Jamie Dimon, JPMorgan Chase chairman and CEO, listed fintech as one of the “enormous competitive threats” to banks in his annual shareholder letter released Wednesday.

“Banks ... are facing extensive competition from Silicon Valley, both in the form of fintechs and Big Tech companies,” like Amazon, Apple, Facebook, Google and Walmart, Dimon wrote, and “that is here to stay.”

Fintech companies, in particular, “are making great strides in building both digital and physical banking products and services,” Dimon said. “From loans to payment systems to investing, they have done a great job in developing easy-to-use, intuitive, fast and smart products.”

Payday lenders want to lure people of color into endless cycles of high-interest debt. Mainstream banks prefer white people as customers.

At least that’s what academic researchers concluded after reviewing advertising and marketing materials for the two industries.

In a soon-to-be-published paper, researchers at the University of Houston sought to understand why Black and Latino people make up a disproportionately high percentage of customers for payday and auto title lenders. I got a sneak peek at their work.

The researchers found that “while African Americans make up roughly 12% of the Texas population, almost 35% of the pictures on payday and title-lender websites were of African American models.”

Crackdowns fail to recognize that alternative lenders are the last hope for Canadians shut out of the traditional lending market

The media often portray alternative lenders as slippery, unethical loan sharks who exploit the poor. When targeting the sector and not just a few bad apples, such stories are easy, cheap hit jobs.

New Brunswick Sen. Pierrette Ringuette, for example, recently described alternative loans to CBC Marketplace as “an abusive financial process that needs to be curtailed.”

The irony is that alternative lenders are the little guys of the financial sector. They have a thankless, high-risk task serving people who have bad or no credit, and get no love from major financial institutions.

A Marketplace investigation found lenders offering personal loans at rates of up to 46.96 per cent, while the Bank of Canada’s wholesale interest rates are below one per cent. Another Marketplace concern was rollover loans – banned in some provinces – which can perpetuate a tragic cycle in which someone borrows from one payday lender to pay back another.

Little-known Sherman Financial filed more collection lawsuits after lockdowns began

When Covid-19 hit the economy, most debt collectors gave borrowers a break, cutting back on lawsuits amid lockdowns, closed courts and loan-forbearance initiatives.

One of the biggest and least-known companies in the industry did the opposite.

Sherman Financial Group filed more lawsuits to squeeze cash from people behind on their credit-card bills. A Wall Street Journal analysis, based on the five state-court districts with searchable online records, showed Sherman had the largest year-over-year increase of any firm identified between last March 15 and Dec. 31 -- up 52% from the year-earlier period, compared with a 24% decline in those districts for the industry as a whole.

Sherman, a privately held enterprise, through its subsidiaries filed 15,420 more debt-collection lawsuits in those districts than during the year-earlier period. Those courts serve 13% of the U.S. population.

Much has been written in the popular media about how difficult it has been to distribute stimulus funds to all eligible recipients quickly.  There are two central reasons for this: a) individuals do not trust the federal government with their checking account credentials that could facilitate a fast and safe direct deposit of funds and b) they don’t have an account.

The FDIC is trying to do something about the latter. The Washington Post writes that FDIC will launch a campaign to encourage account ownership through a partnership with participating financial institutions:

To make it easier for these households to get their stimulus funds, the FDIC has launched a public awareness campaign — #GetBanked — to persuade unbanked individuals of the benefits of having a bank account.

In the last few months, inflation has been a hotter topic than in recent memory. Google trends search intensity for the word “inflation” hit an all-time high (for the last 16 years since it was measured) and is roughly twice as high as it has been in normal weeks in the last five years.

A number of economists have suggested that recent fiscal policy stimulus will lead to overheating and inflation, while others have argued just as vociferously it will not (see for example). This suggests that over the next few months, each inflation reading will draw increased scrutiny. There are a number of reasons to use caution when reading the data, though.

Bouncy data in the next few months

The COVID-19 pandemic cost hundreds of thousands of lives in the United States and unleashed a sharp recession. In addition to loss of employment and income, the shock caused the steepest three–month drop in the core personal consumption expenditures (PCE) price index since data exists in 1959 (the PCE is the preferred price index of the Federal Reserve and “core” means it excludes volatile food and energy prices). This dip is shown in the figure below which shows both headline (overall prices) and core prices over the last few years along with a line showing what the price level would have been had prices grown at 2 percent. This highlights that prices are still well below what a simple 2 percent trend would have generated.

WASHINGTON, D.C. — The Consumer Financial Protection Bureau today proposed extending the effective date of two recent debt collection rules to give affected parties more time to comply due to the ongoing COVID-19 pandemic.

The CFPB issued a Notice of Proposed Rulemaking (NPRM) to delay by 60 days the effective date of two final rules issued under the Fair Debt Collection Practices Act (FDCPA). The debt collection rules, issued in late 2020, are scheduled to take effect on November 30, 2021. The CFPB is proposing to extend the effective date of both rules to January 29, 2022. The proposed delay would allow stakeholders affected by the pandemic additional time to review and implement the rules.

The first debt collection rule, issued in October 2020, focuses on the use of communications related to debt collection, and clarifies prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.