January 27, 2022
Paving the Payments Future
U.S. banks close 2,927 branches in 2021, a 38% jump

  • Banks across the country shuttered a record 2,927 branches in 2021, according to an S&P Global Market Intelligence report published Thursday.
  • The net number of branch closures jumped 38% last year, from 2,126 in 2020 — itself a previous record.
  • Wells Fargo, with 267, reported more net closures than any other bank in the U.S., followed by U.S. Bank at 257.

It’s National #EITC Awareness Day:
Have you told your employees about the Earned Income Tax Credit?
Here are some #IRS ideas:

Have a tax law question?
Our #IRS Interactive Tax Assistant has answers.
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Is Rent-To-Buy the Next Hot Market? Wall Street Thinks So

Private equity powerhouse Blackstone recently poured $6 billion dollars into one of the biggest bets on suburbia in recent history. In July of 2021, Blackstone purchased America’s largest rent-to-buy (RTB) company, Home Partners, which owns 17,000 houses across the country. The rent-to-buy model has been around for years, but with Main Street now putting real money into this financial model, it could shift the consumer real estate market — and change the path to homeownership for average Americans.

The model is simple enough. Companies gobble up thousands of homes and put them on the market as “rent-to-buy” — meaning you enter the home as a renter, but with the option to buy the property outright from the owner — or owning company — at a future date.

With skyrocketing demand for homes and waning inventory, the rent-to-buy model became very popular during the pandemic. President of digital real estate platform Home Qualified, Ralph DiBugnara, told GOBankingRates in a note he believes that investment banks are betting on the rent-to-own model because of the increased focus on single-family home rentals, as well as the expressed strategy to make a higher rate of return on related investments.

CFPB Releases Report on Diversity and Inclusion within Financial Services

Today the Bureau’s Office of Minority Women and Inclusion (OMWI) released the CFPB Report on Diversity and Inclusion within Financial Services. As part of the mandate of Section 342 of the Dodd-Frank Act, the Bureau’s Office of Minority and Women Inclusion (OMWI) is charged with developing standards for assessing diversity and inclusion at the financial entities the Bureau regulates. To further that effort, CFPB engaged in analysis of public data to gain a better understanding of diversity and inclusion within the financial services sector and compiled a report to share its findings. The Report can help industry understand more about diversity and inclusion initiatives that their peers are undertaking and the various options available to entities of different sizes.

Dr. Martin Luther King Jr. had a dream of racial and economic equality. In his 1964 Nobel peace prize address he stated “There is nothing new about poverty. What is new, however, is that we have the resources to get rid of it.” The CFPB’s latest report on diversity and inclusion within financial services highlights the activities that financial institutions have engaged in to advance diversity, equity, and inclusion. Building a diverse team that reflects all consumers ensures that an organization has an understanding of the needs of the entire community. We encourage you to review the report and its data to gain an understanding of the public facing and reported internal diversity, equity and inclusion programming at financial institutions. Based on the research and analysis, the Bureau has outlined recommendations for large, midsize and small institutions.

Top Two Workplace Predictions For 2022: Why Personal Finance Will Play A Key Role In Hiring And Retention

Unfortunately, for employers, experts are predicting that the hiring challenges of 2021 could persist in 2022. A recent report from Glassdoor asserts the unlikelihood that the economy will quickly return to the point where it’s easy for employers to hire, noting that companies will likely continue on the slow path to bring workers back into the labor force. The report concludes that the multitude of available jobs will continue to encourage a reshuffling of talent. This trend coupled with the persistence of the pandemic, the limited availability of retirees and working parents, and the rapid recovery in consumer demand will make hiring a challenge.

As employers prepare for another year impacted by the “Great Resignation,” it’s important to prioritize the employee experience as a way to attract and retain workers. In my opinion, two key predictions will reign true: Inclusive benefits will become a priority and personal finance offerings will be critical to helping employees deal with the ongoing economic impact of the pandemic.

How the Pandemic Could Affect the Rise in Student Debt

Trends in enrollment, tuition, and families’ ability to pay for college could indicate a departure from past recessions

Spikes in borrowing from the federal government during or closely following recessions in the past three decades have played a key role in the country’s upward march in federal student loan debt.1 The economic crisis spawned by the COVID-19 pandemic may leave a different legacy, however.

Student debt levels were already pronounced before the pandemic hit, with $91.1 billion in annual federal student lending in 2019-20, up from $20.7 billion in 1990-91. Over that same period, per-student borrowing rose from $2,110 to $6,276, after adjusting for inflation. (See Box 1 for more information on how debt levels are defined in this analysis.)

The Great Recession provides the most recent example of a surge in borrowing following the onset of a downturn. Total annual student loan borrowing from the federal government increased by over $40 billion, or 47%, when adjusted for inflation, from 2008 to 2011.2 Federal debt also rose for many students, with per-student borrowing increasing by $1,713, or 27%, over the same period.3

Car title loans: What they are and how they work

All loans come with risks if they're not repaid on time. However, a car title loan carries an especially troubling consequence if you fail to meet your payment obligations: The lender can take your vehicle.

Before you consider getting a title loan, consider the potential drawbacks of using your vehicle as collateral to borrow money.

What is a title loan?
A car title loan allows you to borrow anywhere from 25 percent to 50 percent of the value of your vehicle in exchange for giving the lender the title to your vehicle as collateral. These short-term loans generally last for 15 to 30 days. In many cases, in order to obtain the loan, you will need to own your car outright. There are some lenders who will provide this type of loan if your vehicle is nearly paid off, but this is less common.

Three tax changes to know before filing your return

2021 unemployment benefits will be subject to tax

The 2022 tax season is underway and marks the third straight tax season disrupted by the pandemic. 

Before the first returns were even submitted to the Internal Revenue Service (IRS), the agency told families and businesses to be prepared for a bumpy tax filing season. IRS Commissioner Chuck Rettig said earlier this month that "in many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me."

Unfortunately for taxpayers, they cannot forego participating in this tax filing season, which runs until April 18th for taxpayers in most states.

Consumer Financial Protection Bureau to Examine Colleges’ In-House Lending Practices

CFPB Publishes Oversight Protocols for Institutional Student Lending

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) announced it will begin examining the operations of post-secondary schools, such as for-profit colleges, that extend private loans directly to students. The CFPB is issuing an update to its exam procedures including a new section on institutional student loans. As the CFPB begins its supervision, the exam procedures inform industry about practices that CFPB examiners will review, including placing enrollment restrictions, withholding transcripts, improperly accelerating payments, failing to issue refunds, and maintaining improper lending relationships.

“Schools that offer students loans to attend their classes have a lot of power over their students’ education and financial future,” said CFPB Director Rohit Chopra. “It’s time to open up the books on institutional student lending to ensure all students with private student loans are not harmed by illegal practices.”

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