February 2, 2021
The Gateway For Payroll Data
Nearly 1/4 of U.S. adults have a personal loan—this is the No. 1 reason they borrow money

Personal loans were growing in popularity in 2019, but borrowing slowed in 2020. CNBC Select takes a look at Experian personal loan data.

Personal loans were the fastest-growing debt category in 2019, but new data from Experian found that changed in 2020. While personal loans saw a 12% year-over-year increase in 2019, the category only grew 1% in 2020 (the slowest for any debt category last year) with fewer people taking out loans.

Delinquencies also saw a dramatic decrease, with 27% fewer accounts past due 30 days or more. On average, personal loan balances sat at $16,458 in the third quarter of 2020.

Nearly one-quarter (22%) of U.S. adults have a personal loan, according to the credit bureau. Baby boomers led the pack in 2019 with the largest personal loan balances on average ($19,253 in Q2).

Paving the Payments Future
Covid, payday loans, student debt — here are the issues Biden’s consumer bureau may tackle

The Consumer Financial Protection Bureau is expected to become a more aggressive consumer watchdog under the Biden administration.
Consumer advocates say the bureau was almost entirely declawed under former president Donald Trump. Biden nominated Rohit Chopra, a former student loan official at the Obama-era agency, to head the CFPB.
Likely focus areas include: Covid’s financial impact, debt collection, student loans, payday loans, credit reporting, overdraft fees, racial equity and arbitration.

The Consumer Financial Protection Bureau is expected to become a more aggressive consumer watchdog under the Biden administration and while the coronavirus pandemic hurls financial challenges at millions of Americans.

IRS updates FAQs on paid sick leave credit and family leave credit

WASHINGTON — The Internal Revenue Service today posted updated FAQs about recent legislation that extended and amended tax relief to certain small- and mid-sized employers under the Families First Coronavirus Response Act (FFCRA). The FAQs are available at COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs.

The updates to the FAQs cover how the COVID-related Tax Relief Act of 2020, enacted December 27, 2020, extends the availability of the tax credits created by the FFCRA to eligible employers for paid sick and family leave provided through March 31, 2021, as well as other amendments to the credits. 

What's in store for challenger banks in 2021?

As the challenger bank market continues to attract venture capital, new users and even celebrity endorsements, how will the momentum and hype surrounding this new way to bank continue into 2021?

Challenger banks have been on a tear in the past few years. The digital banking institutions, many of which say their aim is to disrupt the traditional banking space, have brought increased attention to the growing fintech sector, with massive funding rounds and reports of steady growth in user numbers. 

There were 256 neobanks worldwide as of December, according to data compiled by Exton Consulting, and many have reported steady account growth over the past 12 months. 

Chime, which closed a funding round in September that valued the startup at $14.5 billion, told Bloomberg last February it had amassed 8 million users, up from the 1 million customers it claimed in 2018.

California consumer agency strikes data-sharing deal with fintech companies

California’s newly empowered consumer protection agency signed a data-sharing deal with several financial technology companies in an effort to better evaluate benefits and risks of their products as the market for cash advance apps grows, Yahoo Finance has learned.

Using new oversight and enforcement authority under the California Consumer Financial Protection Law that went into effect on Jan. 1, the California Department of Financial Protection and Innovation (DFPI) signed the deal on Wednesday with five California-based earned wage access companies — Earnin, Even, Brigit, Payactiv, and Branch — that are licensed and regulated by DFPI.

The deal involves these cash advance companies to deliver quarterly reports starting in April to the DFPI, which will address specific metrics on how their products are affecting consumers and fees being collected. The move is significant in that DFPI, a regulator, is proactively reaching out to companies to research how this nascent industry is affecting consumers.

The macroeconomic implications of Biden’s $1.9 trillion fiscal package

The Biden Administration recently proposed an additional $1.9 trillion in federal spending to address the ongoing pandemic. We estimate that the package would boost economic activity, as measured by the level of real gross domestic product (GDP), by about 4 percent at the end of 2021 and 2 percent at the end of 2022, relative to a projection that assumes no additional fiscal support. We project that if the Biden package were enacted, GDP would reach the Congressional Budget Office’s (CBO) pre-pandemic GDP projection after the third quarter of 2021, exceeding it by 1 percent in the fourth quarter. In the middle of 2022, GDP would show a temporary and shallow decline and then grow at an annual rate of about 1.5 percent, coming close to the path projected just before the pandemic (see figure 1).

Without additional fiscal support, we project that real GDP would remain below the pre-pandemic level for the next several years. In the near term, without additional federal resources to contain the resurgence of the pandemic and distribute vaccines, the economy will face substantial headwinds. More broadly, millions of households will suffer as a result of waning fiscal support for the unemployed and households and businesses suffering financially. Indeed, Biden’s fiscal package should be judged primarily based on the extent to which it invests in COVID-19 containment and vaccination and provides needed relief to help households and businesses weather the pandemic.

SBA outlines steps to improve PPP, reports $35B in approved loans

The Small Business Administration (SBA) on Tuesday said it had approved 400,000 Paycheck Protection Program (PPP) loans worth $35 billion since relaunching the coronavirus relief program this month, and detailed steps it would take to fix operational glitches in the PPP's portal.

American Bankers Association (ABA) President Rob Nichols urged SBA and Treasury Department officials Monday to improve the portal after lenders reported being unable to upload applications for a second-draw loan if the forgiveness application for the borrower's first-draw loan is still pending.

The SBA said it would equip the agency's field team of lender relations specialists with information to support lenders and borrowers in understanding the issues and would provide additional guidance to PPP lenders on the review and resolution process.

Facing a double-whammy, millennials rack up credit card debt during the pandemic

The pandemic’s economic hit is making an outsize impact on one generation’s debt: A greater share of millennials report they have added to their credit card debt since March compared with older generations.

About 56% of millennials say their credit card debt has grown since the start of the pandemic, compared with 53% of Generation Xers and 46% of baby boomers, according to a new survey from About 55% of millennials blamed the crisis for their snowballing balances, while fewer than half of Gen Xers and baby boomers pointed to the pandemic as the cause of their growing debt, according to the survey of 2,475 adults in mid-December.

The reason isn’t due to poor spending decisions but more likely stems from the pandemic’s greater financial impact on millennials compared with older generations, says Ted Rossman, industry analyst. Millennials suffered a double-whammy: The generation trailed in wealth creation in the years before the pandemic, and roughly 6 in 10 say they or a household member lost income from mid-March through mid-December, according to census data. 

51 million Americans increased their credit card debt because of Covid

In times of financial distress, credit cards are one of the easiest ways to access cash.

During the coronavirus crisis, more than half, or 51%, of adults with credit card debt — roughly 51 million people — added to their balances, according to a report by And 44% blame the pandemic, the report found.

In addition, Americans’ confidence in their ability to pay their card balances fell in January, according to a separate survey from LendingTree.

“Hopefully wider vaccine availability will bring better days soon,” said Ted Rossman, an industry analyst at “Unfortunately, we’re not there yet.”

Get ready for tax season: How your stimulus check will be categorized with the IRS

Millions still await a first or second stimulus check, and meanwhile the Senate continues to negotiate a third. The IRS does not consider stimulus checks to be taxable income—what you need to know.

It’s already shaping up to be a confusing tax season, as millions of Americans are still waiting on their first and second stimulus checks from 2020, and the Senate pushes back on President Joe Biden’s $1.9 trillion relief plan calling for a third check (this time for $1,400).

Tax filing also begins a little later this year: The IRS announced it will begin accepting and processing 2020 tax year returns on Feb. 12 — as opposed to late January as it does most years — to give the agency time to prepare for the new stimulus paperwork. The deadline to file still remains April 15.

If you’re worried that the extra boost you got from the stimulus checks will count as taxable income, you need not worry. However, the stimulus money you’re owed could change how much you get back in your refund. Here’s what to know about your stimulus check and taxes.

Understanding the seasonal patterns of mortgage rates

Sweet spot falls in January for loans between $400,000 and $500,000

Much like the changing of the calendar, buying and selling homes follows a seasonality that those in mortgage and real estate have grown accustomed to. But a recent study from tech startup Haus found that mortgage rates can also be seasonal, and borrowers can benefit from understanding that rhythm.

Analyzing over 8.5 million mortgage originations between 2012 and 2018 from Freddie Mac’s Single-Family Loan-Level dataset, Haus found that the sweet spot for rates is typically in January, when mortgage originations also typically slump.

Ralph McLaughlin, chief economist at Haus, explained the correlation. “So, what do lenders have to do to be competitive? They lower their rates. But let’s look at when Treasury rates were dropping like crazy early in 2020. What that usually means is that mortgage rates would also drop like crazy. But at first, mortgage rates didn’t drop. And it’s because there was such a flood of people looking to refinance that lenders couldn’t keep up.

New guide helps military families with unique financial challenges

The coronavirus pandemic has brought many challenges to families all over the country. Many families will take a long time to recover from financial hardship, and some people will have to build a new financial foundation. Military families also faced unique financial challenges as a result of the pandemic and today the Bureau is providing a new tool to help military families begin reconstruction of their financial houses.

Focus on Military Communities is the latest addition to the Your Money, Your Goals suite of financial empowerment materials. The Bureau designed this guide to be the “go-to” resource for financial educators, counselors, and other trusted agents who help servicemembers, veterans, and their families reach their financial goals. Order free copies of Focus on Military Communities to use with the military families that you serve.

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