February 23, 2023

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The Biggest Public Finance Issues to Watch in 2023

State surpluses are up. So too are appetites for more spending and tax cuts. But inflation has reared its ugly head and the possibility of a recession is very real. Governing sorts out this year's financial picture.

Last year, state lawmakers were able to have their cake and eat it too, vigorously cutting taxes and substantially increasing spending, while still able to rack up record savings in their rainy-day funds. The good times are still around — most states are seeing surpluses — but there are reasons to be nervous. Inflation may have slowed a bit, but it’s still eating into real revenue growth. And the prospect of a struggling economy – what economist Mark Zandi is calling a “slowcession,” if not a full-blown recession — is also making some legislators wary.

Still, there’s a considerable appetite both for new spending and continued tax cuts. “No doubt, 2022 will go down in the record books as one of the most successful tax-cutting years in history,” says Jonathan Williams, chief economist at the conservative American Legislative Exchange Council. Given sizable surpluses, he expects to see more. As the year begins, there are promises of major cuts coming not only in the capitols of red states, including Iowa and Texas, but from Democratic governors in states such as Connecticut, Kansas and Wisconsin.

Read more at GOVERNING.COM

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Here’s how much money Americans saved at every age in 2022

In 2022, Americans reported saving an average of $5,011, with millennials reporting the greatest overall savings of $6,043. 

In fact, 54% of adults met or exceeded their 2022 savings goals, a recent Wealth Watch survey conducted by New York Life found. The survey profiled 4,410 Americans on their annual savings, financial concerns, debts and 2023 financial goals. 

Last year’s savings patterns mirrored those of 2021, as young adults continued to navigate the impacts of the Covid-19 pandemic and the potentially impending recession, Suzanne Schmitt, head of financial wellness at New York Life, tells CNBC Make It. 

Read more at CNBC

How Credit Unions Can Regain Their Customer Engagement Edge - The Financial Brand

Customer Engagement at Credit Unions Is Slipping: Here’s How to Reverse the Trend

By helping people improve their financial well-being and become more digitally savvy, credit unions can restore the advantage in customer engagement they once had over banks and fintechs — even as these competitors adopt credit unions’ traditional differentiators.

Credit unions have always enjoyed higher customer engagement than their competitors. Because they don’t have to be concerned with pleasing Wall Street, these financial institutions can spend more time listening to the people they serve — “members” in credit union terminology — and prioritize being helpful to them above all else.

This type of customer focus pays off. In a recent banking study, Gallup found that 73% of members who felt their credit union cared for their financial well-being were “engaged,” meaning they had a rational, emotional, and psychological attachment to the brand. Among those who did not feel their credit union cared for their financial well-being, only 20% were engaged.


Consumer Complaint Database: Consumer Financial Protection Bureau (CFPB)

Explore our database of financial product and service complaints to see how companies respond to consumers. View trends, see maps, read complaints, and export the data.

About the database

What’s published and when

Only complaints sent to companies for response are eligible to be published and are only published after the company responds, confirming a commercial relationship or after 15 days, whichever comes first. The database generally updates daily.

We do not publish complaints referred to other regulators, such as complaints about depository institutions with less than $10 billion in assets.

Read more at Consumer Financial Protection Bureau (CFPB)

Dreher Tomkies LLP

Why the largest credit card companies are suppressing actual payment data on your credit report: Consumer Financial Protection Bureau (CFPB)

Last year, we reported that Americans paid over $120 billion annually in interest and fees on credit cards. Since that time, average interest rates charged by credit card companies have quickly increased. It’s critical that consumers can find and switch to credit cards with the lowest and most competitive rates. That’s why we’ve been carefully examining barriers to a fair and competitive credit card market, especially as it relates to the role of consumer credit reporting.

In 2020, the CFPB noted that the largest credit card companies started to deliberately suppress their customers’ actual payment amounts from the nationwide consumer reporting system. Actual payments are the amount a borrower repays each month, as opposed to the minimum payment or balance. Credit card companies’ failure to report actual payment data means that millions of people’s credit reports are missing fundamental information about their credit card repayment behavior that could help many of them receive better financial offers and potentially save billions of dollars in interest expenses.

Read more at Consumer Financial Protection Bureau (CFPB)


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Student Loan Defaults Can Cause Major Financial Setbacks: PEW

Over the past two decades, student loan borrowers falling into certain demographic groups have been more likely than others to experience default, according to a survey done for The Pew Charitable Trusts. Those groups include Black and Hispanic borrowers, older borrowers, female borrowers, and borrowers who reported having a disability or being widowed, divorced, or separated.

Problems with repayment are widespread. About a third of federal student loan borrowers in the survey reported experiencing default at some point over that time period. And among those who defaulted, nearly two-thirds experienced default more than once.

Since March 2020, the federal student loan payment and interest pause put in place in response to the COVID-19 pandemic has prevented more borrowers from entering default. But that pause is set to expire later this year, and the Department of Education has announced a program to help those in default get back on track.

Read more at The Pew Charitable Trusts

What are Black-owned banks and how to support them?

Where you bank can promote racial equity and inclusion. Supporting Black-owned banks can help economically empower Black communities, who historically have faced discriminatory banking practices and systemic racism, such as redlining.

Today, Black Americans are the most likely of any racial group to be unbanked or underbanked. While 2.1 percent of white Americans are unbanked (have no savings or checking account), 11.3 percent of Black Americans are unbanked, according to the latest FDIC survey.

Additionally, Black individuals face the highest denial rate for mortgages. According to 2021 Home Mortgage Disclosure Act data, 15.3 percent of Black Americans were denied mortgages, compared to 6.3 percent for non-Hispanic white Americans.

Read more at BANKRATE

Millions of debt collections dropped off Americans' credit reports

Tens of millions of debt collections disappeared from Americans’ credit reports during the pandemic, a new government watchdog report found, but overdue medical bills remain a big strain on many households nationwide.

The total number of debt collections on credit reports dropped by 33% from 261 million in 2018 to 175 million in 2022, according to the Consumer Financial Protection Bureau, while the share of consumers with a debt collection on their credit report shrunk by 20%.

Medical debt collections also dropped by 17.9% during that time, but still made up 57% of all collection accounts on credit reports, far more than other types of debt combined — including credit cards, utilities, and rent accounts.

Read more at YAHOO FINANCE



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