April 28, 2020
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Approximately 12 million Americans use small-dollar loans each year.

Lawmakers press for small business loans for payday lenders

The lenders are among many industries lobbying to gain access to the $670 billion small business loan program.

A bipartisan group of lawmakers is pressing the Trump administration to let payday lenders gain access to small business rescue money, going to bat for companies that have been accused of engaging in predatory behavior toward lower-income people.

The move comes as officials try to quell public criticism by stopping hedge funds and publicly traded companies from benefiting from the program, which is designed to avert massive job losses and resumes on Monday after running out of funds because of high demand.

In a letter signed by 24 House Republicans and four Democrats, lawmakers asked the Treasury Department and Small Business Administration to open up Paycheck Protection Program loan applications to "small-size nonbanks," including installment lenders and so-called community development financial institutions, which focus their lending on underserved populations.

Payday lenders weren't explicitly mentioned, but a spokesperson for Rep. Blaine Luetkemeyer (R-Mo.), one of the lawmakers who led the letter, confirmed the intent was to include them in the request. Read more at POLITICO

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Payday lender sues over 'unjustified' COVID-19 loan denial

(Reuters) - A California payday lender has filed a lawsuit challenging the Trump administration's decision to bar financial companies that primarily engage in lending from receiving emergency small business loans under the federal government program established last month in response to the coronavirus pandemic.

Payday Money Centers in a lawsuit filed on Saturday in federal court in Washington, D.C., said the U.S. Small Business Administration had taken an "unjustified stance" in rules it issued governing the Paycheck Protection Program.

The program, created as part of last month's $2.2 trillion economic stimulus law the CARES Act, allows struggling small and medium-sized businesses to obtain loans through banks that can be forgiven if they keep their employees on their payrolls.

The loan program has been overwhelmed with demand, and the initial $349 billion funding for the program was quickly depleted. Congress last week approved another $321 billion to replenish the program.

Payday Money Centers' lawyers, led by Christopher Hatfield of Ballard Spahr, in its complaint said the company applied for a $644,382 loan on April 3, the first day it could, but Republic Bank of Chicago denied its application.
Read more at REUTERS


How to help the unemployed during the coronavirus pandemic

Here are six ways to help people who are unemployed right now.

In the past four weeks, 22 million Americans have filed jobless claims. That staggering number doesn't even reflect everyone who is truly out of work - just those who have been able to get online and file for unemployment benefits.

But not all hope is lost. There are ways to help, even if you've been laid off yourself. Here are a few steps you can take to ease the burden

If someone you know has been laid off:

1. Don't assume you know what they need

Everyone's situation is a little different, and your perception of a person's needs may not actually be what they are. Amanda Clayman, a psychotherapist and financial wellness advocate at Prudential, says that losing work isn't a problem that can be solved overnight. "Sometimes [our assumptions] may be very wrong, and it's more likely that they will take the shape of our own fears of what they want from us," she says. Read more at NBC NEWS


Coronavirus pandemic causes US banks to issue Internet fraud alerts

Fraud alerts are going out from U.S. banks in the wake of the coronavirus pandemic.

In an email sent out earlier this week, Bank of America advised its customers not to respond to unsolicited requests for their account or personal information such as access codes, PINs or Federal Student Aid (FSA) IDs.

The Charlotte, N.C.-based bank offered advice that all cybersecurity analysts give: validate a suspicious email request by finding the official phone number of the organization and calling that number.

On a web page dedicated to Internet fraud, the Bank offers examples of popular scams.

"There's been a change in the transfer for closing, please now send the money to..." is an example given by the bank of a common email scam.
Read more at FOX NEWS


Credit cards start cutting limits for people facing tough times

Major U.S. credit card issuers are starting to lower customer spending limits as the coronavirus pandemic leaves millions of Americans jobless and struggling to keep up on loans.

Discover Financial Services just became the largest lender yet to acknowledge it's begun reining in lines of credit. In a regulatory filing late Wednesday, the firm said it's also easing off efforts to sign up new customers and that it expects to take a hit from programs letting existing borrowers skip payments or delay the accrual of interest.

"As the number of loans enrolled in these programs increases, our financial results will be adversely impacted in the short term due to forgone interest," Discover said.


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Dreher Tomkies LLP

Are states ready for a recession?

Minnesota, Utah Among States Best Prepared for Coronavirus Economic Upheaval

A new Pew report praises states that have strong rainy day funds but suggests others will have a more difficult time dealing with a coronavirus-related recession.

States such as Minnesota and Utah that both conduct regular stress tests to prepare for unexpected shocks to economic growth and tax revenues and that have robust rainy day funds are among those better positioned to ride out the worst of the ongoing coronavirus-fueled economic crisis, according to a Pew Charitable Trusts report published on Thursday.

Pew suggests states that are well positioned to weather coronavirus-related economic upheaval have four common policies in place:
Read more at U.S. NEWS


Investing in the communities that REPAY calls home is always a priority for us. And now, more than ever, we want to show our support. That's why REPAY and our employees have joined together for a COVID-19 Food Bank Fund Drive with 8 food banks across the country. We are honored to contribute to the great work these organizations are doing.


Coronavirus pushes up demand for financial literacy, but money to pay for it is tight

This is a tough time for small nonprofits. Donations were declining even before the coronavirus. Now they fear it could get even worse. With rising unemployment, financial literacy groups are seeing more demand for their services, and they're looking for funding from new sources - including the Consumer Financial Protection Bureau.

Joseph Leitmann-Santa Cruz is working 10-hour days right now. He's the executive director of Capital Area Asset Builders, a Washington, D.C., nonprofit that offers low-income residents free financial coaching. They've seen a 25% increase in phone calls and emails from laid-off restaurant workers and construction workers.

They're asking for advice on what should be paid first, what can be put on hold and what can be negotiated.
Read more at MARKETPLACE


Supporters Of Digital Currency Say Pandemic Bolsters Case For A New Approach

Widespread unemployment and economic turmoil as a result of the coronavirus pandemic mean people are looking for government relief fast, which some say could open up the possibility for a new approach: digital currency.
But there are many hurdles to overcome, including adopting the infrastructure and growing trust in the system.

Since Congress passed the largest economic relief bill in U.S. history last month, direct payments to Americans have been trickling out. The most vulnerable Americans could wait a long time for their funds, though, especially people without bank accounts.

About a quarter of households either did not use banks or used financial services outside of the banking system in 2017, according to the latest survey from the Federal Deposit Insurance Corporation (FDIC). More than half of "unbanked" households surveyed said they did not have enough money to start an account.
Read more at NPR


SBA reports data breach in disaster loan application website

NEW YORK (AP) - Thousands of small business owners reeling from the aggressive measures taken to halt the spread of the coronavirus may have had their personal information exposed last month on a government website that handles disaster loan applications.

The Small Business Administration said Tuesday that the personal information of more than 7,000 business owners applying for economic injury disaster loans was potentially seen by other applicants on the SBA website on March 25.

The SBA said only the disaster loan program was affected, not the Paycheck Protection Program, which did not begin until April 3 and which is handled by a separate system.



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