September 29, 2020
AFSPA Partner
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Payday Loans Aren't a Problem, Student Loans Are

I think most can agree that when it comes to borrowing money-and lending it, for that matter-everybody should be treated fairly.

Recently, various politicians across the country have been going after payday lenders by calling for capping loan interest rates at 36% or even as low as 15%. in some cases, politicians have moved to revoke and ban business licenses for payday lenders altogether. Their motivation is to prevent consumers from taking on unsurmountable debt. Though well-intentioned, policies to cap interest rates would make payday lenders unprofitable and thereby eliminate what is often the only source of available credit for many Americans.

Instead of attacking the payday loan industry, which hardly any actual consumers are complaining about, policymakers should focus on what is a true debt crisis in America: Student loans. Why do policymakers ignore student debt and focus on payday lending? It's politics. Payday lending offers easy soundbites about interest rates and vulnerable consumers; student loans sound like they serve a noble purpose for upwardly mobile youth.

AFSPA Partner

Paving the Payments Future

NEBRASKA: TV ads backing payday lending measure set to air statewide

The first round of television commercials urging Nebraska voters to approve lowering the cap on payday loan rates from 400% to 36% hit airwaves from Omaha to Scottsbluff on Thursday.

Nebraskans for Responsible Lending, the organization behind a successful petition drive to get Initiative 428 on the Nov. 3 ballot, is also responsible for the commercial that will air on broadcast, cable and digital platforms across the state this weekend.

Titled "Underwater," the 30-second ad depicts an overflowing bathtub as a woman describes how high annual interest rates have negatively affected veterans, senior citizens, young people and communities of color, before telling viewers they can "stop predatory lending" by voting "Yes" on the proposal. Read more at LINCOLN JOURNAL STAR

AFSPA Partner

Lending as a Service

Is a cap on payday loan rates about protecting the poor or eliminating a service?

LINCOLN - With the benefit of hindsight, Phil Davis would have found a different way to provide Christmas for his son.

But 10 years ago, he was young and struggling. A car repair bill had eaten up most of his paycheck. He had already tapped the bank of Mom and Dad several times. And he had a three-year-old eagerly looking forward to the holiday.

So he borrowed $500 from a payday lender, paying a $75 fee for the two-week loan. He figured he could cover it with his next paycheck.

Except that other expenses cropped up over those two weeks and he didn't have enough money to pay off the loan. He paid another fee to keep the loan another two weeks. Then he did it again and again and again, every two weeks for more than three years.
Read more at STAR HERALD

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.

Bank of America study: Employers feel more responsible than ever for employees' financial wellbeing

Employers feel more responsible than ever for their employees' financial wellbeing, and there's a clear need to target financial wellness benefits by both age and gender, a new study by Bank of America found.

Six out of 10 employers, 62%, said they feel "extremely" responsible for the financial wellness of their workers, compared to 13% in 2013, according to the bank's 10th annual Workplace Benefits Report.

That sense of responsibility has led to an increase in the number of workplace financial wellness programs, the report found, with more employees seeking information on saving for retirement, planning for healthcare costs, budgeting, saving for college and managing debt.
Read more at BIZ JOURNALS

Dreher Tomkies LLP

Citi pledges more than $1B toward closing racial wealth gap

  • Citi will spend $1.15 billion over the next three years on initiatives meant to close the racial wealth gap and promote anti-racist financial practices, the bank said Wednesday.
  • The commitment breaks down to $550 million to support homeownership for people of color and affordable housing by nonwhite developers; $350 million in procurement opportunities for Black-owned business suppliers; a $100 million investment in minority depository institutions (MDIs); $50 million in investing capital for Black entrepreneurs; and $100 million in Citi Foundation grants to support community entities focused on racial equity.
  • The launch came hours after Wells Fargo CEO Charlie Scharf came under fire for comments he made in June - specifically, that the bank's effort to double Black leadership over the next five years suffered from a "very limited" talent pool. Scharf apologized late Tuesday on Twitter, then again Wednesday in a separate statement.

Read more at BANKING DIVE


Economic Fallout From COVID-19 Continues To Hit Lower-Income Americans the Hardest

Half of adults who say they lost a job due to the coronavirus outbreak are still unemployed

It's been roughly six months since the coronavirus outbreak sent shockwaves through the U.S. economy. While the labor market has recovered somewhat and early stock market losses have been reversed, many Americans continue to face deep financial hardship.

A new Pew Research Center survey finds that, overall, one-in-four adults have had trouble paying their bills since the coronavirus outbreak started, a third have dipped into savings or retirement accounts to make ends meet, and about one-in-six have borrowed money from friends or family or gotten food from a food bank. As was the case earlier this year, these types of experiences continue to be more common among adults with lower incomes, those without a college degree and Black and Hispanic Americans.


Coronavirus experience has more execs looking to improve work-life balance, survey finds

Corporate executives impacted by the coronavirus work experience are rethinking their futures

Nearly eight out of 10 corporate executives have experienced poor mental health during the coronavirus crisis, prompting a number of them to re-evaluate and improve work-life balance, a survey showed on Monday.

Many top company officials in France and Egypt were most likely to have recalibrated their lives after experiencing the pandemic blues, followed by those in the United Arab Emirates, the United States and Britain, according to a survey of about 2,000 high net-worth individuals by health insurer Bupa Global.

The COVID-19 crisis has forced a vast majority of people, including top executives, to work remotely as governments imposed sweeping measures to curb the spread of the pandemic, putting a strain on physical and mental well-being.
Read more at FOX BUSINESS


With race, as with office returns, banks follow the herd or react to it

Citi's billion-dollar pledge and Deutsche's stay-home policy show when one bank misfires, another redirects the narrative.

A common refrain as banks debate when their employees return to the office: What happens when our competitors send their workers in? Certainly that would give them an advantage in face time with clients, right?

This year has shown banks do a good deal of following when another financial institution sets a trend. When Morgan Stanley CEO James Gorman declared in March his bank would not lay off any employees throughout 2020, Bank of America was quick to second it. Citi and Wells Fargo tweaked the narrative slightly, announcing they'd pause cuts, while acknowledging the move was temporary. The nation's third- and fourth-largest banks have each lifted that pause within the past five weeks.
Read more at BANKING DIVE


Student debt is at an all-time high - what that means for borrowers

U.S. student loan debt hit an all-time high of nearly $1.5 trillion in November 2019, according to a Bloomberg analysis. Almost 81% of this debt consists of federal direct loans, as reported by Federal Student Aid (FSA), an office of the U.S. Department of Education. In early 2020, the number of student loans in repayment reached $686.5 billion in the U.S., while $119.8 billion worth of student loans were in default.

These numbers aren't surprising when considering the average tuition for the 2019-2020 academic year for a four-year in-state public college averaged $26,590. The average budget at a private college was $53,980, according to a College Board report, Trends in College Pricing with no slowdown in sight.

Taking out student loans to pay for college
Most college students take out loans to pay for college. In fact, about one-third of students under 30 have student loans, according to the Federal Reserve Board's 2018 Survey of Household Economics and Decisionmaking.
Read more at FOX BUSINESS


Increase in loans at pawn shops

WICHITA, Kan. (KAKE) - Many people in our area are experiencing job losses which means they need help making ends meet.

Pawn shops are seeing an increase in people wanting loans.

One owner tells KAKE News, a lot of people coming in are from the aerospace industry.

And with congress battling over a second stimulus package people are searching for what ever help they can get.

"It's been probably pretty tough on a lot of people out there. And so our pool of people has been growing here lately. I have a fear that it's going to grow quite a bit in near future," said Bruce Harris, owner of A-OK Pawn Shop.
Read more at KTEN10


Unemployment benefits? Stimulus checks? Aid measures are in limbo as people's bills are still due

Oct.1 is around the corner.

And even though millions of Americans are living without a steady paycheck amid the pandemic, the bills are still due.

Making the situation worse is that fact that Congress hasn't been able to reach a deal on another stimulus package, leaving extra unemployment benefits and a second round of direct cash payments in the balance.

To try to get some control over your finances during these difficult times, experts recommend you make a list of all your bills. At the top should be the things you most need: Housing, phone, etc.
Read more at CNBC

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