AFSPA
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
August 18, 2020
IRS and AFSPA
Employers can grant paid leave for COVID-19

Under the Families First Coronavirus Response Act, employers can grant paid leave for an employee to take care of their health needs related to COVID -19 or to care for their family members. This relief helps ensure employees are not forced to choose between being paid or staying home to care for themselves, a child or other family member.

In addition to the relief for employees, businesses can claim two new refundable payroll tax credits for granting paid leave to their employees. The paid sick leave credit and paid family leave credit are available for eligible employers who pay qualified sick leave wages and/or qualified family leave wages from April 1, 2020 through December 31, 2020, and who have fewer than 500 employees.

The paid sick leave credit and the paid family leave credit will immediately and fully reimburse employers for the cost of providing COVID-19 related leave to their employees.

Here is what you need to know about paid leave under the CARES Act.


The Predicted Surge in Short-Term Loans

To put it very bluntly, the coronavirus global pandemic has devastated our national economy in a way that we haven't seen since the Great Depression.

More than 40 million people are unemployed in the United States right now. The stock market has become a roller coaster (hitting record highs and then record lows, bouncing all over the place and then back again with no real rhyme or reason), and 40% - if not more - of all small businesses believe that they won't ever be able to open back up again after the coronavirus has subsided.

Things are bleak.

Because financial situations are so dire right now, we are seeing a huge increase in people digging into their savings accounts and their emergency funds, as well as folks having to turn to traditional and nontraditional short-term lending solutions just to get by.
Read more at ECONO TIMES

AFSPA Partner


REPAY


The Class of 2020: unemployed, taking on debt and struggling to pay the bills

  • The majority of 2020 graduates have had their post-graduate plans impacted by the coronavirus pandemic, leaving many unemployed.
  • Students are finding themselves taking on more debt, and struggling to pay off loans and housing rent.
  • University grants, internships, and independent work, are providing short term relief for graduates without a full-time position but the question remains: When will it get better?

CNBC's "College Voices 2020" is a series written by CNBC summer interns from universities across the country about coming of age, launching new careers and job hunting during a global pandemic. They're finding their voices during a time of great social change and hope for a better future. What money issues are they facing? How are they navigating their student loans? How are they getting work experience, networking and applying for jobs when so many opportunities have been canceled or postponed? How important is diversity and a company's values to Gen Z job seekers?
Read more at CNBC

Alchemy

Why banks are putting PPP forgiveness on the back burner

The Paycheck Protection Program's forgiveness portal has debuted, leaving bankers and their borrowers with a big decision.

Those who participated in the $659 billion program must determine if they are ready right now to navigate the complex system for having loans forgiven, or if it makes sense to wait and see if Congress intervenes and simplifies the process. That decision was complicated over the weekend when talks about a new round of stimulus collapsed, casting doubt on when - or if - PPP will get an overhaul.

A number of banks, including JPMorgan Chase, the program's biggest participant with $29.2 billion in PPP originations, plan to hold off on processing applications. The $3.2 trillion-asset banking giant will start the forgiveness process next month, said Kimberly Hooks, a vice president at Chase Business Banking. Read more at AMERICAN BANKER

LoanPaymentPro

Subprime Buyers May Face Worsening Credit Conditions This Fall

Buyers with ___ credit could find it harder to get an auto loan in the coming months, according to Cox Automotive. The prediction comes following worsening coronavirus outbreaks in many areas of the country. The resulting uncertainty for subprime buyers could be a cause for concern in a market that was recovering.

According to Jonathan Smoke, the chief economist for Cox Automotive, credit conditions could worsen over the next several months, putting a strain on subprime consumers. Cox says COVID-19 risk remains elevated and that the next three months are likely to be the hardest to forecast in an already turbulent year. Smoke predicts that credit conditions are likely to deteriorate over the coming months, saying he expects further tightening to occur.

"It will be harder and more expensive than it has been for probably all credit tiers, but it will be especially hard for the 20% of the market that is subprime," said Smoke in a video discussion published last week. Read more at CARSDIRECT

NDH

Pawn shops fall on hard times as products dry up and customers are flush with cash

Customers either call or come into Gelman Loan Corp. every day looking for second-hand televisions or stereos and gaming systems. But the store sold all its electronic products months ago and has been unable to refill the supply.

Jake's Haggle Hut in Jeannette hasn't been able to buy a single piece of jewelry in five months. Ken Miller, owner of the Buy & Sell Outlet in Washington, Pa., said he had someone sell a TV at his shop last week for the first time since June.

"There's nothing coming in now," Mr. Miller said.
Read more at PITTSBURGH POST-GAZETTE

PAYLIANCE

ANALYSIS: CFPB COMPLAINTS SURGE DURING PANDEMIC, LED BY CREDIT REPORT COMPLAINTS

For the fifth consecutive month, consumer complaints to the CFPB set a new monthly complaint volume record in July, according to an analysis by U.S. PIRG and the Frontier Group. This snapshot focuses on spikes in complaints about credit reporting. While credit reporting complaints have always been among the leading complaint categories, during the pandemic the total number of credit reporting complaints has surged by 86 percent. As a percentage of overall complaints, they accounted for 65 percent in July, compared to 54 percent in February.

The accuracy of credit reports is important because consumer reporting agencies act as gatekeepers to financial or employment opportunities. Few creditors will issue credit without reviewing a credit report or credit score derived from it. Increasingly, employers, landlords and insurers also now use credit reports.
Read more at UNITED STATES PUBLIC INTEREST RESEARCH GROUP

Dreher Tomkies LLP

Car title loans: What they are and how they work

All loans come with risks if they're not repaid on time. However, a car title loan carries an especially troubling consequence if you fail to meet your payment obligations: The lender can take your vehicle.

Before you consider getting a title loan, consider the potential potholes you'll hit if you use your vehicle as collateral to borrow money

What is a title loan?
A car title loan is a short-term loan that lets you secure a small amount of money in exchange for giving the lender the title to your vehicle. You'll also pay a sizable fee to borrow the money.
Read more at MSN MONEY

MaxDecisions

Banks eye loan specialists, marketers as pandemic boosts debt, digital demands

"Four months ago, a workout specialist couldn't find a job anywhere," said Paul Schaus of the consulting firm CCG Catalyst.

Loan workout specialists and digital marketers are in high demand at banks as the pandemic spurs lenders to prepare for bad loans and adjust to digital interactions with current and prospective customers, analysts said.

"Workout specialists - it's the No. 1 thing that banks are looking for right now," said Paul Schaus, president, CEO and founder of consulting firm CCG Catalyst. "Four months ago, a workout specialist couldn't find a job anywhere."

As the pandemic enters its fifth month, high unemployment and a weakening economy are causing banks to prep their "war chest," Schaus said. "They're preparing for battle, and that's poor earnings and bad loans."
Read more at BANKING DIVE

ValidiFI

New report shows historic drop in credit card debt amid the coronavirus pandemic

The Federal Reserve Bank of New York released a report Thursday that shows a sharp decline in credit card balances as Americans cut back on consumer spending amid the coronavirus pandemic.

In the months since the coronavirus pandemic hit and sent millions of Americans to shelter at home, consumers' credit card debt has fallen fast to unprecedented levels.

According to a new report released Thursday from the Federal Reserve Bank of New York, the second quarter of 2020 saw a staggering $82 billion decline in credit card balances. Second-quarter declines in card balances, in general, have only been seen during the Great Recession, and a drop this big in the second quarter of the year hasn't happened since at least two decades ago, the report says.

This sharp decline in credit card balances comes at a time when consumers are spending less in general as unemployment reaches peak highs, leaving many Americans without jobs or income. Read more at CNBC SELECT

TransUnion

Could payday lenders return to SOUTH DAKOTA? Feds might open the door

Just a rate cap on payday loans wasn't enough.

The group of lawmakers who crafted the language in South Dakota's current restrictions on payday loans, which limit interest rates to 36 percent, knew the industry would try to find ways to work around the rule.

So they included some extra protections in the statute, using language intended to stop non-bank lenders from using any "device, subterfuge or pretense" to circumvent the state's rate cap.

Lenders have found a way to do just that, partnering with banks to get around similar protections in other states Read more at ARGUS LEADER

microbilt
AFSPA
ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
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Alternative Financial Service Providers Association
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