September 1, 2020
The Internal Revenue Service (IRS) has partnered with the Alternative Financial Service Providers Association (AFSPA) to assist in an ongoing effort to bring information, research, data and education to the unbanked and underbanked population of America.

Hiring someone with significant employment barriers may get you a good worker and a business tax credit. An #IRS reminder that the Work Opportunity Tax Credit is set to expire at the end of the year.


Small Banks Have Been More Profitable Than the Industry During the Pandemic

Large and regional banks in the U.S. receive much more attention than smaller banks. That makes sense, because they stretch into much broader swaths of the economy. Some of the biggest banks, such as JPMorgan Chase and Bank of America, hold trillions of dollars in assets and carry out a wide array of financial functions. And many of the large banks have performed relatively well through the first half of the year when you consider what has happened to the economy.

But, while you would never know it, they are getting beaten badly by their smaller bank counterparts, who have been much more successful in the first two quarters of the year, at least when it comes to profitability. Let's take a look.

Better returns
Every quarter, the Federal Deposit Insurance Corp. comes out with a banking profile that provides loads of information on how all FDIC-insured institutions -- both public and private -- are performing. It also groups banks by asset class and breaks out how those groups are performing compared to one another. Read more at THE MOTLEY FOOL

AFSPA Partner
Lending as a Service

Merger of two Black-led banks aims to help break a painful cycle

Los Angeles' Broadway Federal Bank and Washington, D.C.'s City First Bank are merging to form the largest Black-led bank in the U.S., underscoring the challenges such banks have faced in generating enough capital to effectively serve their communities.

Black-owned and -led banks have long been caught in a difficult cycle: They tend not to have enough money to lend to help their communities build wealth, and the resulting dearth of wealth-building opportunities diminishes the money available to flow into the banks. Efforts to remedy that include the grass-roots #BankBlack movement - as well as the merger announced Wednesday.

To really make a difference in high-cost markets such as L.A. and D.C., banks need to be able to write bigger checks, particularly to fund projects such as multifamily affordable housing or to finance small businesses and nonprofits, said Brian Argrett, chief executive of City First Bank. Those three areas will be the combined bank's main focuses, he said.

AFSPA Partner

Paving the Payments Future

Deferral of employment tax deposits and payments through December 31, 2020

The Coronavirus, Aid, Relief and Economic Security Act (CARES Act) allows employers to defer the deposit and payment of the employer's share of Social Security taxes and self-employed individuals to defer payment of certain self-employment taxes. These FAQs address specific issues related to the deferral of deposit and payment of these employment taxes, as well as coordination with the credits for paid leave under sections 7001 and 7003 of the Families First Coronavirus Response Act (FFCRA) and the employee retention credit under section 2301 of the CARES Act. These FAQs will continue to be updated to address additional questions as appropriate.

1. What deposits and payments of employment taxes are employers entitled to defer?
Section 2302 of the CARES Act provides that employers may defer the deposit and payment of the employer's portion of Social Security taxes and certain railroad retirement taxes. These are the taxes imposed under section 3111(a) of the Internal Revenue Code (the "Code") and, for Railroad employers, so much of the taxes imposed under section 3221(a) of the Code as are attributable to the rate in effect under section 3111(a) of the Code (collectively referred to as the "employer's share of Social Security tax").

What you need to know about the payment pause for student loan borrowers

The U.S. Department of Education has announced that most student loan borrowers don't need to resume their payments until next year.
CNBC spoke with student loan experts monitoring the program. Here's what we know so far.

Most student loan borrowers don't have to start making payments on their debt again until January 2021.

With Republicans and Democrats locked in a stalemate on the details of another coronavirus stimulus package, President Donald Trump signed an executive order earlier this month that granted people with student debt another three-month break from their bills, during which interest will not accrue.

There have been some questions over whether such a move is constitutional, but the U.S. Department of Education has now announced that it will fully implement the president's memorandum.
Read more at CNBC


US consumer confidence falls in August to lowest in 6 years

U.S. consumer confidence fell for second straight month in August to the lowest reading in more than six years as a resurgence of virus cases in many parts of the country heightened pessimism about the economy

WASHINGTON -- U.S. consumer confidence fell for the second consecutive month, sinking to the lowest levels in more than six years as a resurgence of COVID-19 infections in many parts of the country heightened pessimism.

The Conference Board, a New York research organization, reported Tuesday that its Consumer Confidence Index declined to a reading of 84.8 in August, the lowest level since May 2014.

The drop, which followed a July decline to 91.7, put the index 36% below its high point for the year reached in February, before the coronavirus began to seriously impact the United States.
Read more at ABC NEWS


Capital One cuts borrowing limits amid unemployment aid reduction

  • Capital One has cut borrowing limits on its credit cards, a sign the lender may be bracing for the impact of the reduction in government unemployment aid.
  • The credit card issuer's customers took to social media to voice frustration about the cuts, with some saying the cuts have negatively affected their credit scores. A Capital One spokesperson said customers were informed in advance, but did not share how many accounts were affected.
  • "Capital One periodically reviews accounts based on a variety of factors and may make changes to existing credit lines," a spokesperson for the nation's third-largest credit issuer said. "In this case, our decision was based on customers' account activity over the last year. All credit limits were kept significantly above the highest balance of the past year to ensure that customers can continue to use the card as they have been, and provide flexibility for future spending."

Read more at BANKING DIVE

Dreher Tomkies LLP

CFPB Updates Payday Lending Rule FAQs. by Weiner Brodsky Kider PC

The CFPB recently updated its frequently asked questions (FAQs) related to the Payday Lending Rule. The updated FAQs clarify and provide guidance on the requirements under the Payday Lending Rule.

Some of the key issues addressed in the updated FAQs include, among other things, the following:

  • Reminds lenders that the CFPB does not intend to take supervisory or enforcement action under the Payment Provisions for covered loans exceeding $58,300;
  • Clarifies that if the cost of credit at consummation is not more than 36% per year, a closed-end loan does not become a covered longer-term loan if the cost of credit later exceeds 36% per year;
  • Notes that the exclusion for real estate secured credit applies to refinance transactions if the mortgage or other security interest is perfected during the term of the loan;

Read more at JD SUPRA


What taxpayers should do if they get a letter or notice from the IRS

Every year the IRS mails letters or notices to taxpayers for many different reasons.

  • Here are some do's and don'ts for taxpayers who receive one:
  • Don't ignore it. Most IRS letters and notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do.
  • Don't panic. The IRS and its authorized private collection agencies do send letters by mail. Most of the time, all the taxpayer needs to do is read the letter carefully and take the appropriate action.
  • Don't reply unless instructed to do so. There is usually no need for a taxpayer to reply to a notice unless specifically instructed to do so. On the other hand, taxpayers who owe should reply with a payment. has information about payment options.
  • Do take timely action. A notice may reference changes to a taxpayer's account, taxes owed, a payment request or a specific issue on a tax return. Acting timely could minimize additional interest and penalty charges.
  • Do review the information. If a letter is about a changed or corrected tax return, the taxpayer should review the information and compare it with the original return. If the taxpayer agrees, they should make notes about the corrections on their personal copy of the tax return and keep it for their records.


Bureau adopts new procedures for external peer review of important research

Bureau experts conduct various types of research to develop evidence that can inform the decisions policymakers face. The strength of that evidence depends on the quality of the research. The Bureau's research is often highly technical, and therefore assessing the validity of the research can be challenging to policymakers and the public.

External peer review of research is commonly used across disciplines to enhance the quality and credibility of the research. Under peer review, a research paper is given to an expert or experts in the same field, who carefully review the work and provide a thorough and objective critique of the work. The review typically covers several facets of the research, including whether the data and methodology used in the research are appropriate for the research question and whether the conclusions drawn from the analysis are consistent with the analysis.


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Alternative Financial Service Providers Association

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