May 20, 2021
The Gateway For Payroll Data
Traditional banks mirror challengers with new digital offerings

"There's a story behind every one of these kinds of overdrafts," said Jimmy Stead, chief consumer banking officer at Frost Bank, which launched an overdraft grace feature last month.

Early access to paychecks and overdraft protection have long been the selling points for some low-income customers who have flocked to challenger banks in recent years. 

But as consumers grow accustomed to these services commonly offered by digital banks and fintechs, incumbent financial institutions are taking notice and launching similar offerings.

Paving the Payments Future
Wells Fargo rolls out 10-year effort to boost options for underbanked

  • Wells Fargo on Monday launched a 10-year program meant to give unbanked people — especially Black, Brown and Indigenous communities — better access to affordable, mainstream accounts.
  • The bank aims to redesign 100 of its branches in low- to moderate-income (LMI) neighborhoods with high unbanked populations, with the goal of prioritizing one-on-one consultations and financial health seminars, and improving digital access.
  • The San Francisco-based lender also is forming a National Unbanked Advisory Task Force — which will feature representatives from the NAACP, UnidosUS, the National Urban League and other organizations — to develop solutions to bank more people from underserved communities and provide input on how best to measure success.

The Internal Revenue Service and the U.S. Department of the Treasury announced today that the first monthly payment of the expanded and newly-advanceable Child Tax Credit (CTC) from the American Rescue Plan will be made on July 15. Roughly 39 million households—covering 88% of children in the United States—are slated to begin receiving monthly payments without any further action required.

IRS and Treasury also announced the increased CTC payments will be made on the 15th of each month unless the 15th falls on a weekend or holiday. Families who receive the credit by direct deposit can plan their budgets around receipt of the benefit. Eligible families will receive a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 and above.

U.S. Households Borrow More Than Ever, Just Not on Credit Cards

Americans increased their borrowing to a record of $14.6 trillion in March, driven by home and auto loans. But the growth masked what Federal Reserve Bank of New York researchers called a “confounding” decline in credit-card balances during a quarter when retail sales soared and travel resumed.

The New York Fed report, the first snapshot of household balance sheets as the economy started to rebound from the pandemic, shows that mortgage, auto and student loan balances have continued to increase. So did the quality of new borrowers, many of whom were taking advantage of low-interest rates to refinance their home loans.

Credit-card balances shrunk by $49 billion in the first quarter, the second-largest quarterly decline since the data started being compiled in 1999 -- the largest was in the second quarter of 2020, when business activity was frozen by lockdowns.

Promising job numbers are hiding a slow recovery for many metro areas

Employers across America’s largest metro areas added nearly 453,000 workers to their payrolls in March. This marked the largest monthly addition to job totals in the nation’s 191 largest metro areas since October, and is a sign that a steady recovery from the pandemic recession is underway as vaccination rates increase, stimulus checks flow to households, and businesses reopen.

March’s jobs uptick continues an upward trend in employment in 2021 after employment gains slowed down at the end of 2020. Large metro area economies added 321,500 jobs in January and 371,000 jobs in February. However, even with the increasingly bright labor market outlook, many metro area economies—particularly those dominated by the hardest-hit industries—still have a long way to go to fully recover.


The IRS probably won't audit you this year: Here's why

The IRS audited just 0.45% of individual tax returns in fiscal 2019

Tax season officially came to a close on Monday, meaning that most Americans can breathe a sigh of relief until next year.

Another reason for taxpayers not to worry? The chances of being audited by the Internal Revenue Service are extremely slim, with the odds of an individual audit falling significantly over the past decade.

The agency audited just 0.45% of individual tax returns in fiscal 2019, according to a recent Treasury Department report, or roughly 1 out of every 225 individual returns. Nearly half of those returns belonged to filers who claimed the Earned Income Tax Credit. 

That figure is down from 0.59% in 2018 and 1.11% in 2010.

Yellen says corporate tax hike can pay for infrastructure

U.S. Treasury Secretary Janet Yellen on Tuesday will make the case for raising the corporate tax rate when she speaks to America's business leaders today, in part, to help fund President Biden's massive $2.2. trillion infrastructure spending included in the American Jobs Plan.

"We are proposing to fundamentally reform the corporate tax system. That will help offset the cost of the proposed public investments," Yellen said in prepared remarks set to be delivered before the U.S. Chamber of Commerce's Global Forum on U.S. Economic Recovery. "With corporate taxes at a historical low of one percent of GDP, we believe the corporate sector can contribute to this effort by bearing its fair share: we propose simply to return the corporate tax toward historical norms."

Biden is proposing to lift the corporate tax rate to 28% after former President Donald Trump slashed it to 21% early in his term – a move that was celebrated by the business community.

Bank of America to increase minimum hourly wage to $25 by 2025

Bank of America will increase its minimum hourly wage to $25 by 2025, the Charlotte, North Carolina-based bank announced Tuesday.

The move follows the bank’s 2019 decision to bump up by a year the timeline by which it raised its minimum wage to $20 per hour. The bank boosted its minimum hourly wage from $15 to $17 in May 2019 and announced it planned to further raise it to $20 by 2021. The $20 rate instead went into effect by the first quarter of 2020.

The move by the nation’s second-largest bank comes as calls are growing for corporations to boost their minimum wages amid the pandemic. President Joe Biden has voiced support for a $15 federal minimum wage and recently signed an executive order raising federal contract workers’ minimum wage to $15 an hour.

Wells Fargo, U.S. Bank disclose CFPB investigations

  • Wells Fargo on Wednesday revealed in a Securities and Exchange Commission (SEC) filing that the Consumer Financial Protection Bureau (CFPB) is investigating "certain of the Company's past disclosures to customers regarding the minimum qualifying debit card usage required for customers to receive a waiver of monthly service fees on certain consumer deposit accounts."
  • The bank also disclosed that the bureau is probing "whether customers were unduly harmed by the Company’s historical practices associated with the freezing (and, in many cases, closing) of consumer deposit accounts after the Company detected suspected fraudulent activity (by third parties or account holders) that affected those accounts."
  • The filing came a day after U.S. Bank disclosed that the CFPB is investigating "certain of the Company’s consumer sales practices."

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