ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
December 21, 2021
Paving the Payments Future
Consumer Financial Protection Bureau Opens Inquiry into “Buy Now, Pay Later” Credit

Buy Now, Pay Later Expected to Set New Records for Lending this Holiday Season

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) issued a series of orders to five companies offering “buy now, pay later” (BNPL) credit. The orders to collect information on the risks and benefits of these fast-growing loans went to Affirm, Afterpay, Klarna, PayPal, and Zip. The CFPB is concerned about accumulating debt, regulatory arbitrage, and data harvesting in a consumer credit market already quickly changing with technology.

“Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too,” said CFPB Director Rohit Chopra. “We have ordered Affirm, Afterpay, Klarna, PayPal, and Zip to submit information so that we can report to the public about industry practices and risks.”

Buy now, pay later credit is a type of deferred payment option that generally allows the consumer to split a purchase into smaller installments, typically four or less, often with a down payment of 25 percent due at checkout. The application process is quick, involving relatively little information from the consumer, and the product often comes with no interest. Lenders have touted BNPL as a safer alternative to credit card debt, along with its ability to serve consumers with scant or subprime credit histories.

#IRS is offering a webinar called ‘Tax Changes from a Forms Perspective – Tax Year 2021.’ For details and to sign up for this free webinar.

#GetReady now for the upcoming filing season. Special steps related to Economic Impact Payments and advance #ChildTaxCredit payments can make tax filing easier in 2022. visit: https://go.usa.gov/xefcU

An #IRS reminder that qualified contributions of food inventory may represent a tax deduction of up to 25% of a business taxpayer’s taxable income. 
Financial Stability Oversight Council Releases 2021 Annual Report

WASHINGTON – The Financial Stability Oversight Council (Council) today unanimously approved its 2021 annual report. This year’s report describes activities of the Council over the past year, as the U.S. economy has continued to rebound from the disruptions caused by the COVID-19 pandemic. Monetary and fiscal policy, substantial progress in vaccinations, and broadly accommodative financing conditions have together supported this recovery and bolstered the financial condition of households and businesses. Additionally, the Council’s annual report describes significant financial market and regulatory developments, potential emerging threats to U.S. financial stability, and recommendations to promote U.S. financial stability. The report was developed collaboratively by members of the Council and their agencies and staffs.  

“The Financial Stability Oversight Council’s annual report analyzes past episodes of financial turmoil to understand weak points in our financial system. It also reviews the actions taken by the Council to strengthen our financial system, with one eye on the past and one on the future,” Secretary of the Treasury Janet L. Yellen said. “In the coming year, the Council will continue to monitor threats to financial stability and take concrete action where appropriate.”  

6 tax moves to make before the end of the year

The end of the year can be a busy time with presents to buy and travel plans to make. But be sure to leave room on your to-do list for key tax moves — some of which can lower next year’s tax bill. 

That might mean funneling more money into tax-advantaged accounts or figuring out how to best balance your stock sales. No matter your financial changes, the sooner you can get to it, the better. 

“Anecdotally, I’ve seen that customer service wait times and processing timelines have been much slower lately,” said Justin Pritchard, a certified financial planner with Approach Financial. “If you need to get something done by the end of the year, start now.”

Here are six smart tax moves to consider.

CFPB Calls Tech Workers to Action

Clear, actionable information is critical for workers when they’re deciding how to raise concerns and consider becoming whistleblowers. I am pleased to announce the Consumer Financial Protection Bureau (CFPB) has used human-centered design, including usability testing, to streamline how tech workers can alert us to potential violations of federal consumer financial laws.

Whistleblowing as a tool to hold industry accountable
Blowing the whistle is not a new concept, but it doesn’t make it any less of a high-stakes option for workers witnessing conduct they know is not right. Tech workers may have entered the field to change the world for the better, but then discover their work being misused or abused for unlawful ends.

We want those in the consumer financial products and services and fintech realms who see potential misconduct to report it to us. Whistleblowers can affect history, drive change, and defend individuals and families against corporate wrongdoing.

What Wall Street economists expect for the US economy in 2022

U.S. economic activity resurged in 2021 after a year marked by lockdowns and stay-in-place orders, with the rebound fueled by a combination of monetary and fiscal stimulus, as well as firm consumer spending. 

However, against this backdrop, the second half of this year especially has seen an economy grappling with supply-side constraints and rising price pressures. Lingering virus concerns have compounded with still-elevated demand to push up inflation. 

But next year, these pressures will begin to ease, according to a number of top Wall Street economists. A number of pundits have already delivered their forecasts on what to expect in the U.S. economy next year — and most expect to see easing inflation alongside somewhat slow growth in gross domestic product (GDP). 

Seven examples of unfair practices and other violations by mortgage servicers: CFPB supervision activities uncover red flags

In 2021, we’ve seen many promising signs that the economy is reopening and recovering, including lower unemployment and more household spending. At the same time, our recovery remains fragile, and millions of families continue to struggle to afford their mortgage payments.

Through our supervision of the financial marketplace, we spot potential bad actors and help families avoid unnecessary hardships and errors that could result in financial harm. During the pandemic, we’ve closely monitored mortgage servicing companies as over 7 million homeowners entered forbearance programs to defer their monthly payments. A recent report revealed numerous violations of consumer protection laws, including those put in place to help families impacted by the financial crisis.

Three Barriers Unbanked Citizens Face And How Fintech Overcomes Them

It’s difficult to find exact numbers on how many people in the U.S. are unbanked or underbanked. But even before the pandemic, the Federal Deposit Insurance Corporation estimated that about 25% of Americans either didn’t have a bank account at all or were unable to get the full array of financial services they need to establish credit and put savings aside.

Tens of millions of hardworking Americans live on the brink financially, unable to afford an emergency that costs more than $400. Low wages are part of the problem, and rising wages are welcome news for those families. But there are systemic issues with the traditional approach to banking that shut people out and keep many locked in a cycle of poverty.

Unbanked and underbanked citizens face at least three major financial barriers, and until these structural problems are addressed, too many people will be excluded from the services they need and deserve. Here’s a look at the major barriers blocking unbanked and underbanked communities and some fintech innovations that are helping them clear the hurdles.

Gender Gap in Employee Financial Wellness Goes Far Beyond the Paycheck, According to New Origin Research

Female employees less likely to invest to build wealth and be financially confident, finds Origin’s 2021 State of Financial Health and Wealth Report

Employers that provide access to financial advisory benefits can differentiate in a hot talent market and do their part to mitigate the gender wealth gap, retirement crisis and overall financial stress within their teams

SAN FRANCISCO, December 16, 2021--(BUSINESS WIRE)--It’s already been widely reported that the COVID-19 pandemic has negatively impacted women’s employment more than men, and new research shows that their overall financial well-being is also lagging behind. Origin, the employee financial wellness platform, today released its inaugural State of Financial Health and Wealth Report, a survey of 1,000 full-time U.S. employees, diving deep into the financial behaviors and stressors of employees today. Among other insights on financial burdens of employees detailed in the report, Origin’s survey found men are nearly 2x more likely to be confident or very confident in their financial health than women (62% of male respondents versus 38% of female respondents).

ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
Alternative Financial Service Providers Association
757.737.4088
315 Tuscarora St., Lewiston, NY 14092