October 29, 2020
The Gateway For Payroll Data
FDIC: US Bankless Rate Set To Rise If Pandemic Continues
The number of Americans without bank accounts is expected to spike again in the wake of the coronavirus pandemic after hitting a low last year, according to a new report by the Federal Deposit Insurance Corp (FDIC).

U.S. households without checking accounts fell to 5.4 percent in 2019, the lowest since the FDIC began tracking this stat in 2009.

But a surge in unemployment triggered by the coronavirus-driven recession is likely to push those numbers back up again, the FDIC notes in its new report, How America Banks.

While the “full effects of the pandemic are far from known,” the “early evidence has shown a rapid and dramatic increase in the unemployment rate,” the report notes. “One effect of these conditions is likely to be an increase in the unbanked rate from its level just before the pandemic.”
Lending as a Service
Pandemic expected to push poorer Americans out of banking system: Regulator
WASHINGTON (Reuters) - Many poorer Americans will struggle to keep a foothold in the banking system due to economic fallout from the coronavirus pandemic after years of increasing access, a U.S. banking regulator said on Monday.

A new report from the Federal Deposit Insurance Corporation (FDIC) found that in 2019 just 5.4% of Americans lacked a checking or savings account, the lowest level recorded by the decade-old survey.

But the watchdog warned that economic havoc wrought by the pandemic could push many struggling Americans, who were already hovering at the fringes, out of the traditional banking system altogether.
Paving the Payments Future
Banks look to new accounts to attract the unbanked as COVID-19 takes a toll
Millions of consumers — including people of color — aren't able to easily cash a check or visit an ATM because they're not customers of regular banks. 

The top reasons given for not having a bank account include not having enough money to meet minimum balance requirements, not trusting banks, bank account fees are too high, bank account fees are too unpredictable.

Banks across the country are now being urged to offer a more affordable type of account called Bank On accounts that allow for banking with little to no fees. Such accounts have low monthly maintenance fees and no overdraft fees, as well. 

The American Bankers Association on Monday called on every bank in the country to consider offering "Bank On-certified accounts" to expand access to banking services and reduce the number of unbanked and underbanked Americans. More than 40 banks offer such accounts today. The minimum opening deposit could be $25 or less.
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.

Jobless Claims Strain States
As a historic wave of layoffs continues, states are grappling with evaporating funds for unemployment benefits that could force cuts to those payments or hikes in business taxes.

Thirty-one states already are dipping into federal CARES Act dollars or seeking federal loans to keep money in the unemployment coffers. Those and other states also are considering legislation or other actions to fend off business tax increases triggered by high jobless payouts.

Unemployment insurance trust funds are paid for by business taxes and pay out benefits to laid-off workers. If the funds start to run out of money, state and federal law triggers tax increases to replenish the accounts.

“It is a big deal for states and businesses,” said Shelby Kerns, executive director of the National Association of State Budget Officers. “States generally do not want to increase taxes on businesses in an economic downturn, and borrowing only pushes those increases to the future, which can make the economic recovery more difficult.”
Fiscal 50: State Trends and Analysis: Tax Revenue Swings Complicate State Budgeting
The coronavirus pandemic is causing sharp, unpredictable swings in tax collections, confounding state lawmakers’ efforts to balance budgets. Sudden fluctuations present challenges even under less extreme economic conditions—with some states experiencing far higher levels of tax revenue volatility than others, depending on their tax mix. Over the past two decades, year-to-year fluctuations have been greatest in natural resource-dependent economies, driven by the boom and bust cycle of energy prices.

Revenue volatility differs across states because each relies on a unique mix of tax streams. Individual tax streams experience different fluctuations from year to year, contributing to a state’s overall revenue volatility. Between fiscal years 2000 and 2019, severance taxes on oil and minerals and corporate income taxes were consistently more volatile than other major state taxes, such as those on personal income and sales of goods and services.
Fintech boom prompts Justice to revisit bank merger guidance
DOJ asking public whether online lenders and their ilk should factor into decisions on competitive effects of proposed mergers

The Department of Justice’s antitrust division is contemplating whether it should revisit 25-year-old bank merger guidelines as new financial technologies reshape the banking industry and the market share data that the government uses to determine whether to allow mergers to proceed.

It is asking the public whether it should include “nontraditional banks,” such as online lenders, when considering the competitive effects of a proposed bank merger. The responses could shape a policy allowing more rural banks to combine, a move that might not impact competition as much as in the past, given consumers’ increasing options.

At least one trade group is telling it that the old rules don’t fit the modern landscape.
Here’s who Biden would likely pick as the top financial watchdog for consumers
Joe Biden, the Democratic nominee for president, would likely pick a new director of the Consumer Financial Protection Bureau if elected in November.

The CFPB has become more lax in regulating Wall Street during the Trump administration, according to consumer advocates.
Many top candidates include current and former CFPB staffers and have ties to Sen. Elizabeth Warren.

Consumers are likely to get a new financial watchdog if Joe Biden wins the presidential election next month.

The Consumer Financial Protection Bureau has languished during the Trump administration, making it likely that Biden, if elected, would make leadership changes, according to consumer advocates.
Retail And The Underbanked Opportunity
In the last 10 years, the global retail industry has been hit by a debilitating concoction of technological disruptions and competitive challenges. From issue-based brand boycotts to rapidly changing customer expectations, many of these challenges have disproportionately affected the brick-and-mortar retail market. 

Even before the current global pandemic, it was becoming increasingly clear that traditional brick-and-mortar retailing was entering a period of protracted decline. Now, faced with volatile trading conditions and intensifying competition from e-commerce platforms, brick-and-mortar vendors have found it increasingly difficult to keep up with online retail giants like Amazon AMZN -0.3% and Alibaba BABA +0.8%. 
OCC clarifies 'true lender' status on bank-fintech loans
  • Banks will be the "true lender" on loans made in partnership with fintechs if, as of the origination date, it funds the loan or is named as the lender in the loan agreement, the Office of the Comptroller of the Currency (OCC) clarified Tuesday in a final rule.
  • Further, if one bank is named as the lender in the loan agreement, and another bank funds the loan, the former is the true lender, the OCC specified.
  • The clarification gives banks the burden of ensuring a loan complies with consumer protection laws.

Pandemic-Driven Declines in Tourism Take Toll on Many States' Revenues
Hawaii, Nevada, and Florida predict significant budget hit after leisure and hospitality job losses

Hawaii’s economy thrives on tourism and all the dollars spent at hotels, restaurants, and attractions throughout the state. So when the COVID-19 pandemic forced business closures and grounded air travel in March, the islands sustained a major economic blow. Leisure and hospitality workers suffered massive layoffs, and the latest data covering August shows that state employment in the industry remained less than half of what it had been in February.

Nationally, leisure and hospitality jobs have endured by far the largest losses of any major industry. A review of U.S. Department of Labor jobs data for August, however, shows vast differences in how the industry has held up across states. Seven had incurred sharp reductions of a third or more from February’s pre-pandemic employment totals. A few others, meanwhile, had largely recovered from an initial wave of layoffs and were down less than 10%. For areas that lean heavily on tourism and hospitality, how the industry recovers matters not only for regional economies, but also for the vital tax dollars generated to fund state and local government budgets.
Alternative Financial Service Providers Association
315 Tuscarora St., Lewiston, NY 14092