August 11, 2020

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After a 15-year ban, could payday lending return to North Carolina?

In 2017, Melody Garrett was in a bind. She'd been laid off from her job at a garbage disposal company, and her new part-time job at CVS didn't pay enough for her to make the $1,400 rent on her Mount Holly apartment, where she lived with her teenage son.

She searched Google for loans and found that she could get a $2,200 car title loan online through a company called Approved Financial. The company asked her to send photos of her car, a 2011 Toyota Corolla, along with photos of both her driver's license and car title.

"It was a last-minute quick decision. I was just stressed - my back was against the wall. I didn't know where else to turn," Garrett recalled Monday in a phone interview with The News & Observer.

Dreher Tomkies LLP

Going cashless during the COVID pandemic makes life even more difficult for the 14 million unbanked Americans

'Alarm bells go off in my head because the impact of going cashless is highly unequal,' said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics

Even though there have been many advancements in financial technology over the past decade, many Americans still prefer to pay in cash.

In fact, cash was the most popular form of payment until 2019, when debit cards rose to the top of the ranks in the San Francisco Federal Reserve's annual survey. Cash remains king, however, when it comes to payments under $10.

But the coronavirus pandemic has caused people to shift away from cash transactions for fear of coming in contact with coronavirus on the surface of dollar bills and coins they receive in change.

Out of an abundance of caution, some stores have stopped accepting cash and some have been asking customers to provide exact change, mainly because of the coin shortage in the U.S.
Read more at MARKETWATCH


Americans' household debt fell for the first time since 2014 - but that doesn't mean people are paying off their loans

The pandemic-fueled economic downturn hasn't led to Americans going into default on their debts yet

Total household debt fell on a quarterly basis for the first time since 2014, as Americans tightened their belts amid the coronavirus pandemic.

The Federal Reserve Bank of New York reported that total household debt fell by $34 billion, or 0.2%, in the second quarter. It was the largest decrease on record since the second quarter of 2013.

The drop in household debt doesn't mean Americans are better off financially though. A separate survey from real-estate website Apartment List found that one in three people couldn't pay their rent or mortgage in full this month.
Read more at MARKETWATCH


Capital One to pay $80 million fine for 2019 hack that exposed 100 million accounts

Capital One has agreed to pay $80 million to settle federal charges over a 2019 hack of its computer systems that was one of the largest financial data breaches ever. More than 100 million credit card applications were exposed in the cyberattack, which was allegedly carried out by a single individual.

The accused hacker, former Amazon web services employee Paige Thompson, was arrested in July 2019 and charged in connection with the incident. Thompson has pleaded not guilty, and her trial has not begun.

In a consent order filed Thursday, the Office of the Comptroller of the Currency said Capital One had neglected to protect customer data. Specifically, the federal bank regulator said the company had failed "to establish effective risk assessment processes" before migrating some of its technology operations to the cloud. The OCC also said the credit card issuer has a history of lax and ineffective cybersecurity going back to at least 2015.
Read more at CBS NEWS


These 9 states are suffering from the worst unemployment rates

The number of jobs lost due to the coronavirus shutdown continue to mount, with the latest weekly total of Americans applying for unemployment benefits coming in at another 1.2 million.

The latest swath of applications brings the total amount of jobless claims to more than 54 million over the past four months, wiping out the 20 million jobs added over the last decade by a near three-to-one margin.

While some states have seen unemployment applications recede from record highs after the coronavirus pandemic roiled America's employment picture, some have suffered stubbornly high job losses months into the recovery. Those have stacked up in some states to see unemployment rates shoot as high as 20%.
Read more at YAHOO FINANCE


NEBRASKA: Voters Will Decide Whether To Cap Interest Rate For Payday Loans At 36%

Nebraska voters will soon decide whether to significantly lower the cap on interest rates for payday loans. This week the Secretary of State's office confirmed there are enough signatures to put the issue on November's ballot.

Delayed deposit loans are more commonly known as payday loans - they give a company direct access to the borrower's bank account, and they can charge interest rates of 400% or more.

"TThey're essentially designed to be loans that are only profitable if a borrower can't pay them back," said Aubrey Mancuso, executive director of Voices for Children in Nebraska
Read more at NET NEBRASKA


Six more banks partner with Google to launch co-branded checking accounts

  • Six more banks and credit unions are partnering with Google to offer digital bank accounts through Google Pay, the tech giant, along with several institutions, announced Monday.
  • BankMobile, BBVA USA, BMO Harris, Coastal Community Bank, First Independence Bank and SEFCU will join Citi and Stanford Federal Credit Union (SFCU) in offering co-branded bank accounts next year. Citi and SFCU were named the project's first banking partners in November. The accounts will be built on top of the financial institutions' existing infrastructure, and Google will provide the front-end, user experiences and financial insights.
  • "We had confirmed earlier that we are exploring how we can partner with banks and credit unions in the US to offer digital bank accounts through Google Pay, helping their customers benefit from useful insights and budgeting tools, while keeping their money in an FDIC or NCUA-insured account," Google said in a statement. "We are excited that six new banks have signed up to offer digital checking and savings."

Read more at BANKING DIVE


7 groups caution lawmakers about possible ramifications of credit reporting prohibition during COVID-19

The coronavirus pandemic certainly has disrupted so many parts of finance-company operations.

But a group of seven industry organizations, including the American Financial Services Association, is urging federal lawmakers to make sure the pandemic impact doesn't spread to one of the most important tools for underwriting and portfolio maintenance - credit reporting.

The organizations sent a letter this week to the top two members of the Senate Banking Committee to refrain from adding new credit reporting provisions that may negatively affect consumers as federal lawmakers consider potential financial provisions for the COVID-19 response legislation now being discussed on Capitol Hill.

The groups emphasized in the letter that the CARES Act established requirements that are "appropriately calibrated" to protect and preserve the long-standing benefits derived from credit reporting. Read more at AUTO REMARKETING


The number of Americans skipping mortgage payments is falling - except among these borrowers

Forbearance plans allow mortgage borrowers to make reduced payments or skip monthly payments

For nearly two months now, the share of mortgage borrowers who has received approval to skip their monthly loan payments has fallen precipitously.

But a new trend has begun to develop, which indicates that some homeowners are facing more financial pressure as the coronavirus pandemic continues.

The percentage of Ginnie Mae loans in forbearance increased one basis point to 10.28%, according to the most recent data released Monday by the Mortgage Bankers Association.
Read more at MARKETWATCH


Could Digital Currencies Make Being Poor Less Costly?

By definition, blockchain technology cuts out middlemen. In relying on networks of users and collective trust, it reduces the need for centralized networks and data storage. This trait made blockchain-powered currencies popular on shadowy parts of the internet, but it has the potential to do something more revolutionary than obscure how money is changing hands: Blockchain-based payment systems can bring the more than 1.7 billion people who are unbanked or underbanked (including 25% of U.S. households), into the formal economy. And in doing so, they can render obsolete the expensive, usurious payment and informal financial services those people use to make ends meet. A generational pandemic makes this challenge all the more urgent, as decades of (admittedly uneven) economic progress are erased.

Right now, more than 70% of the world's central banks are exploring the merits of central bank digital currencies (CBDCs) - electronic versions of their national fiat.
Read more at Harvard Business Review



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