NEWS: Massive Credit Score Misconceptions

ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

March 10, 2020

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Americans have massive credit score misconceptions, study shows

While Americans know their credit score is extremely important to their financial lives - a majority don't appear to know what goes into it.

According to a new study from CompareCards, 62 percent of Americans did not know the main factor that determined their three-digit score was their payment history. As previously reported by FOX Business, for the average individual's payment score typically accounts for 35 percent of their overall score.

Millennials and Generation X were less likely to know the correct answer when compared with older generations.

There are a number of factors that are taken into account when your credit score is calculated, and among each person, the weight placed on each category will be different based on things like the length of an individual's credit history.

The other factors besides payment history that are considered include amounts owed, length of credit history, credit mix and new credit. Read more at FOX BUSINESS

It is not surprising to see that nearly 57 percent of Americans would struggle to bridge a financial gap or pay an unexpected expense of $2,000.

COVID-19: Steps to prepare a remote work policy

A successful remote work plan will unite technology with norms and expectations, one source said.

"Now is the time" for businesses to begin their preparation for the spread of COVID-19, or the new coronavirus, according to a Feb. 25 notice from the Centers for Disease Control and Prevention (CDC).

This preparation may need to include the expansion of employers' capacity to offer remote work. "Businesses can replace in-person meetings with video or telephone conferences and increase teleworking options," Nancy Messonnier, director of the CDC's National Center for Immunization and Respiratory Diseases, said in a conference call.

As the COVID-19 situation evolves with the U.S. and elsewhere, employers will need to keep a close eye on any developments, one source said.
Read more at BANKINGDIVE

Service members being hurt by law meant to protect them. by Ray Haynes

President George W. Bush had the best of intentions when he signed the Military Lending Act (MLA) into law in 2006, capping the fees that banks and other businesses can charge when lending to service members and their spouses. After all, who wants those who have put their lives on the line for this country to be exploited by unfair lending practices? The MLA was supposed to protect them from exploitation, make borrowing more affordable to our service members and their families, and limit the bad actors in lending.

It has not worked out as planned.

In fact, borrowing has not become more affordable for military members and their families. The update in 2014, which added further restrictions on military lending, simply compounded the difficulties that service members were facing under the law.

Harris Insights polling has found that between 2014 and 2019, the percentage of military personnel suffering financial distress more than doubled, from 16% to 34%.
Read more at dailycitizen.news

House report slams Wells Fargo, regulators' failure to rein in 'reckless' bank

The House Financial Services Committee says Wells Fargo's board and senior management failed to comply with consent orders issued by regulators in response to the bank's widespread consumer abuses, according to a document released by committee Democrats Wednesday evening.
In a scathing report, lawmakers also accused federal regulators of failing to hold the bank accountable for its misdeeds, which included opening phony accounts, charging unnecessary auto insurance, and overcharging military service members to refinance mortgages.
The 113-page report also claims former Wells Fargo CEO Tim Sloan gave inaccurate and misleading information to Congress during his testimony in March, 2019.

Read more at BANKINGDIVE

FDIC PUBLISHES GUIDE FOR FINTECHS ON CONDUCTING BUSINESS WITH BANKS. Dreher Tomkies LLP

The Federal Deposit Insurance Corporation's ("FDIC") new technology lab, FDiTech, has published a 6-page guide to help financial technology companies ("Fintechs") and other third-party vendors understand unique aspects of entering into a partnership with banks. The guide is relevant to all Fintechs and vendors and does not focus on any particular type of third-party relationship, such as bank partnerships.

The guide explains generally banks' third-party risk management responsibilities and focuses on aspects of a bank's third-party risk management program that may affect Fintechs and third parties, including what banks will generally consider during their pre-engagement risk assessment and due diligence of a potential third party vendor. The guide also notes the following general considerations to help third parties prepare for a bank's due diligence process:

Read more at DREHER TOMKIES LLP

Collection agencies would get special treatment under revised Utah bill

A bill in the Utah Legislature this year started out as a plan to stop a high-interest lender that had found a way to jail some borrowers who default on loans and then seize their bail money.

Proposed changes to that bill almost allowed the lender, and some others, to continue the practice - and instead aimed to prevent the state's payday lenders from starting to do the same thing.

Ironically, those payday lenders - often criticized for charging more than 500% annual interest - had testified that the new loan practice is so predatory that even they oppose it. But they came close to becoming the only ones banned from using it. But because of their protests, it appears that now everyone but collection agencies and lawyers seeking collections may be banned.
Read more at THE SALT LAKE TRIBUNE

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CFPB Takes Key Steps to Prevent Consumer Harm; Proposes Whistleblower Award Program, Other Measures

WASHINGTON, D.C. - The Consumer Financial Protection Bureau (Bureau) today announced three steps to advance its strategy on one of its key priorities: preventing consumer harm.
The Bureau is:

Implementing an advisory opinion program to provide clear guidance to assist companies in better understanding their legal and regulatory obligations through advisory opinions;
Amending and reissuing its responsible business conduct bulletin, which articulates that the Bureau intends to provide credit to entities for their responsible conduct based on its extent and significance; and
Engaging with Congress to advance proposed legislation that would authorize the Bureau to award whistleblowers who report violations of Federal consumer financial law.

Read more at Consumer Financial Protection Bureau

Analysis finds a 'tipping point' for Americans struggling with household debt

At a time when U.S. household debt has reached a new pinnacle of $14.15 trillion, a separate analysis by American Consumer Credit Counseling (ACCC) found that American households seeking financial help are usually carrying more than $20,000 in credit card debt.

"Most of the people in our study are using credit cards to just get by and are living paycheck to paycheck," Madison Block, a marketing communications and program associate at ACCC, told Yahoo Money.

The analysis of over 40,000 consumer clients who sought budget counseling since 2018 noted that carrying credit card balances of $20,000 "is more than double the debt of the average household carrying credit balances, and more than three times the average credit card debt of all households in the U.S."

This led researchers to identify a "tipping point" for households in debt.
Read more at YAHOO MONEY

House report slams Wells Fargo, regulators' failure to rein in 'reckless' bank

The House Financial Services Committee says Wells Fargo's board and senior management failed to comply with consent orders issued by regulators in response to the bank's widespread consumer abuses, according to a document released by committee Democrats Wednesday evening.
In a scathing report, lawmakers also accused federal regulators of failing to hold the bank accountable for its misdeeds, which included opening phony accounts, charging unnecessary auto insurance, and overcharging military service members to refinance mortgages.
The 113-page report also claims former Wells Fargo CEO Tim Sloan gave inaccurate and misleading information to Congress during his testimony in March, 2019.