ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

11 judges will soon decide the fate of a polarizing US agency

On Wednesday, 11 D.C. Circuit Court judges will hear arguments over the constitutionality of the Consumer Financial Protection Bureau, an agency created in the wake of the great recession of 2008.

The stakes are high for both consumer protection advocates and financial services institutions. The latter have, in the past five years, been ordered by the CFPB to return nearly $12 billion to 29 million of their customers in recompense for various predatory practices. The Dodd-Frank Wall Street reform legislation of 2010 created the CFPB and gave it power to enforce 18 consumer protection laws previously administered by seven separate agencies, and also vested it with new authority to regulate and prosecute "unfair, deceptive, and abusive" acts.

Conceived in 2007 by then-Harvard law professor and now-Senator Elizabeth Warren (D-Massachusetts)-today, the personification of a liberal firebrand-the CFPB has been a political lightning rod since its inception. It has fought to rein in deceptive practices in such realms as subprime mortgages, payday lending, nonprofit education, and prepaid debit cards, with Republicans screeching in protest all the way.

In February Senator David Perdue (R-Georgia), the former CEO of Reebok and Dollar General Stores, whose state is home to TSYS-the parent of prepaid card unit Netspend-branded CFPB a "rogue agency" at Yahoo Finance's All Markets Summit; Senator Ted Cruz (R-Texas) and Rep. John Ratcliffe (R-Texas) introduced bills to abolish the bureau; and, according to a report in Politico last month, President Donald Trump recently threatened to fire its director, Richard Cordray, a former Ohio attorney general.

As it happens, Trump can't currently fire Cordray, and that's precisely what lies at the heart of the legal dispute the D.C. Circuit judges will be pondering. In the lawsuit, PHH Corp, a mortgage lender, is challenging the constitutionality of the CFPB's structure. In January 2014 the bureau brought an enforcement proceeding against PHH which culminated, in July 2015, in the imposition of $109 million in fines against the company for its allegedly having participated in a kickback scheme.

Read more at YAHOO FINANCE

CFPB Director Richard Cordray Meets with House Dems, Left-Wing Groups Amid Rumors of Gubernatorial Run

Consumer Finance Protection Bureau Director Richard Cordray spent time with House Democratic lawmakers Wednesday, having met in recent months with a menagerie of far-left interest groups - meetings likely to fuel rumors the controversial Democrat is planning to run for governor of Ohio.

Cordray has been the target of Republican lawmakers in particular, who have accused Cordray of acting unlawfully and running a "rogue federal agency." Republicans have opposed the CFPB, created out of the 2010 Dodd-Frank financial reform bill, from its inception and have called for the White House to fire Cordray.

"For conducting unlawful activities, abusing his authority and denying market participants due process, Richard Cordray should be dismissed by our President," said Rep. Jeb Hensarling (R-TX) in April. "Today, Mr. Cordray and his CFPB don't just act as a cop on the beat, they act as legislator, prosecutor, judge and jury all rolled into one."

In February, the Boston Globe reported that the White House was weighing its options, but was being held back by a number of legal and political hurdles.

The CFPB is an independent agency and President Trump can only fire Cordray for inefficiency, malfeasance or neglect of duty. In October, a Washington, D.C., circuit court ruled that the CFPB structure, and the protections for Cordray's job, are unconstitutional.

"The CFPB's concentration of enormous executive power in a single, unaccountable, unchecked director not only departs from settled historical practice, but also poses a far greater risk of arbitrary decision-making and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency," Judge Brett Kavanaugh wrote in a majority opinion.

However, an appeals court has agreed to reconsider the D.C. court's ruling, which would repeal Cordray's job protection, later this month. Read more at BREITBART

Dan Gable Museum Receives $25,000 from Sale of George W. Bush Truck

The proceeds of an auction for the only known vehicle to have been signed twice by a U.S. president will now benefit an Iowa museum named after Dan Gable - the most dominant wrestler in history.

The highlight of the April 8th Barrett-Jackson auction in West Palm Beach turned out to be a white 2009 King Ranch F-150 4X4 pickup autographed twice by President George W. Bush and owned by Allan Jones, the founder and CEO of Check Into Cash. Jones is a longtime wrestling philanthropist both nationally and in Tennessee, where he resides.

The Barrett-Jackson event was broadcast nationwide on the Velocity channel and generated tremendous interest on social media.

The biggest news from the sale of the truck was that $25,000 of the proceeds would go to the National Wrestling Hall of Fame Dan Gable Museum in Waterloo that benefits youth wrestling for boys and girls. Read more at CheckintoCash

Fourth Circuit Again Rejects Arbitration Request Under Payday Loan Agreement

On May 10, 2017, the Fourth Circuit affirmed the Middle District of North Carolina's refusal to compel arbitration under the terms of a payday loan agreement. In Dillon v. BMO Harris Bank, N.A., BMO Harris attempted to compel arbitration pursuant to an agreement that would have required the arbitrator to employ the law of the Otoe-Missouria tribe to the exclusion of state and federal law. The Fourth Circuit held that the arbitration clause at issue was unenforceable because it was, effectively, a prospective waiver of the borrower's federal law rights. The Fourth Circuit's decision solidifies and extends a trend in the Fourth and Eleventh Circuits of rejecting such tribal-law arbitration provisions in payday loan cases

In Dillon, the plaintiff entered into a payday loan agreement with Great Plains Lending LLC in December 2012. As part of that agreement, he agreed to allow Great Plains to withdraw payments from his bank account through the Automated Clearing House (ACH) system. Op. at 4. Moreover, he agreed to arbitrate any claims he might have in connection with the agreement subject to "the law of the Otoe-Missouria Tribe of Indians." Op. at 10. Among other things, the agreement specified "[n]either this Agreement nor the Lender is subject to the laws of any state of the United States" and "no other state or federal law or regulation shall apply to this Agreement." Op. at 10-11. The plaintiff ultimately sued BMO Harris-which was connected to the plaintiff's payday loan because it processed the ACH transactions to which he consented-alleging violations of the federal Racketeer Influenced and Corrupt Practices Act (RICO). Relying on the terms of the payday loan agreement, BMO Harris sought to compel arbitration, but the Middle District of North Carolina rejected that request.   Read more at JD SUPRA

The Financial CHOICE Act Provides Just That. by Gregory T. Angelo

If Washington, D.C. had a "Most Wanted List" for unaccountable government agencies, the Consumer Financial Protection Bureau (CFPB) would be Public Enemy No. 1.

Since its inception in 2010, the CFPB has issued more than $5 billion in penalties, punishing financial institutions and other companies under the guise of "consumer protection." In 2016 alone, the agency collected $525 million in civil penalties, helping finance 1,648 employees and an operating budget of nearly $650 million. Credit unions saw a $7 billion regulatory hit in one recent year, if you account for lost revenue.

Payday loans are perhaps the most targeted. The CFPB now requires payday lenders-those who provide short-term loans to low-income borrowers-to verify a borrower's income, major financial obligations, and borrowing history before issuing any loan. The agency has issued a long list of "affordability criteria" to lengthen the payday lending process.

Current financial regulations governing short-term loans already insure that customers know the terms and fees of their agreement, while the transaction itself remains quick and transparent. But the CFPB's most recent mandates jeopardize payday transactions by imposing unreasonably high standards, effectively eliminating the reason for choosing these loans over traditional bank loans in the first place. They leaves low-income Americans with less hope of securing a line of credit.

All of this, while the CFPB operates almost entirely outside of congressional oversight. The agency receives annual funding as a fixed percentage of the Federal Reserve's annual budget, keeping elected officials out of the appropriations process. Meanwhile, Director Richard Cordray can only be fired by the president and for just cause, a sobering fact that comes under a cloud of allegations of discrimination based on race, age, gender, and sexual orientation. 

Read more at THE DAILY CALLER

Why Workplace Financial Wellness Programs Are Hot

Most Americans are seriously anxious about their finances. It's not simply the raw fear of outliving their money, but a more urgent yearning to sleep at night without money stresses and to have a sense of financial security. Employers, I'm pleased to say, are increasingly taking note.

The recently-released eighth annual Employer-Sponsored Health and Well-Being Survey from the National Business Group on Health and Fidelity Investments found that 84% of 141 large- and mid-sized companies surveyed now have financial wellness programs, up from 76% a year ago.

Money Angst Across America

It's hard to say precisely what's spurring the interest, but a myriad of factors are pushing employers to pay attention. For starters, numerous surveys have trumpeted the bad news blues about employee money angst.

For example, PwC's 2017 Employee Financial Wellness Survey of 1,600 full-time employed adults said that 53% of employees are stressed about their finances. Those who are stressed are more likely to be distracted by their finances at work, miss work due to their personal financial issues and cite health issues caused by financial stress.

And a new Paychex survey of 1,000 full-time employees discovered that most felt the most important job incentive was regular bonuses - that ranked higher than paid vacation and health insurance. Read more at FORBES

Employees look to employers for financial stability

As the American dream of financial security continues to slip out of reach for many U.S. workers, employers - seen as trusted partners by employees - will need to step up to restore faith in retirement readiness.

Only 22% of individuals described themselves as feeling financially secure, Prudential says in its new research paper, and there is growing acceptance among employers that there is significant value in improving employees' financial wellness.

Aspirations are modest, says Clint Key, a research officer in financial security and mobility at The Pew Charitable Trusts. Between economic mobility or financial stability, an overwhelming 92% of workers say they want stability.

"Four in 10 don't have the resources to pay for a $2,000 expense," he said Tuesday, at a joint financial wellness roundtable sponsored by Prudential Financial and the Aspen Institute in Washington, D.C. More alarmingly, employees don't have the income to last a month if they were to lose their job.

Still, Key adds, it isn't so much the number of dollars in the bank, but the peace of minds that savings buy them.

And employers are feeling the repercussions of the growing stressors in the workplace.

"People who are stressed about finances are five times more likely to take time off from work to deal with personal finances," added Diane Winland, a manager with PricewaterhouseCoopers. "Three to four hours every week go to handling personal finances, and these employees are more likely to call out sick from work."      Read more at BENEFIT NEWS

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