Today, the Consumer Financial Protection Bureau (CFPB) published a new analysis on state Community Reinvestment Act laws, highlighting how states ensure financial institutions' lending, services, and investment activities meet the credit needs of their communities. The report examined the laws of seven states (Connecticut, Illinois, Massachusetts, New York, Rhode Island, Washington, West Virginia) and the District of Columbia, and found that many of those states adopted laws similar to the federal Community Reinvestment Act in decades following the 1977 passage of the landmark federal anti-redlining law.

“The financial market has changed considerably since the passage of the Community Reinvestment Act, and nonbanks are now capturing a large share of the mortgage market,” said CFPB Director Rohit Chopra. “States have responded by creating reinvestment obligations for mortgage companies and have tailored state reinvestment requirements to meet the needs of their local communities.”

While the federal Community Reinvestment Act law applies strictly to banks, state reinvestment laws can apply to a wide range of financial institutions, including nonbank mortgage companies. Banks now originate and hold a much smaller share of outstanding mortgage debt than they did when the legislation was originally enacted. In 1977, banks held 74% of outstanding mortgage debt. By 2007, this share had declined to just 28%. As of 2021, nonbank mortgage companies originated 64% of conventional home purchase mortgage loans, compared to the 25% originated by banks.

Key findings of today’s report are:

• Some states apply an affirmative lending, service delivery, and investment obligation to mortgage companies, in addition to deposit-taking institutions. Most state Community Reinvestment Acts adopted shortly after the passage of the federal law in 1977 applied only to banks. Several states, including Massachusetts and New York, later expanded their state law to cover mortgage companies.
• Some states conduct independent examinations of lending-, services-, and investment-related performance, while other states review federal performance evaluations in conjunction with additional state-designated factors. In some states, performance evaluations are periodic, while other states review a financial institution’s performance in response to an application for a merger, branch, license, or other activity.
• Enforcement mechanisms include limitations on mergers, acquisitions, branching activities, and licensing, but some states have adopted additional measures. Like the federal Community Reinvestment Act, none of the state laws reviewed explicitly provide for the ability to issue civil monetary penalties or structural remedies for failing to meet state reinvestment requirements.
• Some states collect and consider information beyond what is required under the federal Community Reinvestment Act to evaluate lending, services, and investment performance in their state. Most states rely on existing data, such as Home Mortgage Disclosure Act data for mortgage lending, or federal Community Reinvestment Act data for small businesses or small farms, to complete their evaluations. At least one state, New York, requires additional small business lending data reporting beyond what is required by the federal law.
• State Community Reinvestment Acts have been amended from time to time in response to changing markets. Many state laws were initially passed shortly after the enactment of the federal Community Reinvestment Act in 1977. Just as the federal law has been revised since its passage, state reinvestment laws have been amended to cover additional types of financial institutions, collect additional data to better understand financial markets, and address other state-specific needs.

When implementing their state community reinvestment laws, states also use information from federal regulators, such as mortgage, small business, and small farm data, or consider violations of federal laws in their review of a financial institution’s reinvestment performance.

Read the report, State Community Reinvestment Acts: Summary of State Laws.

Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their companies have violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov.

In the relentless whirlwind of the UK business landscape, an alarming 40% of companies are ensnared in the time-consuming management of late payments, losing up to nine full working days annually. This drain on resources, mirroring an employee’s annual leave, is a critical issue that transcends the UK, with American SMEs facing a daunting average of 700 hours a year on the same endeavor. This silent epidemic cripple the potential for growth and innovation, with a staggering 87% of businesses wrestling with delayed payments and the average enterprise owed £38,000 - a precarious edge for many towards insolvency.

The financial drain is momentous, costing the UK economy a colossal £2.16 billion in debt chasing alone, and casting a long shadow over the mental well-being and personal lives of business owners. With 12% of businesses employing dedicated staff for this taxing role, the emotional toll is stark, preventing nearly a quarter of entrepreneurs from taking a deserved holiday and impacting the personal relationships of nearly half.

But there is hope on the horizon.

Gala Technology Paves the Way with SOTpay

Gala Technology, a vanguard in the payment solutions arena, is pioneering a new era with SOTpay, a revolutionary suite of automated payment systems designed to combat the late payment crisis head-on. SOTpay, through its seamless integration with acclaimed accounting software like Xero, QuickBooks, and Sage, ensures swift reconciliation and financial management, liberating businesses from the shackles of payment chasing.

"SOTpay is our answer to the global challenge of late payments," says Jason Mace, CEO of Gala Technology. "Our innovative solution ensures that time is spent where it should be – on growth and innovation. We are not just offering a product; we're providing a lifeline for businesses to thrive in these trying times."

SOTsync Pro Accounting Interface and the payment gateway Open Banking and Direct Debit integration exemplify Gala Technology's commitment to providing transformative solutions, allowing businesses to reclaim their time and mental space for strategic endeavours.

Business Development Manager Chris Evans adds, "With SOTpay, the power to secure your business’s financial operations is at your fingertips. It's time to turn the tide, streamline your processes, and watch your business soar."

A Call to Action for Business Leaders

As a visionary in your field, the value of time and peace of mind is paramount. Don’t let late payments thwart your business's potential. Connect with Gala Technology today and step into a world where financial fluidity is the norm, and the late payment crisis is a thing of the past. Secure your future with SOTpay and let us take care of the rest.

Paays Financial Technologies Inc., a leading provider of Fraud Detection, KYC, AML and Income Verification software solutions in Canada, is pleased to announce a new partnership with Yoti, a leading digital identity company. Paays will integrate Yoti’s identity verification technology with the Paays ID Verifier solution, to streamline the customer journey, strengthen identity checks and reduce the risk of fraud in auto finance applications.

Lenders and dealers in auto finance are seeing increasing customer demand for digital processes. The Paays ID Verifier enables auto dealers and lenders to verify the identity of customers online, without relying on physical documents, enabling faster lending decisions, with more digital solutions and less paperwork. With Yoti’s identity verification technology, Paays’ customers can confirm identities of individuals in real-time, through a secure, fast, and seamless online process.

As with other Paays digital solutions, ID Verifier improves the onboarding experience for new customers and reduces the risk of identity fraud. Yoti’s automated identity verification technology confirms the authenticity of identity documents, ensuring every customer account is genuine and accurate. This is especially important for highly regulated sectors which have a higher risk of fraud.

Robin Tombs, CEO of Yoti said, “We’re excited to partner with Paays to strengthen the reliability and accuracy of identity checks for the Canadian auto financing sector. Finding the right balance between fraud and friction can be challenging. But our online identity verification gives customers a secure, simple and fast way to confirm their identity. Together with Paays, we can enable a smooth digital experience for customers, and reduce the risk of fraud.”

David Fry, CEO of Paays said, “Both Paays and Yoti have a shared vision of creating better and safer digital processes for identity verification, with advanced technology to help reduce fraud. Paays has seen increasing demand for our ID Verifier solution from the auto financing space, along with other lending areas in Canada that are going digital. After an extensive due-diligence and review process, combined with our own experience over the past year with ID Verifier, we are pleased to partner with a global identity verification provider like Yoti.

FERO is delighted to announce the successful closure of a $3 million seed round from Coatue, Volta Ventures, and Antler. This capital will enable FERO to expand and enhance its unique online payment solution to tackle the $5T of annual revenue merchants lose at the point of checkout. 

After working for Ekata, a global payments fraud solution and then Mastercard (after Ekata was acquired), co-founders Craig Savage and Maximilian van Boxel saw firsthand how complicated payments processing has become at checkout for end-merchants. 

Data shows that the majority of online shoppers that reach the checkout stage fail to complete their purchases. Today’s ‘one size fits all’ approach to the checkout experience and payment journey is a significant barrier to purchase conversion. While participating in Antler’s founder residency in 2022, the team identified an opportunity to create personalised purchase preferences that would make it easier and more seamless for consumers to complete their payments. 

“As a payments data scientist, I was shocked when I started to uncover the level of abandonment during the checkout and payment journey. Today, upwards of 45% of customers place items in their shopping cart, but never finalise their purchase due to payment related issues. This translates to over $5.2 trillion of lost revenue per year,” explains Craig Savage, Co-Founder and CEO, FERO. “We founded FERO to help retailers deliver a more seamless and customised shopping experience to their customers.”   

FERO’s solution analyses each shopper, their behaviour and activity, to predict the likelihood of purchase completion. Through the sequenced application of segmentation, multi-classification prediction and reinforcement learning, FERO learns a shopper’s purchase preferences and delivers the most optimal payment experience. This includes individually customised payment methods and subsequent payment journeys like reducing the friction caused by 3D secure authentication challenges.

“While payment innovations have made transactions faster and more seamless, few solutions have looked at the behaviour of shoppers to understand why so many items are left un-purchased in the online shopping cart,” says Elena Sakach, Partner, Coatue. “It’s exciting to see the FERO team take a unique approach that leverages behaviour analytics to deliver purchase solutions that will improve the shopping experience and drive revenue for retailers.”

With the capital from this seed round, FERO will build out its team across Europe and the US, and further enhance its product offerings to serve more retailers around the world.

Connectly, the leader in conversational commerce, today announced its $7.85 million Series A investment led by Volpe Capital, with participation from RX Ventures and Saurabh Gupta, managing partner of DST Global. This brings the total amount the company has raised to $17.25 million. Founded by industry veterans from Facebook, Google, Uber, and NASA, and backed by Unusual Ventures, Connectly uses proprietary artificial intelligence (AI) models to automate how businesses communicate with their customers and sell their products. Already, Connectly’s personalized AI-generated marketing campaigns have generated upwards of 30x returns for its customers.

In our digital-first world, retaining consumers’ attention and mindshare is becoming more difficult by the day. Businesses need a simple way to have impactful conversations with customers while more effectively creating personalized, one-on-one relationships. They must deliver the right message to the right person at the right time - and on the right platform.

Connectly provides a simple plug-and-play solution for businesses to create winning messaging campaigns and automate two-way conversations - to both leads and loyal customers - at scale and across any messaging platform.

“This investment marks a critical milestone in Connectly’s journey,” said Stefanos Loukakos, co-founder and CEO, Connectly. “Not only does it provide us the opportunity to expand our platform and continue developing state-of-the-art AI models, but it also marks our entrance into the U.S. market. What’s more, this funding round will aid our expansion onto new messaging platforms and further our position as a leader in conversational AI. This is just the beginning of an exciting new chapter for us.”

SpiderSilk, a Dubai-based cybersecurity AI startup, is making significant strides in the rapidly evolving world of cyber defense.

The firm announced a successful $9m funding round, spearheaded by Waed Ventures, the $500m Kingdom-based venture capital fund of Aramco. The round also saw active participation from STV and Global Ventures.

The essence of SpiderSilk revolves around addressing the critical challenges in the cybersecurity realm. Established in 2019 by co-founders Rami El Malak and Mossab Hussein, the company offers an innovative AI-powered cyber defense platform, coupled with state-of-the-art continuous exposure detection technologies.

The capital from this funding will be channeled towards expanding SpiderSilk’s cyber defense technology offerings in Saudi Arabia, catering to the growing market need for top-notch cybersecurity solutions in the region.

SpiderSilk CEO Rami El Malak expressed his views on the significance of this achievement, saying, “While the GCC is a key technology market, there is hardly any IP being built in the region for the region and beyond, and we believe that it is increasingly important to achieve self-reliance in this sector for the benefit of the public and private organizations.”

Know-it, the all-in-one credit management solution, has announced the appointment of Phil Hobden as its Head of Strategy and Growth.

As an expert in the fintech field and a well-known name within the UK accounting industry, Phil brings over 15 years of experience, strategic vision, and passion for business growth to the team at Know-it. His experience in leadership, empowering accountants and SMBs will accelerate Know-it’s growth opportunities.

The fintech industry, start-ups and the accountech space are familiar to Phil’s leadership experience. He has spent years leading and building sales teams, defining go-to-market strategy and growing business success.

The mission of Know-it is to expand its services globally and assist SMEs worldwide in realizing the importance of automating the credit control process.

CEO and Founder of Know-it, Lynne Darcey Quigley, comments on the announcement: “With a rich background in fintech, Phil holds a strategic role which will guide Know-it’s strategic direction, global ambition and collaborations which will drive growth and impact in the sector” “We are super excited to have Phil join us, working with Accountants and their clients is very important and I believe Phil is the person to drive this relationship”.

Phil Hobden commented: “As a company with a strong existing leadership and ambition, Know-it offered the opportunity for me to work in a booming fintech scene with a great product and the aspiration for it to be the leading light in the industry.”

“Through partnering with accountants, bookkeepers, and advisors, I plan to build on Know-its ground-breaking work so far into the advisor led space, ensuring that we make a lot of noise in the process. Simply put EVERY SME should be using Know-it and whilst there are other software’s in the market there that touches on what we do, no one has yet nailed that end-to-end piece like we have.”

Canada is witnessing an increasing interest in Islamic finance, particularly in areas like housing finance, mortgage finance, and takaful (Islamic insurance) products. Some small level Islamic finance institutions in the Canadian market are offering the financial services that adhere to Sharia principles.

Alhuda Centre of Islamic Banking and Economics (CIBE) – UAE, a leading global Islamic finance consultancy and advisory firm, recently conducted a two-day specialized training workshop on the basic and practical aspects of Islamic banking and finance in Toronto, Canada. Islamic finance is a rapidly growing industry worldwide, and Canada is no exception. While Islamic finance is still in its early stages of development in Canada, it is gaining popularity among both Muslims and non-Muslims alike. The growing popularity of Islamic finance in Canada is a positive development for the country’s economy. Islamic finance can help to promote financial inclusion and economic growth. It can also help to strengthen Canada’s ties with other Muslim-majority countries.

Mr. Zubair Mughal, CEO of Alhuda CIBE, spoke at the workshop about the importance of Islamic finance in promoting religious harmony and financial inclusion. He said Islamic finance is a system, not a religion. Muslims have a distinct advantage, as it aligns with their religious principles, but it also offers non-Muslims a unique and ethical way of managing their finances. This is an inclusive system that benefits everyone, regardless of their faith. 

Mr. Zubair Mughal added that the religious harmony in Canada makes it an ideal atmosphere for Islamic finance, and due to the large number of Muslim immigrants, demand of Islamic banking products is increasing in the market. This industry not only caters to the financial needs of Muslims but also resonates with individuals seeking ethical and socially responsible financial solutions. 

The specialized training workshop by Alhuda CIBE aimed to equip participants with a comprehensive understanding of Islamic banking and finance principles and their practical applications to the Canadian Market. It also provided a platform for industry experts to share insights and experiences. Through initiatives like the recent workshop, Alhuda CIBE continues to play a vital role in promoting the principles of ethical and responsible finance in Canada.