ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

NEWS: April 30, 2015

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House Wants To Block Lending Protections For American Troops
WASHINGTON -- House Republicans are pushing legislation to block predatory lending protections for American soldiers, under pressure from the banking lobby.
GOP lawmakers tucked the deregulation item into the National Defense Authorization Act -- a major bill setting the military's funding, along with a number of other controversial terms on Guantanamo Bay and other issues. If the banking item is enacted, it would impose a one-year delay on new Department of Defense rules meant to shield military families from abusive terms on payday loans and other forms of high-interest credit. The bill is being considered Wednesday before the House Armed Services Committee.
The military has been struggling with the financial impact of predatory lending on service members for years. A 2014 report issued by the Consumer Financial Protection Bureau documents a host of abuses targeting troops. One family that took out a $2,600 loan ended up paying back $3,966.84 over the course of a year. Another borrower spent $1,428.28 to pay off a $485 loan in just six months. Thousands of service members receive short-term, high-interest loans each year. Read more...Huffington Post

Alabama Supreme Court upheld a lower court's decision that requires payday lenders to use a database to make sure borrowers do not exceed a $500 limit for payday loans.
The database will aid in enforcing current state legislation, including the requirement that no lender can give a payday loan to an individual who already has $500 in payday loans, according to a release from the Southern Poverty Law Center, or SPLC. The database will be required by the State Banking Department, the release said. Read more...Birmingham Biz Journal

Aaron's spurns Rent-A-Center takeover approaches
(Reuters) - Aaron's Inc (AAN.N), a U.S. electronics and furniture rental chain, has turned down several informal takeover approaches in the last 12 months from peer Rent-A-Center Inc (RCII.O), according to people familiar with the matter.
The rent-to-own retail sector has suffered in the last few years, as low-income customers cut spending. Rent-A-Center's overtures illustrate that mounting competition is putting pressure on some retailers to consider acquisitions.
Rent-A-Center's latest approach to Aaron's, which has a market capitalization of roughly $2.5 billion, took place earlier this year but did not lead to serious discussions between the two companies, the sources said this week.
Aaron's resisted negotiating a deal because it favors its standalone prospects and does not view Rent-A-Center's stock as a valuable acquisition currency, the sources added.
There are curre
ntly no active talks between the companies, they said. It was unclear if Rent-A-Center, which competes with Aaron's, remained interested in acquiring Aaron's. Read more...REUTERS

TEXAS: Lawmakers face long odds in effort to crack down on payday lending
AUSTIN-Faith groups, consumer advocates and veteran lawmakers called on Wednesday for a crackdown on payday and auto title lenders-a massive industry that critics say reaps huge profits by taking advantage of the poor and leaves thousands of Texans enslaved by debt.
But lawmakers conceded that any attempts at reform face an uphill battle in the Legislature-where the measure has failed before-because of the industry's clout and heavy spending on lobby efforts. There's also huge reluctance among the GOP majority to impose greater restrictions on business.
"People need help and these people who need help are being beat down in Texas and being charged larger rates because of fees that should be fixed," said veteran Rep. Tom Craddick, R-Midland.

Read more...Trail Blazers

Consumer Lending Revolution - A Mike Walrod Blog
The more I look at what is happening with consumer lending today, the more I believe we are in the midst of a true revolution. This is not a slow evolution, although some of these changes have been happening over the past few years, this is a substantial change in the lending environment. In my opinion, there are three main areas driving this consumer lending revolution:

Regulatory Changes
*The CFPB's proposal for changes in small dollar credit will have a dramatic impact on short and longer term loans. No matter what the final rules say, you can be assured they will dramatically change consumer's access to credit and lender's approach to offering credit. Good or bad, it will be a significant change.
*The Department of Justice's "Operation Chokepoint" initiative to pressure financial institutions to cut off access to "risky" businesses illustrates the federal government's willingness to take an unorthodox approach to affect their change - even as it negatively impacts law-abiding business owners.

Technology & Data
*There is increasing consumer comfort with initiating financial transactions outside of a branch. While there is still a group of consumers that prefers a face-to-face experience, that group is shrinking. Smartphones are now mainstream and this will continue to drive transactions from the storefront to a mobile device. Not only do you need to be online, your site needs to be responsive and very user-friendly.
*More companies are implementing data analytics to improve their marketing efforts, risk management, and product offerings. In fact, there will soon be a time when consumers expect an offering that is tailored specifically to them. Read Mike's Blog

Banks pursue the 'underbanked': millennial and low-income clients
A large number of New Yorkers have limited access to financial services. Some banks want to fix that.
New York City's status as a global banking capital hasn't helped it solve a vexing challenge: a large population of people who are "underbanked" and have limited access to financial services-or have none at all.
Jay and Luvleen Sidhu hope to make a dent in the problem. In January, Mr. Sidhu-a former chairman of Santander and Sovereign Bank-and his daughter Luvleen, who earned an M.B.A. from Wharton, launched BankMobile, which they tout as the first completely mobile bank.
The bank, which has its executive offices in New York City, is actively courting millennials who are still getting established financially. With no physical branches, it is using digital advertising to tout its no-fee accounts and free overdraft protection.
BankMobile is a wholly owned division of Customers Bank in Reading, Pa., where Mr. Sidhu is chairman and CEO. Read more...Crain's

Where Americans don't know how to write checks
Writing a check has always been a fundamentally strange act. There's the fussy ceremony of writing out the amount in words and drawing the squiggly line across the remainder of the space, ostensibly to protect against a type of fraud -- tampering with individual digits -- that's quaint by today's standards. There's the questionable business of handing a complete stranger a document with your bank account and routing number printed plainly across it.
And of course, the memo line -- an open invitation to humiliate your friends and leave passive-aggressive notes to your creditors.
Today, Americans are writing fewer checks than ever. According to the Federal Reserve's most recent study of how Americans pay for things, "the number of checks paid declined more than 50 percent since 2000." Meanwhile, electronic and card payments tripled over the same period.