November 4, 2021
Paving the Payments Future
The Myth of the Disappearing Bank Branch

A recent report from the Federal Reserve Bank of Cleveland found that consolidation in the banking industry has not come at the expense of access for customers, as measured by proximity to full-service bank branches. Over the past 20 years, branch proximity has remained stable for urban customers and has moderately improved for rural customers.

In rural parts of the country, the average distance to a bank branch decreased from 4.6 miles in 2000 to 4.3 miles in 2020, according to the study. In urban areas, the average distance to a branch remained 1.0 mile for low- and moderate-income communities, fell from 1.8 to 1.5 miles for middle-income communities, and increased marginally from 1.6 to 1.7 miles for upper-income areas. These findings align with ABA research, which showed that most U.S. households live within commuting distance of a bank—in fact, the average American lives near 25 bank branch locations.

Mergers and acquisitions contributed to a nearly 50 percent decline in the number of banks between 2000 and 2020. However, buyers largely maintained the branch footprints of acquired institutions while focusing closures on “overlapping or redundant branches,” the study found. As a result, the average number of branches per bank has increased steadily over the last two decades, providing consumers access to larger branch networks. Similarly, the ABA Bank Access Report found that branch closures have largely been concentrated in saturated, upper- and middle-income (primarily urban) markets where branch access is widespread.

Investors expect a faster pace for Fed rate hikes, CNBC survey shows

  • The CNBC Fed Survey indicates the Fed will announce a taper Wednesday and begin hiking rates sooner than previously forecast.
  • Sixty percent believe inflation is a big enough concern that the Fed should halt all asset purchases now.
  • On stocks, the survey shows a 48% chance of a 10% downside move and a 39% chance of a 10% upside move.

Amid heightened concerns about inflation, respondents to the CNBC Fed Survey believe the Federal Reserve will announce a decision to taper Wednesday and begin hiking interest rates considerably sooner than previously forecast.

Respondents to the survey overwhelmingly forecast that the Fed will announce a decision to reduce its monthly asset purchases in the statement Wednesday and begin tapering in November. The Fed is expected to reduce its $120 billion in monthly purchases of Treasurys and mortgage-backed securities by $15 billion a month, which would bring purchases to an end by May.

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FDIC Creates New Office to Support Mission-Driven Banks

The FDIC announced today that it is creating a new office to support its engagement with mission-driven banks, including minority depository institutions and community development financial institution banks. The new Office of Minority and Community Development Banking will promote private sector investments in low- and moderate-income communities and expand collaboration with mission-driven banks.

FDIC Chairman Jelena McWilliams said that establishing the new office is part of the FDIC’s commitment to increasing financial inclusion and that “mission-driven banks are the financial lifeblood of their communities, enabling individuals and minority-owned small businesses to securely build savings and obtain credit.”

Gig workers should not be ‘credit invisible’

In recent years, the gig economy has grown to the extent that it now employs an estimated 34% of the U.S. workforce. Our reliance on gig workers was highlighted by the COVID-19 pandemic as many aspects of the traditional economy shut down.

Consumers continue to rely on these services even as economies reopen, with food delivery usage and spending both still up over 50%, according to Envestnet-Yodlee’s COVID-19 Income and Spending Trends data. However, while we need these workers, their financial needs are not being met.

Opportunities in the gig economy attract many unemployed and underemployed workers, but access to credit remains a significant hurdle for them, with traditional credit scores reliant on traditional employment. Many of these individuals fall into the category of credit builders, who are focused on seeking opportunities to raise their traditional scores. By using alternative data points alongside traditional credit scores, financial service providers can best serve our increasingly individualized, diverse, and modern economy.

What the ‘Great Resignation’ Means for the U.S. Economy

A historic 19 million Americans—amounting to roughly 12 percent of the civilian labor force—quit their jobs between April and the end of August, and many more are looking to make the jump. Nearly half of America’s workers (48 percent) are actively job searching or watching for opportunities, according to Gallup, up from 46 percent in 2019. The trend isn’t just prevalent in one industry; workers in all job categories, from customer service roles to highly professional positions, indicate they were looking to make a switch.

Who is quitting?

Resignations are apparent in all worker age groups. While younger workers have historically had the highest turnover rates; since 2020, mid-career employees have seen the greatest increase in resignations. The Harvard Business Review found that this age group saw an average increase of more than 20 percent in resignations over the year. Many factors could have attributed to this jump in mid-career employee resignations, including the shift to remote work leading to demand for more experienced workers. There is also a chance that uncertainty caused by the pandemic led many to hold off a previously desired job transition until summer 2021.

Is Your State Saving for the Next Downturn?

States’ Financial Reserves Estimated to Surpass Pre-Pandemic Levels

Unprecedented federal aid and smaller-than-anticipated tax revenue shortfalls have allowed the majority of states to avoid tapping their rainy day funds since the outset of the pandemic-driven recession in early 2020. After a one-year dip, states’ combined fiscal cushion—counting rainy day funds and leftover budget dollars—was expected to spring back and exceed pre-pandemic highs by the start of this budget year.

The 50-state total of rainy day funds fell temporarily in fiscal year 2020 when some states relied on their reserves to cope with the public health emergency and recession set off by the coronavirus pandemic. But states estimated that they would end fiscal 2021 with enough money collectively set aside in savings to eclipse their pre-pandemic highs, according to preliminary figures reported to the National Association of State Budget Officers (NASBO) between March and May 2021, just before the last fiscal year ended in June for most states. Estimates for 2021 and related rankings are subject to revision.

6 budget hacks to get your financial life on track

The idea of making a budget may make your eyes glaze over.

Yet it is fundamental to achieving financial wellness.

“It’s really hard to make any plan or progress if you don’t know where your money is going,” said Chris Browning, creator and host of the podcast Popcorn Finance. In his short-form podcast, Browning discusses finance topics such as investing and managing your money in about the time it takes to make a bag of popcorn.

“Refer to it as something else if you don’t like the word,” he said, of a budget.

Can You Use a Credit Card at an ATM?

There could be many reasons you might want to use a credit card at an automated teller machine (ATM). Perhaps you've run into unexpected car repairs or another emergency that requires funds you don't have in your bank account. Maybe your child has an expense that you are unable to cover. Whatever the reason for using a credit card to make a cash withdrawal, it's essential to understand what you're getting into. Here, we'll cover the ins and outs of dropping by your local bank or credit union for a cash advance and offer options that can save you money.

The short answer is yes, you can use a credit card at nearly any ATM to withdraw cash. Whether the ATM is at a bank, credit union, or other financial institution, ATMs are set up to allow you to conduct all kinds of business, including using a credit card to take out a cash advance.

Before you pull out the plastic, though, keep reading. There are things about using a credit card to take a cash advance at an ATM that you'll need to understand. Once you know everything there is to know about cash advances, you'll be in a far better position to make an informed decision.

Fintech lender Enova says CFPB probing loan processing

(Reuters) - The U.S. Consumer Financial Protection Bureau is investigating loan processing issues at fintech lender Enova International Inc, the company said on Thursday.

Enova self-reported several unspecified issues and is cooperating with the regulator and repaying customers, the company said in an earnings announcement Thursday.

The Chicago-based financial technology company offers payday loans and other consumer and business loans. The company has settled with the CFPB before.

During an investor call on Thursday, CEO David Fisher expressed hope of wrapping up the investigation quickly.

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