ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

NEWS: July 9, 2015

Industry NEWS is brought to you by AFSPA Endorsed & Certified SUPPLIERS

How Compliant Is Your Company?

Philadelphia Fed Examines Debt Collection Laws and Credit Availability

New working paper from the Federal Reserve Bank of Philadelphia looks at credit levels in the U.S. and the impact of stricter debt collection laws on lenders' issuance of credit card loans.

In a working paper published in June, the Federal Reserve Bank of Philadelphia examines the impact of state debt collection laws on the ability of third-party debt collectors to collect on delinquent accounts and, in turn, the availability of credit.

Author Viktar Fedaseyeu concludes in the paper, Debt Collection Agencies and the Supply of Consumer Credit, that, "stricter debt collection regulations appear to reduce the number of third-party debt collectors and to lower recovery rates on delinquent credit card loans. This, in turn, leads to fewer openings of credit cards."

According to Fedaseyeu's research, lenders' willingness to issue credit card loans is connected to the availability of enforcement resources for creditors to "pursue a defaulting borrower's income and assets."

Revolving debt (including credit card debt) is prevalent in the U.S. and comes with a high default rate among borrowers.   Read more...ACA INTERNATIONAL 

Kansas City payday loan operation banned by feds for fake loans
WASHINGTON
A huge payday lending operation based in Kansas City will be banned from offering any more loans under a $54 million settlement announced by federal regulators on Tuesday.
The Federal Trade Commission accused 14 companies owned by two Johnson county men, Timothy A. Coppinger and Frampton T. Rowland III, of using online data to take out loans for payday loan applicants without their permission.
The companies - including CWB Services LLC, Orion Services LLC and Sandpoint Capital LLC -targeted borrowers who had gone online to research short-term payday loans, which tend to be small dollar loans repaid in two-week increments.
Most borrowers remembered typing in their personal financial information into third-party websites, known as "lead generators," to see if the sites could match them with a lender. But they never formally applied for any loans, according to the complaint filed by the FTC.
Coppinger and Frampton's companies then bought the borrowers' information from the lead generators, deposited $200-300 "loans" in borrowers' accounts without their permission, and started withdrawing up to $90 at a time from their accounts for "finance charges," the complaint said.   

Read more...The KANSAS CITY STAR 

National Pawnbrokers Association Announces Certified Pawn Professional (CPP) Learning Program
Keller, TX (PRWEB) July 06, 2015
The National Pawnbrokers Association (NPA) announces the debut of its Certified Pawn Professional (CPP) learning program, designed for experienced pawnbrokers to further their professional education and earn the designation "CPP." The CPP program builds on the NPA's commitment to provide resources and tools to strengthen the pawn industry. The designation will elevate professional standards within the industry and will be the recognized mark of distinction among those in the pawn business.
The CPP learning program was created by the NPA in partnership with pawnbroker members who are experts in their field. Ben Levinson, NPA President, reports, "The CPP designation recognizes pawnbrokers who are committed to professional development and the attainment of the skills and knowledge necessary to perform their jobs at the highest level of quality." The CPP designation is also an avenue for employers to recognize and promote pawn professionals.   Read more... National Pawnbrokers Association

Work being done by OLA (Online Lenders Alliance)

"Our Attorney General outreach continues to gain traction with the first letter pushing back on the CFPB small dollar proposal being sent by Oklahoma Attorney General Scott Pruitt.  The letter is first in what we hope to be a series of letters to the CFPB stating concern over the proposal and its effects on state laws and the customers served by the industry."  You can read the letter here.

OLA submitted a comment letter to the California Department of Business Oversight related to the Department's third proposed changes to the California Deferred Deposit Transaction Law 

Read the Letter Here 

Five people who participated in a payday loan scheme that bilked consumers of $25 million await their punishment from a federal judge.
     U.S. District Judge Jennifer Dorsey granted summary judgment Tuesday to the FTC against the five but denied summary judgment against others, including Ideal Financial Solutions, due to judgments already entered against them.
     The five are Steven Sunyich, Chris Sunyich, Michael Sunyich, Melissa Sunyich Gardner and Jared Mosher.
     Default judgments already had been entered against Ascot Crossing, Bracknell Shore, Chandon Group, Fiscal Fitness, Avanix and Ideal Financial, and consent judgments were entered against Kent Brown and Shawn Sunyich.
     The FTC sued Ideal Financial et al. in 2013, claiming they "used an intricate web of concealment to debit hundreds of thousands of consumers' bank accounts and bill their credit cards more than $25 million without their consent."
     Ideal Financial and others "targeted financially vulnerable consumers who had never come in contact with them and without authorization debited their bank accounts and charged their credit cards, usually for about $30," the FTC said.
     "Those who disputed the charges were told they had purchased something, such as financial counseling or loan-matching services or assistance in completing a payday loan applications."  

Read more...COURTHOUSE NEWS

A study published by the Boston Federal Reserve Bank shows that unbanked consumers are substituting prepaid cards for checking accounts.
Consumers without checking accounts are twice as likely as those with checking accounts to own a general-purpose reloadable prepaid card, and are more likely to have wages directly deposited onto prepaid cards and to use prepaid cards to make payments.   Read more...THE STUDY 

Prepaid Card Use Increases Among Consumers, Many of Whom Have Bank Accounts
A Pew study found that one out of every 11 consumers uses a prepaid card at least monthly.
The use of general purpose reloadable (GPR) prepaid cards increased more than 50 percent from 2012 to 2014, according to a recent report by Pew Charitable Trust. Now, one out of every 11 consumers uses a prepaid card at least monthly.
The study attributes much of the expansion to the increasing use of prepaid cards by consumers with bank accounts. From 2012-2014, the number of adults who had a checking account and used a prepaid card monthly grew from 4 percent to 7 percent. According to the study, 27 percent of GPR prepaid cardholders who use their cards at least monthly are "unbanked," or do not have a checking account.
For unbanked consumers, GPR prepaid cards provide a way to make point-of sale and online purchases and are often used like checking accounts. Unbanked prepaid card users reload their card more often (75 percent) than prepaid card users with bank accounts (50 percent). Unbanked consumers also check their balances more habitually and register their cards more often than other cardholders.
However, cardholders who are unbanked tend to be less knowledgeable about the rights and protections that come with a prepaid card than those who have higher incomes and a bank account. For example, the study found that nearly half of unbanked consumers do not know their prepaid cards have liability limits.
According to the study, unbanked prepaid card users tend to have lower incomes than banked users. More than eight out of 10 unbanked prepaid cardholders have annual household incomes below $50,000; within that group, approximately one-third live on a household income of less than $15,000 per year. In all, half of unbanked prepaid cardholders have an annual household income of less than $25,000.  

Read more...ACA INTERNATIONAL 

ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION 

 
ASSOCIATION WEBSITE     SUPPLIER DIRECTORY     ADVERTISE 

FOR SALE BY OWNER     ASK a PRO

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