• This week’s newsletter highlights a shifting landscape for alternative financial services, defined by regulatory recalibration, the rapid integration of AI, and persistent challenges in consumer access to traditional credit.

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Why Small Mortgages Are Hard to Get

Small mortgages—those under $150,000—are critical to housing affordability, particularly in lower-income and rural communities. But they’re often out of reach for borrowers.

Why? These loans cost lenders about the same to issue as larger loans, but they generate less revenue.

Specific changes could help lenders issue more small mortgages, making it easier for more Americans to buy lower-cost homes.

Secondary Market Solutions Can Help Expand Small Mortgage Access

Fannie Mae and Freddie Mac have the chance to make homeownership possible for more Americans

Overview

• Small mortgages—loans below $150,000—play a critical role in enabling affordable homeownership, particularly in lower-income and rural communities.1 But would-be homebuyers often find it difficult to obtain such a loan, even when they are otherwise well qualified.2 This difficulty stems largely from the economics of mortgage lending: Small mortgages cost about the same for lenders to originate as larger ones, but they generate less revenue.3 Without financial incentives, many lenders won’t issue small mortgages or will deprioritize them as part of their business model.

Read more at Pew Research Center

Apply for a Low Income Taxpayer Clinic grant to serve taxpayers in your community: IRS

Grant application period runs May 6 to July 6, 2026

WASHINGTON — The Low Income Taxpayer Clinic Program today announced it will accept applications PDF for LITC matching grants from all qualified organizations from May 6, 2026, to July 6, 2026. The grant period of performance will be Jan. 1, 2027, through Dec. 31, 2027, and applications from underserved areas will be given special consideration.

The Taxpayer Advocate Service, an independent organization led by National Taxpayer Advocate Erin M. Collins, administers the LITC Program. Although LITCs receive partial funding from the IRS, LITCs and their employees and volunteers operate independently from the IRS.

“Low Income Taxpayer Clinics are essential to ensuring that every taxpayer, regardless of income or language, has access to a fair and just tax system,” Collins said. “These clinics are a lifeline that protect taxpayer rights, ensure fairness, and provide trusted support to those who need it most. I encourage community organizations to apply and join us in expanding this vital work so that every taxpayer, in every community, has access to justice.”

Read more at Internal Revenue Service

Have a tax law question?

Our #IRS Interactive Tax Assistant has answers.

Watch this short video to learn more:

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Jose L. Santiago

Public Affairs Specialist

Tax Outreach, Partnership and Education

Email: jose.l.santiago@irs.gov

Credit Scores, Used to Predict Repayment, Can Restrain Economic Recovery: UCLA Anderson

Rigid adherence to scoring systems can reduce consumer spending when it’s most needed

Credit-scoring systems are part of the critical infrastructure of modern finance, key to deciding who can borrow and at what cost. But a stream of academic research since 2008 suggests that lenders’ devotion to rigid credit rules has stunted the economy’s rebound from the global financial crisis.

A paper by UCLA Anderson’s Mark J. Garmaise and Gabriel Natividad of the University of Piura (Peru) published in the Journal of Finance seeks to take that research a step further. The authors’ specific focus: Do lender and borrower behaviors change simply because of the “shock” effect of a sudden downgrade of a borrower’s credit rating, regardless of what specifically caused it or whether it truly signals financial trouble for the borrower?

To put it another way, do credit-rating systems too often paint unfair pictures of individual debtors?

Read more at UCLA Anderson

CFPB’s Final Rule Recalibrates Fair Lending Enforcement: A Return to Clarity and Core Statutory Principles by Alan S. Kaplinsky

On April 22, 2026, the Consumer Financial Protection Bureau (CFPB), under Acting Director Russell Vought, issued a significant final rule reshaping the agency’s approach to fair lending enforcement under the Equal Credit Opportunity Act (ECOA) and Regulation B. While early commentary has been sharply divided, a closer reading of the final rule itself reveals a thoughtful and disciplined effort to realign enforcement with statutory text, evidentiary rigor, and practical compliance realities.

This development is particularly important for banks, fintechs, and other consumer financial services providers navigating increasingly complex regulatory expectation, especially in an era of rapid technological change and expanding use of algorithmic underwriting.

The CFPB published a notice of proposed rulemaking on November 12, 2025. The comment period ended on December 15, 2025, and it has been reported that more than 64,000 comments were received. The amended rule becomes effective on July 21, 2026. Stay tuned for another podcast show that we will soon release about the amended rule.

Read more at Ballard Spahr L.L.P. 

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How the 'Annoyance Economy' Is Costing Americans Billions in Hidden Fees and Wasted Time

Key Takeaways

• A study argues that the "Annoyance Economy" costs American families at least $165 billion annually in junk fees, spam calls, and other time- and money-wasting practices.
• The researchers claim that companies intentionally make subscription cancellations difficult, increasing their revenue by over 200%.
• Complex health insurance paperwork and poor customer service contribute significantly to consumer frustration and financial losses.

You call your insurance company about a nixed claim, get routed through a phone tree, wait 40 minutes, explain your problem to a chatbot that can't help, then start over with a human agent who asks for the same information. By the time you hang up, you've burned an hour on what should've been a two-minute fix—and you might have to call again.

Now multiply that frustration across most U.S. households every year and you get what Stanford economist Neale Mahoney and Groundwork Collaborative policy fellow Chad Maisel call the "Annoyance Economy."

Read more at INVESTOPEDIA

Coinbase, PayPal Cut Jobs As AI Reshapes Fintech Workforce

Gotrade News - Two of the most recognizable names in fintech moved on the same day to cut staff and lean harder on artificial intelligence. Coinbase said on Tuesday (05/05) it will reduce headcount by about 14%, while PayPal's new chief executive signaled plans to trim roughly 20% of the workforce over the next two to three years. The pairing matters because both companies are pointing to the same driver, smaller AI-augmented teams replacing traditional roles in support, fraud, and back-office functions. The market response has been telling, with investors treating the cuts as a margin event rather than a distress signal.

Key Takeaways

• Coinbase is cutting about 14% of its workforce, roughly 660 to 700 employees out of a 4,700 base, and expects $50 to $60 million in mostly cash restructuring charges in Q2 2026.
• PayPal CEO Enrique Lores plans to cut around 20% of staff over two to three years and is spinning Venmo into a standalone unit while standing up a new AI transformation group.
• Markets are treating the moves as efficiency stories, with Coinbase (COIN) shares rising nearly 4% in premarket trading after the announcement.

Read more at HeyGoTrade.com

Payliance enables organizations to streamline

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FinTech enters new era focused on scale, profitability and AI

The global FinTech industry is entering a more mature and disciplined phase, moving beyond the earlier era of rapid expansion and valuation-driven growth toward a stronger focus on scalability, profitability, and regulatory alignment. A recent report by McKinsey & Company, in partnership with QED Investors, highlights how this transition is being shaped by technological innovation, evolving business models, and a deeper integration with the broader financial system.

Artificial intelligence has emerged as the most significant force driving this transformation. Fintech firms are increasingly leveraging AI to accelerate product development cycles, reduce operating costs, and expand access to financial services. What once took years to build can now be developed in a matter of weeks, allowing firms to respond quickly to market demands and serve customer segments that were previously unviable. According to a 2026 study by the Cambridge Centre for Alternative Finance, 79% of financial institutions reported positive outcomes from AI adoption, with fintech firms seeing stronger gains at 86% compared to 68% for traditional institutions. Improvements were most pronounced in technology, data, and product functions, while operational efficiencies were also widely reported across both fintech and incumbent players.

Read more at IBSi FinTech

Privacy Comes at a Cost for Fintech Borrowers: UCLA Anderson

Consumers in India welcomed an end to intrusive data mining, but it made it harder to get the loans

Fintech firms have become a lifeline for consumers who need a loan but lack the golden tickets — a strong credit score and stable income — required by traditional lenders. These firms leverage technology to mine alternative data that isn’t part of traditional credit scoring to suss out whether a higher-risk borrower is actually worth the risk. Artificial intelligence has turbocharged the lenders’ ability to collect and analyze nontraditional data.

But like all things digital, there is an implicit tension in how the ability to mine alternative data intersects with privacy.

Read more at UCLA Anderson

Loved by collection agencies, debt buyers, and lenders handling diverse portfolios. cf

Fintechs Making Inroads Across Financial Services: Report

According to the JD Power Financial Services Churn Data and Analytics report, fintech brands are making meaningful inroads in building market share across the full spectrum of financial services. The report tracks new customer acquisition and attrition rates across financial services and sheds light on the key demographic and behavioural details that define this industry-wide transformation.

Chime becomes mass market powerhouse

Chime, Chase and Wells Fargo have the highest share of checking account openings through the first quarter of 2026, holding their places from the last report in Q4 2025. These three brands rank highest among banks considered as well, but fintechs lead in conversion rates, with Chime and Current each with 76% and SoFi at 72%. Cash App follows closely with a 65% conversion rate.

When broken down by customer income, Chime leads in account openings among mass-market customers (14.2%), followed by Wells Fargo (8.1%). Chase leads the field among mass affluent (10.6%) and affluent (14.4%) customers.

Read more at CROWD FUND INSIDER

What types of news do Americans seek out or happen to come across? PEW

A growing share of Americans say they mostly get news because they happen to come across it, not because they’re actively seeking it out. About half of U.S. adults (49%) say this is the case today, up from 39% when we first asked this question in 2019.

However, Americans are especially likely to find certain types of news by chance and actively look for others, according to a recent Pew Research Center survey from the Pew-Knight Initiative.

The types of content that most Americans say they get by chance tend to be reactions to news: humor and opinions. About two-thirds of adults say they see funny posts (66%) and opinions (64%) about the news mostly because they happen to come across them. Meanwhile, 21% say they get opinions mostly by looking for them, and 14% say the same for funny posts.

Read more at Pew Research Center

Our Vision is to become the leading

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How much credit card debt is too much right now? Experts weigh in

Credit card debt is climbing, and it's becoming a real issue among borrowers nationwide. Case in point? Americans held about $1.23 trillion in total credit card balances in the last quarter of 2025 — a record level that was up by tens of billions from the previous quarter. In turn, the average borrower now holds nearly $6,600 in credit card debt.

That might not seem like a huge amount at first glance, but with credit cards carrying an average rate of over 21% these days, even a small balance can snowball quickly. As a result, borrowers need to be hyper-vigilant about monitoring their debt balances and understand how to recognize when their debt is getting out of hand. 

Want to make sure your debts remain manageable? Here's how much is typically too much, according to experts.

Read more at CBS

Chase Accelerates Support for the Next Generation with Modern Banking Solutions

New research and young adult feedback are guiding enhancements that deliver greater value, stronger protections, and support on their terms

NEW YORK, May 5, 2026 — Chase today announced accelerated efforts to better serve young adults ages 18–24 and customers new to banking, with products, experiences, and support designed around how they manage money, build credit, and plan for the future.

“Young adults are telling us exactly what they want from their bank: make it easy, keep it safe, and be there when it matters,” said Matt Gromada, head of emerging growth segments at Chase. “We’re doing a lot of listening—and we’re building alongside them.”

For many young adults, financial stress is high, and small steps can make a big difference. Chase is investing across products and experiences to deliver more value, control, and convenience—with support on customers’ terms.

Read more at CHASE Media Center

Alarm bells raised over fintech firm’s bank purchase

With nonbank lenders entering the banking space, some are concerned it could lead to an increase in this one practice.

While many Americans have an account at a traditional bank, there are some who, for various reasons, can’t get an account.

Roughly 18% of Americans are unbanked, meaning they don’t have a bank account or don’t fully participate in the banking system, according to the Federal Reserve Bank of Cleveland.

This might be because they’ve been flagged in a bank’s system, are not in an area served by traditional banks, or have opted out of the banking system for personal reasons.

Read more at The Street

Google Stock Soars, Meta Tumbles as Investors Digest Latest Big Tech Earnings

Key Takeaways

• Shares of Google-parent Alphabet jumped on Thursday after it said surging demand for its AI models and services helped its cloud business grow at its fastest rate in nearly a decade last quarter.
• Meta shares tumbled after it raised its full-year AI spending forecast, despite spending less than expected last quarter and having less to show for its spending to date. 

Big stock moves on Thursday followed big earnings beats out of Silicon Valley on Wednesday.

Google parent Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), and Meta Platforms (META) all handily beat expectations on the top and bottom lines last quarter. Cloud growth, generally considered a proxy for AI demand, accelerated to its fastest pace in more than three years at Amazon and more than four at Microsoft. Alphabet’s cloud business grew more than 60%, its fastest growth since 2017, when the then-nascent business was about a twentieth of its present size. 

Read more at INVESTOPEDIA

E-Complish, LLC Launches: IntellAgent™, a 24/7

AI Companion for Customer Account Management & Payment Processing

Assessing the state of AI adoption across the federal government

Executive summary

• Three consecutive administrations have made adoption of artificial intelligence (AI) across the U.S. federal government a priority. Most recently, the Trump administration’s AI Action Plan highlighted AI’s potential to “help deliver the highly responsive government the American people expect and deserve.” To assess the current state of AI adoption across the federal government, this report draws on AI use case inventories from 2023 to 2025, federal jobs data, OMB memoranda, request for information submissions, and interviews with current and former federal technologists across eight agencies.

While the scope and pace of AI adoption accelerated significantly over the past three years, AI use across the federal government remains concentrated among a handful of large agencies. Workforce capacity constraints, a risk-averse culture, procurement and funding challenges, and low public trust in AI systems slow adoption efforts.

Read more at Brookings Institution

JPMorgan Chase bets on the fintech playbook to lure Gen Z customers

JPMorgan Chase (JPM) is borrowing some tactics from its upstart fintech competitors.

The lender is rolling out a new banking app, waiving service fees, and making it easier for 17-year-olds to open accounts as it tries to attract more of the 30 million young adults in the country making their first major financial decisions.

The move comes as part of a firmwide initiative JPMorgan unveiled in late March, pledging to help prop up the American Dream, which longtime CEO Jamie Dimon described as “alive” but “slipping” for many Americans.

Read more at Yahoo Finance

Top 10 States For High School Financial Literacy

Americans overwhelmingly believe that financial literacy skills are essential to adulthood, yet millions of high school students still graduate without them.

For example, more than 90% of Americans say budgeting should be taught in schools, but only a fraction of states have built comprehensive, high-quality programs into their curricula, according to a recent WalletHub survey.

The need is not abstract—it is measurable in household balance sheets and long-term financial outcomes. And while some students may wonder if they ever will use that trigonometry in real life, they’re guaranteed to need financial skills.

Unfortunately, only about 57% of U.S. adults are considered financially literate, defined as having a basic understanding of four fundamental concepts in financial decision-making: how interest rates work, what interest compounding is, what inflation is and how to diversify risk, according to a Standard & Poor’s global financial literacy survey.

Read more at Financial Advisor Magazine

Mark Cuban warns these 5 job categories are at risk due to AI

Billionaire entrepreneur Mark Cuban is warning that five major job categories are increasingly at risk as artificial intelligence adoption accelerates, particularly for workers in routine, entry-level roles.

Cuban said the shift is already underway, driven by companies weighing the cost and productivity of AI systems against human labor.

As tools improve and become more cost-effective, he expects businesses — especially large ones — to reduce headcount in roles built around repetitive tasks.

The transition is where the risk shows up, Cuban said in recent social media posts and interviews: “There’s only two types of companies in this world. Those who are great at AI and everybody else.”

Read more at The Hill

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If You're Looking for a Job, the Latest Data Shows It's Slim Pickings

Key Takeaways

• The U.S. economy had 6.9 million job openings in March, the same as in February as the job market stayed in a state of limbo.
• The frozen-over labor market thawed slightly as hiring, quitting and layoffs all edged up.
• The Iran war could affect job creation in the coming months as high gas prices squeeze household budgets and force cutbacks to spending on other things.

The labor market mostly stayed in its low-hiring, low-firing limbo in March, but churned a little more than it has in recent months.

The number of job openings stayed at 6.9 million in March, the Bureau of Labor Statistics said Tuesday.

That was more than the 6.8 million openings forecasters had expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal, but shows that the market for employment remains sluggish.

Read more at INVESTOPEDIA

Financial literacy lagging, FINRA finds

Retail investors’ knowledge is “alarmingly low,” according to report

Many investors have little financial knowledge and are ill-prepared to manage their own finances, let alone make complex investment decisions, finds new research from the investor education arm of the U.S. Financial Industry Regulatory Authority (FINRA).

The FINRA Investor Education Foundation (FINRA Foundation) has reported that its research — which was conducted along with the Global Financial Literacy Excellence Center (GFLEC) at the George Washington University School of Business — found that financial knowledge is “alarmingly low” among retail investors.

In particular, the FINRA Foundation found that the 15,000 investors they surveyed “had significant difficulty” answering questions about the concepts of asset pricing and risk diversification.

Read more at Investment Executive

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Claiming “no tax on tips” deduction for occupations that customarily and regularly receive tips may require an amended return: IRS

The Department of the Treasury and the IRS have issued Regulations section 1.224-1 identifying occupations eligible for the “no tax on tips” deduction for tax years beginning after 2024. These final regulations clarify the scope for certain occupational categories previously identified in proposed regulations and add several new occupational categories, including visual artists, floral designers, and gas pump attendants.

Use the list in the regulations, or the list available at IRS.gov/tippedcccupations, to determine if your occupation qualifies your tips for the deduction. Qualified tips are reported on Schedule 1-A (Form 1040). See the instructions for Schedule 1-A in the 2025 Instructions for Form 1040 for details on the additional criteria that must be met for the deduction. 

Read more at INTERNAL REVENUE SERVICE

A Lack of Financial Literacy Is Just One of Americans' Problems

April has been Financial Literacy Month, a national initiative focused on improving financial education and awareness.

However, recent survey results show that many Americans still lack a strong understanding of basic financial concepts: According to a report from Fortunly, poor financial literacy cost Americans more than $246 billion in 2025.

But becoming financially literate is only half the battle. For many, applying financial knowledge to their personal finances is a challenge.

Read more at Think Advisor