July 16, 2020
AFSPA Partner


States Where People Need Loans the Most

The coronavirus pandemic has deeply disrupted the U.S. economy, which in turn has hurt the incomes of many Americans. Businesses have been forced to lay off workers as they struggle to survive, and even though the job market has begun to improve, the unemployment rate still sits at 11%. In addition, while all state economies are now at least partially reopened, some states have paused further reopening due to spikes in COVID-19. It will take a long time to reverse the economic damage done by coronavirus, and consequently many Americans need to borrow money to stay afloat.

Americans who are having trouble with their finances during the COVID-19 pandemic are searching for all sorts of options to relieve the pressure, from home equity loans to payday loans. However, people's interest in getting these types of loans varies from state to state. In order to determine the states where people are searching for loans the most during the pandemic, WalletHub compared the 50 states and the District of Columbia across four key metrics. These metrics combine internal credit report data with data on Google search increases for three loan-related terms.
Read more at WALLETHUB

AFSPA Partner


Despite a massive recession, JPMorgan Chase just posted record revenue - here's how the bank did it

  • JPMorgan posted a record $33.8 billion in second-quarter revenue because of shrewd moves made under CEO Jamie Dimon to build up its investment bank in the years after the financial crisis.
  • Surging volatility and unprecedented steps taken by the Federal Reserve to support credit markets have created the best environment for trading and advising on debt and equity issuance in years.
  • JPMorgan's corporate and investment bank posted a record $5.5 billion profit for the second quarter, which is more money than most entire banks typically generated before the coronavirus pandemic.
  • The bank's Wall Street division helped offset losses in two of JPMorgan's four main businesses, its consumer and commercial bank, as the firm set aside $8.9 billion for expected loan defaults across its operations.

Read more at CNBC


Payday and title loans are even more essential during the COVID-19 pandemic. 
by Jennifer Robertson is the chief executive officer of Checkmate

Opinion: The COVID-19 pandemic has created a financial crisis that especially affects those in Arizona without bank accounts. This is where we come in.

Arizona is home to more than 550,000 small businesses, each affected in different ways by the novel coronavirus pandemic. The recent surge in COVID-19 cases demonstrates that the virus knows no boundaries on who it affects, when it strikes and where it ultimately takes us.

For the time being, we have to be especially attentive to communities that are underserved or unserved - from broadband penetration to health care access and from access to stores serving healthy foods to banks providing financial services. Communities that do not possess proximity to these critical services risk not only being left behind, but further harm, particularly economic, during this crisis.

A critical concern is the plight of the underbanked and unbanked in our communities.
Read more at AZCENTRAL


Don't use coronavirus as excuse to close branches, OCC says

  • Banks should not be using the coronavirus pandemic as a cover to shutter branches, the acting head of the Office of the Comptroller of the Currency (OCC) told the Financial Times.
  • Brian Brooks, who took over as acting comptroller at the end of May following the departure of Joseph Otting, said existing rules governing branch closures would remain in place, and banks should not expect to see a permanent extension of certain rule relaxations related to COVID-19.
  • "I don't believe this is the worst thing that's ever happened in the history of the Republic and so therefore I'm not prepared to revisit the fundamentals of bank regulation," Brooks told the publication.

Read more at BANKING DIVE


Wells Fargo may start cutting tens of thousands of jobs this year

  • Wells Fargo is drafting plans that could cut tens of thousands of jobs starting this year, people familiar with confidential talks told Bloomberg. Executives haven't decided on a specific number, one of the people said. A source confirmed the possible cuts to the Financial Times, but said no decision had been made. The bank declined to comment Thursday.
  • Wells was among several U.S. banks in March to commit to halting any planned layoffs as the coronavirus pandemic took hold. But while Morgan Stanley and Bank of America, for example, pledged to forgo any staff cuts for all of 2020, the nation's fourth-largest bank was more measured. "We have paused initiating new displacements," Beth Richek, a Wells Fargo spokeswoman, said in March. "We will continue to evaluate during this fluid situation." The bank's freeze expires this month, but may be extended, Bloomberg reported.
  • CEO Charlie Scharf, in his first quarterly earnings call at the bank's helm, said the bank may take "much of this year" to review the budget and broader business. "There are still big parts of the company where we are extraordinarily inefficient," he said. "We want to be able to think with as clean a sheet as possible about how we should be spending our money."

Read more at BANKING DIVE


Coronavirus made 36% of Americans delay financial milestones

Buying a car or house, going to college, getting married or retiring has taken a backseat during COVID-19

A little more than one in three Americans have delayed at least one major financial milestone due to the coronavirus pandemic, according to a new survey from Bankrate.

These milestones include life events such as finding a new job, buying or leasing a car, buying a home, furthering education, getting married, having children, retiring or similar activities.

Of those who are making sacrifices to preserve the health of their personal finances, millennials between the ages of 24 and 39 as well as Gen Zers between the ages of 18 and 23 were twice as likely to delay a financial milestone than their older counterparts.
Read more at FOX BUSINESS


Senators Kevin Cramer and Bob Menendez introduce The Payment Choice Act

WASHINGTON (KFGO) - U.S. Senators Kevin Cramer and New Jersey Democrat Bob Menendez and the Senate Banking Committee members, Tuesday introduced the "Payment Choice Act".

The bipartisan bill provides customers the freedom to choose how to pay for goods or services by prohibiting businesses from refusing to accept cash, posting signs that cash is not accepted, or charging a higher price for using cash.

"Businesses who prohibit cash payments discriminate against the millions of Americans who do not have bank accounts while forcing customers to exclusively use a less secure form of payment," said Senator Cramer."Our legislation protects people's right to choose their preferred currency and ensures the money we print remains usable as legal tender for all debts, just as it says."
Read more at KFGO

Dreher Tomkies LLP

Consumer bureau revokes payday lending restrictions

The Consumer Financial Protection Bureau (CFPB) on Tuesday revoked rules that required lenders to ensure that potential customers could afford to pay the potentially staggering costs of short-term, high-interest payday loans.

The bureau released Tuesday the final revision to its 2017 rule on payday loans, formally gutting an initiative with roots in the Obama administration that was aimed at protecting vulnerable consumers from inescapable debt.

The initial rule, released shortly before President Trump appointed new leadership at the CFPB, effectively banned lenders from issuing a short-term loan that could not be paid off in full by a borrower within two weeks. Read more at THE HILL


States Whose Unemployment Claims Are Recovering the Quickest

The June jobs report brought good news for American workers, as it showed that the U.S. added 4.8 million nonfarm payroll jobs during the month, exceeding expert projections. This demonstrates that the process of reopening states has had a positive impact, and many workers who were temporarily laid off while their employers remained closed are now being rehired. However, some states are temporarily pausing their reopening processes due to COVID-19 spikes, which is necessary but may slow down job growth in the near future. There are still 17.8 million Americans unemployed due to the COVID-19 pandemic in total. Last week, there were 1.3 million new unemployment claims nationwide, compared to 6.9 million during the peak of the pandemic (an 81% reduction).

To identify which states' workforces are experiencing the quickest recovery from COVID-19, WalletHub compared the 50 states and the District of Columbia across three metrics based on changes in unemployment claims. Read on for the results, additional commentary from a panel of experts and a full description of our methodology.
Read more at WALLETHUB


Joe Biden's policy roadmap aims to create a new, federally-backed credit bureau to close the racial wealth gap

Americans may see the formation of a new federally-backed credit bureau if former vice president and presumptive Democratic presidential nominee Joe Biden is elected in November, thanks to the efforts of a task force appointed by Biden and Vermont Senator Bernie Sanders in May.

This week, the task force of Democrats presented Biden with a 110-page document of policy recommendations. NBC News first reported on the policy wish list on Wednesday. Although the document contains a wide range of initiatives from health care to immigration, the policy recommendations also focused on ways the U.S. can work to close the racial wealth gap, including creating a more level playing field when it comes to credit reporting.
Read more at CNBC


Citi profit falls 73% as bank sets aside $7.9B over loan concerns

  • Citi's second-quarter profits fell 73% but were buoyed by a 68% jump in fixed-income trading, the bank reported Tuesday. The swell in trading marked a familiar pattern for the nation's third-largest bank, which reported a 49% increase in the category during last year's fourth quarter and a 39% bump in this year's first to give the segment its best quarterly result in eight years.
  • The bank set aside $7.9 billion in the quarter for loan losses. That breaks down to $5.7 billion added to the bank's reserves and $2.2 billion in net write-offs. The reserve figure outpaces the $4.9 billion the bank reserved during the first quarter.
  • Credit card spending, however, suffered a 24% drop as the pandemic kept consumers home and saving money. It marked a continued decline - the bank saw a 30% decrease in card spending in the last week of March - in a usually reliable business segment for the world's largest card issuer. Card balances slumped 7.4%.

Read more at BANKING DIVE



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