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    AFSA Publishes 2018 Legislative Preview and 2017 Review White Paper

    AFSA Staff

    AFSA’s State Government Affairs department this week published its 2018 State Legislative Preview and 2017 Review white paper. Published monthly, AFSA’s state white papers typically provide a snapshot in time covering a single-issue area; however, the 2018 preview/2017 review provides a broad look across AFSA members’ priority issues, including debt collection, fintech regulation, mortgage lending and servicing, payment cards and systems, state rate cap activity, traditional installment loans, and vehicle finance. The paper provides AFSA members a good idea of what they can expect from the states over the next year.

    Although only 46 state legislatures are scheduled to meet in 2018, AFSA expects the states to have an active year. The white paper examines legislative trends across the past seven years, focusing on last  year’s legislative activity. The paper also includes information on legislation prefiled for the upcoming sessions. Privacy and fraud issues are likely to be a high priority for many states this year, following several major recent data breaches, plus an increased focus on elder financial exploitation by state attorneys general.

    In addition to information on the priority issue areas, the 2018 preview/2017 review covers the recent expansion of the Nationwide Multistate Licensing System (NMLS) and proposed NMLS 2.0, the ongoing evolution of fintech regulation, and state attorney general enforcement activity in 2017.

    Members can find previous white papers on AFSA’s website under the State Resources section.  

    Redesigned Newsbriefs

    AFSA Staff

    You may notice that Newsbriefs looks slightly different today. Our redesign focuses on highlighting Association and industry news in a clean, easy-to-read package. The editorial goal of the message remains relatively the same – to ensure that AFSA members are up-to-date with the Association’s initiatives on their behalf and provide important industry news.

    Our featured story appears in full at the top of the message and others may appear in full from time to time. The majority of our stories, however, appear as brief summaries with ‘Read More’ links to the rest of the story of the AFSA website.

    This allows you to quickly scan Newsbriefs relevant to your company. Clicking ‘Read More’ takes you to our website where you can read the entire story and have easy access to content and information the Association provides.

    You will also note that the redesign has fewer advertisements. This provides Newsbriefs with a cleaner look for members, but also provides important value to advertisers, as their products and services are more brightly highlighted with each issue. All of our advertisers are listed in the online version of Newsbriefs, via the “Read More” links, where their products and services reach 9,500+ Newsbriefs readers. We encourage you to visit the newly redesigned Buyer’s Guide, highlighting all of our Business Partners, when it launches later in January.

    In between issues, be sure to follow AFSA on Twitter @AFSA_DC and visit the blog, which are constantly updated with news and notes.

    We hope you enjoy the new Newsbriefs and welcome your feedback. Please do not hesitate to contact the Communications team with any comments, concerns or questions.

    Fintech Poised for Growth in 2018

    AFSA Staff

     

    Financial services conferences in 2017 seemed to have one thing in common: there was a panel on fintech. Fintech seemed to be the biggest financial services buzz word in 2017. Whether discussing the growth of online lending, or the use in alternative data in underwriting, fintech was of main interest among financial institutions and association representatives, and rightfully so. 2017 saw fintech take off into the national spotlight, with SoFi, an online lender, becoming a common name, and major banks expanding their own online lending experience. Even the government got in on the action, with the Office of the Comptroller of the Currency (OCC) escalating its efforts to create a limited purpose national bank charter for fintech companies.ba

     

    This year is shaping up to be another exciting year for fintech, specifically in the online lending space. On December 20, the new Comptroller of the Currency, Joseph Otting, in his first press briefing in his new role, announced that he was in support of the creation of a bank charter for fintech companies. The Wall Street Journal reported that Otting said fintech companies are filling a market gap in small-dollar loans. He also stated that many of these companies could serve long-term needs.

     

    Seeing the success of fintech in the consumer lending space, some big banks are looking to step in as well. In 2017, Goldman Sachs launched Marcus, the company’s own online consumer lending platform. Since it began, it has originated almost $2 billion in loans. At the end of 2017, two more major banks announced they, too, would be joining the online consumer lending space. In a blog post by online lending blog Lendacademy.com, Barclays will introduce an online, unsecured consumer loan offering to prime and super-prime consumers in 2018. PNC Financial Services Group also announced that they are expecting to launch an online consumer lending product in 2018.[2]

     

    The growth of fintech lenders is highlighted in a recent study by TransUnion, which looks at unsecured personal loan originations since 2010, with a more detailed look between 2014 and 2016. The study shows that fintech lenders have made up significant ground in loan originations since 2010. According to TransUnion, Fintech companies made up 30 percent of personal loan balances originated, up from .9% in 2010. A majority (58 percent) of 2016 fintech loan originations were in the prime or near prime space. This growth is not slowing, Through June 2017, fintech lenders made up 32 percent of personal loans in TransUnion’s portfolio, while only 15 percent were originated by traditional finance companies.[3]

     

    While the world of lending saw a lot of growth online, recent events show that there is more room for fintech to grow. AFSA continues to stay up to date on everything fintech, and will expand its focus on technology in 2018.

    It’s Blowin’ Up a Storm

    Bill Himpler, AFSA Executive Vice President

    There’s always a storm brewing or blowing in Washington – whether its threats of a government shutdown, or the latest court decision in a battle over who’s running the Consumer Financial Protection Bureau (CFPB). As we enter 2018, we enter the second year of an administration and Congress that has helped shield consumers from some of the worst winds of that storm.

    Mick Mulvaney, the new Acting Director of Consumer Financial Protection Bureau (CFPB) has specifically said that he does not want to “set the [CFPB] on fire or blow it up.” What he wants to do is do away with “outdated, unnecessary or unduly burdensome regulations” and protect consumer’s data. He has stopped the collection of all data by the CFPB containing personally identifiable information about consumers until the security concerns the inspector general has raised have been fixed. Directory Mulvaney started his tenure by announcing a freeze on new regulations. He halted a planned survey on debt collection. And, he has expressed support for legislation introduced in the House to repeal the CFPB’s small dollar rule. AFSA looks forward to continuing to work with the new director in the new year.

    While Director Mulvaney surges forward, the Trump administration continues its search for a permanent, Senate-approvable CFPB director. With a slim majority, the Trump administration may be looking for a less-controversial appointment then previous names suggested. AFSA continues to advocate for a director who understands consumer finance and state-licensed institutions.

    In addition to the CFPB, AFSA’s advocacy efforts have been focused on the Department of Defense (DoD), which issued an interpretative rule at the end of 2017 that is having broad ramifications on the vehicle finance industry. The DoD issued an interpretation of the Military Lending Act (MLA) that will cause a number of issues for the industry, as well as limit the ability of service members and their families to buy GAP when they finance a new car. AFSA is working with the DoD, other members of the administration, and Congress to try to revise the interpretative rule.

    Much of AFSA’s advocacy efforts are focused on Congress. We ended 2017 with the House passing important annual privacy notice reform. The Senate will now take up the legislation. The Senate is also looking at exploring whether to try to use the Congressional Review Act (CRA) to overturn the CFPB’s 2013 bulletin on disparate impact. The House is also looking at using the CRA, but to overturn the CFPB’s small dollar rule. AFSA continues to ask Congress for CFPB reform and the modernization of the Telephone Consumer Protection Act.

    We’ll keep you updated as the storm continues.

    AFSA Comments on Consumer Complaint Database

    AFSA last week submitted a comment letter on the CFPB’s consumer complaint database highlighting concerns with the privacy and security of consumers’ sensitive information. The CFPB was seeking comment on the consumer response intake form, as well as the consumer complaint system in general. Specifically, the CFPB was asking the Office of Management and Budget (OMB) for approval to test and pilot new questions for the intake form.

    AFSA’s letter asked that the complaint process be reviewed. The letter stated, “AFSA does not believe that OMB should grant the CFPB’s requests without substantial changes to the complaint process.”

    While the Dodd-Frank Act requires that the CFPB establish reasonable complaint procedures, it does not require the massive amount of data collection the CFPB has set up, nor the publication of the complaint database. AFSA wrote that it, “… has strong concerns about the CFPB’s ability to ensure consumer privacy and data security as it continues to collect an unprecedented amount of personal data. With any additional data collection or any expansion of the complaint database, the CFPB should address ongoing problems to ensure consumers are protected. Both the Inspector General and CFPB Ombudsman have expressed concerns about the complaint database.”

    The letter acknowledged that CFPB Acting Director Mick Mulvaney has identified data security concerns at the Bureau and taken the important step of freezing its collection of personal information. “We commend the seriousness with which the director takes data security,” AFSA wrote.

    AFSA Connect Focuses on Member Engagement

    AFSA Staff

    As the American Financial Services Association embarks on its 102nd year of protecting access to credit, the latest edition of AFSA Connect pays tribute the important role that our members play in the daily life of the association.

    Without active participation by the approximately 1,200 individuals on boards, committees, and working groups, the association would not be able to achieve the gains it has made in 2017 with Congress and the regulatory agencies in Washington D.C., and with state legislators and regulators throughout the country.

    Constant two-way communication with our members provides AFSA staff the information and perspective from the marketplace that is needed to form strategies advocating for issues important to our members’ customers and communities.

    With “member engagement” as the overarching theme in this bold and bright issue of AFSA Connect, the implicit theme is a lookback at 2017 and the sense of shared accomplishment by AFSA members and AFSA staff.

    The photographic backdrop for the issue was provided by the 2017 Annual Meeting in Washington D.C. Knowing the attendance at AFSA meetings is strong, not to mention the built-in national constituency in attendance, AFSA was able to attract heavy hitters to the conference such as Mick Mulvaney, Director of the Office of Management and Budget (OMB), who has since added Acting Director of the Consumer Financial Protection Bureau (CFPB) to his duties; Jeb Hensarling, (R-Texas) Chairman of the House Financial Services Committee and author of the CHOICE Act; Richard Cordray, who at the time was the Director of the CFPB, and; Stephen Moore, former Economic Advisor to the Trump campaign.

    There are also many photos in this issue of an even more important group than the DC political stars: people from the AFSA member companies who are actively engaged in the association initiatives whether in leadership or supporting roles. We hope you’ll take the time to review AFSA Connect on our website.

    As you take time to review 2017 in AFSA Connect, keep an eye on Newsbriefs as well. This and the next several editions will take a look at the initiatives AFSA is focusing on in 2018.