Federal Regulators Issue Joint Statement on the Use of Alternative Data in Credit Underwriting

WASHINGTON, D.C.– Five Federal financial regulatory agencies today issued a joint statement on the use of alternative data in underwriting by banks, credit unions, and non-bank financial firms. The statement from the Federal Reserve Board (Federal Reserve), the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA) notes the benefits that using alternative data may provide to consumers, such as expanding access to credit and enabling consumers to obtain additional products and more favorable pricing and terms.

Free vulnerability scanning for your business

You know the importance of strong cybersecurity, but have you heard about free vulnerability testing? As part of its mission to protect the nation’s cyber infrastructure, the Department of Homeland Security’s Cyber-Infrastructure Security Agency (CISA) offers free vulnerability scanning to government, critical infrastructure, and private businesses.   What does this mean for you? You may be eligible for no-cost vulnerability scanning that will continuously check your internet-facing assets. The testing checks for known vulnerabilities and weak configuration, then recommends ways to improve your

Transworld Systems Inc. to Acquire Alltran’s Financial Services Business

LAKE FOREST, Ill., Dec. 3, 2019 /PRNewswire/ -- Transworld Systems Inc. ("TSI" or the "Company"), the leading analytics and technology driven provider of accounts receivable management, healthcare revenue cycle and loan servicing solutions, announced today that TSI and certain affiliates entered into a definitive agreement with Alltran to acquire its Financial Services business. Transaction terms were not disclosed.   Alltran Financial Services is a first- and third-party accounts receivable management provider for the financial services, automotive, debt buyer, and marketplace lending industries, with approximately 900 employees working from three operations centers located in the southwestern United States.

The Navy commander behind the credit union banks love to hate

When bankers complain to Capitol Hill about the competitive threat posed by large credit unions, they are almost certain to mention Navy Federal Credit Union.   With more than 8 million members, 300 branches nationwide and over $100 billion of assets, Navy Federal is the largest credit union in the world and ranks among the top 50 financial institutions in the country. Its net income in 2018, on which it didn’t pay federal or state income tax, was $1.55 billion.

CFPB proposes increase to remittance safe harbor

The CFPB Tuesday issued a proposal related to its remittance rule that includes a NAFCU-sought increase to the safe harbor threshold under the rule, though it is not as high as NAFCU recommended. NAFCU has expressed concerns about its highly burdensome compliance costs that have caused many credit unions to stop offering these services and urged the bureau to exempt credit unions from the rule.

DeVos proposes spinning off federal student loans from Education Department into independent agency

RENO, Nev. — The Trump administration proposed Tuesday to break off the nearly $1.5 trillion federal student loan portfolio from the Education Department and have it instead be managed by a new independent federal agency. Education Secretary Betsy DeVos pitched the proposal for federal student loans to be operated by "a stand-alone government corporation, run by a professional, expert and apolitical board of governors," instead of by the department's Office of Federal Student Aid.

Panels announced for December 10th FTC-CFPB Accuracy in Consumer Reporting workshop

How central is accuracy to the credit reporting system? It’s important enough that Congress mentioned it in the second line of the Fair Credit Reporting Act – and more than 70 times in the text of the statute. On December 10, 2019, the FTC and CFPB will host a public workshop to talk about issues affecting the accuracy of both traditional credit reports and background screening reports used by employers and landlords. It’s a discussion you and your clients won’t want to miss.

Consumer Financial Protection Bureau Issues Notice of Proposed Rulemaking on Remittance Rule

WASHINGTON, D.C. –The Consumer Financial Protection Bureau (Bureau) issued today a Notice of Proposed Rulemaking (NPRM) relating to the Remittance Rule (Rule).   The Rule generally requires companies that provide remittance transfers in the normal course of business disclose to consumers certain fees and the exchange rates that apply to transfers. The Rule also includes an exception that allows certain banks and credit unions to estimate certain fee and exchange rate information instead of disclosing exact amounts in certain circumstances, but this exception expires by statute in July 2020.  

U.S. banking regulators urge ‘responsible use’ of alternative lending data

WASHINGTON (Reuters) - U.S. banking regulators said on Tuesday that lenders must have robust compliance tools in place to ensure “responsible use” of non-traditional sources of financial data to help determine whether a potential customer is credit worthy. In a joint statement, the country’s five chief regulators acknowledged that using consumer information originating outside of traditional sources could expand the access and affordability of credit for certain borrowers.

Low mortgage rates will push home lending to 12-year high

Low mortgage rates will push home lending this year to a 12-year high of $2.07 trillion, the Mortgage Bankers Association said in a forecast. The volume for mortgages to purchase homes probably will total $1.27 trillion, the highest since the peak of the housing bubble in 2006, according to the group’s Nov. 20 forecast. Refinancing probably will reach $796 billion, the most since 2016, MBA said.

Small Contractors Struggle to Meet Cyber Security Standards, Pentagon Finds

Small companies are struggling to meet the Pentagon’s newish network security rules, and even larger contractors aren’t doing as well as they think they are, a recent department study has found. “For the most part, the big companies do very well,” Kevin Fahey, assistant defense secretary for acquisition, told reporters at the Pentagon on Monday. “But in no case do they meet everything that they thought they met.” For one thing, big companies tend to give their smaller subcontractors a lot of data they don’t need, which then becomes vulnerable to foreign hackers. 

New rules for robocalls take effect Tuesday

Pennsylvanians will be receiving an early holiday gift Tuesday: Another layer of protection when it comes to avoiding unsolicited phone calls.   That’s when a bill signed by Gov. Tom Wolf in October will go into effect. The law will place additional restrictions and require more procedures for companies that use telephone marketing and automated solicitation phone calls, known as robocalls.   “Telemarketing remains legal,” said Tom Flynn, Slippery Rock University professor of communication. “But the law is a great thing because it gives people more control over their communication environment.”

For banks, data on your spending habits could be a gold mine

NEW YORK (AP) — There’s a powerful new player watching what you buy so it can tailor product offerings for you: the bank behind your credit or debit card. For years, Google and Facebook have been showing ads based on your online behavior. Retailers from Amazon to Walgreens also regularly suction up your transaction history to steer future spending and hold your loyalty.

AG REPORT SHOWS DATA BREACHES INCREASED IN 2019

OLYMPIA — Today Attorney General Bob Ferguson released his fourth annual Data Breach Report. The report shows that data breaches increased by nearly 20 percent in 2019. The report also shows that breaches affected fewer Washingtonians in 2019 due to the relative size of the breaches.   Ferguson’s Data Breach Report relies on filings from businesses and state agencies that experienced breaches between July 2018 and July 2019. Washington law requires businesses and state agencies to report breaches affecting at least 500 Washingtonians to the Attorney General. That requirement stems from the passage of Attorney General Ferguson’s data breach legislation in 2015.

Robinhood pulls bank charter application as fintechs face hurdles to disrupting financial system

Robinhood is no longer looking to become a federally insured bank.   The stock-trading start-up announced Wednesday that it was pulling its bank charter application with the Office of the Comptroller of the Currency, which was submitted earlier this year. A Robinhood spokesperson said the withdrawal was voluntary. But the move highlights the struggles a tech company can face when trying to upend the financial system.

CFPB Requires Screening Firm to Pay $8.5 Million for Alleged FCRA Violations

On November 22, 2019, the Consumer Financial Protection Bureau (CFPB) – an agency enforcing federal consumer financial laws – filed a proposed Stipulated Final Judgment and Order that will require a background screening company to pay $6 million in monetary relief and a $2.5 million civil money penalty to resolve allegations of Fair Credit Reporting Act (FCRA) violations, according to a news report from the CFPB.

Supreme Court schedules oral arguments in CFPB structure challenge

The U.S. Supreme Court is currently scheduled to hold oral arguments March 3, 2020, in the lawsuit filed by Seila Law challenging the CFPB's single-director structure. The CFPB previously announced it would no longer defend its director structure, following years of lawsuits and calls to reform it from various stakeholders.

Mobile payments undermine banks’ battle for credit card dominance

Banks are battling to get consumers using their credit cards for holiday shopping. But faster mobile payment options are making that more difficult. As consumers shop on their phones, analysts say they may end up using whichever card is automatically stored instead instead of considering rewards. Gerard du Toit, banking consultant at Bain, said smartphone shopping “changes the equation” for credit card habits — it takes something “dramatically better” to unseat people from their default payment method.

‘Hundreds of millions of people’ may have had their text messages exposed online, researchers say

Some of your text messages may have been left exposed on the internet for the world to see. A database housing millions of private SMS text messages was left open online for an extended period of time, a team of researchers at the online privacy company vpnMentor said Sunday. The Texas-based text messaging firm TrueDialog is thought to be responsible for the leak, the cybersecurity experts said. The database contained access information to online medical services along with passwords and usernames to websites such as Google and Facebook.

What’s Behind the Subprime Consumer Loan Implosion?

OK, we’ve got a situation in subprime consumer loans. The delinquency rate on credit-card loan balances at the nearly 5,000 smaller commercial banks in the United States – this means all banks except the largest 100 – is blowing out, according to Federal Reserve data. In the third quarter, the delinquency rate at these banks rose to 6.25%. That’s higher even than during the peak of the Financial Crisis.

CFPB constitutionality case gets March date in Supreme Court

The Supreme Court will hear oral arguments March 3 in a case that challenges the constitutionality of the Consumer Financial Protection Bureau (CFPB), according to the high court's calendar. The court agreed to take the case in October.   In Seila Law v. CFPB, a California debt collection law firm argues the CFPB's leadership structure is unconstitutional, and therefore it should not have to comply with a civil investigative demand from the bureau.

The Future of the CFPB: the Executive Branch and Separation of Powers

On October 18, 2019 the Supreme Court granted certiorari in Seila Law v. Consumer Financial Protection Bureau (CFPB). SCOTUS  will answer the question of “whether the substantial executive authority yielded by the CFPB, an independent agency led by a single director, violates the separation of powers,” and the Justices requested that the parties brief and argue an additional issue: “If the Consumer Financial Protection Bureau is found unconstitutional on the basis of the separation of powers, can 12 U.S.C. § 5491(c)(3) [the for-cause removal provision] be severed from the Dodd-Frank Act?”

How Credit Unions Can Win The FinServ Innovation Game

In addressing the innovation gap that exists between credit unions and their larger financial institution (FI) brethren, credit unions (CUs) may be perceived to be at a disadvantage, at least when it comes to dollars.  At first glance, that gap may seem insurmountable in the age of mobile banking, where technology is a vital component of financial services.   The bigger the IT budget, it would seem, the more can be spent on bringing innovation to market that grabs consumers’ minds and wallets.

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