May 13, 2021
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U.S. Senate votes to repeal 'true lender' banking rule issued under Trump

WASHINGTON, May 11 (Reuters) - The U.S. Senate voted on Tuesday to repeal a regulation introduced during former President Donald Trump's administration that Democrats say allows predatory lenders to skirt state consumer protections. 

 Lawmakers voted 52-47 to repeal the "true lender" rule, marking the first time Democrats have rolled back a Trump-era financial rule using the Congressional Review Act, a 1996 law that gives Congress the ability to rescind recently enacted regulations. 

The White House said in a statement it supported the resolution repealing the rule, which now heads to the Democratic-led House, where it is also expected to pass. 

The targeted rule, written last year by the Office of the Comptroller of the Currency, attempted to clarify whether state or federal laws applied when lenders like fintechs partnered with traditional banks.

Paving the Payments Future
Congress Looks to Address Banking Access Shortfalls

Banks signal support for bill that will encourage new banks to be formed in underserved areas

A new bill before Congress is seeking to improve access to banking services for underserved communities across the US.

The American Bankers Association (ABA) has welcomed plans to kickstart the economic recovery in underserved areas by easing regulations that hinder new bank charters.

The ABA wrote to Congress in support of the Promoting Access to Capital in Underbanked Communities Act of 2021 – recently introduced by Andy Barr, Republican representative for Kentucky – encouraging the formation of new banks in locations where bank branches were scarce.

The legislation comes amid concerns about the decrease in community banks across the country over the past decade.

Have you heard that the Child Tax Credit has changed for 2021?
It’s true! Among other things the credit is now fully refundable, meaning you may benefit even if you don't have earned income or don't owe any income taxes.
Paying With Cash? Retailers Must Take Your Dollars in These States.

DENVER — After a constituent called Colorado state Rep. Alex Valdez last spring and complained that some local businesses weren’t accepting cash, the Denver Democrat started noticing cashless businesses everywhere, from restaurants to his local coffee shop.

Valdez thought refusing cash due to the COVID-19 pandemic made no sense, as merchants were still willing to touch debit and credit cards. And he feared such policies could shut out people without bank accounts, a group that’s disproportionately low-income, Black and Hispanic.

So this year Valdez sponsored a bill that would require retailers to accept cash, with a few exceptions. “We really just need to reaffirm that cash is currency,” he said.

Two Major Trends in Fintech Lending

Wharton MBA student looks at the two major trends that are shaping fintech lending in the USA today

This past year was a true roller coaster ride for lending businesses: sudden drops in consumer spendings as well as business spendings due to lockdowns, deteriorating credit performances, unemployments and PPP loans, unexpected acceleration in e-commerce and digitalization of financial services, favorable regulation changes, and more. I’m eager to hear directly from all these fintech industry experts at LendIt Fintech USA about what they have learned during the pandemic and what they think will be next for lending.

Below, I would like to share with you two observations that I have for this space: 

Fintech companies are becoming banks
Non-fintech companies are developing fintech arms

1. Fintech companies are becoming banks, by seeking or acquiring US banking licenses.

Nebraska could let state banks offer cryptocurrency services

OMAHA, Neb. (AP) — Nebraska banks that want to cash in on the cryptocurrency tech craze could start offering services to customers who own Bitcoin and other digital assets under a bill backed by state lawmakers.

Senators advanced the measure on Monday, 39-1, through the first of three required votes in the Legislature.

The measure would make Nebraska the second state to create a formal charter for “cryptobanks,” allowing them to help facilitate transactions. The first state was Wyoming, which chartered its first institution in September.

Cryptocurrencies are an online form of money that are stored and tracked using a decentralized network of independent computers, which make transactions extremely secure and easy to verify. Unlike paper cash, they aren’t issued by any central government, which appeals to some users who are worried about inflation.

CFPB defends broad investigation into auto title lender

The Consumer Financial Protection Bureau has denied TMX Finance LLC’s bid to end an investigation into the auto title lender’s business practices, rejecting the company’s claim that it was unlawfully broad.

The CFPB demanded documents from the company in February for an investigation into potentially illegal lending, loan servicing and debt collection practices by "consumer-lending companies or title-loan companies,"according to the decision.

TMX Finance, represented by Allen Denson of Venable and Richard Zack of Troutman Pepper Hamilton Sanders, had argued the demand encompassed "the entirety of the company's business," and did not specify an alleged violation as required by the Consumer Financial Protection Act.

Top tax frustrations for Americans: The feeling that some corporations, wealthy people don’t pay fair share

President Joe Biden has proposed raising taxes on corporations and wealthy Americans to help pay for a series of new initiatives, ensuring that the issue of taxes will be front and center for Congress in the weeks and months ahead.

The public’s frustrations with the U.S. tax system have not changed much in recent years. Far more Americans continue to say they are bothered “a lot” by the feeling that some corporations and wealthy people do not pay their fair share of taxes than by the complexity of the tax system or even the amount they pay in taxes.

Majorities of Americans say they are bothered a lot by the feeling that some corporations and wealthy people don’t pay their fair share in taxes (59% each), according to a Pew Research Center survey conducted April 5-11.

Nearly half (47%) say they are bothered a lot by the complexity of the federal tax system, while a third say the same about the amount they pay in taxes. Just 13% express a similar degree of frustration with the feeling that some poor people don’t pay their fair share in taxes. For four of the five items asked about in the survey – the exception being the sense that the poor do not pay their fair share in taxes – sizable majorities say they are bothered a lot or some. Relatively few say they are bothered not much or not at all by these aspects of the tax system.

Recovery Milestone: Tax Revenue Gains Outpace Losses

State Tax Revenue Passes a Recovery Milestone
In most states and nationwide, collections overcome early pandemic losses

For the first time since COVID-19 sent state finances into a tailspin, tax revenue has grown enough to erase its initial pandemic losses in a majority of states, and total collections nationwide were poised to do the same.

After an initial sharp plunge, state tax revenue recovered enough as of February 2021 that 29 states had taken in as much or more revenue in the 12 months since the pandemic began as they did in the 12 months before the pandemic, according to preliminary monthly data from the Urban Institute. Idaho led all states with 11% more tax revenue as of February compared with pre-pandemic levels.

Total state tax receipts were only 0.01% higher for March 2020 through February 2021 compared with the same months a year prior, based on the institute’s preliminary data, which covers 49 states and is the most current available. This means that for states collectively, cumulative tax revenue since the onset of COVID-19 reached pre-pandemic levels for the first time, though without adjustments for inflation.

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