June 8, 2021
The Gateway For Payroll Data
US economy 'roughly' at pre-pandemic levels as America winning war with COVID: Bank of America CEO

Bank of America CEO Brian Moynihan credited vaccinations, government intervention and the private sector

Bank of America CEO Brian Moynihan believes that the United States is "starting to win the war" against COVID-19, with the economy reaching "roughly" pre-pandemic levels.

The economy shrank considerably during the pandemic, contracting by about 3.5%: More than 400,000 small businesses closed, and some Americans had to rely on stimulus checks to make some purchases. 

Moynihan said during an appearance on CBS show "Face the Nation" that vaccination efforts and reopening businesses has provoked a strong response from the economy.

"Spending is up dramatically," Moynihan said. "Car rentals, hotels for leisure, travel, not business travel yet – that will probably be late this fall – is strong, theme park bookings and things like that."

Paving the Payments Future
Ally Bank Removes Overdraft Fees for Roughly 3.6M Accounts, Won't Use Them Going Forward

Amid an intensifying public backlash against banks charging overdraft fees during a global economic and public health crisis, Ally Financial announced it will end overdraft charges across its bank products, the Associated Press reported.

The decision is a significant one for Ally, one of the largest banks in the U.S., as well as the industry as a whole. About 3.6 million checking, savings and money market accounts will be affected, according to a bank spokesman.

Overdraft fees are a major source of revenue for banks, one that critics say primarily affects poorer Americans who can't afford to pay for overdrawing accounts. But Ally said it doesn't expect much of a detriment on the company's full-year profit forecasts.

Politicians, activists and consumers have fought for the end of overdraft fees for years, but the calls have escalated during the pandemic, which has devastated many Americans financially. The banking industry pocketed more than $12 billion in overdraft fee revenue in 2020 alone, according to industry research.

IRS sending letters to more than 36 million families who may qualify for monthly Child Tax Credits; payments start July 15

WASHINGTON — The Internal Revenue Service has started sending letters to more than 36 million American families who, based on tax returns filed with the agency, may be eligible to receive monthly Child Tax Credit payments starting in July.

The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March. The letters are going to families who may be eligible based on information they included in either their 2019 or 2020 federal income tax return or who used the Non-Filers tool on last year to register for an Economic Impact Payment.

Eligible families should file tax returns soon

Big Banks Could Approve You for Credit Without a Credit Score

A pilot program will review information from deposit accounts to expand access to credit.

A new federally backed program featuring some of the nation's biggest banks aims to help you open a credit card even if you have no credit score.

Banks such as JPMorgan Chase, Wells Fargo and U.S. Bancorp could begin a pilot program this year that evaluates information from applicants' checking and savings accounts to increase the chances of card approval, according to The Wall Street Journal. The goal is to help underserved but financially responsible Americans gain access to credit.

About 45 million Americans may be denied credit because they lack credit records and are "credit invisible," according to the Consumer Financial Protection Bureau. Those without credit scores will typically pay with cash or debit cards.

Addressing racial inequities in consumer finance markets

Over the last year, our country has faced many significant challenges, including the COVID-19 pandemic, the murder of George Floyd, and other acts of violence and racism. As a result, our nation has started a critical and long overdue conversation around race and equity.

The COVID-19 pandemic has created economic and financial insecurity for millions of Americans. Communities of color have disproportionately borne the impact both in terms of health and the resulting financial crises. For example, women- and minority-owned small businesses faced more severe economic consequences than their White counterparts, and Black and Hispanic homeowners were less likely to receive mortgage relief and forbearance. Across all racial and ethnic groups, including White Americans, economically vulnerable consumers, face challenges in accessing the help they need now.

As Acting Director of the Consumer Financial Protection Bureau, my top priorities are to take bold and swift action to address issues of pervasive racial injustice and the long-term economic impacts of the COVID-19 pandemic on consumers. Growing opportunities for those who have historically been denied them increases opportunity for everyone.

Big bank CEOs are open to the idea of a federal 36% interest rate cap on consumer loans

The heads of major U.S. banks on Wednesday expressed tentative support for a federal interest rate cap on consumer loans, which would likely include payday and auto title loans. 

During a Wednesday hearing held by the Senate Committee on Banking, Housing, and Urban Affairs, Senator Jack Reed, D-R.I., asked the CEOs of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Wells Fargo if they would support a 36% cap on interest rates on consumer loans like payday loans. 

The bank CEOs did not immediately reject the idea. “We absolutely don’t charge interest rates that high for our customer basis,” Citi CEO Jane Fraser said in response to Sen. Reed’s question. She added that Citi would like to have a look at the law, just to make sure there are no unintended consequences to it. “But we appreciate the spirit of it and the intent behind it,” she said. 

In Early Results, COVID-19 Appears to Have Little Impact on Retirement Preparation and Withdrawals

Survey of near and recent retirees reveals few planning changes to date

Even under relatively normal conditions, planning and preparing for retirement—estimating how much to save and when to retire—are difficult. These decisions can be further complicated in times of economic uncertainty. And unforeseen health concerns or family circumstances may lead someone to retire earlier than planned.

Now the COVID-19 pandemic and its ongoing financial and health fallout have exacerbated a challenging retirement picture for many Americans, leading to two questions: Has the pandemic changed the savings behavior of retirement plan participants? And are workers delaying retirement because of the pandemic?

Americans closest to retirement have been affected by the pandemic’s economic consequences differently from younger generations: After then-President Donald Trump declared the pandemic a national emergency in March 2020, the unemployment rate for workers age 65 or older peaked at 15.6% in April 2020, the highest rate recorded for this group since record-keeping began in 1948. This exceeded the rate of unemployment for those ages 25 to 54 by 3 percentage points, the largest gap between these groups ever recorded.1

Manufactured Housing Loan Borrowers Face Higher Interest Rates, Risks, and Barriers to Credit, New CFPB Report Finds

Consumers tend to be rural and lower income, and those who do not own the underlying land have the greatest challenges

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) published a report that provides new insights into manufactured housing financing, a vital source of lending for millions of manufactured housing homeowners. Manufactured housing is a small segment of the overall housing supply, but it is one of the most affordable types of housing available to low-income consumers and makes up 13% of the housing stock in small towns and rural America. Those low acquisition costs, however, often come coupled with higher interest rates and limited opportunity to refinance. Consumers who do not own the underlying land are more likely to see their homes depreciate and have fewer protections if they fall behind on payments. These factors combined can make this affordable housing a potentially risky avenue for homeownership. The CFPB’s report uses new information collected under the Home Mortgage Disclosure Act to shed light on the experiences of these often-overlooked families.

Yellen says higher interest rates would be 'plus' for US

Treasury secretary says interest rates have been 'too low now for a decade'

Treasury Secretary Janet Yellen said that President Joe Biden's $4 trillion spending plan would be good for the U.S., even if it contributes to rising inflation and results in higher interest rates, Bloomberg News reported.

"If we ended up with a slightly higher interest rate environment it would actually be a plus for society's point of view and the Fed's point of view," Yellen said in an interview with the outlet on Sunday. 

"We've been fighting inflation that's too low and interest rates that are too low now for a decade," the report quoted Yellen as saying.

"We want them to go back to" a normal interest rate environment, "and if this helps a little bit to alleviate things then that's not a bad thing- that's a good thing," Yellen added.

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