October 1, 2020
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CFPB, FTC, State, and Federal Law Enforcement Partners Announce Nationwide Crackdown on Phantom and Abusive Debt Collection

'Operation Corrupt Collector' targets debt collectors trying to collect on non-existent debts, using illegal scare tactics

WASHINGTON - The Consumer Financial Protection Bureau (CFPB), along with the Federal Trade Commission and more than 50 federal and state law enforcement partners, today announced a nationwide law enforcement and outreach initiative to protect consumers from phantom debt collection and abusive and threatening debt collection practices.

The initiative, called Operation Corrupt Collector, includes enforcement actions brought by the FTC, three federal partners, and partners from 16 different states against debt collectors engaged in these illegal practices.

"The CFPB is actively working to protect consumers from illegal actions of debt collectors," said CFPB Director Kathleen L. Kraninger. "We will continue to monitor the financial marketplace, as well as consumer complaints received, in order to ensure that we identify and take action against debt collectors who are violating the law. Lastly, consumers should know that the Bureau's consumer complaint system is a resource for them to submit any complaints they may have on their experiences with financial services providers."
Read more at Consumer Financial Protection Bureau

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Lending as a Service

Did your second coronavirus stimulus check just get closer?

The two political parties have been dancing for months around the idea of giving Americans a second round of cash to relieve financial pain from the coronavirus and stimulate the struggling economy.

So far there's been no deal. But Democrats this week have offered a new $2.2 trillion proposal that House Speaker Nancy Pelosi says in a news release is "necessary address the immediate health and economic crisis facing America's working families right now."

And it includes more of those so-called stimulus checks - which could be approved before Election Day. Read more at YAHOO

AFSPA Partner

Paving the Payments Future

Can Regulators Foster Financial Innovation and Preserve Consumer Protections?

An investigation of mobile and faster payments, regulatory sandboxes, and the challenge of maintaining customer safety

Between 2010 and 2018, U.S. investments in financial technology, or "fintech," grew from almost $2 billion to more than $100 billion, with over half of the increase occurring in 2018 alone. Among the ripest spaces in the financial sector for a technology upgrade is payments-the systems that move money between people and institutions-which currently rely on aging infrastructure and often make consumers wait for access to their funds. Payments innovation is important not only to ensure the expediency and safety of everyday transactions, but also to speed the delivery of government benefits or funds to those in need, especially during emergencies, such as natural disasters and the COVID-19 pandemic and resulting recession. As businesses and policymakers seek to promote the development of new payments technologies, the need to also ensure safety and efficiency will present a range of challenges to regulators and traditional financial systems.
Read more at The Pew Charitable Trusts

AFSPA Partner
IRS releases state-by-state breakdown of nearly 9 million non-filers who will be mailed letters about Economic Impact Payments
IR-2020-214, Sept. 17, 2020

WASHINGTON -The Internal Revenue Service today released a state-by-state breakdown of the roughly nine million people receiving a special mailing this month encouraging them to see if they're eligible to claim an Economic Impact Payment.

The IRS will mail the letters to people who typically aren't required to file federal income tax returns but may qualify for an Economic Impact Payment. The letter urges recipients to visit the special Non-Filers: Enter Payment Info tool on before the Oct. 15 deadline to register for an Economic Impact Payment.

States Take in More Taxes Than Expected

States collected more tax revenue in fiscal 2020 than many budget analysts initially expected, given the global pandemic and recession that began this spring. Some analysts also are increasing their estimates for tax collections in fiscal 2021, which in most states began July 1.

Connecticut, South Carolina and South Dakota ended fiscal 2020 with unexpected budget surpluses. And in states such as Colorado, Michigan and New Jersey, which ended the fiscal year in better shape than anticipated, budget analysts are revising their fiscal 2021 revenue estimates upward.

Back in April, many state and local leaders predicted catastrophic declines in tax revenue as stay-at-home orders shuttered businesses.
Read more at The Pew Charitable Trusts


Fed's George says strains on financial industry could still mount

WASHINGTON (Reuters) - The current recession's impact on households and businesses could still risk the sort of damage to the banking system that the United States has avoided so far, Kansas City Federal Reserve president Esther George said on Friday.

Throughout the pandemic Fed officials have taken solace in the fact that it has not yet led to a wave of mortgage, business or other defaults that could cripple banks, cause them to stop lending, and deepen the recession.

But "the economic far from complete," George said in remarks prepared for delivery via the web to the Independent Bankers of Colorado. "Strains on household and commercial balance sheets since March have created fragilities that could yet threaten bank profitability and loss-absorbing capacity for some time."
Read more at REUTERS

Dreher Tomkies LLP

Pew Encourages Efficiency in Treasury Department's Small-Dollar Loan Program Investments

Letter cites research, evidence, and market analysis to argue for sustainability, automation

On Sept. 10, The Pew Charitable Trusts filed a letter with the Department of the Treasury's Community Development Financial Institutions (CDFI) Fund in response to the department's request for comment regarding the allocation of funding in its Small Dollar Loan Program.

In its letter, Pew applauds the fund for its effort to make affordable, small installment loans available to millions of American families through CDFIs-specialized organizations that provide financial services to underserved populations. With proper assistance from specialty providers skilled in automated underwriting and origination, CDFIs can compete successfully in the small-dollar loan market to offer borrowers affordable payments and substantially lower prices than payday and other high-cost lenders.

Drawing on its extensive market research, Pew recommended that the CDFI Fund allocate the bulk of the grants to lenders that demonstrate long-term financial sustainability, have the ability to serve a large number of borrowers, and could benefit from technical assistance for automating small-dollar lending. Read more at The Pew Charitable Trusts


Treasury says it could start forgiving PPP loans this week

  • The Treasury Department expects as soon as late this week to begin approving and paying out the forgiveness requests of Paycheck Protection Program (PPP) applicants, the agency said Tuesday, according to The Wall Street Journal.
  • Meanwhile, 10 trade groups - including the American Bankers Association (ABA), the Credit Union National Association, the Independent Community Bankers of America and the Bank Policy Institute - wrote a letter urging Senate and House leaders to pass a measure reauthorizing PPP funding. The program closed to new applications Aug. 8, leaving $130 billion unallocated.
  • Banks expect more borrowers to inquire about commercial and industrial loans through another Federal Reserve facility - the Main Street Lending Program (MSLP) - over the next three months, but most don't anticipate lenders will be willing to hand out more loans in that time, the Fed found in a survey released Tuesday.

Read more at BANKING DIVE


Households, businesses fall into financial holes as COVID aid dries up

Americans feeling the economic weight of the coronavirus are about to enter their third month without crucial government aid that helped keep millions of households afloat during the recession.

Two months have passed since Congress and the White House allowed emergency COVID-19 protections and safety net programs to expire. Those provisions, enacted in late March under the CARES Act, were credited with preventing an even worse economic downturn.

Now, families are struggling to get by without supplemental unemployment funding, and many small businesses are reaching the end of financial lifelines that were extended by the federal government in the spring and summer.
Read more at THE HILL


Trump vs. Biden: 2020 election outcome may impact these stocks the most

Financials, health care and green energy are in play as Trump-Biden hit the debate stage

As President Trump and former Vice President Joe Biden prepare for the first of three debates, Wall Street strategists are already handicapping potential portfolios of sectors and stocks that would perform well under each administration.

The team at Wells Fargo, using propriety data from Bloomberg, laid out a detailed synopsis of how to make money around each candidate based on some of their policies for corporate America.

As for the broader market, the firm remains bullish regardless of who wins, but labels a Trump as having a "higher-beta" and would reduce uncertainty and would stave off Democrats' less business-friendly policies. While a Biden win is "lower beta."
Read more at FOX BUSINESS


How peer-to-peer lending is helping SMEs during the pandemic

In recent years small and medium enterprises (SMEs) have been reporting declining sales and trouble with distribution, among a string of other problems. With small businesses contributing more than 60 percent to GDP, the implications are disastrous.

However, SMEs have recently been given a lifeline in the form of peer-to-peer (P2P) lending platforms. Recent research has indicated that businesses on P2P lending platforms had seen a significant increase in revenue, helping the economy dramatically.

Research into P2P lending
A study by the University of Indonesia has uncovered some heartening results for SMEs and the economy overall. By engaging in new financing means, businesses are showing vast levels of improvement, lessening the strain on individuals and the broader economy.
Read more at TECHTALKS


These retailers announced hundreds of store closures in September

New York (CNN Business)A summer of bankruptcies and store closures is seeping into the fall.

Earlier this month, the legendary New York bargain retailer Century 21 filed for bankruptcy, and several mall staples announced hundreds of store closures. Some retailers are now closing more stores than originally planned, underscoring how badly businesses have have struggled during the pandemic.
Here are some of the highest-profile retailers that announced store closures in September:

American Eagle Outfitters
The clothing retailer is closing between 40 and 50 locations this year, it announced during an earnings call. It also said it was eyeing up to 500 locations over the next two years that could be possibly closed.
Read more at CNN BUSINESS

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