January 28, 2021
The Gateway For Payroll Data
Janet Yellen asks Congress to do more to fight pandemic-induced recession

WASHINGTON — Treasury Secretary nominee Janet Yellen is calling on Congress to do more to fight a deep pandemic-induced recession, saying the threats of a longer and even worse downturn are too great to cut back on support now.

“Without further action, we risk a longer, more painful recession now — and long-term scarring of the economy later,” Yellen said in testimony prepared for her confirmation hearing Tuesday before the Senate Finance Committee.

Yellen, who will be the first female treasury secretary in the nation's history, is expected to have little trouble winning approval in a Senate that will be narrowly controlled by Democrats once two Democratic senators from Georgia are seated.

Paving the Payments Future
Survey: Few Americans Could Pay A Surprise $1,000 Bill From Savings

As the pandemic enters its most intensive phase yet and job growth stalls, just 39% of Americans surveyed say they could comfortably cover an unexpected expense of $1,000.

Underscoring the shaky finances of many Americans, Bankrate's January Financial Security Index finds that fewer than 4 in 10 U.S. adults could absorb the cost of a four-figure car repair or emergency room visit by tapping into savings.

Fully 18% of respondents said they would put the expense on a credit card and pay it off over time, incurring interest charges. Another 18% said they could handle a surprise expense without borrowing, but would have to make room in their budgets by scrimping on other items.

An additional 12% said they would borrow from family or friends, while 8% said they would take personal loans.

Preparing for 2021 Tax Season

  • Tax season will start on Friday, February 12, 2021, when the IRS will begin accepting and processing 2020 tax year returns.
  • As people get ready to file their 2020 tax return, the IRS reminds taxpayers they can find answers to their tax questions from the safety of their home using IRS online tools and resources.
  • Organizing tax records is an important first step for getting ready to prepare and file a federal tax return.
  • Taxpayers can receive their federal tax refund faster by filing electronically and choosing direct deposit.

79% Say Another Round of COVID Relief Will Be Needed

Most Americans say another round of COVID-19 economic relief will be needed

Following the passage of a second stimulus package in December in response to the impact of the coronavirus outbreak, 79% of U.S. adults say another economic assistance package will be necessary. Just 20% say another package will not be needed.

The level of support for an additional package today is nearly identical to the share of Americans (80%) who said more coronavirus aid was needed in the weeks leading up to passage of a $900 billion stimulus bill late last year, according to a new Pew Research Center survey.

While majorities of both Republicans and Democrats say they think another economic assistance package will be necessary, Republicans are less likely to say this.

SBA outlines steps to improve PPP, reports $35B in approved loans

The Small Business Administration (SBA) on Tuesday said it had approved 400,000 Paycheck Protection Program (PPP) loans worth $35 billion since relaunching the coronavirus relief program this month, and detailed steps it would take to fix operational glitches in the PPP's portal.

American Bankers Association (ABA) President Rob Nichols urged SBA and Treasury Department officials Monday to improve the portal after lenders reported being unable to upload applications for a second-draw loan if the forgiveness application for the borrower's first-draw loan is still pending.

The SBA said it would equip the agency's field team of lender relations specialists with information to support lenders and borrowers in understanding the issues and would provide additional guidance to PPP lenders on the review and resolution process.

Black- and Latinx-focused digital bank Greenwood hits 500K signups in 100 days

"We see that there is definitely an appetite for what we're doing," said Ryan Glover, who founded the startup with civil rights leader Andrew Young and rapper Killer Mike

Greenwood Financial, a new challenger bank aimed at serving Black and Latinx communities, has amassed 500,000 signups in the first 100 days since opening its waitlist in October, said Ryan Glover, an Atlanta-based entrepreneur and founder of Bounce TV.

Glover said he thinks the platform, which is expected to launch in May or June, is on track to hit more than 600,000 active accounts by the end of the year. 

"We see that there is definitely an appetite for what we're doing," said Glover, who founded the digital bank alongside civil rights leader Andrew Young and rapper and activist Michael "Killer Mike" Render.

Solutions for Bank and Non-Bank Lenders and Servicers

Whether you’re a small independent company or a larger enterprise, we’ll work with you to create customizable solutions that fit the needs of your business. Using our consumer lending expertise we make recommendations that save you money and help you meet all compliance requirements.

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Fed holds rates near zero amid fresh signs US economic recovery is slowing

The U.S. central bank, as widely expected, held the benchmark federal funds rate at a range between 0% and 0.25%

The Federal Reserve said during its first meeting of the year on Wednesday that it would leave interest rates near zero and reaffirmed its commitment to other easing policies amid fresh signs the U.S. economic recovery from the coronavirus pandemic is slowing.

The U.S. central bank, as widely expected, held the benchmark federal funds rate at a range between 0% and 0.25%, where it has been since mid-March, and said it would maintain its large-scale asset purchases, a practice known as quantitative easing.

“The pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic,” policymakers said in a post-meeting statement.

Banks sync in lock-step over diverse hiring

Citi said it will require, effective this year, that at least two diverse candidates be interviewed for assistant vice president roles and above, up from one in previous years.

JPMorgan Chase, Bank of America, Citi, Wells Fargo and U.S. Bank have all committed to either adjusting their policies for considering diverse job candidates or disclosing the ones they have, The Wall Street Journal reported Tuesday.

The pledges are a response to proposals the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) sent to the banks as shareholders.

It wouldn't be the first time big U.S. banks have moved in lock-step over the past year to boost diversity. The May 2020 killing of George Floyd by police spurred a spate of commitments by banks to narrow the racial wealth gap. Bank of America was among the first to make a $1 billion pledge to that end, and other lenders, such as U.S. Bank, PNC and even nonbanks such as PayPal and Netflix, soon followed. Similarly, when Wells Fargo unveiled a move in June to double the number of Black leaders at the bank within five years and to tie executives' compensation to their efforts to further diversity, Goldman Sachs, HSBC, Visa and Mastercard posted their own goals.

Population Growth Slowest Since Great Depression

Census Estimates Show Population Decline in 16 States

With a perfect storm of aging residents, low birth rates, COVID-19 deaths and immigration cutbacks, 16 states saw population decreases last year as the United States experienced the slowest national population growth since the Great Depression.

The nation grew only about 7% between 2010 and 2020, similar to the previous historic low between 1930 and 1940, according to new Census Bureau estimates, which do not reflect the 2020 census counts. The agency will release the final 2020 census tally in March.

California, Massachusetts and Ohio had been growing throughout the past decade until last year, while Michigan, New Jersey and Pennsylvania began slides in 2019. Longer-term losses continued for Alaska, Connecticut, Hawaii, Illinois, Louisiana, Mississippi, New York, Rhode Island, Vermont and West Virginia.

Black-owned businesses hope this round of PPP won’t fail them

Adrienne Parker knows what it is like to struggle as a Black small business owner during the pandemic.

The sole proprietor of Peace of Mind Consulting, a management and bookkeeping consulting firm in Atlanta, Parker saw much of her income dry up as clients faced their own financial struggles.

So when the first round of Paycheck Protection Program loans became available, she went to a community development financial institution (CDFI), Atlanta-based Access to Capital for Entrepreneurs, instead of a big bank.

“I have heard the horror stories, and I have witnessed the horror stories first-hand, the experiences with the large banks,” said Parker, 37.

While she eventually got a $9,000 loan, one of her clients, who went through a larger institution, waited for months to find out they had been turned down.

Experiment suggests people pay down debt but keep savings cushion

Personal finance experts and your friends and family may all have an opinion on how you should manage your savings and your debts. We set out to see what people would do when presented with a hypothetical scenario with the opportunity to pay off debt using available savings.

Findings from our online experiment with hypothetical scenarios suggest:

People want a savings cushion. In nine of the ten savings scenarios presented to study participants, fewer than half of participants put the maximum amount of savings toward reducing the debt. The majority of the participants paid off credit card debt completely only when they had twice as much savings as debt.
People also want to pay down debt. The vast majority of study participants—over 90 percent in each of the savings scenarios—used at least some savings to reduce the debt. On average, participants put more than half of savings towards paying down debt, even when savings was only one-fifth the amount of debt.
Studying the trade-offs between keeping savings and paying off debt helps us understand how people view risk around their finances and the importance of savings for financial security.

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