ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

NEWS: June 5

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FactorTrust

Despite Claims, CFPB Remains Inflexible in Rulemaking, Enforcement: CUNA

Disputing recent assertions made by CFPB Director Richard Cordray, CUNA says the agency has done an abysmal job of tailoring its rules to the size and type of financial institutions it regulates.

"Regrettably...credit unions continue to tell us that the accommodations the CFPB continues to cite are not sufficient exemptions and they do not fully take into consideration the size, complexity, structure, or mission of all credit unions," CUNA President/CEO Jim Nussle said in a letter to Cordray this week.

In recent speeches and testimony, Cordray has touted the flexibility his agency has shown in issuing rules.

But congressional Republicans have disputed those claims and may consider a Dodd-Frank overhaul bill as early as next week that would drastically curtail the CFPB's powers.

In his letter and accompanying recommendations, Nussle outlined CUNA's objections to CFPB's decisions. Among other things, the association told Cordray that:

The agency should modify its 2015 Home Mortgage Disclosure Act rules to provide meaningful exemptions for credit unions as soon as possible, since implementation deadlines are quickly approaching.

The CFPB should make significant changes to mortgage disclosure and underwriting requirements since the rules increase the regulatory burden facing credit unions and create arbitrary barriers to homeownership.

"The CFPB should recognize credit unions are not predatory lenders but good faith partners for their members seeking to buy a home," CUNA said. Read more at CREDIT UNION TIMES

CFPB CommentWatch

Nevertheless It Persists: The Consumer Financial Protection Bureau Fights Trump, Congress, and Federal Courts in Effort to Remain Unaccountable to Anyone

The CFPB is fighting a three-front war against Congress, the Trump administration, and in the courts to maintain its unaccountable status.

The Consumer Financial Protection Bureau's days as the federal government's most uniquely unaccountable regulatory agency might be numbered.

The CFPB, a product of the Dodd-Frank financial regulation package passed in the wake of the 2009 financial collapse, has broad authority to regulate American financial institutions. Unlike other federal regulatory agencies, however, the CFPB does not have to answer to Congress or the president for its actions. It gets its funding directly from the Federal Reserve, and is run by a single director (an unusual arrangement since most regulatory agencies are run by a bipartisan group of three or five individuals) who serves a 10-year term and cannot be removed from office before that time.

Just about every part of that description could be changing-and soon.

Lawyers for the CFPB were in front of the full U.S. Court of Appeals for the District of Columbia Circuit last week, appealing a previous ruling that determined the bureau's single-director structure to be unconstitutional. Meanwhile, President Donald Trump's budget proposal would restructure the CFPB's funding stream so Congress has to provide appropriations to fund the bureau. A separate piece of legislation that could come up for a vote in the House as soon as next week would similarly hold the CFPB's budget accountable to Congress and would make it easier for the president to remove the bureau's director.

That three-front battle to reform the CFPB is the culmination of six years of Republican opposition to the bureau's creation, spurred by progressive darling Elizabeth Warren in the days before she was a member of the Senate. The fight over the future of the CFPB is, in part, a partisan project to discredit one of the major progressive achievements of the Obama administration, but it's also an effort to hold a potentially powerful regulatory body accountable to the democratically elected branches of government.

In theory, the bureau is supposed to operate independently. The goal is to insulate it from political influences that could shape regulatory decisions made by other agencies or by Congress-similar to how the Supreme Court and the Federal Reserve work. Read more at REASON.COM

DECISION Cloud

CFPB: Older Consumers Log Most Payments Complaints

The Consumer Financial Protection Bureau released its monthly complaint report Wednesday (May 31) that showed older consumers frequently report servicing problems with reverse mortgages, difficulties recovering money after financial scams, confusion around deferred interest credit cards and frustration when experiencing charges for unauthorized add-on products.

In a press release, the CFPB said the snapshot provides an overview and analysis of more than 103,100 complaints submitted to the Bureau by consumers voluntarily reporting their age as 62 or older.

"Older consumers who may be on a fixed income are at a greater risk for financial trouble if they encounter problems with financial products or services," said CFPB Director Richard Cordray in the press release. "The complaints submitted by older consumers are important for the Bureau to ensure we are properly looking out for this segment of the population."

Among the main problems seniors are facing, many pointed to reverse mortgages, which are exclusively available to people over 62 years of age. The CFPB said older consumers with reverse mortgages seeking to stay in their house following the death of the borrowing spouse report servicing problems that sometimes result in foreclosure proceedings.

Another common complaint among older consumers: getting money back after falling victim to a financial scam. The CFPB said older consumers are targeted for financial scams and identity theft. Older consumers working to recover from scams or exploitation have complained about difficulty with correcting credit reports, disputing charges with credit card companies and attempting to regain money that was withdrawn from their bank accounts.

While credit cards can be confusing for all sorts of people, the CFBP said older Americans complained during May about the confusion over deferred interest and zero interest credit card offers. Some older consumers on fixed incomes use credit cards to pay for unanticipated large expenses, such as medical needs. Consumers complained about confusion understanding credit card terms and conditions. Read at PYMNTS.COM

MicroBilt
 NASHVILLE POST
Tina Hodges

Advance Financial's Hodges captures CEO World award

Tina Hodges, chief executive and chief experience officer for Nashville-based Advance Financial, has been selected as one of the winners in the CEO World Awards in the Female CEO of the Year category.

Hodges (pictured) is the gold winner for large companies (500 to 2,499 employees).

Under her leadership, Advance Financial is opening 25 new stores in the next 12-18 months, bringing 250 new jobs and an estimated $10 million to the state's economy, according to a release. Along with the company's expansion throughout Tennessee, Hodges and her team also worked to broaden the company's reach online, offering its services to residents in Missouri, Kansas, Idaho and Utah.

The company's employees have volunteered more than 1,800 hours in Tennessee communities, and the Advance Financial Foundation gave more than $276,000 to organizations around the state.

"It is incredible to watch Tina at work as she leads our company into exciting new directions," said Mike Hodges, chairman of Advance Financial. "She has grown in many ways as a CEO and there is no one more deserving of this honor. I know I speak for the entire company when I say we are incredibly proud to work with Tina every day."

Winners will be honored in San Francisco on Monday, June 26 during the annual SVUS (Silicon Valley United States) Red Carpet Awards Ceremony Dinner.

CULLEN EARNEST, VP
Public Policy and Communications
Advance Financial
615.341.7681
Advance Financial




Dreher Tomkies LLP

Embattled Cordray Defends CFPB as House Prepares to Neuter It

As the House prepares to consider legislation to drastically cut his power, CFPB Director Richard Cordray said Wednesday that his agency has succeeded in protecting consumers and disputed assertions it has hampered financial institutions in serving consumers.

"We are less than six years old, but we have consistently gotten results," Corday said at the People and Places conference in Arlington, Va. The conference was co-sponsored by several community revitalization and racial equity groups.

He said the agency has recovered billions of dollars for consumers and has instituted strong safeguards to ensure that the reckless mortgage practices that caused the financial crisis cannot occur again.

"And we are giving consumers a voice, so they can address their own concerns and report on broader patterns of problems or abuse," Cordray said.

Cordray said that some "doomsayers" contend that new rules are killing banks and restricting credit.

"On the contrary, these common-sense rules of the road are promoting access to more responsible and safer credit," he said, adding that banks remain profitable and community banks and credit unions are obtaining a higher share of the mortgage business.

Cordray also said the agency has tailored its rules based on the size of a financial institution-an assertion disputed by credit union officials.

Cordray's defense comes as the House prepares to consider the Financial CHOICE Act, legislation sponsored by House Financial Services Chairman Jeb Hensarling (R-Texas). The legislation would eliminate the CFPB's supervisory powers and transform it into a law enforcement agency. It would prohibit the agency from issuing final rules governing mandatory arbitration agreements and payday lending. And it would make the agency subject to the annual appropriations process.  Read more at CREDIT UNION TIMES

INCITE Business

Arbitration Update: CFPB Rule Uncertain, Mixed Fates for Others

A half dozen Obama-era rules to limit mandatory arbitration have met a variety of fates in the four months since Donald Trump became president.

The Consumer Financial Protection Bureau rule, which covers financial products, hasn't been finalized yet and is in a perilous position.

Some consumer advocates argue the bureau should go ahead with it. But others caution Congress could undo the rule as it did with one covering federal contractors, and permanently bar the bureau from regulating arbitration in the future.

Congress reversed the federal contractor rule under the Congressional Review Act in March.

Anti-arbitration rules covering nursing homes and communication contracts have been put on hold by their originating agencies, while two others appear to be in the clear, at least for now.

Those rules, which apply to for-profit colleges and financial advisers, could, however, still be challenged in the courts.

Meanwhile, on the litigation front, another hot-button arbitration topic-the use of class-action waivers in employment contracts-is up in the air until the U.S. Supreme Court takes it next term.

Below is the current status of the CFPB rule, and five others advanced under the Obama administration.

CFPB Arbitration Rule Perilous

The CFPB's proposed rule-released May 5, 2016, after years of study by the bureau-would bar banks and other financial institutions from using mandatory arbitration clauses to prevent class actions.

The bureau received nearly 13,000 comments on the proposed rule by the Aug. 22, 2016, deadline. The final rule was expected by mid-2017. But nothing has happened yet.

Professor David Noll told Bloomberg BNA the bureau engaged in the "monumental task" of sorting through the comments and improving on the rule's cost-benefit analysis to get it ready for publication. Read more at BLOOMBERG

AFSPA Endorsed

The CFPB Wants Data On Small Business Loans. Bankers Are Outraged

They're heeeere!

In its first seven-plus years, the Consumer Financial Protection Bureau set its sights on - what else? - consumer finance. It made rules to rein in mortgage lending, payday loans, debt collection, and the like. But it was inevitable that the bureau would eventually turn its attention to business lending, and that day finally came earlier this month, when it asked the public to comment on how it should seek data on small-business loans from banks and other lenders.

The CFPB is acting on a provision of the Dodd-Frank financial reform law that requires lenders to collect and report data on credit sought by small businesses, minority-owned businesses, and women-owned businesses. With the aim of helping the government enforce fair lending laws, as well to help communities figure out how to better serve these businesses, the law specifically directs financial institutions to compile 13 separate data points, including the amount of funding sought and approved, the type and purpose of the financing, as well as the location and most recent annual revenue of the applicant. And the law allows the agency to specify "any additional data that the Bureau determines would aid in fulfilling the purposes" of the law.

Historically, there's been very little data on small-business loans and who's making them or getting them, apart from information gathered about loans backed by the Small Business Administration (which comprise a very small part of the market). It wasn't until 2010, for example, that banks had to report the size of their small-business loan portfolio on a regular basis, and even then the definition manages to simultaneously include a lot of loans that you wouldn't think of as small business loans, and exclude many others you would. And now it appears the government will scale back collecting that information as part of the Trump administration's agenda to reduce regulatory burden.    Read more at FORBES

AFSPA
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION 


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Alternative Financial Service Providers Association
757.737.4088

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