than reduce financial regulations enacted under the Obama administration. It also targets the CFPB, the regulatory agency created by Dodd-Frank to police the financial marketplace.

Among other things, the bill would:

  • Strip away the agency's authority to regulate large banks and payday lenders
  • Remove its power to prosecute companies that engage in unfair, deceptive or abusive acts or practices
  • Eliminate independent funding from the Federal Reserve Bank and give Congress the power to set the CFPB's budget
  • Allow Congress to kill any major financial rules proposed by the agency; both houses would have to give their approval within 60 days
  • Stop public access to the CFPB's database of more than 1.1 million consumer complaints.

AFSPA
OWNER MEMBERS:
We want NEWSLETTER content  FROM YOU!

This is  YOUR association, tell us about your company,
what you are thinking, planning and what you have going on!

  • Are you active in your community? Send us the details or the article!
  • Do you have an article or a white paper related to the industry? Send it to us!
  • Do you have an idea that could help the industry? Send it to us!
  • Are you growing or expanding? Send us details!

If you have anything about your company, or yourself, 
we want it in our NEWSLETTERS!

Send us a link to an article or attach a document or just send us an email
email to:  Newsletter Content

We reserve the right to decide what to publish.
This is for Owner Members, not Supplier Members; except AFSPA Endorsed Suppliers.

MicroBilt

OKLAHOMA: Fallin vetoes high-interest loan bill that reflected national industry push

Gov. Mary Fallin vetoed a bill on Friday that would have created a loan with a 204 percent annual interest rate.

In her veto message, Fallin wrote that the bill, which reflects a national push for new installment loans by the payday lending industry, would create a high-interest product without restricting access to other payday loan products.

"In fact, I believe that some of the loans created by this bill would be MORE EXPENSIVE than the current loan options," she wrote.

Oklahoma's legislation had one of the highest potential annual interest rates among 10 similar payday lending bills this year in seven states, an Oklahoma Watch review found.

House Bill 1913 would have created "small" loans with a monthly interest rate of 17 percent, which equates to 204 percent in annual interest. A 12-month loan of $1,500 would leave borrowers owing about $2,100 in total interest if all payments were made on time.

Asked for comment about the bill, the office of one of its sponsors, Rep. Chris Kannady, R-Oklahoma City, referred all questions to a senior vice president at a large payday lending company, Advance America. The company is part of Mexico-based Grupo Elektra, which is the largest payday lending firm in the United States and is owned by Mexican billionaire Ricardo Salinas.

Jamie Fulmer, of Advance America, said he didn't know who wrote Oklahoma's bill.

"Our company provided input based on our perspective as a marketplace provider," he said. "I'm sure a lot of folks provided input, as is the case with every piece of legislation."

Dreher Tomkies LLP

ALABAMA: Lawmakers Consider Dueling Payday Loan Bills

Lawmakers in both chambers of Alabama's legislature are debating changes to payday loans in the state.

Dueling bills in both the House and the Senate each aim to reform short-term lending in Alabama, but they go about it in different ways.

The House proposal, among other things, would institute a so-called "cooling off" period, where recent loan borrowers wouldn't be allowed to take out another payday loan for 48 hours. The Senate bill would lengthen the minimum term for payday loans to 30 days, and would allow borrowers the chance to restructure the loans if they're unable to pay them off.

Shay Farley is with the Southern Poverty Law Center. She supports the Senate bill, and says the House proposal doesn't do enough to fix the real problems with short-term lending.

"It keeps the payday loans at 14 days, which is really the heart of the problem. The maximum number of loans that a borrower will get under the House version is 22 payday loans a year, which is just exploitive. We just don't think that that is doable for a consumer."

The Senate Banking and Insurance Committee will hear their version of the bill this morning. If it passes, it will advance to the Senate floor for debate tomorrow. ALABAMA PUBLIC RADIO

Insight.tm

The FactorTrust Underbanked Index: The Three Cs of Consumers  has been released.

The Index highlights quarterly insights of the earning, spending and living habits of underbanked consumers. Our findings serve as a valuable resource for lenders, associations, analytics and the media to better understand the demographics of this large and growing consumer population.

The Index provides insights into the:
  • Characteristics of underbanked consumers - average age and gender
  • Credentials of underbanked consumers - educational attainment, top employment segments
  • Capacities of underbanked consumers - loan amount relative to income, marital status and top employers
Underbanked Index

I hope you will take time to read the news release and view the infographic. Thank you for your interest in helping to give underbanked consumers better credit options.

Regards,
Greg Rable
FactorTrust CEO

Prepay Nation

The Next Battleground for Amazon and Wal-Mart: The Unbanked

Few retailers have catered more to the unbanked than Wal-Mart (NYSE: WMT). Whether it's a dislike of banks, a distaste for their fees, or some other reason, a sizable portion of U.S. households have chosen not to have a checking or savings account at a financial institution, and Wal-Mart has ensured they have a place to go.

Through its 1,200 money centers, unbanked consumers can meet all of their banking needs at greatly reduced cost. From paying bills to wiring money here or abroad, Wal-Mart has made it cheap, easy, and convenient to bank without a bank. Now it's about to get some sizable competition from Amazon.com (NASDAQ: AMZN), which recently launched its Amazon Cash program that specifically targets this same subset of the population.

Cashing out of banks
According to the FDIC, some 9 million households, or 7% of all U.S. households, do not have an account at an insured institution. Moreover, almost 20% of households, or 24.5 million households in the country, are "underbanked" -- they have a checking or savings account, but also used other non-bank services for their banking needs.

While conventional thinking has led us to believe that banks are the be-all, end-all of finance, it also shows that a huge swath of the population has a high level of distrust of or dissatisfaction with traditional financial institutions. Read more at THE MOTLEY FOOL

Incite Business

Auto Lending Shifts to Higher-Credit Consumers

In the third quarter of last year, credit unions surpassed captive auto lenders to become the second largest lender type in the market. The latest results from Experian's "State of the Automotive Finance Market" report showed credit unions remain the second largest lender type in the market with $277 billion in open auto loans. Banks remain the largest lender type, with $364 billion in open loans, while captive auto lenders ($252 billion) and finance companies ($179 billion) rank third and fourth, respectively.

The automotive lending industry remains on an upward trend overall. In Q4 2016, total dollar value for outstanding loan balances reached a record high of $1.072 billion, up from $987 million in Q4 2015 and $886 million in Q4 2014. All lender types experienced growth year-over-year, led by finance companies (up by 22.4%) and credit unions (up by 15.87%). Banks and captives grew at much lower rates (7.64% and 6.26%, respectively).

More prime consumers moving to used car financing and driving up the average credit score strengthens credit union portfolios, as credit unions focus heavily on used car financing. Credit unions remain the second largest lender in used car financing - and overall financing - as they grew their used vehicle loan share from 25% in Q4 2015 to 25.4% in Q4 2016. Overall, credit unions grew total market share to 19.1% in Q4 2016 from 18% in Q4 2015. Read more at CREDIT UNION TIMES

SAVE THE DATE: April 16-19, 2018
CFSA's 18th Annual Conference 
The Doral National in Miami, Florida
CFRSA 2018 Conference

ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION 


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. 

Alternative Financial Service Providers Association
757.737.4088

315 Tuscarora St., Lewiston, NY 14092
dan@afspassociation.com
www.afspassociation.com