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Friday, September 10, 2021

Last month we wrote a blog relating to a consent order entered into by the California Department of Financial Protection and Innovation (DFPI) with a servicer of income share agreements.  The DFPI determined that, despite claims by the provider to the contrary, the income share agreements are student loans that subject the provider to California’s licensing requirements.  It did not take long for the CFPB to enter the fray.  On September 7, the CFPB entered into a consent order with Better Future Forward, Inc. and various affiliates (collectively BFF) in which the CFPB determined that the company:

Engaged in deceptive acts and practices concerning the fact that their income share agreements are student loans;

Failed to make disclosures required by the Truth in Lending Act and Regulation Z for creditors generally and for originators of private education loans;

Imposed prepayment penalties on private education loans through its use of a “payment cap” mechanism, in violation of the Truth in Lending Act; and

Offered or provided a consumer financial product or service not in conformity with federal consumer financial law.

BFF made the argument that its product was not a loan, because if certain terms were not met (including the student’s future income exceeding a provided threshold), the student was not obligated to repay the amount received from BFF.  The CFPB rejected this position, stating that BFF’s income share agreements “are credit under the [Consumer Financial Protection Act] because they grant consumers the right ‘to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for such purchase.’ 12 U.S.C. § 5481(7).”
Putting It Into Practice:  As we pointed out in our earlier blog, and now reiterate, not to be lost by this action (or the earlier action of the DFPI), however, are the parallels to other cash advance products.  Courts, regulatory agencies, and the plaintiffs’ bar have, in a number of recent instances, cast cash advance products as the equivalent of lending products that carry usurious interest rates and violate state and federal prohibitions against unfair and deceptive acts and practices, among other laws.  Merchant cash advance transactions, pension advances, and litigation funding advances, among others, bear similar transactional elements and risks to funding companies as income share agreements because, in part, all of these transactions include contingencies such that the funders may receive no return on their investments if future events fail to materialize, e.g., a student under an ISA fails to secure sufficiently gainful employment in the future.  Nonetheless, such advance products have been characterized as loans notwithstanding their conditional nature.
While the CFPB’s consent order honed in on a student loan provider, providers of the types of programs referenced above or other similar programs may need to consider what program adjustments may be necessary to avoid finding themselves on the CFPB’s radar.

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.

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Hello and welcome back to MarketWatch’s Extra Credit column, a weekly look at the news through the lens of debt.
This week, we’re diving into a recent regulatory action surrounding Income Share Agreements — deals companies, schools, nonprofits and other organizations offer students as a way to finance their education. 

The agreements, — which allow a student to pledge a portion of their future earnings in exchange for upfront funds to pay tuition — have gained traction in recent years as policymakers and educators grow increasingly concerned about the implications of traditional student debt on borrowers. Proponents of the deals note that they offer insurance for students because borrowers’ incomes typically have to reach a certain threshold before they’re making payments on the agreement. 
But ISAs have also sparked concern from consumer advocates and some lawmakers who say that an ISA is just a loan by another name with terms that risk confusing borrowers and calling them something else is just an effort to evade regulation. 
Watching the debate play out over the past few years over whether an ISA constitutes a loan is one of the things that pushed me to look more closely in this column (and elsewhere) at the way we talk about debt and credit. It starkly highlights the weight of those terms; the rules these products have to follow hinge in part on whether they’re defined as credit in the eyes of the law, but a major part of their appeal is that they’re pitched as an alternative to student loans. 
This week may have marked a turning point in that years-long discussion. So let’s dig into the news and its implications. 
CFPB says ISA provider deceived borrowers
The Consumer Financial Protection Bureau found that Better Future Forward, a nonprofit offering ISAs, misled borrowers by telling students that their ISAs weren’t loans and didn’t create debt. The consumer watchdog also found that the organization didn’t follow certain disclosure and other laws that apply to private student loans. 
BFF agreed to a consent order with the CFPB without admitting or denying any of the bureau’s findings. As part of the deal, the organization agreed to — among other provisions — stop saying that its ISAs aren’t loans and to provide potential borrowers with certain disclosures required by law for lending products that are meant to make it easier for consumers to evaluate products. 

“The Consumer Financial Protection Bureau found that Better Future Forward, a nonprofit offering ISAs, misled borrowers by telling students that their ISAs weren’t loans and didn’t create debt.”

The order only binds BFF, “but it throws down a pretty clear marker about what the CFPB thinks about ISAs,” said Adam Levitin, a professor at Georgetown Law.  “It’s a statement that the CFPB believes that ISAs are private student loans,” he said, and are therefore subject to certain laws governing them, like the Truth in Lending Act.
That law requires lenders to inform borrowers of specific provisions of a loan, including the annual percentage rate or APR.  “The CFPB in its order was very clear that those disclosures need to be made by BFF,” said Maria Earley, a partner at Morrison and Foerster, who advises and represents fintech and financial services companies.  

As a result of the order some ISA providers may also rethink their approach to payment caps, said Heather Klein, an attorney at Ballard Spahr, who advises financial services companies on regulatory and enforcement issues. Typically students pay back ISAs one of two ways: Either by paying a percentage of their income for a certain period of time or by paying back a certain amount of money, what’s known in the industry as a payment cap on the ISA. 
The CFPB found that Better Future Forward’s payment cap structure violated a ban on prepayment penalties for private student loans because in one of its programs, the organization automatically added 10% of the funding amount if the student wanted to repay the ISA early. 
“This may portend a significant shift in ISA programs that set the payment cap as a multiple of the funding amount,” Klein said. 
The intent behind setting the payment cap as a fixed multiple of the original funding amount is to allow a high earner to exit the ISA early, but still ensure that they repay enough to subsidize returns from low or moderate earners. Providers may need to redesign their payment caps to comply with the CFPB’s order yet do so in a way that their ISA programs remain sustainable, Klein said. 
Violation of Truth in Lending Act requirements
In the case of Better Future Forward, the organization offered two income-share agreements with financing up to $2,500 or up to $35,000, depending on the program. Students could satisfy their end of the deal in one of two ways, according to the CFPB order. In the first, students would pay back a portion of their income for a set period of time. If students’ post-graduation income fell below a certain threshold, then they would have a monthly payment of zero. 
Students’ second option was to pay back a set amount of money, known as a payment cap on the agreement. Better Future Forward determined the amount of the payment cap by taking a base number and adding what the organization called a “growth component” or percentage of the base number, according to the CFPB order. 
For one of the ISAs offered by BFF, the organization calculated the base for the payment cap by immediately adding 10% to the amount funded, which, according to the CFPB, constituted a prepayment fee or penalty, in violation of Truth in Lending Act requirements for private educational lenders. 
CFPB officials also wrote in the order that “the growth component adds money to the base number in exactly the same way that interest adds money to a traditional loan’s outstanding principal.” 
Better Future Forward told students in multiple places on its application and disclosure forms “THIS IS NOT A LOAN,” the CFPB said, which the agency found deceived borrowers.  
Kevin James, Better Future Forward’s chief executive officer, wrote in an email that the organization’s program is making a difference for its students and other “tremendous ISA programs” are seeing similar results. James added that despite uncertainty surrounding the regulatory treatment of ISAs, the organization has used disclosures built around the principles of existing laws. 
“With the Bureau’s determination, we are eager to work with them to bring clarity to the question of how existing federal disclosures should apply to ISAs,” James wrote. “We will also continue to work with policymakers more broadly to get a more comprehensive consumer protection regime in place that addresses the unique nature of these new tools.” 
Companies doing similar things are likely ‘on notice’
As part of the agreement, the CFPB didn’t impose a financial penalty on Better Future Forward because the organization “demonstrated good faith and substantial cooperation beyond that required by law,” the Bureau said in a press release.  
But going forward, other providers will likely have to find a way to offer their products while complying with the position sketched out by the CFPB in the order, said Dalié Jiménez, a professor at University of California Irvine’s School of Law. That means issuing disclosures and not describing the product as something other than a loan. 
“To the extent that you’re a company that is engaging or has engaged in any of the listed things,” she said. “You are definitely on notice.” 
Following the expectations the CFPB laid out in its consent order, like providing certain disclosures, won’t stop ISA providers from giving ISAs, Earley said. 
But the signal from the CFPB that the Bureau views them as credit could mean, according to Levitin, that ISA programs have to follow the Equal Credit Opportunity Act, which prohibits discrimination on the basis of race, sex and other categories. That is “a real problem for ISAs, particularly ISAs that are being offered not just for a single program, like a coding camp or something, but where they are being offered generally to a higher education population,” he said.   
Critics of ISAs have warned that the way some are structured could mean they’re discriminating against certain protected groups. Some schools and ISA companies offer the deals to students in a variety of majors. Typically, students majoring in a higher earning field will be asked to pay back a smaller percentage of their income than students pursuing majors with less earning potential. 
Fields that pay more tend to be disproportionately white and male, which means women and students of color are more likely to end up with ISAs that have more onerous terms. “There’s a looming fair lending problem if ISAs are credit,” Levitin said. 
Department of Education will consult with colleges offering ISAs
The order, which described ISAs as private student loans, may also present challenges for colleges offering ISAs for another reason: There are specific rules surrounding the way colleges can interact with private student lenders. 
Right now, some colleges do offer income share agreements to students themselves, pitching the deals as an indication that the schools have a stake in students’ success — if a student makes less money, the college gets paid back less. Typically, schools work with a company that collects payments and provides back end support for the agreements in other ways. 
Colleges that endorse a certain private loan product have to publicly document why they’re making that endorsement and can’t share revenue with the loan company. The Department of Education indicated that it would be looking at whether colleges that offer ISAs are following these guidelines, known as preferred lender rules.

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As if dealing with a pandemic weren’t enough, young professionals Eryn Street and Jonathan Fuss last year decided to move from Long Beach, California, to Sacramento, so Street could go back to college. But before any of that could happen, the couple – she’s a critical care nurse and he’s a telecom engineer – needed an affordable place to live.
Like many parts of the country during the pandemic, Sacramento’s housing market was on fire, with a median sale price of $380,000 in July 2020, up from $348,500 the year before, according to Realtor.com. That was far too steep when combined with tuition. Even renting was out of reach – homes in the couple’s desired location started at $3,000 a month.
Then, Street’s mother suggested an alternative: a manufactured home, a factory-built structure on a metal frame that’s transported to a homesite.

They looked at five or six models before finding one they liked, a three-bedroom, two-bath unit built in 1992 and listed for $109,000. Their loan payment, utility bills and $660 lot fee at their mobile home park total about $1,500 a month.
“I didn’t know a lot about manufactured homes,” said Street, 33. “I was surprised by the flow of the home and love the design. It was being remodeled with new flooring and appliances,” and the plumbing and electrical lines were also new.
Living in a mobile home park has also been a pleasant surprise, she added. “We love our neighbors and it’s really quiet.” It’s an all-age park with cultural diversity, another plus. “We’ve met several neighbors. Everybody’s really sweet.”
There are approximately 6.7 million occupied manufactured homes in the United States, according to the U.S. Census Bureau. Low inventory of single-family homes is driving more buyers to look at manufactured housing, said Nicole Bachaud, an economic analyst with Zillow. After the pandemic struck last year, both listing prices and sale prices of manufactured homes increased.
“The $45,000 mobile home selling in 2019 is now selling for $65,000,” said Jon Felts of Hanson’s Mobile Home Sales in Sacramento, where Street and Fuss purchased their unit.
Manufactured housing is 35% to 47% less expensive
A study from the Urban Institute found that manufactured housing is 35% to 47% less expensive per square foot than new or existing site-built homes. Overall, a U.S. Department of Housing and Urban Development report found manufactured housing to be a good value for low-income households.
Yet manufactured homes account for only 6 percent of the country’s housing stock, and the number of new manufactured homes shipped each year is down significantly from the late 1990s.
Authors of the Urban Institute study found that restrictive zoning measures and hurdles in obtaining financing are two main reasons manufactured housing production remains low. Potential buyers face other deterrents. Upfront delivery and setup costs typically range from $21,000 to $34,000, according to Next Step Network, a nonprofit that specializes in manufactured homes.

Owners who lease lots in mobile home communities are vulnerable to rent increases and even evictions when communities are sold to make way for more profitable developments. And some experts are concerned that improperly anchored manufactured homes can be particularly susceptible to heavy damage from tornadoes and hurricanes.
Still, the pandemic helped many buyers overcome their resistance. “Anecdotally, retailers are seeing a lot more interest in our homes,” said Lesli Gooch, CEO of the Manufactured Housing Institute. “My impression is that people are wanting their own space. You can have a garden, you can have animals. There’s an attraction to moving out of urban areas.” Some factories are reporting a backlog of up to six months, Gooch added.
The institute touts manufactured homes as one solution to the shortage of affordable housing, and it lobbies policymakers to address restrictive zoning practices that make it difficult for some buyers to find land for their unit. “While localities may not admit they’re keeping us out, they have rules that affect manufactured homes,” Gooch said.
Zoning restrictions take several forms, as detailed in a 2020 report from the Federal National Mortgage Association (Fannie Mae),a private corporation that buys and guarantees mortgages through the secondary mortgage market. Some municipalities prohibit manufactured homes entirely or exclude them from single-family residential zones. Other zoning restrictions impose minimum lot-size requirements specific to manufactured homes, which force these homes onto more rural, less dense areas.
To help manufactured homes better “fit in” among traditional stick-frame homes, Fannie Mae created MH Advantage, a conventional loan product for manufactured homes with site-built characteristics, such as permanent foundations, garages or carports, and interior drywall. Called a CrossMod, these homes are virtually indistinguishable from higher-priced site-built homes.
CrossMod homes are relatively new 
Still, CrossMod homes are relatively new to consumers and represent only a small piece of the market. Most everyone else faces a daunting array of financing options. In general, though, manufactured-home borrowers tend to have smaller loan amounts, pay higher interest rates and refinance less often than borrowers of site-built homes, according to a report released in May by the Consumer Financial Protection Bureau.
Moreover, only 27% of 420,000 manufactured home loan applications in 2019 resulted in the loan being financed, compared with 74% of applications for site-built homes, according to a CFPB analysis of loan-disclosure data. These differences remain even after controlling for credit score.
The CFPB raises specific concerns about chattel loans, a personal-property loan for manufactured home buyers who don’t own the underlying land. According to the bureau, chattel loans accounted for about 42% of all manufactured home purchases in 2019. When these borrowers default, they typically face repossession, a process with fewer consumer protections that would allow them to remain in the home.
“If you’re doing a chattel loan, you’re at the mercy of the lender,” said Guy Cecala, publisher of industry newsletter Inside Mortgage Finance. “They probably should be regulated more,” he added.
One aspect of manufactured homes that is highly regulated: construction. In 1974, Congress passed legislation that led to the 1976 release of HUD construction codes, which set minimum requirements for construction, energy efficiency and safety for manufactured homes. (Some states have additional construction and installation requirements.)
Hurricane Andrew spurred new regulations in 1994 that divided the country into three different wind zones. All manufactured homes are required to be built to the standards of the wind zone where the home will be placed.

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Written By ESR News Blog Editor Thomas Ahearn
On August 13, 2021, the United States District Court, Middle District of Florida certified an “Adverse Action Class” in the class action lawsuit LYTTLE v. TRULIEVE, INC. that claimed a cannabis company took adverse action against employees and applicants based on background checks in a way that violated the Fair Credit Reporting Act (FCRA). The cannabis company settled the lawsuit for an undisclosed amount, according to court filings.
Plaintiff Lyttle applied for employment with defendant Trulieve and received a conditional job offer. Trulieve then rescinded the job offer based on the contents of his “consumer report,” a term that the FCRA uses to define a background check. Before rescinding the job offer, Trulieve allegedly did not provide Lyttle with notice of its intent to rescind the employment offer, a copy of his background check, or a summary of his rights under the FCRA.
Under FCRA § 1681b(b)(3)(A), when using a consumer report for employment purposes, before taking adverse action based in whole or in part on the report, the person intending to take adverse action shall provide to the consumer to whom the report relates: (i) a copy of the report; and (ii) a copy of the document “A Summary of Your Rights Under the Fair Credit Reporting Act” prescribed by the Consumer Financial Protection Bureau (CFPB).
Trulieve allegedly admitted they had mistakenly denied employment to Lyttle based on his consumer report. If Trulieve had provided him with a pre-adverse action notice, a copy of his consumer report, and a summary of rights, Lyttle claimed he could have clarified any confusion, but he was not given an opportunity to address any concerns with his consumer report or state his case. So Lyttle brought a claim against Trulieve under the FCRA.
The proposed “Adverse Action Class” consisted of: All Trulieve applicants and employees in the United States against whom adverse employment action was taken, based, in whole or in part, on information contained in a consumer report obtained within five years preceding the filing of this action through the date of final judgment, who were not provided notice, a copy of their report or summary of rights pursuant to § 1681b(b)(3)(A).
However, the Court certified the following Class: All Trulieve applicants and employees in the United States against whom adverse employment action was taken, based, in whole or in part, on information contained in a consumer report obtained within two years preceding the filing of this action through the date of final judgment, who were not provided notice, a copy of their report or a summary of rights pursuant to 15 U.S.C. § 1681b(b)(3)(A).
The FCRA 15 U.S.C. § 1681 was enacted by Congress in 1970 to promote the accuracy, fairness, and privacy of consumer information contained in the files of Consumer Reporting Agencies (CRAs), protect consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, and regulate the collection, dissemination, and use of consumer information, including consumer credit information.
Employment Screening Resources® (ESR) – a leading global background check firm ranked the #1 screening provider by HRO Today in 2020 – offers a Cannabis Industry Background Screening Solution since cannabis businesses have an interest in protecting their product from theft and are concerned about providing a safe workplace for their employees and the public. To learn more about ESR, visit www.esrcheck.com.
NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.
© 2021 Employment Screening Resources® (ESR) – Making copies of or using any part of the ESR News Blog or ESR website for any purpose other than your own personal use is prohibited unless written authorization is first obtained from ESR.

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The Consumer Financial Protection Bureau (CFPB) took action against a nonprofit company that offers income share agreements (ISAs) to help students cover the high costs of obtaining a college degree, alleging that the lender has misinterpreted the nature of those financial products.
ISAs, which have gained popularity among college students as an alternative to traditional student loans, provide borrowers with education funding and, in exchange, require them to pay a percentage of their post-graduation income for a period of time. While terms may vary from provider to provider, ISAs can be designed in a way that borrowers have to pay back only when their earnings reach certain thresholds, and with a capped payment amounts.
In a consent order announced Tuesday, the CFPB said it has settled with Better Future Forward, a nonprofit providing education finance plans. The Virginia-based company allegedly misrepresented its product by saying that ISAs are not loans and do not create debt, and allegedly denied consumers information necessary to fully evaluate their financial options, according to the federal agency.
Under the settlement, Better Future Forward will stop saying that ISAs are not loans. It will also provide lending disclosures required under federal law, not object to any discharge of a student’s ISA in the case of bankruptcy, and not impose a prepayment penalty on the loan.
“The ISA industry has tried to evade oversight by claiming that its products are not loans,” Dave Uejio, acting director of the CFPB, said in a press release. “But regardless of the name on the label, these products are credit and have to comply with federal consumer protections. The ISA industry cannot pretend that core consumer protection laws do not apply to their products.”
In response to the CFPB’s consent order, Better Future Forward CEO Kevin James said in a statement that the company has been a leader in advocating for policymakers to adopt “clear and protective guardrails for the emerging ISA space.”
“While there has been uncertainty about the application of the existing federal loan disclosure regime to risk-sharing tools like ISAs, we believe CFPB’s oversight role is critical and are eager to work with the Bureau to bring clarity to these questions around how federal disclosures should apply to BFF’s ISAs,” James added.
Proponents of ISAs, who range from scholars, conservative politicians, to college presidents, see them as a potential solution to the issue of mounting student loan debt. They argue that ISAs are more borrower-friendly than conventional loans, since the risk is expected to shift to the private lenders from students who won’t be burdened with payments if their education doesn’t pay off.
“A student borrows nothing but rather has his or her education supported by an investor, in return for a contract to pay a specified percentage of income for a fixed number of years after graduation,” wrote Mitch Daniels, president of Purdue University, in an op-ed on Washington Post. At Purdue, hundreds of students use an ISA fund called Back a Boiler.
Opponents of ISAs, however, argue that income-based contracts are not as pro-student as they may sound, considering borrowers with higher earnings could end up paying more under ISAs than through traditional student loans.
“Purdue University’s ‘Back a Boiler’ ISA program, for example, requires no payment for those with earned incomes of less than $20,000,” wrote Sen. Elizabeth Warren (D-Mass.) in a letter (pdf) to former Education Secretary Betsy DeVos. “Yet, a student who makes just over that threshold could be required to pay 5 percent or more of her income toward the ISA—a precarious situation for anyone, particularly someone with children or other obligations like medical expenses.

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Everyone has heard the word “credit score”. It’s a three-digit number determined by your credit history. It tells the lender how well you managed your past credit and predicts your future credit. Your credit score can affect your ability to buy a home, get a new car, and in some cases secure a job.But do you really understand how Various factors that affect your credit work or your score? Here are some insights you may not know about your credit:
That “free” credit score may not be the FICO score. There are some free tools that can give you some thoughts on what your credit score is. Companies like Credit Karma offer alternative scores called Vantage Scores. This is usually free with a financial services subscription.However According to the Consumer Financial Protection Bureau, This alternative or “educational” score is not the same as the FICO score. In fact, it is usually not used by lenders to make credit decisions. There are 65 actual models of credit scoring that financial institutions can choose for lending. Therefore, if you request a score from a free service, please be aware that it can be several points higher or lower than the FICO credit score obtained by the lender.
You need to understand credit usage. Credit usage is the ratio of your credit card balance to your credit limit. To calculate your credit usage, divide your credit card balance by your credit card limit and multiply by 100. For example, if your credit card limit is $ 25,000 and your balance is $ 1,000, your card usage is 4%. The lower the usage rate, the better. This means that you are using only a small portion of the credit lent to you. High credit usage can damage your score as it indicates that you are overextended or at risk of delaying payments. As a rule of thumb, keep your credit usage below 30% to maintain a healthy score.

Know what affects your credit score and what doesn’t. Scores are based on five key factors: payment history (35%), credit usage (30%), credit history length (15%), new credits (10%), and credit mix (10%). Is calculated. This means that payment failures, credit card limits, and multiple new credit accounts opened in a short period of time can be a major issue for your score. Some have no effect on the score. For example, getting your own credit report is considered a “soft query” and has no effect on your score. Utility bills, mobile invoices, cables, bank accounts and medical bills are not reported to the credit bureau and do not directly affect your score. That is, unless it is delinquent and reported to the collection.
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As Consumer Reports found out, getting hold of someone to help you may be more difficult than you think

ST. LOUIS — Online-only banks are popular alternatives to traditional banks, offering services like no overdraft fees and early-pay options. But if a problem arises with your account, you can’t just walk into a branch to fix it. 

As Consumer Reports found out, getting hold of someone to help you may be more difficult than you think.

If you find yourself needing to get a problem resolved with your online-only account, you might have to get creative. Try to find the company’s main number online, and ask to be transferred to the office of the CEO. Explain your situation clearly, and remember to be nice no matter how frustrated or angry you get.

Another option is to head to social media. Send a direct message to the company on Twitter instead of a public tweet.

Give the company a chance to fix the problem before you make a scene publicly. It may appreciate that and give you a quicker and more helpful response.

Chime, the biggest online-only bank, told CR that it plans to offer full 24/7 customer service.

If you’re still having problems, you can file a complaint with the Consumer Financial Protection Bureau.

If you think you’ve gotten bad service, make sure you report it to the Better Business Bureau. And before you choose a service, it’s always a good idea to check the BBB website to see what consumers are saying about the company.

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inplace-infolinks

Inplace #2

Arizona, D.C. – unique survey exploration released today by highly regarded polling vendors worldwide Solution Group (D) while the Tarrance team (R) shows that misperception around payday loans, than concept and knowledge, is definitely travel traditional intelligence and fueling regulating measures and constitutional judgments regarding the goods. In reality, both applicants and voters are worried about extra regulation that minimize access in addition to the technique for consumers to decide on payday remedies.
As opposed to the statements of regulators and buyer supporters, the study research shows that individuals enjoy getting the payday loan online solution and completely understand the mortgage conditions. Than financial institutions, payday users afford the pay check loan providers improved markings for the treatment of all of them pretty.
“It’s very clear from this survey research your CFPB’s misguided work to manage cash loans provides absolutely left out a vey important sound, the cash advance purchaser,” explained Dennis Shaul, Chief Executive Officer people economic treatments relation of The usa (CFSA) which commissioned the study. “The CFPB has not addressed the fact that the brand new laws will lessen entry to loans for all the scores of homes which use payday advance loans to properly take care of financial shortfalls and unforeseen costs.”

The client savings security Bureau (CFPB) is anticipated to broadcast its laws on payday advance loans and temporary assets in the impending months or days. In March 2015, the bureau introduced the principle strategies to regulate payday loans and various other forms of short term loan. Predicated on these rule ideas, several feel that a very important lots of payday financial institutions will likely be required to cease activity.
Summary of Review Research Results
Those who have utilized payday goods posses definitely better awareness belonging to the merchandise than voters, love receiving the payday loan online alternative, and grasp the borrowed funds terms and conditions.

Over nine in ten debtors agree that payday loans are a smart determination any time customers are confronted with unforeseen costs, while 58per cent of voters reveal this perspective.
While sixty percent of individuals believe that payday advance loans were rather priced the advantages they supply, especially when in contrast with alternatives, best half that amounts (30percent) of voters consent.
A lot of debtors (96per cent) declare the pay day loans they’ve got removed being helpful to these people yourself and three-quarters are going to suggest payday advances to family (75%).
Virtually all debtors (96%) say these people completely realized how many years it could decide to use pay back their unique payday loans plus the finances fees through pay before you take out the financing.

The reason being more voters inhabit a pretty various economic world than payday loans debtors.

Once need exactly what they would do when dealing with a temporary financial disaster, the plurality of individuals (40percent) would determine an online payday loan, while plurality of voters (49per cent) would just question anybody you like for that financing.
Whereas, around one-quarter (23per cent) of payday loan subscribers indicate they offer used an instant payday loan to convey financial aid to 1 inside buddies or relation.
And around three-quarters of individuals (74percent) say they had not one selection bad credit loans available the moment they received their unique latest payday loan online.

But both borrowers and voters are worried about additional regulation which would minimize availability along with capacity for customers to choose these products.

The survey research learned that 60% of voters explained some level of concern whenever instructed that 60-80% from the payday loans field could possibly be eliminated from recommended requirements. An additional concern, 58per cent of voters attributed some standard of focus throughout the paid down access to loan the about a quarter of People in america who do certainly not qualify for debt from bankers, loan unions or charge cards.
Voters are actually consistently divide (47%/48%) about whether payday lending should be most securely moderated or perhaps not, while 66percent of borrowers want their own newest capacity to receive these loans maintained.
While 80% of customers claim recent requirement to obtain a payday loan are sufficient, around half (47percent) of voters think.
Significantly less than a third of borrowers (26%) and voters (31percent) talk about the goal of pay day loan management should be to restrict credit volume.

Methods
International approach class and so the Tarrance team performed two phones reports for the Community savings Companies connection of The country (CFSA). 1st, a nationwide survey of 1,000 probable 2016 voters between January 9 and 13, 2016. The edge of problem during the 95% self esteem levels are +/- 3.1%. The border of blunder on sub-samples happens to be additional. Second, a nationwide survey of 1,000 payday loans consumers, like oversamples of 321 African North american payday loan applicants and 300 Hispanic payday loans applicants. The study would be complete between January 12 and 19, 2016. The profit of problem for the total test during the 95per cent self esteem levels was +/- 3.1percent. The border of blunder on oversamples and sub- products try greater.

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Labor Day weekend marked a grim milestone for millions of people out of work due to the pandemic.
Unemployment benefits ended for about 7.5 million people after President Biden’s administration declined to ask Congress to extend federal benefits again. Another 3 million people lost a $300 weekly federal boost to state jobless benefits, though governors in 26 states had already withdrawn early from the program.
If your unemployment benefits just ended or got cut, don’t wait to take action. Here are seven steps to take ASAP.
Expanded unemployment compensation has been a lifeline to millions of workers over the last year and a half. If you’re worried about how you’ll stay afloat, here’s what to do.
1. Look for a job in an industry that hires fast
If you’re still searching for employment, consider a bridge job. Basically, it’s any job that helps you pay the bills, even if it’s not your ideal job. Because many businesses are having trouble recruiting employees right now, you may be able to negotiate better wages than you could in pre-pandemic days in fields that don’t traditionally pay well.
Some places to look:
Data entry: Many industries need data-entry clerks and have fully remote positions. Typical pay ranges from $10 to $15 an hour. If you have solid typing skills, becoming a transcriptionist is another option.
Online tutoring: If you have a special skill or a college degree, getting an online tutoring job can help you bring in extra cash. Typical pay ranges from $10 to $27 an hour.
Food service, retail and hospitality. Across the country, employers in food service, retail and hospitality are holding job fairs, with many hiring on the spot and paying higher wages than they did in the past. For example, these 160,000 restaurant jobs pay over $10 an hour.
Also check out The Penny Hoarder’s work-from-home jobs portal, which regularly features remote entry-level listings.
2. Take up a side hustle
Your goal here is to find any way to start generating income before your benefits end. There are plenty of easy side hustles you can take on now with little upfront cost to start earning extra cash. Some ideas include:
Drive for Uber or Lyft. Ride-share companies Uber and Lyft have a driver shortage, making it possible for drivers to earn $25 an hour or more in some markets.
Do odd jobs on TaskRabbit. Use the app to connect with people near you who need help with tasks like furniture assembly, cleaning and painting.
Deliver groceries through apps like Instacart or Shipt.
Babysitting. Find gigs through sites like Care.com and SitterCity.
Pet sitting and house-sitting. As people resume travel, they’ll need services like pet care and house-sitting that weren’t in high demand last year.
Sell stuff. It’s not really a side hustle, but if you have items in good condition that you’re not using, you could pocket extra cash by selling them. For example, here are 14 places to sell used clothing online or in person. You can also sell gift cards online for cash.
3. Search for rental assistance
While the federal eviction moratorium expired Aug. 26, help is still available. Congress has allocated nearly $47 billion to help distressed renters — but getting a piece of that money is maddeningly complex. As Vox reported, more than 340 agencies are administering that aid, each with their own set of rules.
To learn more about relief in your area, check out this state-by-state guide to rental assistance programs. Another good resource is the Consumer Financial Protection Bureau’s rental assistance page. You may also qualify for help with utilities and energy costs.
The 211 helpline, which is operated by the United Way, may also be able to help you navigate local assistance programs. You simply dial 211, and you’ll be connected with someone who knows about resources in your community. Because of the lengthy process involved, it’s essential that you take this step ASAP.
4. Get food assistance
The 211 hotline can also connect you with food pantries near you. Also visit benefits.gov to determine whether you’re eligible for SNAP benefits. It can take up to 30 days to receive benefits through the regular application process, but you may qualify for expedited benefits, depending on your state.
5. Contact your unemployment office
You may still be eligible for your state’s unemployment benefits, but the rules will vary by state. Most states have a limit on how long you can receive benefits.
As difficult as dealing with your state’s unemployment office can be, it’s essential that you contact them immediately to find out whether you’ll qualify for state assistance. In some cases, you may need to submit a new application or apply for an extension.
6. Ask your creditors for forbearance
Though banks aren’t widely advertising forbearance programs the way they were a year ago, contact your lenders to see if skipping or pushing back payments is an option. The best time to do this is always before you’ve missed a payment.
Be sure to ask how they’ll report your payment status to the credit bureaus. If they’ll be reporting your payments as delinquent, your credit score will plummet.
If you have federal student loans, take advantage of the automatic forbearance that’s in effect through at least Jan. 31, 2022. You can ask for a refund of any payments you’ve made since March 2020.
7. Don’t pay debt if you’re putting your health or housing at risk
A bare-bones budget includes only your basic necessities: housing and utilities, food, health care and minimum debt payments. But in a true emergency, you may have to make even deeper cuts.
Try to work with your lenders. But focus on paying rent and utilities, keeping food on the table and getting medications you need before you make payments on credit cards or loans.
Yes, you’ll damage your credit score if you miss payments without your lender’s permission. But you can recover from bad credit. While your credit score is important, your health and housing are far bigger priorities.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected].
This was originally published on The Penny Hoarder, a personal finance website that empowers millions of readers nationwide to make smart decisions with their money through actionable and inspirational advice, and resources about how to make, save and manage money.

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The Consumer Financial Protection Bureau has recently come up with a rule that should help enhance transparency around loans for small businesses.
The proposed rule would require lenders to collect and report all the relevant information about credit applications, such as pricing and demographic data, as well as the reasons for loan denial.
During the COVID-19 pandemic, many entrepreneurs struggled to access relief funds, which is one of the reasons this rule was proposed. The bureau has also announced it would create a web portal where small businesses can share their experiences with the regulator related to applying for credit.
This rule would apply to a wide range of credit services, including lines of credit, credit cards, term loans, and merchant cash advances. It should help regulators see how entrepreneurs fare when trying to get financing and what barriers might prevent them from doing so. The rule was proposed on September 1, and the public has 90 days to submit comments on it.
“After homeownership, small business ownership is the primary means by which families and communities build wealth,” said CFPB’s acting director Dave Uejio, and added, “Yet too often, small business development is starved for want of access to responsible, fairly priced credit.”
The CFPB is a US government agency that ensures lenders, banks, and other financial institutions treat consumers fairly. It is committed to producing innovative tools and resources to help customers develop financial skills and make smart financial decisions. 
The CFPB learns about customer’s needs through research and analyzing data and publishes the information collected about the consumer financial marketplace. It also implements and enforces federal consumer financial laws to preserve choices for consumers and ensure fairness and transparency for consumer financial products and services. Once a new regulation is in place, the CFPB provides support and resources to assist stakeholders in understanding and following the rule.

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Finally, on Tuesday, an email arrived saying she had receive a 100 percent discharge.“I cried,” said Ms. King, who hopes she can now afford computer classes at her local community college.The department appeared to have notified thousands of people about their loan relief on Tuesday, Mr. Gokey said. But confusion remains: Multiple people received notifications with inaccurate information. One borrower who attended ITT, for example, got a letter saying his loans for studying at the Marinello School of Beauty would be eliminated.The push for widespread debt cancellation has overshadowed calls to mend these and other glaring administrative problems that urgently need to be addressed, advocates say — ideally before January, when borrowers will start getting bills again.“The next few weeks and months will be incredibly consequential,” Mr. Frotman said.He and others said the Biden administration should prioritize longstanding struggles with the Public Service Loan Forgiveness program, which is supposed to eliminate the debts of people who work in government or nonprofit jobs for a decade while making payments on their loans. Millions of people could be eligible — the Consumer Financial Protection Bureau estimates that one in four American workers is in a qualifying job — but a variety of problems have left the program with a 98 percent denial rate.And a new debacle is looming: FedLoan, the servicer in charge of guiding borrowers through it, recently said it would end its contract with the Education Department. Its nine million clients will need to be moved to other servicers, a process that has in the past been riddled with mistakes.Ms. Leon, the Education Department spokeswoman, said the agency planned to take up broad rule-making negotiations “in the coming months” that would address regulatory issues for the public-service program and others, but she did not offer any specifics.Advocates hope the Biden administration will help borrowers like Niki Woodard, who earned a master’s degree in communications from Georgetown University and has been working in nonprofit jobs — often low-paying ones — for well over a decade. Ms. Woodard faithfully made her payments for 10 years, then applied for relief on her remaining loan balance, which is now nearly $60,000.

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DURHAM – As this year’s brutal summer showed, it has become increasingly easy to track the consequences of climate change. Just as extreme weather is claiming more and more human lives, more and more species are being lost to extinction. Entire communities have been displaced by savage storms and intolerable temperatures, and rising sea levels and unstable agricultural production threaten to destroy millions of jobs.
These costs are no longer theoretical or far off. They are here now, and though they are being shouldered across the board, the people who feel them most intensely have less access to information, work outdoors, or live in insufficiently protective conditions. Those who cannot easily relocate or afford sufficient property and casualty insurance are increasingly vulnerable.
Despite these growing costs, US financial regulators have yet to show that they are thinking creatively about potential solutions. Their reluctance stands in stark contrast to financial regulators in other rich countries, where policies and processes are being reimagined to accelerate a rapid, orderly, and just transition to a renewable, biodiverse, and sustainable economy.

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On September 7, 2021, the CFPB announced that it had entered into a consent order with an education finance nonprofit (“nonprofit”) in connection with the nonprofit’s offering of income share agreements (“ISAs”). In the consent order, the CFPB asserted that ISAs are extensions of credit covered by the Consumer Financial Protection Act and the Truth in Lending Act (“TILA”) as well as TILA’s requirements with respect to “private education loans.” Because the CFPB asserts in the consent order that it views the nonprofit’s ISAs as credit, the CFPB takes the position that they are also subject to numerous other federal consumer financial protection laws that impose requirements and restrictions on student loan products. This consent order has significant implications for those in the ISA market, as it indicates how the CFPB views re-characterization for ISAs and similar products.
Most ISAs are agreements under which students are provided education funding on the condition that the student pay an agreed-upon percentage of the student’s future income over a defined, post-graduation timeframe. Many ISAs do not require customers to pay anything until their income exceeds a contractually defined floor. A percentage of income exceeding that floor is paid to the ISA provider as an investment return—potentially subject to a cap on overall payments depending on the terms of the specific ISA at issue. Under many common ISA structures, it is conceivable that some customers ultimately will pay nothing in the defined, post-graduation timeframe and, therefore, will see the ISA expire without any payment obligation; other customers will pay an amount less than the funding originally provided; and a final set of customers will pay amounts exceeding the original funding (though, as noted, frequently subject to a total payment cap). While most ISAs provide educational funding, similar products exist to provide funding to consumers, small businesses, and even professional athletes.
Given their structure, ISA providers have generally taken the position that ISAs are not credit and, therefore, are not subject to the requirements of many federal consumer financial protection laws. With this settlement, the CFPB appears to reject that position. The consent order summarily states that the nonprofit’s “ISAs are credit under the CFPA because they grant consumers the right ‘to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for such purchase.’” In a statement on the settlement, Acting CFPB Director Dave Uejio said, “[t]he ISA industry has tried to evade oversight by claiming that its products are not loans . . . [b]ut regardless of the name on the label, these products are credit and have to comply with federal consumer protections. The ISA industry cannot pretend that core consumer protection laws do not apply to their products.”
The consent order released by the Bureau included findings that the nonprofit:

Engaged in deceptive acts and practices by misrepresenting that ISAs are not loans and do not create debt;
Denied consumers information necessary to fully evaluate their financial options by failing to provide disclosures for private education loans as required under TILA and its implementing regulation, Regulation Z; and
Subjected student borrowers to fees or penalties for early repayment or prepayment in violation of the TILA, by calculating the total payment cap on certain ISAs by immediately adding 10% to the amount funded. The Bureau reasoned that if a student paid off the ISA earlier than scheduled, the student would potentially pay more than the amount funded plus the growth component.

Under the terms of the consent order, the nonprofit is required to:

Reform each of its outstanding Opportunity ISAs to eliminate the addition of 10% to the amount funded in calculating the total payment cap;
Stop stating that its ISAs are not loans or do not create debt for consumers;
Provide disclosures required by TILA and Regulation Z for private education loans;
Continue the practice of not objecting to any discharge of a student’s ISA in bankruptcy, including not contesting that repaying a student’s ISA would present an undue hardship; and
Not impose a prepayment penalty on a private education loan and, for certain ISAs, recalculate the payment caps to eliminate the prepayment penalty.

Notably, the CFPB did not impose any civil money penalty on the nonprofit in consideration for good faith and substantial cooperation with the Bureau.

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Student loan servicing will change in the new year when borrowers will be responsible for federal student loan payments after more than a year of forbearance and some servicers’ contracts end.
ACA International members working with student loan borrowers or other consumers with questions can share recent guidance from the Consumer Financial Protection Bureau about the process to resume payments and if their loan is transferred to a new servicer.
Federal Student Aid also offers tips on loan transfers here.
Two federal student loan servicers, Granite State Management and the Pennsylvania Higher Education Assistance Agency, announced they would not renew their contracts with the U.S. Department of Education after this year, ACA previously reported.
With the change in contracts, the Biden administration will need to shift 10 million or more student loan borrower accounts to different loan servicers.
Federal student loan payments are currently on hold through Jan. 31, 2022, after several extensions to help borrowers during the COVID-19 pandemic. The Biden administration has said it was the last extension and payments will be required next year.
According to the CFPB’s resources to share with consumers, student loan servicers will send notices to consumers before their contract ends and borrowers are encouraged to update their contact information with their current loan servicer; open any mail and email from the servicer; set a calendar reminder when payments resume and beware of scammers attempting to collect payment or promise student loan forgiveness.
Meanwhile, the Biden administration is seeking public comment on the Public Service Loan Forgiveness Program (PSLF), specifically what is working and not working within the program for federal student loan borrowers, ACA previously reported.
The department is seeking comment on the following questions:

What features of PSLF are most difficult for borrowers to navigate?
What barriers prevent public service workers with student debt from pursuing PSLF or receiving loan forgiveness under PSLF?
For borrowers who have or had loans other than from the Direct Loan program, what have your experiences been when trying to access or participate in PSLF?  

Comments on the PSFL are due by Sept. 24, 2021, through the Federal eRulemaking Portal using docket number ED-2021-OUS-0082. Information on using Regulations.gov, including instructions for accessing agency documents, submitting comments and viewing the docket, is available on the site under FAQ.
ACA will provide more coverage on the resuming student loan payments and changes in federal student loan contracts.
To receive notifications about ACA content—including member alerts, upcoming events and new products—text ALERTS to 96997.

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US bank Wells Fargo on Thursday was hit with a new fine — $250 million for failing to meet requirements in an agreement to pay previously harmed customers.
The penalty was set by the Comptroller of the Currency (OCC), one of the main US banking sector regulators.
“Wells Fargo has not met the requirements of the OCC’s 2018 action against the bank. This is unacceptable,” said Acting Comptroller of the Currency Michael Hsu.

Wells Fargo admitted to opening 3.5 million fake accounts between 2002 and 2017, allowing its employees to earn bonuses related to the sale of new products, and charge unnecessary insurance premiums to more than half a million customers on their car loans.
In 2018, the OCC and the Consumer Financial Protection Bureau (CFPB) fined the California bank $1 billion and ordered it to reimburse the harmed customers the amounts improperly taken, and to strengthen the bank’s risk management program.
In addition to the penalty, Wells Fargo will face “limits on the bank’s future activities until existing problems in mortgage servicing are adequately addressed,” Hsu said.
“The OCC will continue to use all the tools at our disposal, including business restrictions, to ensure that national banks address problems in a timely manner, treat customers fairly, and operate in a safe and sound manner,” he added.
The OCC’s actions “point to work we must continue to do to address significant, longstanding deficiencies,” said Wells Fargo CEO Charlie Scharf.
In February 2020 the bank was hit with a $3 billion fine over the fake accounts scandal.
Wells Fargo has already paid more than $7 billion in financial penalties related to its business practices.
The OCC banned John Stumpf, the Wells Fargo CEO from 2005 to October 2016, for life from the banking industry.

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