November 3, 2020
The Gateway For Payroll Data
Government must first do no harm while we increase access to banks
Why does the market leave out those 66 million unbanked or underbanked Americans with nearly $1 trillion in buying power? The answer involves the unintended effects of the regulatory actions and turf wars meant to assist these neglected consumers, who are more likely to be minorities and from areas of persistent poverty. During the last decade, some state regulators and attorneys general have fought to increase state oversight power, limit interstate banking, prevent more evolution in the federal banking system, and enact measures that protect the most vulnerable.

While that last objective is clearly laudable, their efforts impose licensing, paperwork, and system development rules. Those business costs are then passed onto customers in the form of higher fees and minimum balances, which underserved Americans often cite as barriers to financial access. In some cases, the banks simply stop offering certain products because the regulatory costs make certain products unaffordable.
Paving the Payments Future
FDIC: Share of Unbanked Americans Reaches Record Low in 2019
The share of U.S. households that are unbanked continued falling in 2019, reaching 5.4%, the lowest rate yet recorded in the FDIC’s biennial How America Banks report released today. The figure fell from a high of 8.2% in 2011, but the report cautioned that the coronavirus pandemic—which took place after the survey was fielded—“is likely to contribute to a rise in the rate of unbanked households.”

The unbanked rate saw greater percentage point drops for Black, Hispanic and multiracial households. Black households’ unbanked rate dropped from 16.8% to 13.8%, while the rate for Hispanics fell from 14.4% to 12.2%. The share of unbanked households with two or more races fell from 8.5% to 4.9%. The rate for Asian-American households fell from 2.6% to 1.7%. White households saw their unbanked rate drop from 3% to 2.5%.

Among the unbanked, 29% said that not having enough money for a minimum balance requirement was the main reason. Three quarters of unbanked Americans said they were not at all or not very interested in having a bank account. Today, as part of its efforts to reduce the ranks of the unbanked, Earlier today, the American Bankers Association urged all banks to offer low-cost accounts with predictable costs and safe features that meet the Bank On standards.
Lending as a Service
OCC Finalizes ‘True Lender’ Rule
The OCC today issued a long-awaited final rule establishing a “clear test” to determine when a bank making a loan is considered the “true lender” in the context of a partnership between a bank and a third party. Under the final rule, a bank makes a loan if, as of the date of origination, it is named as the lender in the loan agreement or funds the loan.

A loan originated by a bank that satisfies either part of this test would retain its status as a bank-originated loan if the loan is sold, assigned, or otherwise transferred to a nonbank entity. In cases where the bank funds the loan, if a bank funds a loan as of the date of origination, the OCC concludes that it has a predominant economic interest in the loan and, therefore, has made the loan—regardless of whether it is the named lender in the loan agreement as of the date of origination. The final rule further states that “if, as of the date of origination, one bank is named as the lender of the loan agreement for a loan and another bank funds that loan, the bank that is named as the lender in the loan agreement makes the loan.”
UPDATE! Educate the public!

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.

US New Home Sales Drop 3.5 Pct In September From Previous Month
The number of new homes sold in the U.S. in September was lower than the number sold in August, according to a joint report by the U.S. Census Bureau and the Department of Housing and Urban Development.

The houses sold were at a seasonally adjusted rate of 959,000, which was 3.5 percent lower than the August rate of 994,000, the report stated. However, the rate is also 32.1 percent above the rate from September 2019 of 726,000.

The median price of new houses sold was sitting at $326,800, and the average sales price was $405,400, according to the report. The seasonally adjusted estimate for new houses for sale by the end of September was 284,000, which is a supply of 3.6 months at the current sales rate.
Consumer Financial Protection Bureau Releases Advance Notice of Proposed Rulemaking on Consumer Access to Financial Records
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today issued an advance notice of proposed rulemaking (ANPR) requesting information related to consumer access to financial records.

In issuing the ANPR, the Bureau is asking the public how it might most efficiently and effectively develop regulations to implement Section 1033 of the Dodd-Frank Act, which provides for consumer rights to access financial records.

When consumers use financial products and services, the providers of those products and services generally accumulate data about those consumers and their use of those products and services. Consumer access to these data allow consumers to manage their financial accounts and can enhance consumers’ control of their financial matters. Consumers may realize these benefits by authorizing third parties to access these data on their behalf and allowing those third parties to deliver new or improved financial products and services. Use cases for consumer-authorized data include personal financial management, making and receiving payments, assisting consumers with improving savings outcomes, underwriting credit, and many other services.
Financial Services Professionals Say Lending Sector to Take A Year or Longer to Recover to Pre-COVID Levels: Survey
The COVID-19 pandemic has accelerated the shift to digital with financial services, according to a recent report from TransUnion (NYSE:TRU), a financial services data platform and credit report provider.

The report notes that the Coronavirus outbreak sent “shockwaves” through the financial services sector and has “challenged the way lenders have historically operated.” TransUnion also mentioned that as more commerce begins to move to all-digital platforms, “empowered” consumers will have even more power or control in today’s global, technology-driven economy.

The company’s report pointed out that 40% of consumers are now using all-digital channels more frequently than before the pandemic began. The increase in the use of digital services is taking place at a time when 60% of consumers say that “the majority of their financial transactions are conducted via mobile applications.”
CFPB’s clear rules of the road for debt collector communications lead to stronger consumer rights
1977. Bell-bottoms were popular fashion, Elvis passed away, the very first Star Wars movie was released, Jimmy Carter became president, and Steve Jobs introduced the world to the idea of the personal computer with the launch of the Apple II. We can all agree that a lot has changed since then. Advances in technology in particular have transformed how we communicate, with cell phones enabling us to take a call or receive a text 24 hours a day in our neighborhood or on the other side of the globe. But debt collectors and consumers have been trapped in a time warp. They have been required to communicate with each other under standards Congress enacted in 1977. Until now. Today, the Consumer Financial Protection Bureau is issuing a final rule that provides clear consumer rights and limitations for debt collectors on using modern technologies to communicate with each other.

Debt collection is a multi-billion dollar industry with more than 8,000 debt collection firms in the United States. The 1977 Fair Debt Collection Practices Act prohibits harassing and abusive and unfair debt collection practices as well as false and misleading representations by debt collectors. Our rule applies these protections to modern technologies. The rule clarifies how debt collectors can use email, text messages, social media, and other contemporary methods to communicate with consumers. And our rule will allow consumers, if they prefer, to limit the ability of debt collectors to communicate with them through these newer communication methods.
NY regulator lays out climate risk expectations for banks
  • New York's Department of Financial Services (NYDFS), in a letter Thursday, called on state-regulated financial institutions to integrate climate change-related financial risks into their business strategies, risk management processes and governance frameworks — becoming the first U.S. regulator to explicitly make that request.
  • The agency suggests regulated organizations designate a board member or committee, as well as a senior management function, to be accountable for the institution's assessment and management of climate change-related risks to credit, liquidity, reputation, operations, strategy and the market at large.
  • The regulator said it recognizes climate change affects institutions to different degrees, and appreciates not every organization has the same level of resources. But each institution "should take a proportionate approach that reflects its exposure to the financial risks from climate change and the nature, scale, and complexity of its business."

113 years on, Georgia's smallest bank digitizes
Barwick Bank's new owners installed a fresh core operating system, launched a suite of online banking products — and aim to expand into neighboring Florida while keeping a relationship-driven ethos.

With its brick exterior and teller windows that retain their wrought iron bars, a trip to Barwick Bank in Georgia is like a journey back in time.

Until recently, operations at the $22 million-asset bank — the state's smallest — had hardly changed since its establishment in 1907. Barwick Bank used ledger books instead of electronic tools to track transactions. It had no debit cards, website or modern technology infrastructure, and many of its 80 customers did business with the bank because their families had a long-standing history with it.
Alternative Financial Service Providers Association
315 Tuscarora St., Lewiston, NY 14092