NEWS: 'Don't Waste a Good Crisis'

ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION

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July 30, 2020

As Machiavelli Said Don't Waste a Good Crisis!

This crisis will continue to cause hardship for people, but it will also create opportunities for innovation across many industries, particularly technology and finance

With a risk of financial collapse looming on the horizon, and the US with over 13 per cent unemployment rate (June 2020), we all need to be preparing for a different future. At least 12 million people have been affected by COVID-19, and 3.2 billion global workers stopped working due to full or partial closures of their works (this according to May 2020 data).

The global economy has reportedly contracted by 12 per cent in Q1 of 2020, and the downturn seems to be the one of the worst economic shocks since the Great Depression of the 1930s. COVID-19 is weakening the global economy. To help absorb the shock, governments are implementing emergency policies to directly transfer money to households and businesses. Government to people (G2P) transactions have increased dramatically. The US has committed the largest rescue package at approximately $3 trillion. While the US response is the largest in financial terms, it is not the most aggressive bailout in relation to economic size, equating to approximately 13 per cent of the US GDP. Japan's rescue package which is estimated to be just over 21 per cent of GDP is by far the largest in GDP terms. Read more at ENTREPRENEUR

2020's States with the Highest & Lowest Credit-Card Debts

Americans are known for racking up credit-card debt, but just how much we have in total is shocking. At the beginning of 2020, Americans owed over $1 trillion in credit-card debt. Many consumers will be charging even more to their cards this year than usual due to the COVID-19 pandemic, and WalletHub projects that net credit card debt will increase by $80 billion in 2020.

Americans aren't all in the same boat when it comes to credit-card debt, though. People in some states charge less than others, whether because they are less impacted by the pandemic, are more responsible about their finances or a number of other factors. To determine which states have the least and most sustainable credit-card debts, WalletHub drew upon TransUnion credit data to calculate the cost and time required to pay off the median card balances of each of the 50 states and the District of Columbia. Read on for the full findings, commentary from a panel of experts and a detailed description of our methodology.
Read more at WALLETHUB

Americans can determine if they are middle class with new income calculator

Pew Research Center reports 52% of Americans are in middle-income households

A new income calculator from Pew Research Center will allow Americans to figure out if they are in the middle class.

The calculator lets users compare themselves to their metropolitan area, as defined by the Office of Management and Budget, and among Americans nationwide overall, based on the average size of a U.S. household, as well as compare on the basis of education, age, race or ethnicity, and marital status.

Pew reported, based on 2018 data, 52% of Americans are in middle-income households; 29% are in lower-income households; 19% are in upper-income households.
Read more at FOX BUSINESS

Employers, Its Time To Start Supporting Your Employees' Financial Wellness

Every employer-at least every good one-cares about the wellbeing of their employees. Outside of the basic health insurance and 401(k)s, many companies also offer wellness programs to encourage fitness amongst their staff or even have an educational budget for employees to go back to school or participate in certification courses.

But what about an employee's financial wellness? This should be a priority for employers as well.

Financial literacy, resources and support can make a huge difference in a person's life. When you're stressed about money or living paycheck-to-paycheck, it's hard to focus on anything else-including your job.

As an employer, having employees who are worried about money is bad for business. Implementing a program to support your people through financial decisions, market changes and the journey to retirement will improve day-to-day work and the morale of the office.
Read more at FORBES

Can fintechs help plug banking gaps for struggling Black consumers?

A handful of fintechs are attempting to tackle a problem that has existed for years and been exacerbated by the coronavirus pandemic - many Black Americans are underbanked.

In 2017, the Federal Deposit Insurance Corp. found that 47% of Black Americans were underbanked, compared with 20% of white Americans.

The pandemic is worsening the economic plight of the Black community. A Pew Research survey in April found that 73% of Black adults did not have emergency funds to cover three months of expenses; 47% of white adults reported the same problem.

Forty-four percent of Black Americans said they or someone in their household had experienced a job or wage loss due to the coronavirus outbreak, compared with 38% of white adults.
Read more at AMERICAN BANKER

Alchemy Launches Online Lead Generation Platform With MaxDecisions.

The Costs Of Being Unbanked Or Underbanked

According to a 2019 report by the Federal Reserve, 22% of American adults (63 million) are either unbanked or underbanked. The 6% of Americans who are unbanked have no bank account whatsoever and must rely on alternative financial products and services-such as payday loans, check cashing services, money orders and pawn shop loans-to take care of their finances. The 16% of Americans who are underbanked have some sort of bank account, but they also rely on alternative financial services.

The events of recent months relating to COVID-19 and the economic instability that has accompanied it have brought increased attention to the digital divide. In an economy that runs on the assumption that individuals have full access to traditional banking, living without that access has a number of costs. It's important to understand these costs and how living without full access to the banking system can prevent the unbanked and underbanked from building wealth.
Read more at FORBES

HEALS Act $1,200 stimulus check proposal: Would you qualify?

Some households could receive even more money than last time under the bill

Republicans unveiled a package of bills aimed at helping American families weather the economic effects of the coronavirus pandemic on Monday, including plans for another round of direct payments to households.

The checks would largely follow the same guidelines as those issued under the CARES Act. The payments are $1,200 per adult for those with adjusted gross incomes of up to $75,000. The threshold for married couples is $150,000 - they are eligible for $2,400 and $500 per dependent.

The difference with this round of payments is that there will be no age cap on eligible dependents. While the CARES Act only allowed the additional $500 to be allocated for families with dependent children, now households will be able to claim the additional $500 for dependents of any age.
Read more at FOX BUSINESS

Alchemy Launches Online Lead Generation Platform With MaxDecisions.

FDIC makes it easier for banks to hire people with minor criminal offenses

The Federal Deposit Insurance Corp. (FDIC) approved a final rule Friday that makes it easier for banks to hire people with minor criminal records.

Under Section 19 of the Federal Deposit Insurance Act, banks are prohibited from hiring any person who has been convicted of a crime involving "dishonesty, breach of trust, or money laundering," without prior consent from the FDIC. The regulator said Friday's final rule excludes all offenses that have been expunged or sealed; allows a person with two, rather than one, minor crimes to qualify; and increases the threshold for small-dollar, simple thefts from $500 to $1,000.

"The changes narrow the scope of crimes subject to Section 19, enabling more individuals to work for banks without going through the Section 19 application process, without increasing risk to the Deposit Insurance Fund," FDIC Chairwoman Jelena McWilliams said in a statement.

Read more at BANKING DIVE

Why coins are scarce and what government, banks are doing about it

Federal regulators and financial industry representatives are expected to release a set of recommendations in the coming weeks about how to jump-start the circulation of coins, which has slowed to a crawl during the coronavirus pandemic, according to two participants in the discussions.

Meanwhile, a number of banks - from JPMorgan Chase to community banks in Wisconsin and New York - have taken action on their own to address the shortage, including offering consumers bonuses for change brought in, stockpiling coins and strategically moving coins among branches.
Read more at AMERICAN BANKER

A scary new scam is targeting work-from-home employees - here's what you need to know

In times of great social importance, it's common for predators to strike. True to form, cyber criminals have developed a brand new scam this summer, and it targets the millions of Americans who now work from their home computers.

If you work from home, you could be a target of the new Russian ransomware scam
"Russian hackers are attacking work-from-home employees in record numbers," confirmed Adam Levin, cyber security expert and founder of Cyberscout, to Yahoo Life. A Russian hacking group called Evil Corp. is at the helm of the scam, which aims to infiltrate remote workers' vulnerable WiFi networks.

Between 62 and 64 percent of Americans are now working from home, according to SHRM's COVID-19 Business Index and a recent Gallup poll. Compare that to just 7 percent before the coronavirus pandemic emerged. Evil Corp. has done what many cyber criminals do: identify a mass weak spot and prey upon it. Read more at YAHOO

GOP plan tweaks PPP, proposes loans for seasonal businesses

Senate Republicans on Monday proposed creating a government-guaranteed, long-term loan initiative with almost $60 billion to benefit seasonal businesses and companies based in low-income communities.
The plan, part of a larger coronavirus relief and stimulus package, would flag $190 billion in existing and new Paycheck Protection Program (PPP) funding through the end of the year. PPP, which is set to expire Aug. 8, had about $130 billion remaining Friday, according to the Small Business Administration (SBA).
The Federal Reserve on Tuesday announced a three-month extension, through Dec. 31, for several of its lending facilities, including PPP and the Main Street Lending Program.