December 24, 2020
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U.S. consumers struggled to access credit, handle emergency costs in 2020, study shows

Dec 21 (Reuters) - U.S. consumers struggled to access credit this year and felt less prepared to meet unexpected costs, with applications for credit cards plunging the most, according to a survey released Monday by the New York Federal Reserve.

Consumers of all ages and credit scores showed lower demand for credit cards. But those with higher credit scores continued to apply for mortgage loans and refinancing, which were made more affordable by lower interest rates.

The report reflected how some households have struggled financially in a year when the global pandemic left millions of Americans out of work and low-income workers bore the brunt of the job losses. It was a stark reversal from last year's report, when applications for credit rose as people tried to take advantage of a record long economic expansion and low interest rates.

Paving the Payments Future
U.S. banking regulators propose requiring banks to immediately flag computer breaches

WASHINGTON, Dec 18 (Reuters) - U.S. banks would have no longer than 36 hours after finding a cybersecurity breach to flag the issue to their regulators, under a new rule proposed Friday.

The proposal from U.S. banking regulators would direct banks to notify their primary regulator as soon as possible after a breach is discovered that could impair services or the organization itself. In addition, the rule would direct third-party service providers to promptly tell client banks of any breaches that would impair their services. (Reporting by Pete Schroeder Editing by Chizu Nomiyama)

Steps to Take Now to Get a Jump on Your Taxes

Tax planning is for everyone.
Get ready today to file your federal income tax return.
Steps you can take now to make tax filing easier in 2021.

Pandemic-Driven Economic Slowdown Puts Renters at Risk of Housing Loss

Nationwide, courts take varied approaches to eviction cases as tenants face uncertainty

The 44 million U.S. households in rental housing face myriad challenges when landlords file eviction cases against them in housing court—challenges that can create increasingly grave consequences as the coronavirus pandemic wears on and unemployment remains stubbornly high nationwide.

When these tenants find themselves in housing court, they have legal representation only about 10% of the time. Landlords, meanwhile, have lawyers 90% of the time. That disparity can result in renters having to negotiate with trained professionals as their housing hangs in the balance. And the coronavirus pandemic has exacerbated long-standing challenges: The risk of eviction has increased for many renters at a time when losing housing could pose serious health risks, and they have to scramble to figure out how to respond to eviction court cases.

Citi to offer employees 12-week sabbaticals starting next year

  • Citi employees who have been with the bank for at least five years will be able to take a sabbatical of up to 12 weeks, starting next year, to do whatever they like, Bloomberg reported Wednesday. The catch: Workers would get 25% of their base pay during their time away. Employees would be limited to two sabbaticals.
  • Employees of the bank will also be able to buy up to five extra vacation days per year starting in 2021.
  • Citi is also letting staff members work pro bono for up to four weeks with charitable organizations while receiving 100% of their base pay, as long as they've worked with the bank for five years or more. Workers can take advantage of the perk twice during their Citi tenure.

Fed allows banks to resume stock buybacks with limitations

  • The Federal Reserve said the country's largest banks can resume stock buybacks in the first quarter of 2021 with certain limitations, after the central bank released the results of its first-ever "mid-cycle" stress tests Friday.
  • "The banking system has been a source of strength during the past year and today's stress test results confirm that large banks could continue to lend to households and businesses even during a sharply adverse future turn in the economy," Fed Vice Chairman for Supervision Randal Quarles said in a press release.
  • Following the Fed's announcement Friday, banks including JPMorgan Chase, Goldman Sachs and Citi said they would resume their share repurchase programs.

Good debt vs bad debt: know the difference

  • Can debt be good? Many people think borrowing money means sacrificing financial freedom. But in reality, debt could be one way to gain it. Understanding the difference between good and bad debt can help you make informed financial decisions.
  • What is good debt?
  • Some debt may be a smart investment in your financial future if utilized wisely and you can afford it. It's geared toward leaving you in better financial shape after you pay it off than you were before taking it on. This type of debt shouldn't hinder your financial state or lead to stress.

Benefits of good debt include:

  • Builds or improves your credit history
  • Potential tax breaks
  • The opportunity to build equity
  • A return on investment (ROI)

Stated Income Loans Wrecked the Housing Market in 2008. Here's Why They're Safe in 2021

Stated income loans were a primary cause of the collapse of the U.S. housing market and subsequent Great Recession. They are making a comeback, but with major changes. If you're self-employed or own a business, a stated income loan may be a good mortgage choice.

We spoke to Steven Schnall, CEO of Quontic Bank -- a lender that says it specializes in serving the underdog -- to understand why these loans are now a safe bet.

Why stated income loans needed a facelift
A stated income loan is just what it sounds like, a mortgage based on your stated (not verified) income. Prior to the housing bust, this type of home loan was abused to excess.

There is life after declaring personal bankruptcy, but it comes with some big costs

Ever-mounting consumer debt levels and historically high unemployment rates surpassing 10% in many states have left growing numbers of Americans unable to pay their bills and contemplating personal bankruptcy. Although bankruptcy can offer a fresh start for many debtors, it’s important to be aware of certain constraints and limitations that may be faced for years after filing. Here are the most-common limitations debtors encounter in life after a bankruptcy proceeding: 

Renting an apartment  
Renting an apartment in the first couple of years post-bankruptcy can be especially challenging. Many large, professionally-managed apartment complexes won’t rent to those with recent bankruptcy histories. (Or if they do, they’ll often charge extra security deposit fees, or demand several months of rent upfront.) On average, it takes two to four years post-bankruptcy for renting to become easier. 

Average debt held by oldest households jumped nearly 39% over last decade

  • The share of people age 75 or older who lead a household and carry debt reached 51.4% in 2019, up from 38.5% in 2010.
  • The increased debt amount among the oldest cohort compares with a drop among people age 65 to 74.
  • Retirement savers should pay attention the both sides of their balance sheet, says one expert.

The Fed just pretty much guaranteed that mortgage rates will stay low

With coronavirus infections spiking across the country, Chairman Jerome Powell and his colleagues at the Federal Reserve have announced they're keeping a key interest rate near zero — which promises to help mortgage rates stay at record lows.

At the end of a two-day meeting on Wednesday, central bank officials also said they intend to keep buying up Treasury bonds and mortgage-backed securities until employment numbers improve. Those purchases are contributing to today’s deeply cheap mortgage rates.

While ultra-low interest rates won’t help your savings account, they’ve been a windfall for borrowers.

Consumer Financial Protection Bureau Releases Report on Implementing the Dodd-Frank Act’s Small Business Lending Data Collection Requirement

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) released a panel report today as part of its rulemaking process under Dodd-Frank Act Section 1071 governing the collection and reporting of small business lending data.

A panel was convened pursuant to the Small Business Regulatory Enforcement Fairness Act, comprised of representatives of the Bureau, the Office of Advocacy of the Small Business Administration, and the Office of Management and Budget. The panel consulted with representatives of small entities likely to be affected directly by a Section 1071 regulation, referred to as small entity representatives or SERs. The SERs provided feedback on the Bureau’s proposals under consideration for Section 1071 and the potential economic impacts of complying with those proposals. The panel and SERs also discussed regulatory alternatives to minimize potential impacts.

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