Today's Headlines

    Experian’s Clarity Services

    The Resource Directory Feature Listing for the month of January is Experian’s Clarity Services. Clarity Services, a part of Experian, is a credit bureau that provides reporting on near-prime, non-prime and subprime consumers. Clarity's growing database of more than 62 million unique consumer identities helps financial institutions and lenders better serve this market by examining alternative credit data not available from traditional sources. As an FCRA-regulated credit reporting agency, Clarity delivers data to enhance risk management, portfolio monitoring and underwriting.

    AFSA supports bureau’s changes to HMDA

    The Consumer Financial Protection Bureau (CFPB) last week announced that it will require mortgage lenders to publicly release fewer details under the Home Mortgage Disclosure Act (HMDA) starting in 2019. AFSA has previously advocated in favor of the changes and supports the bureau’s augmentation of the data that is collected.

    The CFPB will move to exclude certain items from public facing HMDA data, including property addresses and credit scores. Other pieces of information will be released but only in ranges, as opposed to precise numbers.

    In its statement, the bureau said it “has decided that it would be beneficial to conduct a separate notice-and-comment rulemaking to incorporate any modifications of HMDA data into the text of Regulation C."

    The statement also said that the bureau will consider what HMDA data will be released in future years based on the comments it receives.

    AFSA Responds to American Banker Story

    AFSA submitted the below to the American Banker yesterday.

    To the Editor,

    A recent story published in American Banker on December 27th makes a number of salient points about the consumer loan products sometimes called “live checks.” While the article points out that these products fill a recognized need in the marketplace, it also includes false claims from an activist group hostile to financial services.

    As the article states, live checks are in demand as customers with less than perfect credit face difficulty borrowing from traditional banks. Contrary to the claim by the activist group, the National Consumer Law Center (NCLC), the checks themselves are clearly and transparently marketed in accordance with federal and state truth in lending laws. Moreover, the consumer finance companies themselves have every incentive to ensure their practices are fully compliant with relevant regulations.

    NCLC also erroneously claims that it has been “getting more complaints about live checks, from both lawyers on the ground and the Consumer Financial Protection Bureau’s [CFPB] complaint database.”

    However, NCLC offers no hard basis for the first part of that claim, and the second part is demonstrably false. As can be easily confirmed on CFPB’s own website, there have been fewer than 100 out of over a million complaints – that’s 0.008% – to CFPB in the last five years. In contrast, there are over 20,000 complaints about federal student loans. In fact, the article cites a former CFPB acting deputy enforcement director who says that she is, “not sure how big of a problem this is.”

    Limiting the use of live checks would harm consumers. The Federal Reserve has been clear that pre-screened offers of credit, including live checks, benefit consumers who need access to credit.

    The public and lawmakers alike both deserve a clear picture of our industry’s products and practices as they consider new legislation, and we hope this letter will help dispel false claims.

    CFPB Chief’s message: Enforce, but don’t presume guilt

    Kathy Kraninger, the recently-confirmed director of the Consumer Financial Protection Bureau (CFPB) said in an email to staff that the bureau will “vigorously enforce the law,” but also must weigh the “costs and benefits to consumers” of enforcement activities and rulemakings, according to the American Banker.

    “We must do our work with an open mind and without presumptions of guilt, and to always carefully weigh the costs and benefits to consumers of our enforcement activities and regulatory rulemakings,” Kraninger wrote in the brief email. “On my watch as Director, the CFPB will vigorously enforce the law. I also want the Bureau to respect the rights of all we serve and interact with, to safeguard their personal information, and to be transparent in its operations.”

    Kraninger went on to extend her wishes for a new year “full of commitment, good health and laughter.”

    Webinar to Cover Optimization of Alternative Data Usage

    Join AFSA on Tuesday, Jan. 15 for Optimizing the Usage of Alternative Credit Data in Auto Finance, presented by Clarity/Experian.

    The drive to approve as many applicants as possible and boost revenue can leave auto lenders vulnerable to fraud or default. Augmenting a traditional credit report with alternative credit data allows lenders to expand their approval criteria without the additional risk, opening the door to a whole new consumer population.

    In this webinar, attendees will learn:

    ·         Why alternative credit data is necessary in subprime auto lending

    ·         How to optimize underwriting and apply risk-based pricing strategies

    ·         How to use alternative credit data to approve more loans and determine safer loan terms

    Registration and program information is available in the Webinar Resource Center.

    AFSA Publishes 2019 Legislative Preview and 2018 Review White Paper

    Today, AFSA’s State Government Affairs department published its 2019 State Legislative Preview and 2018 Review white paper. Published monthly, AFSA’s state white papers typically provide a snapshot in time covering a single issue area; however, the 2019 preview/2018 review provides a broad look across AFSA members’ priority issues, including information on debt collection, fintech regulation, mortgage lending and servicing, payment cards and systems, state rate cap activity, traditional installment loans, and vehicle finance. The paper will give AFSA members a good idea of what they can expect from the states throughout this year.

    With all 50 state legislatures scheduled to meet in 2019, AFSA expects the states to have an active year. This white paper examines legislative trends across the past seven years, and looks at 2018’s legislative activity. The paper also includes information on legislation prefiled for the upcoming sessions. In the wake of recent major data breaches, privacy and fraud issues are likely to be a high priority for many states this year—particularly in California, where state legislators may look at changes to last year’s far-reaching Consumer Privacy Act.

    In addition to information on the priority issue areas, the white paper also covers state attorney general enforcement activity in 2018 and the ongoing evolution of fintech regulation.

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

    AFSA expands staff roles in federal, state policy functions

    The American Financial Services Association (AFSA) today announced promotions reflecting expanded expertise and increased responsibilities in both its federal and state government policy functions.

    Celia Winslow, formerly Director of Legal & Regulatory Affairs, becomes the association’s new Vice President, Legal & Regulatory Affairs. She will work with AFSA’s members to devise and implement a comprehensive and proactive policy regarding federal regulations, with an emphasis on the Consumer Financial Protection Bureau. On the legal side, she manages AFSA’s amicus (friend-of-the-court) brief efforts in district, state, and federal courts. Additionally, she is the staff liaison to AFSA’s Law Committee. Winslow joined AFSA in 2006 and holds a BA in Politics from The Catholic University of America, Washington, D.C.

    Susan Sullivan, formerly Manager of Congressional Affairs, becomes AFSA’s new Director of Congressional and Political Affairs. In this role, she builds and maintains relationships with members of Congress and congressional staff and implements AFSA’s federal advocacy agenda. In addition, Sullivan manages AFSA's Political Action Committee (AFSAPAC). She also serves as staff liaison to AFSA's Operations Committee. Sullivan, who joined the association in 2010, holds a BA in Politics and International Relations from Rollins College, Winter Park, Fla.

    Matt Kownacki becomes AFSA’s new Director of State Research & Policy, tracking and analyzing state and local regulatory and legislative policy. He issues comment letters to state legislators and agencies on issues affecting AFSA member companies. Additionally, he drafts and edits resources available to AFSA members, including 50-state surveys, talking points, issue briefs, and white papers. Kownacki also provides regular updates to State Government Affairs Committee members on current state legislation. Kownacki joined AFSA in 2015 and holds a BA in Economics from Hillsdale College, Hillsdale, Mich.