ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
September 30, 2021
The Gateway For Payroll Data
If there's a government shutdown, here’s what you need to know

Congress has until the end of the day Thursday to pass a temporary funding bill

A possible government shutdown is looming as funding runs out at the end of the day Thursday, and Congress has yet to pass a temporary measure to keep the government going.

If one passes both the Senate and House it could be on President Joe Biden’s desk for his signature by Thursday.

But if Congress fails to act, a government shutdown could begin as early as Friday.

If there’s a government shutdown, does everything close?

No, not everything. A full government shutdown would mean federal agencies close their doors or reduce their operations to only what is deemed essential. Programs and agencies that receive mandatory funding or are self-sufficient, such as the U.S. Postal Service, will continue to operate. Only those programs and agencies that are dependent on annual appropriations will be running with empty pockets.

Essential services necessary for public safety such as air traffic control and law enforcement will keep operating -- though not necessarily at the same levels.

Paving the Payments Future
Is There a Statute of Limitations on Debt?

The statute of limitations on debt depends on where you live or where the debt originated.

If you still receive calls about a debt you stopped paying several years ago, you may wonder if there's a statute of limitations, a time when bill collectors must stop hounding you and let it go. You may also be concerned about the impact unpaid debt has on your credit report. Here, we'll sort out the answers.

Is there a statute of limitations on debt?
Yes, each state has its own statute of limitations on debt. How long a creditor or debt collector has to take legal action against you varies depending on the type of debt. Once the statute of limitations is up, the creditor cannot file a lawsuit against you, and cannot use the court in any way to collect from you. This includes judgements, liens, and wage garnishments. No matter what a debt collector says, they have no power outside the statute of limitations.

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Loan origination complaints spike during pandemic

White borrowers are more likely to complain about loan origination issues, agency says

Loan origination-related consumer complaints rose significantly over the first 18 months of the COVID-19 pandemic, according to a Consumer Financial Protection Bureau’s (CFPB) report published last week.

The bureau’s research brief, which analyzed the relationship between U.S. Census characteristics and the share of consumers complaining about each stage of the credit life cycle, found that between February 2020 and July 2021 there was a “large increase in the volume of consumers with credit reporting and loan origination complaints.”

Specifically, the bureau said that loan origination complaints, mainly driven by mortgage complaints, were 50% higher in 2020 than at the beginning of 2018. The complaints mainly stemmed from communities that were predominantly white and had relatively high incomes, the report noted.

“Much of this volume appears to be related to refinancing of existing mortgages as consumers try to take advantage of historically low interest rates,” the bureau added.

Taxpayers who aren’t eligible for the child tax credit should look into the credit for other dependents

The credit for other dependents is a tax credit available to taxpayers for each of their qualifying dependents who can’t be claimed for the child tax credit. The maximum credit amount is $500 for each dependent who meets certain conditions. These include:

  • Dependents who are age 17 or older.
  • Dependents who have individual taxpayer identification numbers.
  • Dependent parents or other qualifying relatives supported by the taxpayer.
  • Dependents living with the taxpayer who aren't related to the taxpayer.

U.S. banking regulators working on climate risk management guidance, official says

WASHINGTON, Sept 15 (Reuters) - U.S. banking regulators are working on new climate risk management guidance for large lenders, a top official said on Wednesday, in another sign of efforts to incorporate the risks posed by rising temperatures into financial rules.

Acting Comptroller of the Currency Michael Hsu said his agency was working on the guidance in collaboration with other banking regulators to help lenders navigate the physical and transition risks climate change poses to the financial system.

Climate change could upend the financial system because threats such as rising sea levels, as well as policies and carbon-neutral technologies aimed at slowing global warming, could destroy trillions of dollars of assets, risk experts say.

Who has added credit card debt during the pandemic?

About half of Americans have credit card debt, and of those, a new survey from Bankrate finds over 40% have more debt now than they did when the pandemic began. 

That is especially true for younger people. Over half of people 40 and under owe more on their credit cards now than they did a year and a half ago, while people who are over 40 are significantly less likely to have added to their credit card debt during that time.

“This really showcases that young adults were in many respects hit hardest by the pandemic financially,” said Ted Rossman, an industry analyst at Bankrate. He said some of that is because younger people generally had less in savings, lower salaries, and more student debt to begin with. There’s something else.

“They were the most likely to work in service industry jobs that were negatively impacted, the most likely to lose jobs or lose income.” Rossman said.

SBA Loans Saved Businesses Before Covid—Now They Could Ruin Them

As the owner of Bane, the biggest haunted-house attraction in New York City, Jennifer Condron knows her way around scary situations. Except what to do about her bank loan.

Condron’s BulletProof Productions LLC got a $350,000 loan backed by the U.S. Small Business Administration in 2019, before the Covid-19 pandemic shut down entertainment venues and dried up their revenue. Under the extraordinary circumstances, the agency issued guidance in early March 2020 that encouraged lenders participating in its 7(a) program to allow deferred payments for six months and beyond.

But the latest extension of that policy, one of the last remaining forms of pandemic relief for businesses, expires at the end of September. Borrowers without the means to pay back the loans because of the pandemic, such as those that relied on foot traffic from people working in offices, will have few options to stop lenders from demanding payments, small-business attorneys say.

State Pensions Expect Best Funding Since 2008

The State Pension Funding Gap: Plans Have Stabilized in Wake of Pandemic

Increased contributions and a market surge have strengthened balance sheets, but uncertainty remains

Overview
The nation’s state retirement systems finished the 2021 fiscal year in their best condition since the Great Recession of 2007-09. According to projections by The Pew Charitable Trusts, the gap between the cost of pension benefits that states have promised their workers and what they have set aside to pay for them dropped in 2021 to its lowest level in more than a decade. Pew estimates that state retirement systems are now over 80% funded for the first time since 2008.

Such progress would be significant in any year, but the improvement in fiscal 2021 occurred during a recession in which many analysts predicted that revenue losses related to the COVID-19 pandemic would increase retirement fund shortfalls. Instead, Pew found an increase in assets of over half a trillion dollars in state retirement plans, fueled by market investment returns of more than 25 percent in fiscal 2021 (the highest annual returns for public funds in over 30 years) and substantial increases in contributions from taxpayers and public employees to pension funds.

$1M Is No Longer the Standard Nest Egg — Here’s How Much Most Americans Think You Actually Need To Retire

A common financial rule of thumb is that you should have $1 million saved for retirement, but this piece of advice may now be outdated — you may actually need roughly double that. At least, that’s what most 401(k) plan participants believe. A recent survey conducted by Schwab Retirement Plan Services found that on average, 2021 plan participants think they need to save $1.9 million for retirement. But how accurate is this number?

Nathan Voris, director of business strategy at Schwab Workplace Financial Services, thinks that the survey participants have a pretty accurate idea of how much they will need in retirement.

“I think for a survey like this, that’s a pretty good number,” he said. “That’s a ballpark range for a wide range of folks. Obviously, retirement is not one-size-fits-all, but that’s sort of the middle of the range for a lot of people.”

As Voris notes, there are numerous factors that will affect how much someone will actually need in retirement, so some may need more and others may need less.

The Fed is evaluating whether to launch a digital currency and in what form, Powell says

The Fed is pushing ahead with its study into whether to implement its own digital currency and will be releasing a paper on the issue shortly, Chairman Jerome Powell said Wednesday.

No decision has been made on the matter yet, he added, and said the Fed does not feel pressured to do something quickly as other nations move forward with their own projects

The Federal Reserve is pushing ahead with its study into whether to implement its own digital currency and will be releasing a paper on the issue shortly, Chairman Jerome Powell said Wednesday.

No decision has been made on the matter yet, he added, and said the Fed does not feel pressured to do something quickly as other nations move forward with their own projects.

“I think it’s important that we get to a place where we can make an informed decision about this and do so expeditiously,” Powell said at his post-meeting news conference. “I don’t think we’re behind. I think it’s more important to do this right than to do it fast.”

ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
Alternative Financial Service Providers Association
757.737.4088
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