April 30, 2020
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Why Households Are Turning to Payday Loans in This Financial Crisis

The COVID-19 coronavirus has wreaked havoc on our economy. According to the IMF, it could cause financial instability around the entire world, and create an economic depression and financial crisis worse than even the 2007-08 financial crisis.

And in this time of economic insecurity and instability, more American households than ever are turning to payday loans. Both payday lenders and title lenders anticipate more applications as layoffs due to COVID-19 coronavirus continue to affect Americans.

So why are American households turning to payday loans to get the cash they need during this crisis? Let's find out.

Total U.S. unemployment claims have hit more than 20 million, as of publication time, officially passing the record set during the Great Depression. Joblessness claims have hit a few industries particularly hard.
Read more at The Yucatan Times

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Only 1.5% of all consumer complaints submitted to the CFPB concern small-dollar loans.

Democrat senators to credit bureaus: Protect Americans' credit scores amid the coronavirus pandemic

Two Democratic senators are urging the national credit reporting agencies to help safeguard the creditworthiness of Americans hurt by the coronavirus pandemic, according to a letter obtained by Yahoo Finance.

Senators Elizabeth Warren (D-MA) and Brian Schatz (D-HI) sent a letter to Equifax, Experian, and TransUnion, inquiring about the actions they are taking to make sure Americans' credit isn't damaged permanently if they have trouble paying their bills on time during the crisis.

"If American families and consumers are piled under a mountain of debt during this pandemic and once it ends, the country will struggle to emerge from a deep recession," Warren and Schatz wrote. "This means that when the crisis is over, months of late or missed payments could add up to not just a mountain of debt, but a cratering credit score that takes away the shovel they might use to dig themselves out." Read more at YAHOO MONEY


Demand for small business rescue program 'much greater' than funding, Rubio says

Program exhausted its initial $349B in funding within 13 days

Sen. Marco Rubio said Tuesday the demand among small business owners for government-backed aid "far exceeds" the funds in the Paycheck Protection Program.

"Let me be clear, the demand for PPP loans far exceeds the supply of dollars," Rubio, the chairman of the Senate Small Business Committee, said. "I just want to be frank and honest about it. The need out there is much greater than what's been appropriated, and what's been given is a lot."

The program, an integral part of the federal government's massive economic stimulus effort passed at the end of March, exhausted its initial $349 billion in funding within 13 days and was heavily criticized for granting multimillion-dollar loans to big, publicly traded companies - even as small businesses languished financially.
Read more at FOX BUSINESS


Coronavirus pandemic has people turning to pawn shops for quick cash

NORTH VERSAILLES, Pa. - As millions of people are finding themselves out of work and unemployed amid the coronavirus pandemic, pawn shops are seeing an increase in customers looking for help.

"It makes you feel for these people," said Nicholas Maurizi, owner of National Gold Exchange in North Versailles. "It's just sad."

Maurizi said his customers come from all walks of life, but right now he's seeing a lot of people who are out of work due to the pandemic and haven't been able to collect unemployment.

"We had a customer this morning that needed $10 - $15 to put gas in his tank so he could make it downtown to get a food voucher for food for his family, and he had some odds and ends he was trying to sell," he said.

Maurizi said customers are bringing in everything from electronics, to tools, jewelry and batteries. Read more at ACTION 4 NEWS


Behind The Apply Button: Episode 13 - "Make a Payment Button v2.0"

Alchemy is proud to announce today of our next generation Make Payment button.

Available today, our enhanced Make Payment feature is available for all customers on our lending operating system. After months of development, was are unveiling a more intelligent and connected Make Payment feature that works seamlessly with any payment gateway and our native automated payment schedule as well as our Collections Module:

Make Payment 2.0 ~ Main Feature Include:
  • Intelligently connected to customer repayment history
    • Awareness of late payment
      • Able to track all late interest (accrued and late accrued)


How LoanPaymentPro™ Can Help
  • 24/7/365 distribution and payment acceptance
  • Funds disbursement and payment acceptance capabilities
  • Real-time payment type validation and verification
  • Increase payment acceptance rate up to 35% with LoanPaymentPro™
  • Fully automate payment acceptance compliance without additional cost
  • Web based platform or API plug-in for Loan Management Systems (LMS)
  • Established and exclusive relationships with multiple Sponsor Banks



Senator Gillibrand calls for legislation to establish postal banking

ALBANY, NY (WRGB) - U.S. Senator Kirsten Gillibrand will host a video press conference calling on Congress to strengthen the country's postal service, reestablish postal banking, and reinvigorate voting rights.

The coronavirus pandemic has devastated the finances of millions of Americans. As families struggle to make ends meet, low-income households that lack access to traditional banking services - such as checking and savings accounts - have been forced to turn to services such as prepaid debit cards, rent-to-own stores, and overdraft fees.

Gillibrand calls this legislation the Postal Banking Act. It's goal is to provide low cost, basic financial services to New Yorkers who don't have access to banks, it will create revenue for the postal service, and guarantee access to vote by mail. Read more at WRGB

Dreher Tomkies LLP

Lawmakers Try to Target PPP Funds for CDFIs & Even Payday Lenders

Some lawmakers want to ensure small, non-bank lenders such as installment lenders (payday lenders) are eligible to obtain PPP loans.

As the federal government begins processing new small business applications from the Paycheck Protection Program, lawmakers are asking the Trump Administration to ensure that a variety of lenders, from Community Development Financial Institutions to installment and finance companies, have access to the program.

The Treasury Department and Small Business Administration were scheduled to begin Monday morning processing loan applications after Congress refilled the program's coffers last week.

The loans are intended to help companies weather the coronavirus crisis, giving them the ability to continue to pay employees. Congress set aside $30 billion for banks, credit unions and Minority and Community Development Financial Institutions with less than $10 billion in assets.


Coronavirus stimulus phase 4 could exceed $1 trillion and include negative payroll tax

Negative payroll tax is wage subsidy government would give to employers who would pass it on to employees

Congress and the White House are mulling a fourth phase of stimulus, which could exceed a trillion dollars, as they continue to combat the economic recession caused by the coronavirus lockdowns, people familiar with the negotiations tell FOX Business.

Under discussion are two key proposals: A payroll tax holiday, which is an elimination of the payroll tax, and a so-called negative payroll tax, a wage subsidy the government would give to employers who would pass it on to their employees.

Missouri Sen. Josh Hawley (R) has advocated the concept of a negative payroll tax in his Phase 4 Relief Plan, which would cover 80 percent of payroll costs for most employees. Under the plan, the government would send businesses 80 percent of employees' salaries; the businesses in turn would pay their employees the government money. As part of the legislation, there would be limits to how much money they can receive.
Read more at FOX BUSINESS


Coronavirus relief often pays workers more than work

When combined with state benefits, weekly government payouts create incentives that employers say complicate efforts to reopen businesses

Roughly half of all U.S. workers stand to earn more in unemployment benefits than they did at their jobs before the coronavirus pandemic shut down wide swaths of the U.S. economy, and employers say the government relief is complicating plans to reopen businesses.

The package of coronavirus stimulus laws Congress passed and President Trump signed in March included a $600 boost to weekly unemployment benefits through July 31. As that support is added to state benefits over the coming weeks, the average weekly payment to a laid-off worker should rise to about $978 from the $377.97 the Labor Department said was paid on average late last year.
Read more at FOX BUSINESS

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As Kentucky Payday Lenders See Business Dropping, Industry Seeks Forgivable Loans

As members of Congress push for allowing payday lenders to access federal loans, data show that their business in Kentucky dropped precipitously when the pandemic struck.

The industry processed about 20% fewer loans in March than it did the previous March, according to a monthly report provided to the Kentucky Department of Financial Institutions by the loan processing firm Veritec Solutions. That represents a drop in lending of $8.3 million in the short-term, typically high-interest loans.

The database shows loan volume ranged from 129,000 in March 2019 to as high as 168,000 loans the following August. But only 104,000 loans were processed this March, the lowest by far in the last year. Read more at WFPL News Louisville



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