ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
December 30, 2021
Paving the Payments Future
To Keep Americans from Falling off an Economic Cliff, We Need to Fix Overdrafts

As state and federal aid programs wind down, millions of economically vulnerable Americans face an uncertain financial future. For example, the Consumer Financial Protection Bureau (CFPB) warns that renters—which make up 30% of the U.S. population— are at risk of “falling off an economic cliff.” This is partly because of a close correlation between their financial stability and changes in stimulus payments and unemployment benefits.

With past due bills piling up and income dwindling, many Americans may no longer be able to afford traditional banking services—or worse, their negative payment histories could put them on the banking deny list permanently. In 2019, 6% of U.S. households, or 14.1 million adults, were unbanked, and rates were on the decline. But this wasn’t the case in vulnerable communities, where 19% of households making less than $30,000 annually were unbanked (compared to 2.4% of households making more than $30,000 annually). On top of that, 18.7% of U.S. households were underbanked. Importantly, these 2019 figures don’t take the effects of the pandemic into account.

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Raising rates would be a positive event for the U.S. economy, New York Fed’s Williams says

“I go into next year feeling [like] the baseline outlook is a very good one. Therefore, actually raising interest rates would be a sign of a positive development in terms of where we are in the economic cycle,” said New York Federal Reserve President John Williams.

His comments came after the Fed signaled earlier this week that it sees as many as three rate hikes in 2022.

The central bank also said this week it would aggressively dial back its bond-buying program.

Green Dot, PayPal helped Secret Service recover more than $400M in stolen COVID-19 relief funds

Criminals have swindled nearly $100 billion through fraudulent applications since the start of the pandemic in the U.S., the agency said this week.

Criminals have swindled nearly $100 billion through fraudulent COVID-19 relief applications since the start of the pandemic in the U.S., the Secret Service said Tuesday in a press release.

Investigations by the Secret Service into unemployment insurance and Small Business Administration (SBA) loan and grant programs have recovered $2.3 billion in stolen funds so far. Roughly 100 people have been arrested in connection to such crimes, the agency said.

Tuesday's release dovetails with the Secret Service's appointment of Assistant Special Agent in Charge (ASAIC) Roy Dotson as national pandemic fraud recovery coordinator.

Lawmakers Press Biden to Push Big Tech Regs

President Joe Biden is facing pressure to get more into the fight over regulating social media and online platforms, The Wall Street Journal reports.

Both parties’ lawmakers are working on legislation about things like online privacy and child safety, transparency regarding data collection, accountability for content posted and market dominance.

Big tech companies are likely to oppose the laws. Democrats have usually been the party pushing for harsher regulations for things like harmful content, while Republicans advocate for lighter touches and have been against things that could restrict speech.

Upping the stakes is the fact that Republicans have the potential to win back some of the government houses this year during the U.S. midterm elections.

Wells Fargo postpones office return indefinitely

Tuesday's move marks the fifth delay to the bank's timeline since August. Wells is not alone in resisting setting a new target date. Capital One gave up on that in October.

Wells Fargo on Tuesday became the largest U.S. bank to indefinitely postpone its office-return plan, according to a statement seen by Bloomberg and Reuters.

Employees will receive further details on the bank’s plans in 2022, the statement said.

Tuesday’s move marks the fifth delay since August to Wells Fargo’s timeline for large-scale office reopening. The bank in September set a Jan. 10 mandatory return date for employees supporting business lines, among others.

Online Lenders Alliance (OLA) Issues Updated Best Practices To Guide Short-Term Lending Industry, Set Industry Standards And Improve Borrower Outcome

ARLINGTON, Va. (December 16, 2021)—The Online Lenders Alliance (OLA) today issued updated guidance, known as the OLA Best Practices, for companies in the online short-term, small-dollar credit industry. These Best Practices ensure that consumers are able to access the trustworthy credit they need in a fair, transparent, and responsible way. Members of the Online Lenders Alliance are required to strictly adhere to the guidelines, although OLA encourages all companies—members and nonmembers alike—to abide by their standards for the industry.

“As our industry grows and evolves, so too must the standards that we set for it,” said Andrew Duke, CEO of the Online Lenders Alliance. “OLA’s Best Practices have long covered how our members market loans, communicate with customers, process payments, protect consumer information, collect on accounts, and originate new loans with a high level of standards that ensure fairness and transparency for borrowers. Our updated best practices, which were developed with input from the Financial Health Network, enhance our efforts with new standards focused on improving borrower outcomes.

Ten tips to lower your federal income tax bill before 2021 ends

It's the last week of the year, which means it's your last chance to save big on taxes. By donating to charities or changing your investments, you could save thousands in tax liability.

Here are 10 end-of-the-year tax tips, courtesy of TurboTax CPA and tax expert Lisa Greene-Lewis:

1. Defer bonuses
If your hard work paid off and you expect a year-end bonus, this extra money may bump you up to another tax bracket and increase the amount of taxes you owe, according to Greene-Lewis. To avoid that, you may want to consider delaying the extra income until the beginning of next year, Greene-Lewis says.

Fed signs off on 3 mergers, but several still remain in limbo

First Citizens and CIT may find relief in their green light, but for other banks such as Old National, the wait is not over.

The Federal Reserve on Friday signed off on three proposed bank mergers: Connecticut-based Webster Bank’s $5.1 billion all-stock acquisition of Sterling Bancorp; Delaware-based WSFS Financial’s $976.4 million purchase of Pennsylvania’s Bryn Mawr Trust; and the $2.2 billion merger between First Citizens BancShares and CIT Group.

The approvals come at a time when the lack of a green light — particularly from the Fed — has delayed a number of deals. When First Citizens and CIT announced their proposed tie-up in October 2020, the banks estimated it would be complete in the first half of this year. The Fed and the Federal Deposit Insurance Corp. (FDIC) in January each extended their public comment period on the merger "in light of the ongoing challenges from the coronavirus." That, in turn, pushed the expected completion time frame to Oct. 15. 

ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION
Alternative Financial Service Providers Association
757.737.4088
315 Tuscarora St., Lewiston, NY 14092