CFPB Looks for Comments on Mobile Technology & the Underserved

looking-through-binoculars-future-predictionsIn mid-June CFPB issued a notice inquiring about mobile apps geared toward the financially underserved.  Here’s a sampling of the questions the agency is seeks comment on:

(1) What are some of the ways in which consumers use mobile technology to access financial services? What are some of the benefits to consumers of enhanced access via mobile?

(2) How would making access via mobile differ from or improve overall access compared to only accessing financial services through an online channel?

(3) Based on your experience, what percentage of customers access accounts at financial institutions via mobile? Has there been any research that sheds light on level of use by income strata, age, or other demographic factors?

I was interviewed by Mobile Payments Today on the topic:

“There is no question that there is a great need to provide financially underserved consumers with fair and robust products and services,” she wrote in an email. “Right now, all bets are on mobile technology due obviously to the ubiquity of mobile devices, particularly for low- to moderate-income consumers, and the number of companies and new entrants is enormous.

“So, it isn’t surprising that this is an area that the CFPB is interested in, or interested in enough to make a formal request for information. It also isn’t surprising that segments of the industry will be nervous that regulations will soon come next, but in my experience with the CFPB, it is likely the agency is conducting its due diligence in gathering information from all interested and involved stakeholders and will likely be taking its time in figuring out how best to address any issues or concerns that have been or might be raised.”

If this topic is of importance to you, make sure to submit your comments by the deadline, Sept 10, 2014.

 

 

Taking on Debt

Man Lifing the Word DEBTA discussion about debt these days often brings topics around student lending and the financial status of Millennials and following generations front and center.  I have only scratched the surface of this predicted massive financial blowout, I’ve found these bits of information to be both useful and unsettling:

1.  Gap in Data

There is “lack a full understanding of how student debt affects financial decisions and how future problems in repaying student loans may impact other parts of the economy because the student loan market is “quite opaque,” according to Rohit Chopra, Consumer Financial Protection Bureau.”

2.  The Next Bailout (which is already happening)

“[W]hile today’s grads may be part of the most educated generation in history they are also the most indebted twentysomethings the world has ever seen.”

3.  There are about 80 million Millennials!

“The sheer number of millennials — about 80 million — makes them a significant force in the U.S. economy. But many of them have trouble accurately answering basic personal finance questions, spend more than they make and are worried about their debt”

4.  Stats and Facts from Pew’s Recent study on Millennials:

• About half of millennials with student loans say this debt has made it more difficult to make ends meet.

• Unemployment remains high. Pew says 13 percent of the 18-to-24 age group were out of work in the first month of this year.

• The share of young adults living in their parents’ home reached a historical high in 2012, three years after the Great Recession ended.

• Most millennials say they would like to marry. But many, especially those with lower levels of income and education, don’t think they can because they don’t have “a solid economic foundation.”

• When compared with the Gen Xers and boomers, millennials have less wealth and income than the two immediate predecessor generations had at the same stage of their lives.

5.  Tips on Paying for College

Some useful tips for those heading off to college despite the enormous price tag.  I doubt that many college bound students calculate their return on investment…but in the least, some good research will likely pay off.

It’s no surprise there have been new approaches to ease this financial burden:

SoFi offers a new model to help students refinance their federal and private student loans by directly connecting borrowers with lenders.

GiveCollege and GradSave provide crowdfunding platforms so that aunts, uncles, friends can contribute to a student’s

Pave offers a “fair, innovative financial agreement that’s affordable for talent and meaningful to backers” Students provide a portion of their future earnings to funders once they graduate and make more than 150% FPL.

Kalamazoo Promise Anonymous donors are sending their city’s students to college debt free.

Reflecting on Payments at Year’s End

This is not original content, but I wanted to commemorate the end of an active year in payments.  The Atlanta Fed’s Blog Portals and Rails has a great list, so why reinvent the wheel?:

As the year draws to a close, the Portals and Rails team would like to share its own Top 10 list of major payment-related events that took place in the United States this year.

  1. The Consumer Financial Protection Bureau finalized Dodd-Frank 1073 money transfer rules.
  2. The payments industry experienced increased regulatory scrutiny of third-party processors and high-risk business customers.
  3. Major global ATM cash-out fraud attacks—including many U.S. ATMs—totaled $45 million.
  4. FTC issued a proposal to ban telemarketers from using remotely created checks and payment orders.
  5. Debit networks sought a compromise on an EMV interface—while there is little movement on the issuance of EMV cards.
  6. The newly designed $100 bill with additional security features was released.
  7. Several major data breaches occurred, and identity theft occurrences skyrocketed. (Perhaps you are experiencing repercussions from the recent Target breach?)
  8. Cyber Monday online sales were up 17 percent, with phones and tablets representing almost a third of the total.
  9. Virtual currencies received increased public, legislative, and regulatory awareness after the U.S. Department of Justice took action to close down virtual currency operators Liberty Reserve and Silk Road.
  10. U.S. District Court Judge Richard Leon threw out Regulation II debit card interchange fees and routing rules.

Happy Holidays everyone!

On Track

My goal has been to officially launch PaymentsLaw.com next Monday, Sept 16, and it looks like we are on track…

My blog will discuss a variety of consumer finance, money and privacy issues, with a sprinkling of other interesting topics that may come along the way.  The primary focus is to help navigate what may be coming down the pike in the ways of regulation, rules and best practices for fintechs, entrepreneurs, and other small businesses.