February 16, 2023

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CFPB Finds One-Third Decline in Collections Items on Consumer Credit Reports: Consumer Financial Protection Bureau (CFPB)

Report underscores ongoing concerns about accuracy of collections data, particularly with respect to medical debt

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) released a report examining trends in credit reporting of debt in collections from 2018 to 2022. The report found the total number of collections tradelines on credit reports declined by 33%, from 261 million tradelines in 2018 to 175 million tradelines in 2022. The share of consumers with a collection tradeline on their credit report decreased by 20% in the same timeframe. The CFPB also released today additional analysis examining factors that increase the likelihood of inaccurate medical collections reporting and may contribute to the decline in medical collections tradelines.

“Our analysis of credit reports provides yet another indicator that, due to a strong labor market and emergency programs during the pandemic, household financial distress reduced over the last two years,” said CFPB Director Rohit Chopra. “However, false and inaccurate medical debt on credit reports continues to be a drag on household financial health.”

Read more at Consumer Financial Protection Bureau (CFPB)

Jose L. Santiago

Public Affairs Specialist

Tax Outreach, Partnership and Education

Jaw-Dropping Stats About the State of Debt in America

Most Americans have some credit card debt. A recent GOBankingRates survey found that 30% of Americans have between $1,001 and $5,000 in credit card debt, 15% have $5,001 or more in credit card debt and about 6% have more than $10,000 in credit card debt. Although 6% may seem like a small amount, that means that based on the survey results, 14 million Americans have over $10,000 of credit card debt.

Here's a look at even more jaw-dropping stats about the state of credit card debt in America.

33% of Americans Believe It Will Take More Than 2 Years To Pay Off Their Credit Card Debt

Although 39% of Americans believe they will be able to pay off all of their credit card debt at some point in the next year, a good portion think it will take two years or longer.

Read more at GOBankingRates

18% drop since 2020 in people with reported medical debt

WASHINGTON (AP) — The number of people with medical debt on their credit reports fell by 8.2 million — or 17.9% — between 2020 and 2022, according to a report Tuesday from the U.S. Consumer Financial Protection Bureau.

White House officials said in a separate draft report that the two-year drop likely stems from their policies. Among the programs they say contributed to less debt was an expansion of the Obama-era healthcare law that added 4.2 million people with some form of health insurance. Also, local governments are leveraging $16 million in coronavirus relief funds to wipe out $1.5 billion worth of medical debt.

There has also been a persistent effort by the CFPB to reduce medical debt. The major credit rating agencies said last year that they will no longer include in their reports medical debts under $500 or debts that were already repaid.

Read more at Associated Press

Dreher Tomkies LLP

States With the Highest Property Taxes

In some states, homes are cheap, property tax rates are less than half of 1% and the average property tax payment is just a few hundred bucks per year. In the most expensive states, however, rates soar over 2%, homes are pricey and average annual property tax bills routinely creep as high as $10,000 per year.

Using data from the Tax Foundation, GOBankingRates ranked the states with the highest property taxes in America, including the percentage rate, the average dollar amount paid and the average home value. We ranked the top 15 in ascending order from least expensive to most. For context, the national average effective property tax is 1.04%, the U.S. average home value is $349,015 and the average annual property tax bill is $3,630.

Read more at GOBankingRates

From the Consumer Financial Protection Bureau (CFPB)

Credit invisible

In 2015, we published a report finding that 26 million Americans are "credit invisible." This figure indicates that one in every ten adults does not have any credit history with one of the three nationwide credit reporting companies. An additional 19 million consumers have “unscorable” credit files, which means that their file is thin and has an insufficient credit history (9.9 million) or they have stale files and lack any recent credit history (9.6 million). In sum, there are 45 million consumers who may be denied access to credit because they do not have credit records that can be scored. People who are credit invisible or unscorable generally do not have access to quality credit and may face a range of issues, from trying to obtain credit to leasing an apartment.

Military active duty alert

Members of the military (such as members of the Marines, Army, Navy, Air Force, and Coast Guard) can request an active duty alert. When you place an active duty alert on your credit report, creditors must take reasonable steps to make sure the person making the request is actually you before opening an account, issuing an additional credit card on an existing account, or increasing the credit limit on your existing account. Active duty alerts last for 12 months. Your name also will be removed from the nationwide credit reporting companies' pre-screen marketing lists for credit offers and insurance for two years.

Read more at Consumer Financial Protection Bureau (CFPB)


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Tax refunds are almost 11% smaller this year, early data shows

Tax refunds so far this year are markedly smaller than the same time a year ago, according to the earliest data from the Internal Revenue Service, an outcome that many tax experts were expecting.

The average refund amount was $1,963 as of Feb. 3, down 10.8% from $2,201 the same period last year, the IRS reported. That’s based on nearly 8 million refunds the agency has distributed this year versus 4.33 million refunds disbursed last year. Still, a higher share of taxpayers have received refunds so far this year, with 48% of processed returns getting a refund compared with 33% last year at this time.

While the average amount likely will change as more returns are processed, the early data suggests that the loss of several enhanced pandemic-era tax breaks could mean a smaller, key windfall for many American households.

Read more at YAHOO FINANCE

Map: Here's where home prices are dropping the most

Homebuyers are finally gaining leverage in the housing market, but where they can get the best discounts on home prices varies from metro to metro.

Some of the most popular pandemic boomtowns such as Phoenix and Seattle, plus perennially popular West Coast cities like San Jose and San Francisco, posted home price declines of more than 10% from their 2022 peaks, according to December data from mortgage technology and data provider Black Knight Inc. That outpaced the average national decline of 5.3%, off their June 2022 peaks.

That’s a welcome sign for some buyers who are taking advantage of newfound purchasing power and seller incentives in today’s market. Still, affordability remains a significant challenge this year, as home prices and still-high mortgage rates continue to dampen demand.

“We’re finally seeing real price corrections,” John Downs, senior vice president of Vellum Mortgage, told Yahoo Finance. “Home prices remain high, but they are better now and dropping.”

Read more at YAHOO FINANCE

Retain talent by focusing on wellness, financial health

While unemployment is down in New Mexico, the state continues to add jobs and opportunities for New Mexicans. According to the New Mexico Department of Workforce Solutions, nonagricultural jobs grew by 2.9% last year, or 24,500 jobs. While this is positive news for job seekers, these gains are coming amid an environment of heightened inflation, creating a unique challenge for employers vying to attract and support talent. As open positions impact companies across industries, businesses can shift their focus to employee retention. According to Bank of America’s Workplace Benefits Report, 46% of employers have seen an increase in resignations over the past year, while one in three employees have switched jobs or thought about switching jobs.

Our research shows employees are significantly stressed by current economic conditions, leading to a decrease in their feelings of personal financial wellness. The percentage of employees who feel financially well hit a five-year low in last July. This is true in New Mexico as well: an Albuquerque Journal poll last fall found that 35% of New Mexican families are worried about inflation and 24% of New Mexicans are concerned about economic certainty.


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