ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
October 8, 2020
The Gateway For Payroll Data
Community banks cite 'business conditions' as top challenge in COVID year
Community banks increased their lending to small businesses by 40% in the 12 months that ended in June, according to a survey of 396 bankers published last week to coincide with a conference held by the Federal Reserve, Conference of State Bank Supervisors (CSBS) and Federal Deposit Insurance Corp. (FDIC). Community banks processed at least 37% — or $196 billion — of Paycheck Protection Program (PPP) funds, the survey found.

About 34% of survey respondents cited "business conditions" as the greatest challenge they faced throughout the year. Presumably, that category encompasses not only the coronavirus crisis, but other hurdles predicated by it. About 7% of respondents cited "business conditions" as a primary concern in 2019's survey.
Paving the Payments Future
Loan forgiveness underway for SBA's Paycheck Protection Program
Eligible businesses can have their entire loan amount forgiven

The Small Business Administration is in the process of forgiving potentially millions of loans under the Paycheck Protection Program that were approved to support small businesses during the coronavirus pandemic.

“The SBA began approving forgiveness applications and remitting forgiveness payments to PPP lenders for PPP borrowers on Friday, October 2,” a spokesperson for the SBA said in a statement. “SBA will continue to review all PPP forgiveness applications in an expeditious manner.”

There are a number of criteria that business owners must meet in order to have their loan forgiven, including maintaining staff levels or quickly rehiring workers that were let go. At least 60% of the loan amount must have been put toward payroll expenses, while the remainder could have been used for interest on mortgages, rent, and utilities.
Lending as a Service
Watch Fed Chair Jerome Powell talk rates, the economy and pandemic stimulus live
Federal Reserve Chairman Jerome Powell delivers his latest views on the economy Tuesday morning to a virtual gathering of the National Association for Business Economics.

The official topic of the speech is “Global Reset? Economics, Business and Policy in the Pandemic” and comes amid a change in Fed policy that will keep short-term interest rates anchored near zero for years. At its most recent meeting, in September, the Federal Open Market Committee said it will seek to average inflation at more than 2%, meaning it won’t hike rates until inflation stays meaningfully above that target for a period of time.

In addition to prepared remarks, Powell also will take questions from a moderator.
UPDATE!
IRS extends Economic Impact Payment deadline to November 21 to help non-filers

WASHINGTON — The Internal Revenue Service announced today that the deadline to register for an Economic Impact Payment (EIP) is now November 21, 2020. This new date will provide an additional five weeks beyond the original deadline.

The IRS urges people who don't typically file a tax return – and haven't received an Economic Impact Payment – to register as quickly as possible using the Non-Filers: Enter Info Here tool on IRS.gov. The tool will not be available after November 21.
Leading Consumer Financial Services Companies Announce INFiN, A Financial Services Alliance
Alliance creates a collective of companies dedicated to meeting the needs of consumers in a diverse and evolving financial services marketplace

October 6, 2020, Washington, D.C. – A wide array of the nation’s leading consumer financial services providers announced today the creation of INFiN, a Financial Services Alliance, representing more than 350 companies operating approximately 8,000 locations throughout the United States.

INFiN will provide a unified and strengthened voice for the vital and rapidly evolving consumer financial services industry and to advocate on behalf of its customers.

Consumer financial service providers ensure consumers have access to a variety of critical financial products and services to help manage their personal finances, including check cashing, pre-paid cards, money transfers, electronic bill payments, and small-dollar loans, among others. INFiN represents the formal alliance of these innovative providers, bound by a shared commitment to their customers, regulatory compliance, and transparency.

“Consumers’ financial needs and options, including the ways they choose to access solutions, are continually evolving,” said Ed D’Alessio, INFiN’s executive director. “Our alliance and members embody the ongoing transformation of consumer financial services, providing the inclusion, innovation, and integrity our customers need, expect, and deserve.”
Join us in the fight against breast cancer! 💗 Every October, ACE Cash Express stores participate in a month-long fundraiser for an organization that is close to our hearts: National Breast Cancer Foundation, Inc.

When customers visit their local ACE stores, they’ll have the opportunity to make a contribution to NBCF and receive a pink awareness wristband to show their support. We’re grateful to our customers and employees who make Pink Month such a success!
Acquisition under the radar: Credit unions resume community bank deals
A hearing on tax exemption is long overdue, advocates say. But lawmakers are focusing on pandemic priorities. Meanwhile, a credit union may be a community bank's best hope.

When $635 million-asset Crane Credit Union announced in August it had entered into a deal to buy Spencer, Indiana-based Our Community Bank, the news added to a growing point of contention between community bankers and their not-for-profit counterparts, credit unions.

The trend of credit unions scooping up community banks has been somewhat of a thorn in the side of some community bankers and trade groups, including the Independent Community Bankers of America (ICBA), which say the purchasing power of the nonprofit institutions demonstrates they have strayed from their mandate to serve modest-income households.
The Legacy of Employment & Income Verification
While Ronald Reagan popularized it, the famous trust but verify term has its genesis in a Russian proverb. Truth has always been hard to come by. That makes verifying the claims and statements made by individuals essential to running a business in today's climate.

Verification of a person's employment and income is nothing new. Governmental agencies, as well as businesses (from lenders to insurers to employers themselves) have been conducting these verifications for as long as documents have been falsified. The most basic way to conduct this type of verification is to communicate with the employer directly and just ask. Said another way, If 'Sara' is applying for a loan from 'Bank A' and Sara states that she makes $55K a year working at the Olive Garden, Bank A will contact the Olive Garden and make sure Sara's claim is valid.
Bank of America invests in 7 minority-owned institutions
Bank of America said it completed seven investments in minority depository institutions (MDIs) and community development financial institutions (CDFIs) on Monday, part of the bank's $1 billion, four-year commitment to advance racial equality and economic opportunity in the U.S.

The bank said it acquired approximately 4.9% of common equity in each organization, which includes: CSB&T Bancorp, First Independence, Liberty Financial Services, M&F Bancorp, SCCB Financial, Southern Bancorp and Unity National Bank of Houston.

The investments, which are part of a $50 million commitment to MDIs and CDFIs, will go toward investments in the communities the institutions serve through lending, housing, neighborhood revitalization and other banking services, the bank said.
How canceled student-loan and mortgage debts could affect your taxes
The tax impact can be costly or benign, depending

In this COVID-19 ravaged economy, debts can pile up beyond a borrower’s ability to repay. However, lenders are sometimes willing to forgive (cancel) debts that are owed by especially beleaguered borrowers. While forgiveness can help you survive financially, it can trigger negative tax consequences. Or maybe not. This column summarizes the most important things borrowers need to know about the federal income tax implications of forgiven debts. Here goes.

Cancellation of debt income is generally taxable
When a lender forgives part or all of a debt, it results in so-called cancellation of debt (COD) income. The general federal-income-tax rule is that COD income counts as gross income that must be reported on your Form 1040 for the year the debt cancellation occurs. Read more at MARKETWATCH
Virginia second only to New York in demand for loans due to COVID-19
A study this week found Virginia to be No. 2 out of the 50 states and the District of Columbia in demand for loans as a direct result of the COVID-19 pandemic.

The study, released by WalletHub in D.C., analyzed all types of loans from home equity to payday loans. Virginia is second only to New York in residents' need for loans.

The greater the demand for loans in a state, the more the people in that state are struggling to make ends meet. Virginians' surge in loan demand is indicative of a slow rate of economic recovery in the commonwealth. California, for example, is the state hardest-hit by the COVID-19 disease, but is 37th in the nation in demand for loans. California's rate of economic recovery has been high since the early summer months. Read more at CHATHAM STAR TRIBUNE
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
Alternative Financial Service Providers Association
757.737.4088
315 Tuscarora St., Lewiston, NY 14092