March 4, 2021
The Gateway For Payroll Data
Report: Complaints Skyrocket At Consumer Financial Protection Bureau During Pandemic

The coronavirus pandemic has coincided with a dramatic increase in the number of complaints filed with the Consumer Financial Protection Bureau, according to a study released Monday by the consumer advocacy group U.S. Public Interest Research Group.

Based on a review of CFPB’s public complaint database, U.S. PIRG found that the total number of complaints nationwide jumped from about 277,000 in 2019 to nearly 445,000 in 2020 – an increase of roughly 60%.

More than 60% of the filings in 2020 involved credit reporting issues, a twofold increase from the previous year, according to U.S. PIRG. As in the rest of the country, Pennsylvanians most frequently reported inaccurate credit reports and difficulty getting credit reporting companies to investigate such problems, Monday’s report said. In 2020, credit reporting complaints in Pennsylvania climbed to triple their level in 2019.

Paving the Payments Future
A few small banks have become overdraft giants

The explosion of overdraft fees makes basic banking expensive for people living paycheck to paycheck. Banks and credit unions generate over $34 billion in overdraft fees annually by one estimate. What those with money experience as ‘free checking’ is quite expensive for those without. Prior research has focused on who pays overdraft, finding a small number of people (9%) are heavy overdrafters accounting for 80 percent of the fees. Not as carefully researched is whether this is just a small part of banks’ general business model, or whether for some banks overdraft has become their main source of profit. In fact a few small banks have become overdraft giants relying on overdraft fees as their main source of profit. These banks are really check cashers with a charter. Why do bank regulators tolerate this?

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When Government Goes Digital, What Happens to the Unbanked?

Experts, vendors, and local government officials on designing online services in an accessible way while at the same time working toward community-wide banking equity.

During an ordinary year in Pulaski County, Ark., five public offices are open for people to pay taxes owed on assets, from land to cars to mobile homes. And folks in Pulaski — which is home to the state’s biggest city, Little Rock — tend to be pretty good about paying what they owe, doing so in the 95th percentile, which yields roughly $530 million for the county government.

But 2020, of course, was no ordinary year.

In 2020, tax books opened on March 1 as always, but then, in what felt like a blink of an eye, the COVID-19 pandemic erupted, halting the flow of daily life the world over. All 53 employees of the Pulaski treasurer’s office were soon working from home, and all five of the public offices where payment could typically be rendered in person were ordered shuttered to slow the virus.

Can banks win in the booming buy-now-pay-later space?

While BNPL represents a relatively small niche of the payments ecosystem, banks should take note of what the growth of that silo says about the next generation of consumers, one consultant said.

As more customers have turned to e-commerce amid the coronavirus pandemic, point-of-sale installment loan fintechs such as Klarna and Afterpay have grown in popularity and value over the past few months. Fellow competitor Affirm last week even launched a buy-now-pay-later (BNPL) debit card.

BNPL fintechs, which allow customers to break up an online purchase into a series of payments that can be paid over time, facilitated $20 billion to $25 billion in transactions in the U.S. last year, according to management consultants Oliver Wyman.

CFPB pick Rohit Chopra walks fine line on bank enforcement

Biden's nominee, in a hearing, pledged a strong hand on fair lending and mortgage servicing, stiffer penalties for fraud and misconduct, and a watchful eye on big tech.

President Joe Biden's nominee to head the Consumer Financial Protection Bureau (CFPB) will try to lead the agency in a delicate enforcement balancing act, Rohit Chopra indicated to the Senate Banking Committee at his confirmation hearing Tuesday.

Chopra, who served as the student loan ombudsman at the CFPB when it was created in 2011, spent the hearing reassuring senators he would avoid taking the heavy-handed approach the agency was often criticized for in its early years. He also said that he would not have too-light of an approach that critics of the agency said occurred under the Trump administration.

"I pledge to be a good partner to each of you and approach the agency's mission with an open mind and attuned to market realities," he said.

Right-sizing takes a different shape depending on the bank

TD announced it is closing 82 U.S. branches. Merrill Lynch wants to double its Florida presence. Regions eschews large-scale M&A. And JPMorgan is seeking acquisition targets with "urgency."

TD Bank will close 82 of its 1,223 U.S. branches as part of a "store optimization" effort, Greg Braca, the bank's U.S. CEO, said Thursday during an earnings call. Most of the closures — set for locations with other branches nearby — will take effect in April, Bloomberg reported.

The move marks a 6.7% shrinkage of the Canadian bank's stateside brick-and-mortar footprint, and comes as TD revealed net income at its U.S. retail arm dropped more than 14% compared with the same quarter last year, a filing showed.

After COVID-19: Building a more coherent and effective workforce development system in the United States

Workforce development in the United States today is spread across higher education institutions (primarily public two-year and for-profit colleges), labor market institutions, and workplaces, with public funding from a range of sources. But outcomes for students and workers are weaker than they could be, especially among disadvantaged students and displaced workers; funding for workforce development programs is insufficient and not always effective. I propose the following changes: (1) Implement reforms and additional funding in the Higher Education Act of 1965 (HEA) for postsecondary occupational training for disadvantaged students. (2) Add modest taxes on worker displacement along with new funding for retraining. (3) Create a permanent version of the Trade Adjustment Assistance Community College and Career Training (TAACCCT) grants to fund partnerships among community colleges, workforce institutions, and states. Together, these actions would improve credential attainment and employment outcomes among the disadvantaged and employees at the risk of being displaced.

Student debt cancellation should consider wealth, not income

As enrollment numbers and tuition at higher education institutions grow, the rise in student debt is outpacing both. According to the Pew Research Center, from 1993 to 2012, the share of students taking out loans to finance their degrees rose from roughly half (49%) to over two-thirds (69%), with no indication of slowing. Over the same period, the average loan amount grew from $12,434 to $26,885, and surpassed $30,000 in 2020—a nearly three-fold increase in the last three decades.

If wages and wealth were growing at similar rates, this rise in the cost of education might not be a problem. But the rise in the cost of tuition has outpaced the rise in wages and overall inflation. As more students take out more loans at higher amounts, the issue of student debt—and proposals to mitigate it—has taken greater prominence in national policy debates. The problem is especially pertinent for Black households, for whom a lack of generational wealth risks making student debt a long-term financial burden

Supporting Lenders to Help Support Their Borrowers

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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.

Do you currently rely on a loan management system (LMS) to run your business? Let's integrate! Through one simple integration from your LMS to our payment platform, you can provide your borrowing customers faster and more convenient ways to pay. And when paying is easier, you’re more likely to get paid on time.

Millennials are living on their plastic, and relief will take more than a swipe of a card

Although American consumer debt declined last year due to decreased consumer spending during the pandemic, many millennial credit card holders are having financial deja-vu.

There is more relief on the way from the government, but the age group that makes up the largest portion of the U.S. workforce will need to get creative in the meantime.

About 56% of millennials accrued more credit card debt during the pandemic, according to a poll. And over half of those respondents blame COVID-19, which upset the job market last year, triggering thousands of retail and restaurant closures and resulting layoffs.

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