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Exploring the Finances of the Unbanked
Updated: 48 min 53 sec ago

Republic Bank’s Acquisition of Block Bank Now On Ice

Tue, 09/03/2013 - 16:53

Republic Bank says that it no longer believes that it will be able to complete its intended acquisition of Block Bank by the end of September. In a filing released this afternoon, Republic indicated that the deal will be put off. By the terms of the original contract, the sale had to receive regulatory approval... Read More

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Bank Notes: Middle East Conflict, Fast Food Strikes, Liberty Tax

Tue, 09/03/2013 - 08:22

Western Union at risk with Middle East conflict: Western Union may be the most global consumer-facing financial services company in the world. It is also the one company whose services are most impacted by the ebbs of flows of refugee resettlement. Given that, the prospect of more people fleeing Syria for Turkey matters greatly to... Read More

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Former Student Speaks about his Purchased Diplomas

Fri, 08/30/2013 - 14:47

The following is a transcript of my interview with “Bernard.” I spoke to Bernard a few weeks back at a local education center where he was pursuing a general equivalency diploma (“GED”). Bernard has now earned his GED. Bernard’s story shows how difficult it can be for some students to accurately gauge the authenticity of... Read More

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What Does a Diploma From a Diploma Mill Look Like?

Thu, 08/29/2013 - 13:43

For a few hundred dollars, a high school dropout can buy a degree from institutions known as “diploma mills.” These schools have secured accreditation but most colleges will reject their degrees. Generally, the degrees are purchased from web sites. Some of the senior staff at the Consumer Financial Protection Bureau have indicated that they want... Read More

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eCredable and WilliamPaid Partner on Credit Building Platform

Thu, 08/22/2013 - 17:03

Two of the larger independent credit building products, eCredable and WilliamPaid, intend to make an announcement tomorrow that they will offer their services on a common platform. WilliamPaid currently reports to Experian’s Rent Bureau. With this new arrangement, their customers can opt to have their rent payments delivered to eCredable as well. eCredable gets better... Read More

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Bank Notes: Liberty Tax, H&R Block

Wed, 08/21/2013 - 18:19

Liberty Tax to restate financials: Liberty Tax’s parent, JTH Holding, Inc. (TAX) says that its accounting firm (KPMG) has determined that the financials from its most recent annual report are not reliable. The problem appears to be with how the company is recording revenues from its franchise fees. Susan Ehrlich to leave H&R Block: Susan... Read More

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No Bounce from Bieber for SpendSmart

Tue, 08/20/2013 - 17:30

While it has now been three months since Justin Bieber made his first promotional video for SpendSmart and nine months since he signed his $3.75 million contract to endorse the company’s BillMyParent’s prepaid debit card, the company has still not released any data describing how it has impacted its business. Given that it had about... Read More

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PerkStreet Financial Closing Accounts

Mon, 08/19/2013 - 15:31

PerkStreet, a prepaid card distinguished by its rewards program, has run out of capital and will shut down near the end of next month. What follows for customers depends in part upon when they originally signed up for a PerkStreet Card. Prior to March 2013, Provident Bank issued the cards. After March, Bancorp issued the... Read More

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Bank Notes: Military Lending Act, CPS, Gainful Employment

Tue, 08/13/2013 - 07:10

Lawmakers set goal to close loopholes in the Military Lending Act: Some lenders have re-designed their products to skirt the interest rate caps built in to the 2007 Military Lending Act. As initially constructed, the MLA limited interest rates to 36 percent on closed-end loans. Other provisions included bans on pre-payment penalties, mandatory arbitration, and... Read More

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Bank Talk Takes a Vacation

Mon, 08/12/2013 - 08:39

I am taking a vacation this week. I will have only one entry this week. I will be back on the week of the 19th!   Tweet    

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MetaBank and Liberty Tax Create MyTurn Secured Card

Wed, 08/07/2013 - 12:03

In MetaBank’s quarterly filing released yesterday afternoon, one sentence at the top of page 39 stood out: “MPS is developing a number of new products for fiscal year 2014 which includes credit, income tax, and prepaid deposit products.” MPS is the subsidiary within MetaBank that focuses on its payments business. Those are all interesting statements,... Read More

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Under the Hood at Lending Club

Tue, 08/06/2013 - 12:42

My review of Lending Club’s recent public filing released on July 31st shows that this alternative source of credit serves an upper middle market. The average credit score among the 3,562 notes offered in the prospectus was 735. The population had a downward bias, as the median score was 690. The mode was 680. Lending... Read More

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Rethinking Secured Card Disclosures

Fri, 08/02/2013 - 16:03

I think most people know that lenders use credit scores to underwrite loan applications, but what are the odds that many people actually understand how they are calculated? If they do not, then how should disclosures for a secured card be reformulated in order to not just list prices but to go one step further... Read More

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Green Dot Investor Call: Overdraft, Check Cashing

Wed, 07/31/2013 - 11:27

While news from the Green Dot 2nd quarter earnings elicited praise among investors, the most interesting details concerned Steve Streit’s strong statement about overdrafts and the company’s new roll-out in check cashing stores. Overdraft Steve Street left no room for ambiguity in his comments about overdraft. “Our strong conviction,” Streit said, “is that charging overdraft... Read More

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High-Cost Consumer Finance Companies Extol the Benefits of the Big Banks

Tue, 07/30/2013 - 13:29

Most companies engaged in the business of offer high-cost consumer finance products – be it a payday lender, a pawn shop, a rent-to-own store, a buy-here-pay-here car dealer – need the big banks to provide them with enough capital. These companies generally need some means to cash flow the extraordinary amounts of money that leave... Read More

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Bad News for Payday Lenders

Fri, 07/26/2013 - 13:11

Several earnings calls made in the last week show signs that the payday lenders are having some trouble, particularly in the United States. Cash America told analysts that loan volume is dropping. Fewer people are taking out loans. Here is what Daniel Feehan, CEO of Cash America, had to say:  I don’t have any explanation... Read More

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Bank Notes: Bancorp, TSYS, NetSpend

Thu, 07/25/2013 - 13:58

Fees are growing faster than spend at Bancorp Bank. Bancorp says that its profits from the prepaid debit cards that it issues are being driven by higher non-interest income, rather than by changes in gross dollar volume. True, spending on prepaid cards did increase nineteen percent, but fee income grew 63 percent. TSYS borrows heavily... Read More

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Disparate Impact In the Era of Big Data

Mon, 07/22/2013 - 12:36

While there may be truth to the suggestion put forth in some reports which surmise that the appointment of Thomas Perez to lead the Department of Labor heralds the resuscitation of the disparate impact theory, it is more likely that the rise of Big Data in underwriting will be the force that drives a thousand nails into... Read More

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Another View on Republic’s Purchase of Block Bank

Wed, 07/17/2013 - 17:08

While I recently suggested that regulators would delay approval (“Why Republic Won’t Buy H&R Block Bank This Year”), another view on the likely response from regulators to the proposed acquisition of H&R Block Bank by Republic Bank of Kentucky is that the deal would never have been announced were it not for some kind of... Read More

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Why Republic Won’t Buy H&R Block Bank This Year

Mon, 07/15/2013 - 15:05

Things change if regulators pause to think this one over: If any regulatory approvals remain outstanding after September 30th, 2013, then the transaction is put off until at least April 30th, 2014. In other words, if Block has to go through the work of preparing for next spring’s tax season, then they can expect to... Read More

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