Testimony article – FCA Cleveland http://fcacleveland.org/ Sun, 25 Sep 2022 15:16:34 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://fcacleveland.org/wp-content/uploads/2021/10/icon-4-120x120.png Testimony article – FCA Cleveland http://fcacleveland.org/ 32 32 Integrity in the financial system can bring positive perceptions: OJK https://fcacleveland.org/integrity-in-the-financial-system-can-bring-positive-perceptions-ojk/ Sun, 25 Sep 2022 05:40:17 +0000 https://fcacleveland.org/integrity-in-the-financial-system-can-bring-positive-perceptions-ojk/ BANDUNG, West Java (ANTARA) – Financial Services Authority (OJK) Banking Supervision Chief Executive Dian Ediana Rae stated that a financial system with integrity leads to positive perception and therefore contributes to economic growth. “A financial system with integrity will lead to a positive perception of the national financial system, which is currently plagued by a […]]]>

BANDUNG, West Java (ANTARA) – Financial Services Authority (OJK) Banking Supervision Chief Executive Dian Ediana Rae stated that a financial system with integrity leads to positive perception and therefore contributes to economic growth.

“A financial system with integrity will lead to a positive perception of the national financial system, which is currently plagued by a number of issues,” Rae said Sunday, speaking to the media here.

According to him, the current national financial system needs to be improved as it still has some problems like underground economy transactions like online gambling, drug transactions and unofficial or illegal online lending.

Meanwhile, OJK plays a role in improving the financial system. When integrity is built into the system, it becomes easier to attract foreign and domestic investment, he said.

“This will be our mission for the next five years. Everything has to be tackled fundamentally and systemically. Maintaining trust and integrity,” he said.

However, Rae said that building a financial system with integrity is not just the responsibility of the OJK, but the shared responsibility of many institutions and the community.

In addition, he also mentioned that the national financial industry is currently entering a very crucial period due to the dynamic conditions.

Therefore, he stressed, OJK cannot stand alone. Cooperation and collaboration have become a must.

As the regulator of the financial industry, OJK must be able to balance three important things: stability, consumer protection, and innovation, Rae explained.

In addition, OJK’s balancing acts overseeing business interests, public interests, consumer protection, government policies and Bank Indonesia policies must be carried out in a systematic and measurable manner.

“The integrity of the financial system needs to be fundamentally built to improve the long-term performance of the financial industry,” Rae added.

Related News: Insurance Industry Grows 8.67% Annually Over Last 5 Years: OJK
Related News: 738,853 Student Savings Accounts Opened Under Kreasimuda Program: OJK

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DPR today passes law on personal data protection https://fcacleveland.org/dpr-today-passes-law-on-personal-data-protection/ Tue, 20 Sep 2022 01:39:38 +0000 https://fcacleveland.org/dpr-today-passes-law-on-personal-data-protection/ TEMPO.CO, jakarta – The House of Representatives (DPR) will pass the Personal Data Protection Act today, September 20, 2022. “The meetings of the Steering Committee of the House of Representatives (Bamus) and the Heads of State and Government have decided to submit the bill to the plenary session tomorrow for ratification as law,” Speaker of […]]]>

TEMPO.CO, jakartaThe House of Representatives (DPR) will pass the Personal Data Protection Act today, September 20, 2022.

“The meetings of the Steering Committee of the House of Representatives (Bamus) and the Heads of State and Government have decided to submit the bill to the plenary session tomorrow for ratification as law,” Speaker of the House Puan Maharani said Monday, September 19 2022 in Jakarta.

She hopes that the new regulation will protect every citizen from all forms of misuse of personal data. “The ratification of the draft law will be a milestone for Indonesia in protecting the personal data of its citizens from all forms of crime in today’s digital age,” said the PDIP politician.

The final draft law, under discussion since 2016, consists of 371 problem inventories (DIM) and produces 16 chapters and 76 articles. The number of articles has increased by 4 compared to the original government proposal at the end of 2019.

“So there will be no more tears caused by online lending they didn’t ask for or doxxing causing public uneasiness,” Puan said.

She also hoped that the government will soon enact the bill so that its derived rules, including the establishment of a supervisory body to protect people’s personal information, could be implemented quickly.

“Through the law, the state will guarantee people’s right to the security of their personal data,” Puan Maharani said. She also thanked the government for its cooperation in drafting the Personal Data Protection Law with the DPR.

ANTARA

click here to get the latest news updates from Tempo on Google News

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Mortgage Rates Climb Again to Highest Levels Since 2008 | Mortgages and Advice https://fcacleveland.org/mortgage-rates-climb-again-to-highest-levels-since-2008-mortgages-and-advice/ Mon, 12 Sep 2022 21:08:00 +0000 https://fcacleveland.org/mortgage-rates-climb-again-to-highest-levels-since-2008-mortgages-and-advice/ According to Freddie Mac, mortgage rates rose this week, continuing a month-long trend of rate hikes. The average interest rate on a 30-year fixed-rate mortgage is 5.89%, the highest since 2008. For the 15-year fixed-rate mortgage, interest rates topped 5% for the first time in 13 years. Borrowing costs for the 5/1 adjustable-rate mortgage also […]]]>

According to Freddie Mac, mortgage rates rose this week, continuing a month-long trend of rate hikes. The average interest rate on a 30-year fixed-rate mortgage is 5.89%, the highest since 2008. For the 15-year fixed-rate mortgage, interest rates topped 5% for the first time in 13 years.

Borrowing costs for the 5/1 adjustable-rate mortgage also rose this week, although they’re still lower than fixed rates — as a result, more homebuyers have turned to ARMs in recent weeks, data from Association of Mortgage Banks indicates. Here are the current mortgage rates as of September 8th:

  • 30 years fixed: 5.89% with 0.7 points (up from 5.66% a week ago, up from 2.88% a year ago).
  • 15 years fixed: 5.16% with 0.8 points (up from 4.98% a week ago, up from 2.19% a year ago).
  • 5/1 year adjustable: 4.64% with 0.4 point (up from 4.51% a week ago, up from 2.42% a year ago).

Erica Giovannietti

“Mortgage rates rose again as markets continue to grapple with the prospect of more aggressive monetary policy to combat elevated inflation. Not only are mortgage rates rising, but interest rate dispersion has also increased, meaning borrowers can benefit from scouting for a better rate. Our research shows borrowers could save an average of $1,500 over the life of a loan if they get an additional interest quote, and average about $3,000 if they get five quotes.”

– Sam Khater, Freddie Mac’s chief economist, in a statement Sept. 8

It might be an understatement to say that homebuyers are in a very different situation today than they were a year ago. Aside from building a time machine, there’s not much mortgage applicants can do to lock in the coveted sub-3% interest rate that’s fueled the housing market in 2021, as mentioned in last week’s column.

Although today’s buyers are stuck in a much less favorable interest rate environment, they have one money-saving tool at their disposal – mortgage interest buying. This is especially true when one takes into account the dispersion mentioned by Khater, namely the spread between the highest and lowest rates offered to similar applicants. In the table below you can see how the monthly payments and the total interest burden are affected by small interest rate changes.

quote 1 quote 2 quote 3
mortgage rates 5.75% 5.9% 6.05%
Monthly payment $1,867 $1,898 $1,928
Total Interest Paid $352,535 $363,316 $374,953

Estimated borrowing costs for a 30-year fixed-rate mortgage on a $400,000 home at a 20% discount.

That doesn’t mean that by comparing offers, you’ll get a notch or two difference in your mortgage rate. But by saving just a fraction of a point in interest, you can save thousands of dollars over the life of your home loan.

Indicator of the week: Shop until your rate goes down

With mortgage rates on the rise again, it’s more important than ever to compare loan offers from multiple lenders. In a volatile interest rate environment, you can save in the short term (on your monthly payment) and long term (on your total interest payments) by looking for the lowest interest rate possible. This is how installment purchase works:

  • Contact at least three lenders. Also, try a mix of different types of lenders – for example, banks, credit unions, and online-only lenders. Additionally, it may help you to connect with your local mortgage loan officer to gain a better understanding of state, provincial, or city housing authority programs that aim to save you money.
  • Get a mortgage pre-approval from everyone. Keep your installment purchases within a 45-day window to minimize the negative impact on your credit score. Multiple requests during this period are considered a single request according to the FICO scoring model.
  • Compare credit estimates. You should look at both the interest rate and the APR, or APR, which includes the total cost of borrowing (including interest and fees). Keep an eye on various closing costs and see if any of the lenders on your shortlist offer any type of down payment assistance.

With several loan offers, you can choose the home loan with the most favorable mortgage rate for your financial situation. But manage your expectations because you’re unlikely to find a price today that compares to last year’s average prices.

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7 Reliable Mobile Lending Apps for Online Lending in Nigeria https://fcacleveland.org/7-reliable-mobile-lending-apps-for-online-lending-in-nigeria/ Sun, 11 Sep 2022 06:49:27 +0000 https://fcacleveland.org/7-reliable-mobile-lending-apps-for-online-lending-in-nigeria/ in the the In the age of sophisticated technology like today, people are gradually being confronted with various platforms offering online lending services. Here is a list and link of the best mobile apps for online business and personal loans in Nigeria. This service is very helpful to many people, but the rise of illegal […]]]>

in the the In the age of sophisticated technology like today, people are gradually being confronted with various platforms offering online lending services.

Here is a list and link of the best mobile apps for online business and personal loans in Nigeria.

This service is very helpful to many people, but the rise of illegal online lending is also worrying the public. Hence, we have made a list of official online loans in this article.

Along with the development of the digital age, alternative sources of financing do not always have to come from traditional service providers such as banks.

An online loan application or digital loan can be a pretty reliable solution. In addition to the faster and easier application process, digital loan services also offer easy access from the hand of a smartphone

Online loan applications can be the solution.

The reason for this is that online loans offer a much faster and easier process compared to borrowing from a bank.

You don’t have to leave your house and wait in long lines at the bank.

Submission can be easily done through the application on mobile, saving time and effort.

Here is a list of the best mobile apps for online business and personal loans in Nigeria.

Credit app in Nigeria

1. KiaKia

Kiakia

Kiakia

Established in 2016, KiaKia (a trading name of KiaKia Bits Ltd RC:799552) is a licensed non-bank financial technology company. KiaKia, one of Nigeria’s digital lending pioneers and also the leading peer-to-peer marketplace, offers secured and unsecured loans and also engages in well-structured profit-sharing business transactions. We focus our efforts primarily on micro, small and medium-sized companies with high growth potential that do not have access to credit from traditional financial institutions.

2. FairMoney

fairmoney credit app

fairmoney credit app

Digital bank that provides instant loans with no collateral required.

Get credits up to ₦1 million, a bank account with free transfers, a debit card to spend and more

FairMoney is building the leading mobile bank for emerging markets.

We are unique thanks to our international presence (with offices on 3 continents) and our impact-driven mission. We bring financial inclusion to the underbanked in emerging markets!

3. pay later

Paylater, an online mobile app that provides users with short-term loans, launched version 2 of its app in November. Paylater Plus is the largest addition to Paylater v2 and is available to salaried employees.

4. palm credit

palm credit

palm credit

Borrow money online with the Palmcredit app. Apply for an instant loan with a flexible repayment plan and a favorable interest rate.

Palmcredit is owned by Newedge Finance Limited (RC1585793) and is fully licensed by the CBN to operate as a financial company in Nigeria. Palmcredit is CBN approved. April 26, 2022

5. branch

Branch Loan App

Branch Loan App

Branch makes it easy for people in Nigeria to send money for free, get instant loans up to ₦500,000 and enjoy investment returns of 20% per year. Fill out our application in seconds and benefit from excellent value for money.

Palmcredit is owned by Newedge Finance Limited (RC1585793) and is fully licensed by the CBN to operate as a financial company in Nigeria. Palmcredit is CBN approved. April 26, 2022

6. Quick check

QuickCheck credit app

QuickCheck credit app

Get quick cash. Everytime and everywhere.
Never go broke again. No long queues. No bulky documents. No long waiting times. Just your smartphone and the QuickCheck app.

Why QuickCheck?
We use machine learning to predict borrower behavior and score loan applications instantly.
Our goal is to provide digital financial services that help you get closer to your personal and business goals.

7. Aella credit

The Aella loan app offers a minimum loan amount of ₦1,500 and a maximum amount of ₦1,000,000, with each Aella loan step dependent on a variety of factors including the repayment history and the financial profile of the Aella loan app

In addition to the convenience, online loans also harbor a number of risks.

These loans tend to earn interest daily and there is also a risk of fraud.

Lately there has been a lot of news about online lending that is worrying.

↯↯↯Read more on TDPel Media ↯↯↯

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How Long Do You Have to Wait for SBA Loan Approval? – Forbes Advisor https://fcacleveland.org/how-long-do-you-have-to-wait-for-sba-loan-approval-forbes-advisor/ Wed, 07 Sep 2022 16:50:14 +0000 https://fcacleveland.org/how-long-do-you-have-to-wait-for-sba-loan-approval-forbes-advisor/ Editor’s Note: We earn a commission from affiliate links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors. The US Small Business Administration (SBA) helps business owners access the funds they need to get their business off the ground, expand and thrive. These loans are often easier to qualify for […]]]>

Editor’s Note: We earn a commission from affiliate links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors.

The US Small Business Administration (SBA) helps business owners access the funds they need to get their business off the ground, expand and thrive. These loans are often easier to qualify for than some traditional loans. Still, SBA loan approval and funding can take much longer than most loans — often anywhere from 60 to 90 days. Because of this, SBA loans are not the right choice for business owners who need cash fast.

Here’s what you need to know about SBA loan approval times and how they compare to other business financing options.

Overview of SBA Loans

The SBA does not lend money directly to small business owners. Instead, the SBA guarantees up to 85% of the loan amount, depending on the loan program and amount. This reduces the risk of lending money to applicants and encourages SBA-approved lenders to work with small business applicants that they might not otherwise approve. However, there are several SBA loan programs, each with unique eligibility requirements and conditions:

  • SBA 7(a) loans: The SBA 7(a) program offers various types of loans up to $5 million for various business purposes. Standard 7(a) loans and small 7(a) loans have SBA processing times of between five and 10 business days, but the process takes longer.
  • SBA Express Loans: SBA Express Loans are available for up to $500,000, with repayment terms of up to 25 years for real estate and five to 10 years for other loan types. Express credit falls under the umbrella of 7(a); However, the program offers expedited approval times. Individual lenders make eligibility decisions, but the SBA processing time is only 36 hours.
  • Certified Development Company (CDC)/504 Loans: CDC/504 loans can be used to purchase equipment and real estate. Loans are available for up to $5 million with 10- and 20-year repayment terms.
  • SBA microloans: Microloans top out at $50,000, although the average microloan is only $13,000. The minimum term is six years, the interest rates are between 8% and 13%.

While SBA loans are easier to qualify for than other types of business financing, the application process is extensive. You must provide comprehensive documentation, including a business plan, copies of business and personal tax returns, balance sheets, income statements, and a list of current business debts.

How to Get Approval for an SBA Loan

The SBA loan approval process takes 30 to 90 days from application to funding. However, this timeframe varies by lender and loan type. The exact steps to obtaining an SBA loan can also differ from lender to lender, but there are some general steps in the approval process:

  1. credit application. The SBA loan application process is more demanding than traditional lenders, and prospective borrowers are required to submit extensive supporting documentation. For this reason, the preparation of the application can take up to 30 days. However, you can complete an application more quickly if you have already collected the necessary documents.
  2. Application review and underwriting. After an application is submitted, the lender will review your credit history and finances. This process typically takes between 10 and 14 days, including the underwriting process, but may take longer for lenders who are not in the SBA’s Preferred Lenders Program. Likewise, if collateral is required, the lender may request an appraisal during the underwriting process. Based on this review, the lender determines the loan amount and interest rate that you qualify for.
  3. Credit Agreement. Once approved, it typically takes 10 to 21 days for the lender to draw up the loan agreement and letter of commitment. During this time, you should review the loan agreement to ensure all terms are acceptable.
  4. completion and funding. Closing and financing usually take place seven to 14 days after the loan amount, repayment period and interest rate are finally specified in the commitment. If the lender contacts you with questions or additional requests during this period, respond quickly to keep the process moving.

How do I know if my SBA loan has been approved?

If your loan is approved, the SBA will email you the loan details. Contact the SBA directly if you did not receive an email and would like to check your application status. Depending on your lender, you may also be able to check your application status online or contact your loan officer.

How long does it take to get SBA loan funds after an approval?

After an SBA loan is approved, it typically takes the lender about five days to pay off the loan funds — but it can take up to 14 days. However, how long it actually takes before you receive the loan proceeds depends on the lender and the company’s bank.

SBA loan process compared to other business loans

Lengthy SBA loan approval times don’t match the credit needs of all small business owners. Other business loans can provide funds faster and sometimes with less stringent application requirements. Here is how the SBA loan process compares to some other popular financing options:

  • Business Credit Lines. With a business loan, you can access funds as you need them and only pay interest on the amount borrowed. Approval times are faster than an SBA loan, with funds sometimes available in as little as 24 hours after an application is submitted. Business lines of credit generally have lower credit limits than SBA loans, but they are revolving, so you can access the money again after the balance is paid off.
  • online loan. Several online lenders offer business loans with short approval times – sometimes even on the same day. These lenders often work with businesses that may not qualify for financing from a traditional bank. However, online loans tend to have higher interest rates and shorter repayment terms than SBA loans.
  • equipment financing. Equipment finance is a type of business loan that business owners can use to buy equipment or machines. These loans typically have shorter repayment terms than SBA loans and may also have higher interest rates. Funding can be available in as little as 24 hours or take up to several weeks.
  • Alternative Loans. Alternative loans are another type of financing that can have short approval times, some with same-day approval. These loans are available from many online lenders and are used for a variety of purposes including working capital, equipment financing and expansion. However, alternative loans also tend to have higher interest rates than SBA loans.
  • Personal Loans. Getting a personal loan can be much quicker than an SBA loan because the application process is generally less complicated and approval times are faster. However, personal loans typically have shorter repayment periods and higher interest rates than SBA loans. Also, some lenders restrict the use of personal loans for business purposes.

Find the best small business loans of 2022

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Look for non-tax compliant lenders, GDT asks NBC https://fcacleveland.org/look-for-non-tax-compliant-lenders-gdt-asks-nbc/ Mon, 05 Sep 2022 14:23:32 +0000 https://fcacleveland.org/look-for-non-tax-compliant-lenders-gdt-asks-nbc/ The General Department of Taxation (GDT) has called on the central bank to crack down on two lenders who have been promoting their services on social media despite non-compliance with tax rules. The request, involving Happy Loan Cambodia Co Ltd and Tiger Loan, comes days after the National Bank of Cambodia (NBC) issued a public […]]]>

The General Department of Taxation (GDT) has called on the central bank to crack down on two lenders who have been promoting their services on social media despite non-compliance with tax rules.

The request, involving Happy Loan Cambodia Co Ltd and Tiger Loan, comes days after the National Bank of Cambodia (NBC) issued a public warning on August 25 regarding advertising and other types of solicitation of illegal and deceptive lending businesses and practices.

The GDT notice, signed by its General Manager Kong Vibol and dated August 31, revealed that Happy Loan Cambodia “has registered for tax purposes, but company details are not up to date and have not declared their taxes,” while Tiger Loan “has done so has failed to meet its tax registration requirements”.

Actions by NBC would “strengthen compliance with the Tax Code and the Banking and Financial Institutions Act [LBFI]to improve the business environment and ensure fair competition, and in particular to promote the effective and efficient implementation of the law,” said the department, which reports to the Ministry of Economy and Finance.

The Post could not reach any of the lenders for comment at press time.

Notably, however, Tiger Loan says on its Facebook page that it offers nationwide “quick and easy” unsecured loans starting at $50, with “simple paperwork” and “100 percent customer confidentiality guaranteed.”

Speaking to The Post on September 5, Cambodia Microfinance Association (CMA) spokesman Kaing Tonngy emphasized that legitimate online lenders operating in the Kingdom are those affiliated with NBC or Non-Bank Financial Services Authority (NBFSA) of the Treasury Department.

These lenders are regularly monitored by the authorities and have clearly defined addresses, business activities and customer protection policies, he said.

“What we have seen on social media are mainly illegal operations run by different groups. We have seen a significant increase in these illegal online lending schemes since the start of Covid-19 when many people were short of cash.

“Unfortunately, we have also seen many fall victim to online lending. These illegal operators charge ridiculously high interest rates, cheat their customers, fail to adhere to customer protection principles, use intimidation and violence, and often result in over-indebtedness,” he added.

In its precautionary Aug. 25 press release titled “Advertising and Illegal Lending,” NBC said the banking and financial institutions it licenses to conduct business include: commercial and specialty banks, microfinance institutions regardless of deposit status, financial leasing companies, and rural credit institutions.

These institutes provide loans and other relevant services to companies, corporations and individuals. They are under the control of NBC and their customers are protected by law.

However, NBC warned that it has observed some nefarious actors openly promoting loans through various mediums, including online ads, on social media, or through leaflets and flyers in public places. Lending by these unlicensed companies or individuals is against the law, particularly the LBFI.

“In order to avoid fraud or other consequences of obtaining informal credit and to maintain stability and public confidence in the banking system, we call on the public to exercise heightened caution and encourage them to seek the services of formal institutions.”

“We condemn all forms of informal information dissemination and lending. In the meantime, we are working with authorities to take legal action against any company or individual engaged in illegal activity,” the letter added.

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Online scammers present in the kingdom have been busted by an observant victim https://fcacleveland.org/online-scammers-present-in-the-kingdom-have-been-busted-by-an-observant-victim/ Sat, 03 Sep 2022 01:51:38 +0000 https://fcacleveland.org/online-scammers-present-in-the-kingdom-have-been-busted-by-an-observant-victim/ Cambodian law enforcement officials are calling on the public to be aware of and speak out against an attempted scam from abroad after two suspects in connection with it were arrested by the National Police Criminal Investigation Unit. Interior Ministry Cambodian law enforcement officials are calling on the public to be aware of and speak […]]]>

Cambodian law enforcement officials are calling on the public to be aware of and speak out against an attempted scam from abroad after two suspects in connection with it were arrested by the National Police Criminal Investigation Unit. Interior Ministry

Cambodian law enforcement officials are calling on the public to be aware of and speak out against an attempted scam from abroad after two suspects in connection with it were arrested by the National Police Criminal Investigation Unit.

The Criminal Investigation Department of the Interior Ministry’s National Police said on September 1 that someone who operated a Facebook account under the name Parimal claimed in August that he was stranded in Ukraine and needed to send money to Cambodia.

Parimal claimed he was looking for friendly people who would be willing to help him and that they would be allowed to keep some of the money if they facilitated the transfer for him.

Parimal found a victim named Ek Piseth, a resident of Chaom Chao II township in the Por Sen Chey district of the capital. Several criminals were involved in this case, including a woman posing as a customs officer.

Scams of this type typically rely on multiple factors to work, trying to prey on victims’ greed by offering compensation for their help, which they also try to foment by allowing them to witness one or more genuine ones Become transactions involving the transfer of large sums of money, but in reality they are the scammers’ accomplices who are on the receiving end.

Finally, they use pressure tactics, forcing victims to make decisions about sometimes complex money movements around the globe on the spot, without the benefit of any consultation or reflection on the matter. Ek Piseth was stolen $9,120 as a result of this tactic.

Piseth was lucky, however, because — after being silent for a while — on August 30, the same criminal contacted him and tried to convince him to send him another $5,000 while still pending delivery of the promised package.

Knowing he had been scammed, Piseth reported what was happening to CID officers.

Police officers were able to intervene and, after investigation, arrested two suspects when they entered a Wing location to swindle their victim into what they believed would be another batch of easy money. The arrest took place in Veal Vong commune in Prampi Makara district of the capital.

The suspects were identified as N’cho Marcel, male, Ivory Coast nationality, and Doung Theary, female Cambodian. Police confiscated some items from them, including $5,800 in cash, the victim’s money and four cell phones.

The criminal police have now arrested the two suspects for questioning in order to set up a court case against them to be forwarded to the public prosecutor’s office.

Am Sam Ath, deputy director of rights group LICADHO, told the CPA on September 2 that in today’s modern digital age, the network and technological systems that in some ways make our lives so much easier are also turning into dangerous weapons against victims can become .

“As for the crime of fraud or similar crimes like illegal online loans, many of our people are becoming victims of all these problems today because of some lack of education and awareness and therefore we call on law enforcement to arrest those who run away Online scams,” he said, adding that NGOs like his and others need to find ways to teach people online skills and digital literacy.

He added that in order to prevent these online scams from ruining lives in Cambodia, people need to seriously consider what they should and should not believe, especially the words of strangers communicated anonymously online.

Sam Ath said that after arresting the two suspects, he hoped authorities would step up prevention efforts and strictly enforce the law against such offenders so that people don’t continue to fall victim to these scams.

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A tough time for buy-now/pay-later fintechs | source of payment https://fcacleveland.org/a-tough-time-for-buy-now-pay-later-fintechs-source-of-payment/ Thu, 01 Sep 2022 17:16:00 +0000 https://fcacleveland.org/a-tough-time-for-buy-now-pay-later-fintechs-source-of-payment/ When lawmakers asked the Consumer Financial Protection Bureau to do so last year look at business practices For some of the largest buy-now/pay-later fintechs, there seemed no end to their exponential growth. Back then BNPL fintechs Confirm and Klarna each boasted a market valuation of around $45 billion, while Block (formerly Square) agreed to pay […]]]>

When lawmakers asked the Consumer Financial Protection Bureau to do so last year look at business practices For some of the largest buy-now/pay-later fintechs, there seemed no end to their exponential growth.

Back then BNPL fintechs Confirm and Klarna each boasted a market valuation of around $45 billion, while Block (formerly Square) agreed to pay $29 billion to acquire burgeoning fintech BNPL Additional payment. Rivals Zip and PayPal were also ablaze as consumers flocked to their interest-free turnkey online loans in response to the pandemic’s impact on their finances.

A year later, that fire is far less bright.

In recent days, BNPL fintechs Klarna and Confirm released financial results that revealed fresh weaknesses, including a slowdown in BNPL loan growth rates. With rising inflation and economic uncertainty, consumer arrears have also increased for both companies, shaking investor confidence.

The Consumer Financial Protection Bureau is preparing a market surveillance report on Buy Now/Pay Later that could lead to regulation.

Bloomberg

Although BNPL loans are still popular with consumers, ratings for Affirm and Klarna have increased steadily fallen in recent months, with both now hovering below $7 billion from previous highs around $45 billion.

“BNPL lending has introduced many innovations, but it’s based on 0% rates at a time when interest rates are rising, and it’s already backed off from the hockey stick growth we saw just last year,” Nathan Hilt , managing partner at the consulting firm Protiviti.

More pain could be inflicted later this month, as the CFPB said it will soon share insights from his analysis by five of the best-known BNPL lenders – Affirm, Afterpay, Klarna, Zip and PayPal – all of whom rely heavily on the “Pay in 4” model, where consumers pay no interest when paying back loans in equal parts. Most BNPL firms also offer longer maturities with interest.

The CFPB “looks like moving toward rulemaking or putting BNPL under CFPB oversight,” said Allen Denson, partner at Stroock & Stroock & Lavan.

The CFPB report is likely to reveal the good, the bad, and the ugly aspects of BNPL fintech practices, Denson said. On the positive side, BNPL loans could expand access to credit to new or underserved borrowers and build credit histories. On the negative side, unclear policies regarding penalty interest, late fees and inconsistent handling of sensitive consumer data.

“Any CFPB rule will almost certainly focus on requiring disclosures from BNPL lenders, with some clear guidelines so consumers and lenders work under the same framework,” Denson said.

The report is likely to be the first step in a long process that could take up to a year, based on previous rulemaking for similar fintech-based payment categories like prepaid cards, which the CFPB tackled a few years ago after lengthy industry consultation Denson, predicting that the rules will be published by the end of 2023.

Many BNPL providers could welcome regulation, as such guard rails often facilitate competition by creating stability in a new or chaotic market, Denson said.

Klarna, which has postponed a planned IPO, is the latest BNPL fintech to hint at imminent trouble.

In a biannual letter to shareholders, Klarna CEO Sebastian Siemiatkowski warned that Klarna has had a “very tumultuous” year so far, citing the Ukraine war, inflation and a “likely” recession.

Klarna’s revenue for the first half rose 24% compared to the same period last year to $853 million. But pre-tax losses nearly tripled to $581 million in the same period from $141 million a year earlier. The overall default rate on Klarna consumer accounts is still relatively low at 0.7%, but higher than the 0.5% default rate a year ago.

Over the last year, Klarna has burned hard cash with heavy marketing investments and acquisitions, including the launch of a standalone debit card. The company cut 10% of its workforce in May to keep costs under control.

PayPal is the largest Pay-in-4 lender with a potential reach of more than 200 million US consumers through its existing relationships, while Affirm has approximately 14 million users. Klarna claims the most customers at 150 million worldwide (30 million in the US, its fastest growing market) and recently raised $800 million in funding despite a tight venture capital market.

“[Klarna’s growth rate] is slower than its peers but likely reflects the company’s maturity in core markets,” analysts at Sanford Bernstein & Co.’s New York-based Autonomous Equity Research Unit said in a Wednesday note to investors.

Affirm’s stock tumbled last week after the latest quarterly results showed rising arrears and slower selling momentum, while CEO Max Levchin warned of an impending downturn that could further hurt Affirm’s fortunes. Levchin also said Affirm is on the lookout for acquisitions that could complement the company, noting the likelihood of BNPL consolidation in the coming year.

A fusion – Zip’s planned takeover by Sezzle — fall through earlier this year.

The competition is also increasing. Apple’s BNPL service, Apple Pay lateris due to launch this autumn while several BNPL firms, including Klarna, Afterpay, Affirm and UK newcomer Zilch, are expanding or launching reward programs to attract and keep more customers.

Visas and MasterCard are also building momentum with BNPL platforms and technologies that enable banks to support BNPL loans at any participating retailer.

Because the BNPL industry is still relatively new and evolving, it’s difficult to predict how consolidation and enforcement of rules might complicate its development, Protiviti’s Hilt said.

“BNPL loans surged during an unusual time in the pandemic, when consumers were stuck at home and liked not having to go through a formal credit check,” he said.

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CRA reform could bring larger valuation ranges https://fcacleveland.org/cra-reform-could-bring-larger-valuation-ranges/ Sun, 28 Aug 2022 09:11:01 +0000 https://fcacleveland.org/cra-reform-could-bring-larger-valuation-ranges/ Even medium-sized banks that have more than 50 percent of their lending outside of their branch areas will consider their lending in those other areas as well. A recent attempt to overhaul the Community Reinvestment Act could pose serious challenges for larger banks, which have used online lending to find business across a wide area. […]]]>

Even medium-sized banks that have more than 50 percent of their lending outside of their branch areas will consider their lending in those other areas as well.

A recent attempt to overhaul the Community Reinvestment Act could pose serious challenges for larger banks, which have used online lending to find business across a wide area.

A year-long effort to modernize the CRA now accommodates online banking and lending activity, but still keeps branch networks at the center of state CRA investigations into whether banks do not discriminate where they lend.

For smaller banks, the proposed CRA changes are likely to have little impact on how they define the geographic area that regulators will assess when determining whether they meet a community’s lending needs. But for larger banks, including those offering online lending outside of their branch networks, the proposed changes have raised concerns about the areas in which they will be assessed for CRA activity.

“While we agree that changes in valuation scopes are needed to adapt to the changing banking and technological environment of the financial industry, we do not believe that community banks that serve their customers outside of a geographic boundary, i.e. across Internet and other media were considered,” said Nicole Almeida, senior vice president, chief diversity officer and CRA officer at Swansea-based BayCoast Bank, in a letter to regulators.

Branches and ATMs remain indispensable

After the latest attempt to update the CRA ended with the three federal bank regulators failing to come up with a joint proposal, the FDIC, the Federal Reserve, and the Office of the Comptroller of the Currency worked together to develop new rules.

The proposed changes would represent the first significant update to the CRA since 1995, and have sparked a number of other controversies and criticisms by banking groups and community advocates alike.

The basis of the CRA exams is a bank’s assessment area, which is currently defined by banks based on areas surrounding physical branches and ATMs that accept deposits. To prevent redlining, current regulations prohibit banks from “arbitrarily excluding low- and middle-income census areas from their assessment areas,” and the areas must not reflect unlawful discrimination.

These anti-discrimination requirements remain in the proposed regulations. And audits will continue to assess a bank’s performance across its branch network, in what the proposal calls “facility-based assessment areas.”

“While the number of bank branches has declined in recent years, agencies believe branches remain an essential means of defining a bank’s local communities,” banking regulators said.

Even if a bank does not use the word “branch” to describe a location, it would be considered a branch for CRA purposes if the bank maintains a physical location that accepts deposits from customers. Even though the location is only open by appointment, it still counts as a branch.

Other changes assume that business models or banking options could change. Instead of referring to deposit machines, the proposal now includes “remote service facilities” as part of the facilities-based assessment scope, a broader term that the agencies said encompasses other options like interactive ATMs.

Changes for big banks

Small banks, which would have less than $600 million in assets under the proposed rules, and intermediary banks, which would have less than $2 billion in assets, would continue to use the facility-based assessment scope under a similar approach as set now .

However, some medium-sized banks could be examined outside of their defined geographic region. Banks with more than 50 percent of their lending outside the facility-based rating range would also consider their lending in these other ranges.

For large banks — those with assets of $2 billion or more — the CRA proposal would bring more significant changes.

The proposed rules give big banks two options for their facility-based assessment scope. You could select an area with one or more statistical metropolitan areas or metropolitan areas. Or banks could select one or more contiguous counties within an MSA, a metropolitan area, or the non-metropolitan area of ​​a state.

The agencies said this approach would create a more consistent standard for large banks in defining their rating ranges, while promoting fair lending and easier data reporting.

Different business models

For large banks with lending activities that result in lending outside of their typical geographic region, including online lending, CRA would include a second range of ratings called the “Retail Loan Ratings Range”.

This range would be required for large banks that had 100 mortgage loans or 250 small business loans in a geographic area outside of the facility-based lending range in the previous two calendar years.

“The proposed approach to determining rating ranges for retail loans aims to provide a way to rate banks in a way that establishes parity between banks that mainly lend through branches and banks with different business models,” the proposal reads. “Designating new retail loan rating ranges would ensure that large banks, regardless of delivery channel, have retail loan ratings in the local markets where they have significant retail lending business.”

These changes have raised some concerns among Massachusetts banks. The facility-based scope of assessment could mean that banks have their lending activities assessed for an entire district, even if they only have branches in part of the district.

Diane McLaughlin

“Just because you have a branch in northwestern Middlesex County — maybe you have seven or eight branches up there or in central Massachusetts — does that really mean your assessment area is all of Middlesex County?” Ben Craigie, vice president of government affairs at of the Massachusetts Bankers Association, versus Banker & Tradesman.

In a letter to regulators, Craigie noted that these types of geographic differences exist throughout Massachusetts and New England.

Banks also have concerns about the range of retail loan ratings and the potentially large areas in which banks need to engage in CRA activity.

“Not all major banks currently have the staff and technology to conduct extensive CRA activities in these new RLAAs,” Craigie wrote to regulators.

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Bright Simons unearths 2 ‘new’ loan sharks in Ghana https://fcacleveland.org/bright-simons-unearths-2-new-loan-sharks-in-ghana/ Thu, 25 Aug 2022 08:19:20 +0000 https://fcacleveland.org/bright-simons-unearths-2-new-loan-sharks-in-ghana/ Vice President of IMANI Africa, Bright Simons IMANI Africa Vice President Bright Simons has identified Sokoloan and Truecedi as two illegal financial institutions operating in Ghana. According to him, Sokoloan, which has a branch in Nigeria, has now set up a shop in Ghana where unsuspecting victims work with them to get loans. He further […]]]>

Vice President of IMANI Africa, Bright Simons

IMANI Africa Vice President Bright Simons has identified Sokoloan and Truecedi as two illegal financial institutions operating in Ghana.

According to him, Sokoloan, which has a branch in Nigeria, has now set up a shop in Ghana where unsuspecting victims work with them to get loans.

He further said Truecedi, owned by Jain Finscap, is also an unregistered company in Ghana.

Bright Simons shared his grievances on microblogging site Twitter, claiming that regulators of the country’s financial institutions are doing nothing to drive out these illicit deals.

“I thought Ghanaian regulators would take action, but as with Ponzi schemes, they are dormant. So people like Sokoloan set foot in Ghana and milked new victims. A fintech named Truecedi claims to be owned by Jain Finscap. It’s not even registered as a business in Gh,” read Bright Simons’ tweet.

Beware of loan providers operating without licenses – BoG to Ghanaians

Meanwhile, the central bank has urged Ghanaians not to do business with lenders operating in the country without a license.

The operations of these unlicensed banks, the central bank said, violated the Banks and Specialized Depository Institutions Act 2016 (Act 930).

The Bank of Ghana added that these unlicensed companies mainly use mobile apps and social media for their operations.

A press release copied to GhanaWeb reads: “The Bank of Ghana has identified a number of unlicensed entities as being involved in the provision of credit to the Ghanaian public, in violation of the Banks and Specialized Depository Institutions Act of 2016 violates (Act 930) These illegal organizations mostly use mobile applications and social media in their activities.

“The activities of these unauthorized entities constitute a failure to comply with consumer protection requirements and an abuse of customer data and privacy laws,” it said.

Listed below are the banks that offer loan services to Ghanaians without a Bank of Ghana license

1. SikaPurse Quick Online Loans
2. 4Cedi Instant Mobile Loan Application
3. Zidisha online loans
4. GhanaLending Application
5. ChasteLoan Application
6. LoanClub Ghana Instant Loans
7. AdamfoPa Loan
8. MetaLending – Instant Cash Loan
9. Wohiasika Loan (Ghanaloan.net)
10. Boseafie – Bosea Microcredit
11. SikaKasa Online Lending
12. LoanPro – Digital and Instant Loan
13. SikaWura Loan Application
14. BegyeBosea Loan
15. LendingPapa – Online loans
16. CrestCash Loan
17. Credxter – Loan and Hire Purchase
18. MobiLoan Application
19. Cedi Now – Application for cash loan

The Bank of Ghana said it was taking steps to hold the above banks operating without a license accountable.

Read Bright Simons’ tweet below;

ESA/DA

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