March 29, 2022
Paving the Payments Future
The State of Low-Income America: CREDIT ACCESS & DEBT PAYMENT

As the COVID-19 pandemic enters its third year, the financial lives of low-income Americans are in flux. By several measures, economic conditions look promising for low-income households in early 2022. Last year was the strongest year of economic growth since 1984. The Supplemental Poverty Measure, which includes food and housing assistance (and in 2020 also included COVID-19 relief checks) fell 2.6 percentage points in 2020—to 9.1%. The job market also posted strong gains, with overall employment nearing its pre-pandemic level by December 2021.

Yet aggregate statistics mask the heavy toll the pandemic has taken on lower-wage workers and the uncertainty that lies ahead. Low-income communities and communities of color experienced disproportionate physical and economic harm from the COVID-19 pandemic. Data from the Centers for Disease Control show that infection rates and the risk of serious illness were higher among these populations.2 As the health crisis prompted shutdowns and prolonged economic uncertainty, it exacerbated preexisting inequalities. The unemployment rate rose in April 2020 to a level not seen since the 1930s, and the impact was larger for low-wage workers in 2020, who lost jobs at five times the rate of middle-wage workers, while high-wage employment increased.3,4 And although the unemployment rate has largely returned to pre-pandemic levels, inflation appears to be eating into purchasing power among lower-wage earners. 

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CFPB Director Chopra Statement on President Biden’s Digital Assets Executive Order

WASHINGTON, D.C. — Today, CFPB Director Rohit Chopra released the following statement on President Biden’s Executive Order , Ensuring Responsible Development of Digital Assets:

“Today’s Executive Order recognizes that the dramatic growth in digital asset markets has created profound implications for financial stability, consumer protection, national security, and energy demand. The Consumer Financial Protection Bureau is committed to working to promote competition and innovation, while also reducing the risks that digital assets could pose to our safety and security. We must make sure Americans in all financial markets are protected against errors, theft, or fraud.”

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New effort focused on financial issues facing rural communities

The Consumer Financial Protection Bureau has launched a new initiative to focus on financial issues facing rural America. Our effort will initially focus on rural banking deserts, discriminatory and predatory agricultural credit, and manufactured housing.

There is no single rural America–from Appalachia and the Deep South to rural Alaska, rural places have a wide range of diverse people, economies, and ways of life. Rural people are deeply committed to the places they live, but face real challenges in accessing reliable services and good jobs, keeping up with household expenses, maintaining farming, and finding affordable housing.

It is well known that larger economic trends have uniquely affected rural communities over the past several decades. The number of jobs in rural areas have still not fully recovered from the shock of the 2008 financial crash and job growth in rural areas has been less than a third of the rate of job growth in urban areas.

This Is the Ideal Number of Bank Accounts To Have, According To Experts

It’s common knowledge, at least in the U.S., that you should have a bank account to keep your money in a safe, secure place. Having multiple bank accounts can help you keep things separate, making it easier to keep track of your financials. Today, with more people working online and being paid through direct deposit or a service like PayPal, bank accounts are more essential than ever.

Even after you open your first bank account, though, you can probably still improve your overall banking strategy. The digital age has brought us high-yield online savings accounts, allowing people to stash their savings in a separate account that is insulated from their daily spending.

Many experts recommend taking things even further. Why not have three or even four bank accounts? If you are familiar with the budget envelope method, this is sort of a variation of that. If you seldom use paper money these days, having multiple accounts allows you to separate your budget into different buckets, each having its own purpose. Let’s examine.

Most in the U.S. say young adults today face more challenges than their parents’ generation in some key areas

About seven-in-ten Americans think young adults today have a harder time than their parents’ generation when it comes to saving for the future (72%), paying for college (71%) and buying a home (70%), according to a Pew Research Center survey conducted in October 2021. These findings come at a time when younger Americans are more likely than previous generations to have taken on student debt with tuition costs steadily rising, and to face an affordable housing crisis as rent and housing prices have grown markedly faster than incomes in the last decade.

There’s less consensus when it comes to assessing labor market outcomes for young people today compared with their parents’ generation. Similar shares say finding a job is easier (40%) as say it is harder (39%) for young adults today. A smaller share of U.S. adults (21%) say it’s about the same.

When it comes to finding a spouse or partner, Americans are more than twice as likely to say younger adults today have it harder than their parents’ generation (46%) than to say they have it easier (21%). Around a third (32%) say it’s about the same.

CFPB Extends Opportunity for Public to Provide Input on Junk Fees

We have received a tremendous amount of feedback from our Request for Information on exploitive junk fees. The more than 25,000 comments we have received through mid-March show the high-level of public interest on this topic, and the number of people affected by exploitative junk fees. We are extending the deadline for the public to share input and stories on their experiences with exploitative junk fees through April 11, 2022.

In January, we launched an initiative to save American families billions of dollars in junk or back-end fees. These fees impede competition by making it difficult for families to shop around based on the actual cost of a product or service.

We want to hear from stakeholders – including consumers and small business owners – from across the financial marketplace about their experiences with fees associated with financial products and services, including:

CFPB's overdraft fee research refuted by CBA president: 'Not backed by reality'

CBA says CFPB should focus on the value overdraft services bring to consumers

The president of the Consumer Bankers Association (CBA) accused the Consumer Financial Protection Bureau (CFPB) of making "unsubstantiated claims" about overdraft fees after the federal agency released research on how much banks have relied on such charges over the last six years.

Richard Hunt, who also serves as the trade organization’s CEO, claimed in a January 26 statement that the CFPB’s December 2021 findings were an attempt to alarm consumers.

"This is fuzzy math at its best and political theater at its worst, and another attempt by the Bureau to fearmonger without any credible data to back it up," Hunt said in the statement.

The CFPB’s research found that revenue from overdraft fees and non-sufficient funds in 2019 was estimated at $15.47 billion, and the agency’s director said that banks have become reliant on such fees "to feed their profit model" rather than focus on customer service.

Study: Only 14% of Young Consumers Favor Credit Unions

When it comes to the bank versus credit union (CU) debate, it’s clear where the loyalty of younger consumers lies.

A PYMNTS survey found younger consumers show a stronger preference for national banks than for CUs.

There’s a bright spot here for CUs, however, as more consumers between the ages of 18 and 24 use CUs than those 24 to 34 and 35 to 44, meaning CUs have an opportunity to see a comeback with the youngest generation of banking customers.

The survey showed that the greatest preference for CUs can still be found among baby boomers and seniors, with 60% of those ages 65 and older reporting CU membership.

In addition, 54% of those respondents between 55 and 64, and 35% of those between 45 and 54, are CU members, while just 19% of consumers ages 35 to 44 and 14% of those ages 25 to 34 said they turn to CUs for their banking.

How one credit bureau decision could improve your credit score by 100 points

ROCHESTER, N.Y. (WHEC) — I’m taking an in-depth look at an issue that could have a direct effect on whether you're able to buy a car or a home—your credit score. Leaders with Equifax, Experian and TransUnion announced Friday that paid medical debt will no longer be a stain on your credit report.

It's huge, so big that this move could mean that if you've paid off a medical debt that went to collections, you could improve your credit score by a hundred points. That could mean the difference in you getting that new car loan or being denied.

I know a thing or two about medical debt. I've had cancer four times. And I'm not the only one who has worked for years to pay off medical debt. According to the Consumer Finance Protection Bureau 43 million Americans owe a collective $88 billion in medical debt.

"I could definitely see someone with otherwise strong credit losing 100 points or more just because of a medical collection,” said Ted Rossman, Senior Industry Analyst for

Robocall Facilitators Must Cease and Desist

“There are far too many phone companies that count illegal robocallers among their clients, and that’s bad business. It is illegal to allow these junk calls to flood consumers’ phones, and there are consequences for phone companies that do not take immediate action to stop participating in these schemes.”
– FCC Chairwoman Jessica Rosenworcel

The FCC Enforcement Bureau issued warnings to voice service providers that have apparently transmitted illegal robocalls on their networks. Recipients have 48 hours to stop facilitating this traffic or face all their traffic being blocked by other providers. The FCC has carefully constructed the tools necessary to take swift and impactful action against bad actors – this means not only possible fines when violations occur, but also business consequences for those removed from the Robocall Mitigation Database. To date, all recipients have quickly responded and committed to take actions to stop the flow of robocalls on their networks. That said, the FCC and its partners remain vigilant in monitoring these – and all – providers’ efforts to ensure unyielding compliance with consumer protection requirements going forward.

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