July 23, 2020
AFSPA Partner


Credit complaints to federal consumer agency have spiked during coronavirus pandemic

Households aren't too happy with the U.S. consumer financial ecosystem these days, a report suggests.

Complaints made to the federal Consumer Financial Protection Bureau were up 50% from March through June this year compared with the same time period in 2019, according to research from consumer advocacy organization U.S. PIRG. The group analyzed the consumer bureau's public database of complaints - issues range from credit report mistakes to problems related to debt collection, credit cards or mortgages - which come with requirements for company responses and resolutions.

"Consumers are complaining a lot about their treatment during the pandemic," said Ed Mierzwinski, senior director of the Federal Consumer Program U.S. PIRG. "If you read the narratives in the database that are public, they tell of financial pain and frustration."
Read more at CNBC

AFSPA Partner


Insurers lobby for federal pandemic insurance program

U.S. businesses are losing an estimated $1 trillion a month as businesses are disrupted due to the coronavirus pandemic, according to estimates by the American Property Casualty Insurance Association. Yet, insurers collect only $4.5 billion a month for all commercial property policies.

This month, the groups representing the underwriters, the brokers and the agents are lobbying members of the House Financial Services Committee on a proposal to provide a type of pandemic coverage for the future.

The proposed Business Continuity Protection Program or BCPP would offer, in part, government-subsidized revenue replacement and protection for up to 80% of specific losses, like payroll expense or operational losses for up to three months.

The program would function something like the Federal Flood Insurance Program - with the government as the underwriter and insurers administering the policies.
Read more at CNBC

Dreher Tomkies LLP

4th Circuit rejects agreement to arbitrate payday loan disputes under tribal law

An agreement by the borrower of a payday loan to submit any disputes to arbitration that is governed by tribal law is unenforceable, a federal appeals court has ruled.

The 4th U.S. Circuit Court of Appeals on Tuesday ruled in favor of borrowers who took out loans from payday lenders affiliated with Native American tribes in two related cases, finding that borrowers could not waive their future rights under federal law. The ruling allows their claims to proceed against Haynes Investments LLC, accused of operating an illegal payday loan scheme, and Sequoia Capital Operations LLC, one of its investors.
Read more at REUTERS


CFPB retools payday loan rules to help desperate Americans access an important source of credit

Despite phased reopenings across the country, the economic fallout from the COVID-19 pandemic continues keeping unemployment too high and straining personal finances.

With the unemployment rate at 11.1% and a severe credit crunch ongoing, many people need access to affordable, short-term credit. While some may turn to bank loans or credit cards, more than 12 million Americans rely on payday loans each year to make ends meet. It's telling that a number of states with mandatory stay-at-home orders have deemed payday lenders so vital to the economy that they've been declared essential businesses.

The good news is that the federal Consumer Financial Protection Bureau (CFPB) has just released a long-awaited rule governing payday loans, a final rewrite of the Payday, Vehicle Title, and Certain High-Cost Installment Loans rule. It retools the controversial payday lending rule put out in 2017 by Obama appointee Richard Cordray. The old rule would have stripped consumers of this source of credit and effectively forced them to choose between financial ruin or borrowing from illegal "loan sharks," the kind that use unsavory methods to enforce loan terms.


Banking Basics: Why You Need Both a Checking and Savings Account

The best financial plan is one that makes sense for your own personal circumstances. What works and makes sense for one person may not for another.

However, there are some evergreen financial strategies that will work around the contours of almost anyone's life - and one of those is the necessity of bank accounts. At the bare minimum, you should have a checking and savings account to begin to meet your financial goals. They both have distinct functions and roles within your life, and they form the foundation upon which you can add other types of bank and investment accounts.

If you are unbanked - as in you don't have any bank accounts currently - we recommend starting here with our guide for the unbanked. Otherwise, read on to see how you can maximize your checking and savings accounts.
Read more at NEXT ADVISOR


A bank is paying people to bring in their spare change to help local businesses amid the coin shortage

(CNN)A Wisconsin bank is bringing change to their community by helping local businesses struggling because of the nationwide shortage of coins caused by the coronavirus pandemic.

On Wednesday, the Community State Bank launched a Coin Buy Back Program which offers a $5 bonus for every $100 worth of coins turned in to any of its seven locations. Anyone who brings by coins, whether they're a bank customer or not, can receive up to a maximum coin bonus of $500.

"We knew we needed to figure something out. We hate the idea of telling our customers, 'No, we can't give you one of the services we're proud to provide,' so we came up with a creative way to get things done," Community State Bank Vice President Neil Buchanan told CNN. "Just because this hasn't been done before doesn't mean it isn't going to work -- and it has already made a huge difference." Read more at CNN


U.S. Bank sees 62% drop in net income despite loan, deposit growth

  • U.S. Bank on Wednesday reported $689 million in net income among its second-quarter earnings. That's a 62.2% drop from last year's second-quarter figure - $1.82 billion - and a 41.2% slide from the $1.17 billion the bank reported in this year's first quarter.
  • The bank set aside $1.7 billion as a provision for credit losses, a 75% increase over the previous quarter.
  • Revenue for the nation's largest regional bank stayed relatively flat, as a 5% increase in noninterest income year-over-year balanced out a 3.2% drop in net interest income.

Read more at BANKING DIVE


2020's Most & Least Educated Cities in America

Cities want to attract highly educated workers to fuel their economic growth and tax revenues. Higher levels of education tend to lead to higher salaries. Plus, the more that graduates earn, the more tax dollars they contribute over time, according to the Economic Policy Institute. In turn, educated people want to live somewhere where they will get a good return on their educational investment. People also tend to marry others of the same educational level, which means that cities that already have a large educated population may be more attractive to people with degrees.

Not all highly educated people will flock to the same areas, though. Some may prefer to have many people with similar education levels around them for socializing and career connections. Others may want to be a big fish in a little pond. Not every city will provide the same quality of life to those with higher education, either. In addition, the most educated cities could shift in the near future depending on how well cities deal with the current COVID-19 crisis and its impact on schooling.
Read more at WalletHub


Coronavirus led 33% of Americans to make a credit-harming decision: Study

As the coronavirus persists in the U.S., one-third of Americans have admitted to making at least one financial decision in the last four months of the pandemic that is likely to hurt their credit score, a new Bankrate study has revealed.

Particularly, the main financial decisions Americans have made that can adversely affect their credit score include adding more debt, paying at least one bill late, carrying a balance, ignoring a bill payment date or canceling a credit card.

Of those who increased their debt, 22 percent of respondents said their household income was negatively impacted by the pandemic while 11 percent said their household income was not negatively impacted. Meanwhile, for the people who reported paying a bill late, only 18 percent had their household income negatively impacted while seven percent did not.
Read more at FOX BUSINESS


Cuts to basic services loom as coronavirus ravages local economies and sends states into fiscal crisis

  • Economic activity in every state fell sharply during the first three months of the year, according to the latest government statistics. New York and Nevada posted 8.2% declines in GDP.
  • Every state now faces a budget gap, with estimates that revenue shortfalls could total more than $200 billion through this fiscal year.
  • States are weighing cuts in basic services including education, health care and public safety.
  • State and local governments have shed nearly 1.5 million jobs since the pandemic began.

Read more at CNBC


It's finally time to get rid of the penny

A penny for your thoughts - or a nickel, dime or quarter, for that matter - may be harder to come by these days because of a nationwide shortage of coins.

During the pandemic, more consumers are staying home, shopping online and avoiding the use of physical currency, so coins have piled up in jars or under couch cushions rather than in banks and cash registers like normal. The US Mint also had to slow coin production because of employee safety measures, though the Mint told CNN Business it resumed full production capacity in mid-June.

That could make this the perfect time to finally get rid of the near-worthless American penny (sorry, Abe).

"Three months into the lockdown, I realized that the paper money and coins I had in my pocket were the same paper coins and money I'd had in my pocket three months before. I just wasn't using them," said Henry Aaron, Bruce and Virginia MacLaury Chair senior fellow in economic studies at the Brookings Institution. "In that environment, the disruption that would be caused by buying back outstanding coins would be zilch." Read more at CNN



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