Today's Headlines

    New Member Welcome

    AFSA welcomes the following new members to the association.

    Crescent Bank is a privately-owned bank founded in 1991 and has been specializing in non-prime automobile financing for over 25 years. Crescent has 34 loan production centers located across the country with two operation centers as well as two full service branches located in their home base of New Orleans. www.cbtno.com

    Tesoro Financial, LLC (d/b/a Solutions Finance of Tennessee) is a traditional installment lender with four offices in Tennessee. www.solutionsfinance.us

    DIMONT, based in Dallas, TX, is a provider of insurance claims management and adjustment services for mortgage and auto lenders, servicers and investors in the United States. www.dimont.com

    AFSA Comments on Proposed Draft Legislation on Vermont Vehicle Repossessions

    On March 16, AFSA submitted a comment letter to the chairman of the Vermont Senate Committee on Economic Development, Housing and General Affairs regarding draft legislation that would significantly alter the repossession process in the state. The repossession provisions, which are part of a larger consumer protection bill, would impose costly new requirements on vehicle finance companies, including a new right to cure and additional waiting periods and notification requirements after default. AFSA’s letter urged the chairman to strip the repossession provisions out of the bill and explained that repossession is a last resort and not the preferred outcome of finance agreement. Additionally, the letter identified specific problems with the proposed requirements for the notice of default and the numerous waiting periods proposed in the draft legislation.

    The Committee is set to consider the draft legislation at additional working sessions this week. AFSA will continue to monitor the process and keep members apprised of any future changes to the proposed requirements.

    New York regulator's bid to expand fintech authority in jeopardy

    American Banker, Lalita Clozel (March 14, 2017)

    New York Governor Andrew Cuomo’s proposed budget for next year includes a provision that would require certain marketplace lenders, brokers, and merchant cash advance companies to obtain a license in order to do business in the state. However, per a copy of the New York State Assembly’s budget bill obtained by the American Banker, that portion of Cuomo’s budget was “intentionally omitted.”

    The proposal would have effectively expanded licensing requirements to a number of online lenders and banks chartered in other states. Specifically, all companies making personal loans of $25,000 or less, or commercial loans of $50,000 or less to New York residents, regardless of interest rate.

    The news was mixed among fintech companies, with many applauding the move and others noting that it would discourage them from doing business in the state given the difficult licensing requirements.

    Many changes could still occur to the budget as it makes its way through the committee process and the state Senate is likely to dump the measure in its own version of the bill.

    DOL fiduciary rule opponents file injunction in Dallas court

    InvestmentNews, Mark Schoeff Jr. (March 14, 2017)

    The Department of Labor (DOL) has proposed delaying the implementation of its fiduciary rule for 60 days while the agency conducts an assessment of the regulation, called for by President Trump, as opponents of the measure seek to block it at the judiciary level in a Dallas federal court.

    Plaintiffs brought suit to file an injunction by March 20 in the US District Court of Northern Texas to stop the rule from becoming applicable on April 10. The industry plaintiffs argued that if the DOL is not able to delay the rule before April 10, financial firms would continue to have to "sink extensive resources into compliance capabilities."

    The injunction is also necessary, the plaintiffs argued, to permit the DOL time to adequately assess the rule. The Labor Department tried to alleviate some confusion about timing last Friday by issuing an enforcement memorandum intended to ease compliance concerns in the near term, as it reviews the rule and before any delay is final. But questions remain.

    One of the challenges for the industry associations in their court action is they're asking for the injunction from the same judge, Chief Judge Barbara M.G. Lynn, who ruled against every claim in their lawsuit.

    The industry groups are all asserting that the delay should go into effect immediately when the final delay rule is published in the Federal Register, likely later this month. They also maintain that a longer delay — up to 180 days — is needed for the review, and that the DOL's original cost-benefit analysis of the rule understated the potential harm to investors and firms.

    EO Calls for Reorg of Executive Branch

    This week, President Trump signed an Executive Order (EO) calling for a comprehensive plan to reorganize the executive branch. The EO is intended to improve the efficiency, effectiveness, and accountability of the executive branch by charging the director of the Office of Management and Budget (OMB) to propose a plan to reorganize governmental functions and eliminate

    unnecessary agencies, components of agencies, and agency programs. Per the White House, the executive branch currently employs four million Americans, including members of the military.

    The EO directs the head of each agency to submit to the OMB director a proposed plan to reorganize the agency within 180 days. The EO also directs OMB to publish a notice in the Federal Register inviting public comment on suggestions for improvements in the organization and functioning of the executive branch.

    Within 180 days of the closing date for the submission of comments, the OMB director must submit a proposed plan to reorganize the executive branch to the president. The director must also consider whether some of the functions of an agency would be better left to state or local governments, or even to the private sector. 

    Featured Premier Business Partner

    AFSA will feature a new AFSA Premier Business Partner on our Premier Partner resource page on a bi-monthly basis.

    This month’s spotlight company is eight-star partner Clarity Services a real-time credit bureau, has provided fraud detection and credit risk management solutions for the underbanked, subprime and thin/no-file consumer segment since 2008.

    AFSA Joins Amicus in PHH Case

    On March 10, AFSA joined several other trade associations in an amicus brief to the U.S. Court of Appeals for the District of Columbia in a case challenging the Consumer Financial Protection Bureau (CFPB). The case is PHH Corp. v. CFPB. It is now in front of the full court, after a petition for rehearing was granted. The case deals with CFPB Director Richard Corday’s June 2015 order concluding that PHH violated the Real Estate Settlement Procedures Act (RESPA). The CFPB asked for the rehearing after a panel of judges ruled that the CFPB’s structure of a single director who can only be removed by cause is unconstitutional.

    The joint trade amicus focuses on how the CFPB’s order against PHH conflicts with RESPA, governing regulations, and longstanding policy guidance upon which AFSA members and others have relied. The brief also argues that the CFPB’s order exceeded the CFPB’s statutory authority and violated fundamental tenets of administrative law and fair notice. The joint trade amicus does not address the constitutionality of the CFPB.

    On the same day, PHH filed its opening brief and six other amicus briefs were filed. The next step in the case is oral argument, which is scheduled for May 24.

    AFSA Comments on TCPA Petition

    AFSA and other trades joined signed a letter asking the Federal Communications Commission (FCC) to deny a petition regarding prior express consent under the Telephone Consumer Protection Act (TCPA). The petition asks the FCC to clarify that institutions must get written consent before using an autodialer to call their customers on their cell phones.

    The trades wrote, “Not only do customers desire these communications, there are a multitude of laws that mandate Institutions contact their customers.” In addition to highlighting the legal conflict the petition presents, the trade groups discuss the dampening effects such a petition, if granted, would have on customer-business communications.

    As a result, the groups ask the FCC to consider as part of its review the many critical and just reasons why a company would need to call a consumer, highlighting how companies often call to address an issue or provide a service. The petition fails to acknowledge today’s highly mobile economy and the fact that companies such as banks and internet providers call their customers to provide valuable information regarding the customer’s account and more.