Biden-Harris Administration with the CFPB and FTC announce new actions to protect consumers from junk fees

New proposals would crack down on junk fees across industries and ban fees for essential bank services

Today, President Biden will be joined by Federal Trade Commission (FTC) Chair Lina Khan and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra as they announce new efforts to crack down on junk fees and bring down costs for American consumers. Junk fees are hidden, surprise fees that companies sneak onto customer bills, increasing costs and stifling competition in industries across the economy. Last year, as part of his agenda to increase competition following his Executive Order on Promoting Competition, President Biden called on federal agencies, Congress, and private companies to crack down on junk fees and provide consumers with the full price up front.

Junk fees cost American families tens of billions of dollars each year and inhibit competition, hurting consumers, workers, small businesses, and entrepreneurs. Research shows that fees charged at the back-end of the buying process make it harder to comparison shop for the best deal and lead to consumers paying upward of twenty percent more. Junk fees also make it hard for honest businesses to compete, stifle innovation, and hurt small businesses.

Read more at WHITEHOUSE.GOV

Have a tax law question?

Our #IRS Interactive Tax Assistant has answers.

Watch this short video to learn more:

https://youtu.be/y6HkaBkdKdU

• Child Tax Credit: This is available to parents and guardians of children under age of 17. The credit is up to $2,000 per child.
• Child and Dependent Care Credit: This credit is available to parents and guardians who pay for childcare expenses so they can work or go to school. The credit is up to $3,000 per child under the age of 13 and up to $6,000 for two or more children.
• American Opportunity Tax Credit: This credit is available to students who are pursuing their first four years of college. The credit is up to $2,500 per year.
• Lifetime Learning Credit: This credit is available to students who are taking college or vocational courses to improve their job skills. The credit is up to $2,000 per year.

To learn more about the EITC and other tax credits, visit the IRS website or call

the IRS Taxpayer Assistance Center at 1-800-829-1040.

Jose L. Santiago

Public Affairs Specialist

Tax Outreach, Partnership and Education

Email: jose.l.santiago@irs.gov

The Need for Regulations to Safeguard Americans’ Financial Data

The head of the Consumer Finance Protection Bureau (CFPB), Rohit Chopra, has warned that the United States could follow in China’s footsteps if regulations are not implemented to protect Americans’ financial data. Speaking at a panel discussion hosted by the Brookings Institute, Chopra emphasized the importance of payment companies disclosing more information about their use of personal data and digital currencies.

Chopra expressed concerns about the accumulation of unprecedented power by private companies in influencing Americans’ financial decisions. He cautioned against a consolidated market structure similar to China’s, where the lines between payments and commerce are blurred, leading to excessive surveillance and even financial censorship.

The panel discussion, titled “Making America’s Payment System Work for a Digital Century,” also featured Federal Reserve Board member Christopher J. Waller. The focus of the conversation was on central bank digital currencies (CBDCs), which critics argue can lead to increased surveillance. Chopra pointed out that companies like Google and Apple gather significant financial data through their payment systems, necessitating clear regulations to separate their activities from those of the financial sector.

Read more at CLAYTON COUNTY REGISTER

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How to Survive Banking’s Biggest Threat: Staffing

There's a growing realization among banks and credit unions that the new competitive environment requires incumbents to transform their recruiting and retention strategies to challenge fintechs for the staffs of the future.

To compete with upstart fintechs and “megafintechs,” like PayPal, traditional institutions need to morph, as one analyst says, “to become tech companies that provide banking services.” Key to their success will be to identify new critical skills, expand potential recruitment areas, and change the workforce culture. Otherwise, fintechs with their revolutionary approach to staffing will leave traditional financial institutions in the dust.

“Since digital finance is rapidly growing, new roles are being created whereas others are becoming obsolete,” says the Centre for Finance, Technology and Entrepreneurship in a massive report. “This requires a renewed awareness of opportunities borne out of fintech growth for job seekers [and] hiring organizations.”

Two thirds of financial institutions now consider talent a top concern, up about 45 percentage points in one year.

Read more at The Financial Brand

Financial strain is up, yet workers remain cautiously optimistic, Bank of America finds

Financial wellness among employees fell to 42%, the lowest it’s been in at least 13 years, the report found.

Dive Brief:

• Two-thirds of workers say the cost of living is rising faster than their income, according to Bank of America’s 13th annual workplace benefits report, The Transforming Workplace, released Sept. 26. That compares to 58% of workers in February 2022.
• Financial wellness among employees fell to 42%, the lowest it’s been in the 13 years Bank of America has produced the workplace benefits report. That strain is more strongly felt among women, only 38% of whom characterized themselves as financially well in 2023, a five-year low and down from 55% the year before. Among women, 54% said they worried they wouldn’t be able to meet their financial responsibilities because of inflation, as opposed to 32% of men.  
• Despite the effects of inflation and economic uncertainty, 56% of workers say they’re “cautiously optimistic” about their financial future over the next two to three years, per the report, which surveyed 1,300 employees and nearly 800 employers.

Read more at HRDIVE

Credit Card Lenders Should Look Past the Almighty Credit Score for Growth

As delinquencies in credit cards creep up, lenders pull back. But many lenders still make overly simplified decisions based on credit scores. Experts say there is prudent growth for those that weigh more nuanced credit parameters. In fact, the best growth opportunities often can be found when other industry players are down on a particular sector.

As more consumers get overextended and delinquencies tick up, credit card lenders tend to pull back. But they’re up against a math problem.

If they approve fewer credit card applications amid rising delinquencies, “the percentage of delinquent loans will increase,” says Charlie Wise, TransUnion’s senior vice president of research and consulting.

“If you want to protect your portfolio, find prudent growth opportunities as opposed to shutting off lending,” he advises.

To assess how to find this growth, Wise details some ways to go beyond using the credit score as such a blunt instrument. He suggests thinking strategically about how to surface good risks that may be hidden in key customer segments, like those who are new to credit.

Read more at The Financial Brand

CFPB’s Chopra warns of ‘financial censorship’ in payments

The federal agency is considering regulatory action to better protect U.S. consumers from “excessive surveillance,” Director Rohit Chopra said last week during a Brookings Institution event.

Citing concerns of “financial censorship,” Consumer Financial Protection Bureau Director Rohit Chopra said last week the agency is weighing regulatory steps to better protect consumers in the payments market.

Chopra’s warning came during a payments-focused event Friday at The Brookings Institution, a Washington, D.C.-based think tank. Toward the end of his remarks, Chopra laid out a number of steps the CFPB seeks to take to protect U.S. consumers.

Those include getting more information from big tech firms about personal data use and private currency issuance; examining non-banks that offer consumer payment platforms; and publishing a proposed rule about personal financial data rights, Chopra said during the event, titled “Making America’s payment system work for a digital century.” That proposed rule will be published later this month, Chopra noted.

Read more at PAYMENTSDIVE

The Best Annual Reports from Banks and Credit Unions

The annual report is a unique opportunity to reinforce your brand by connecting with all stakeholders, including the community at large. Some institutions do this masterfully, transforming their annual report from a dry regulatory filing into a tour de force of storytelling. See this philosophy in action in the gallery below, showcasing two dozen standout annual reports.

Banks and credit unions produce some classy and innovative annual reports, seizing the occasion to tell their story through strong narrative, images and graphics.

Not that they have to. Financial institutions can satisfy annual reporting requirements with less fuss by submitting the usual data in their regulatory filings, along with a 10-K to the Securities and Exchange Commission if they are a reporting company.

But some clearly don’t want to miss one of the biggest storytelling moments of the year. In an era of short attention spans, their annual reports show the power of the “glossy,” as the reports are known, to distill key messages, shape perceptions and showcase accomplishments. It’s why this approach retains its allure even as print publishing goes the way of the typewriter.

Read more at The Financial Brand

Most employees say they’re now in office full time — and they aren’t happy about it

Workers report finding ways to skirt in-office requirements, including via the new trend of “coffee badging.”

Dive Brief:

• Two-thirds of employees are now in office full time, according to an Owl Labs survey of 2,000 workers conducted in June — a significant jump from 41% responding the same in 2022. Only 22% of surveyed respondents said it was their preferred working arrangement, however.
• Workers are still finding ways to skirt the in-office requirement, Owl Labs data shows; 58% are “coffee badging,” or going to the office for only a few hours to show their face.
• The majority of employees who continue to have remote or hybrid arrangements indicated they’d be resistant to a full-time, return-to-office policy change. Thirty-one percent said they would go but begin looking for other jobs, 22% said they’d go but be unhappy and 6% said they’d quit.

Read more at HRDIVE

7 in 10 workers say they’ve lied on their resumes

Even higher percentages have lied in cover letters and job interviews, according to a new survey from ResumeLab.

About 70% of U.S. workers say they’ve lied on a resume to land a job, and 37% say they lie frequently, according to an Oct. 3 report from ResumeLab.

In addition, about 76% have lied in their cover letters, and 80% have lied during a job interview, often by embellishing skills, job responsibilities and previous job titles.

“In the competitive world of job hunting, the pressure to stand out in a candidate pool leads many people down a slippery slope — lying on their resumes. All’s fair in love, war, and recruitment, right? Wrong,” Agata Szczepanek, a career expert at ResumeLab, wrote in the report.

In a survey of 1,900 U.S.-based workers, more than 70% said they’ve lied when it comes to resumes, cover letters and job interviews.

Read more at HRDIVE