ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

             ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

NEWS: September 30, 2015

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Why payday loans are in consumers' best interests. by Florida Rep. Alcee L. Hastings, a Democrat, serves as a senior member of the House Rules Committee
It is difficult for many of us to imagine having to choose between paying the rent on time or purchasing our sick child's prescription medicine. But for many Americans who live paycheck to paycheck, circumstances like these are an all-too-familiar reality. For these individuals who are credit-constrained, payday loans provide a financial solution when emergencies or other unforeseen events arise.
I know how important these loans can be: I myself relied on a short-term loan to establish my first law practice. At the time, it was the only avenue available to me.
It is both because of my own personal experience, and because I understand that many Americans at times require access to small-dollar loans to make ends meet, that I firmly believe consumers must maintain access to regulated payday loans. To assume that those of us in Washington, the vast majority of whom have never faced a similar predicament, know which types of financial products best fit consumers' needs is both patronizing and counterproductive.
The payday statute in my home state of Florida is among the most progressive and effective in the nation. In the 14 years since its enactment, payday lenders have undertaken radical reforms that encourage the responsible use of payday loans. Floridians who utilize the services of payday lenders are treated fairly and with dignity. Indeed, it has become a national example of the successful compromise between strong consumer protection and increased access to credit.
Florida's law prohibits a borrower from taking out a second payday loan to cover the original loan, often termed as "rollovers," and limits a customer to a single advance of $500 or less. Payday lenders must cap their interest fees at 10 percent of the original loan, with the loan ranging from 7 to 31 days. Most significantly, a statewide database was established to monitor the industry and those who take out loans. Finally, if a borrower cannot repay a loan, the law provides for a 60-day grace period, during which the consumer must take part in credit counseling and set up a repayment schedule.
In March, the Consumer Financial Protection Bureau (CFPB) announced that it intends to implement rules to regulate payday lenders and other forms of short-term credit. The purpose of this regulation, CFPB asserts, is to eliminate "debt traps" by requiring lenders to ensure that customers can repay their loans through a variety of regulations.   Read the story at the WASHINGTON TIMES
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PEW Report: Banking on Prepaid  - Survey of motivations and views of prepaid card users

PEW Report: Consumers Without Banks Use Prepaid Cards Like Checking Accounts

*Industry analysts estimate that approximately one-third of payday loans now originate online. Between 2006 and 2013, online loan revenue tripled from $1.4 billion to $4.1 billion.  
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*A South Dakota group that is sponsoring a ballot measure to cap interest rates at 36 percent in the state has filed a complaint with the attorney general's office, alleging signatures are illegally being collected for a rival ballot measure that hasn't been approved and is meant to confuse voters.  PEW CHARITABLE TRUSTS
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*Poverty Rate Drops in 34 States, DC
New Mexico almost surpassed Mississippi last year as the state with the highest percentage of its population living in poverty, although both states were among 34 along with the District of Columbia that experienced a drop in poverty rates.
In Mississippi, 21.5 percent of the state's nearly 3 million people lived in poverty, according to figures from the U.S. Census Bureau's annual American Community Survey, out Thursday. New Mexico, with a population of nearly 2.1 million, followed at 21.3 percent.
Nationally, the poverty rate was 14.8 percent last year, meaning 46.7 million people lived in poverty-as many people as there have been the past four years.
The poverty rates for men, 13.4 percent, and women, 16.1 percent, also remained about the same nationally compared to 2013. About 15.5 million, or 21.1 percent, of the nation's children under 18 lived in poverty last year.  PEW CHARITABLE TRUSTS
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DETROIT NEWS: Unlicensed title lenders defy state laws
Two lenders offering loans that charge consumers exorbitant, triple-digit interest rates to borrow against their cars are operating in defiance of state law in Michigan, often seizing the vehicles of desperate borrowers who can't pay.
These unlicensed lenders are issuing auto-title loans, which charge interest rates of more than 250 percent. They require borrowers to sign over the titles to their paid-off cars and don't issue loan documents. The borrowers typically get 25 percent or less of the vehicle's value, and can pay thousands of dollars in interest in a year or less. In many cases, the title lender won't advance the cash until the borrower installs a GPS unit sent by the lender, to make it easier to repossess the car.
State regulators consider the loans, which are made without regard to the borrower's ability to repay, abusive and predatory. Borrowers roll old loans into new ones an average of eight times, and 1 in 6 borrowers loses the vehicle and thus that resource to take kids to school or drive to a job, according to a study from the Center for Responsible Lending, based in Durham, N.C.
While legal in 16 states, title loans are barred in Michigan by laws against excessive interest charges and rules that don't allow lenders to physically take the title as a condition of the loan. Last December, some legal out-of-state auto title lenders attempted to insert a provision into the state pawnshop law to allow title loans in Michigan, but the measure died in the Legislature.   Read more at the DETROIT NEWS
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3 Installment Loan store in South Carolina
4 Las Vegas Auto Title/Payday/Signature/ Check Cashing stores
3 payday stores in Western Kentucky   ....more
The Rise of Corporate Prepaids - No Flash in the Pan
Say the word "prepaid" and the image that may spring to mind is one of, say, a phone card, or perhaps another card, commonly used by the underbanked individual. That image would be an erroneous one, and for one company in Europe, Prepaid Financial Services, the corporate prepaid market has been an area marked by rapid growth. Founded in 2008, the company has put down roots in nearly two dozen markets outside its home base in the United Kingdom.
In an interview with PYMNTS, Noel Moran, who is the chief executive officer of Prepaid Financial Services, offered insight into the long-term trends driving corporate prepaid adoption, especially in greenfield markets across Europe. 
Trends Driving Corporate Prepaid Adoption
Prepaid solutions are growing in Europe, says Moran, as the view of prepaid in general is shifting away from a "subprime" mindset that may carry negative connotations, and toward a technologically advanced platform that can help a range of enterprises manage time and money more efficiently. "This can be evidenced by the many governments and government organizations looking to use prepaid to solve a problem or create an efficiency," according to Moran.
That includes governments - and of course corporate clients - being able to monitor employee spend in real-time fashion, and for Prepaid Financial Services, the demand comes through the company's "current account" offerings in both the United Kingdom and International Bank Account Number (IBAN) services throughout Europe. Across those platforms, says Moran, "we can provide real time money in and out, and faster payments to any organization. We can now effectively turn any wallet into a bank account."  
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