FTC Proposes Rule to Ban Noncompete Clauses, Which Hurt Workers and Harm Competition: Federal Trade Commission

Agency estimates new rule could increase workers’ earnings by nearly $300 billion per year

The Federal Trade Commission proposed a new rule that would ban employers from imposing noncompetes on their workers, a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses. By stopping this practice, the agency estimates that the new proposed rule could increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans.

The FTC is seeking public comment on the proposed rule, which is based on a preliminary finding that noncompetes constitute an unfair method of competition and therefore violate Section 5 of the Federal Trade Commission Act.

“The freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” said Chair Lina M. Khan. “Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand. By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition.”

Read more at the FEDERAL TRADE COMMISSION

Credit Unions Are Falling Behind the Innovation Curve

At a time when consumers, and credit union (CU) members particularly, are seeking more product innovation from these financial institutions, budget constraints and a yearlong macroeconomic beating find CUs cutting back on in-house development efforts.

According to the study “Credit Union Innovation: Product Development Slowdown Tests Member Loyalty,” a PYMNTS and PSCU collaboration based on surveys of nearly 4,300 consumers, 100 CU executives and 50 executives from FinTechs that provide products and services to CUs, the innovation pullback is ill-timed — and being poorly perceived.

Among findings from the survey is the disquieting fact that over one-quarter (27%) of CU members would switch FIs to get more advanced financial products. That discontent has been rising for years: In 2018, just 17% of CU members said they’d switch due to innovation.

Read more at PYMNTS.COM

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The IRS Is Letting You Keep More Money in 2023, Increasing Standard Deductions for Inflation

The IRS has some good news for Americans struggling with rampant inflation: You may get to keep more of your money in 2023.

Due to the increasing costs of food, gas and utilities — the highest spikes in 40 years, per NPR — the government is offering a bit of a reprieve. The IRS is not only adjusting the tax brackets for millions of Americans as of 2023 (upping them by roughly 7%, according to The New York Times), but also increasing the standard deductions that can be taken, thereby reducing a person’s taxable income.

While the government looks at adjustments on an annual basis, the latest tax update is relatively significant, and will likely affect people in all income tax brackets, NPR indicated. In fact, as GOBankingRates previously reported, the 2022 adjustment for inflation was just 3.1%, making the 2023 updates over twice the size.

Here’s how those standard deduction increases break down:

Single taxpayers (and married spouses filing separately) will have a standard deduction of $13,850 (a $900 increase).

Married couples filing jointly will have a standard deduction of $27,700 (a $1,800 increase)

Read more at GOBankingRates

3 ways to increase global access to financial services: WORLD ECONOMIC FORUM

• Financial services are essential to the resilience of people and businesses in uncertain times.
• To ensure equal access, global leaders must democratize access and adopt digital identity infrastructure.
• Public and private sectors must come together to create low-cost forms of financing for small businesses.

Current challenges, including geopolitical instability and rising prices, renew questions about how access to affordable, convenient, and secure financial services can help more people achieve financial security and weather uncertain times. Financial services are essential to building inclusive economic opportunity. That’s why global leaders must ensure the benefits of financial services are distributed equitably, in a way that makes the world stronger and more resilient. In pursuit of these opportunities, we should consider the following areas for greater investment, collaboration, and focus.

1. Democratize financial services

Access to financial services gives people more control over their financial health. 

Read more at World Economic Forum

The Public Finance Outlook for 2023: Prepare to Slog

Disinflation and economic deceleration will dominate state and local budgets and investments. Cash is king, at least for a while. Payroll costs will outpace revenues. It’s going to be a year for muddling through.

Last year’s New Year’s column capsulized the outlook for public finance for 2022 in one word: inflation. For 2023, it’s almost the reverse, as disinflation — a slowing in the rise of prices — will be the backstory. But it will be a sticky and murky disinflation. With 12-month CPI measures still running hot, workers are not going to sit still for 2 percent pay increases, as much as the Federal Reserve might aspire to that number as its long-term inflation target.

Meanwhile, state and local government budget squeezes are coming, as softer revenues are expected from income, sales and property taxes. A soft landing for the economy is possible, but there is still a credible risk of worse. By spring, the global economy and business environment will feel like a muddy, mucky Ukrainian battlefield: prepare to slog.

Although it’s now highly probable that the Federal Reserve will soon be able to escalate its overnight Fed funds interest rate to levels higher than the latest core inflation rates, that is just the first salvo in the central bank’s battle to tame the multi-headed inflation hydra. As long as workers expect to see 5 percent pay raises this year, the overnight interest rate needs to hover at that level or above. 

Read more at GOVERNING

Statement of CFPB Director Rohit Chopra on Proposed Registry of Supervised Nonbanks that Use Form Contracts to Impose Terms and Conditions that Seek to Waive or Limit Consumer Legal Protections: Consumer Financial Protection Bureau

Today, the CFPB is proposing to create a registry of contract terms that financial companies use to censor their customers and force individuals into surrendering their legal rights.

When purchasing a product, downloading an app, or signing up for a service, Americans are routinely required to click a checkbox to agree to “terms of service” or to sign contracts with boilerplate fine print. Typically, a company and its lawyers draft these contracts. They are not subject to negotiation with a consumer. Instead, they are “take it or leave it” form contracts.

Due to this dynamic, many contracts are one-sided and favor the company over the consumer. For example, some consumer contracts have included “gag clauses,” which forbid a consumer from posting a negative online review or filing a complaint. More recently, we have seen one company seeking to include language in its “acceptable use” agreement that gives the company the ability to “fine” individuals for their speech.

Read more at Consumer Financial Protection Bureau

6 IRS Changes Coming in the Next 5 Years That Could Impact Your Finances

On Aug. 16, President Joe Biden signed the Inflation Reduction Act into law. At $750 billion, it is one of the largest spending packages in American history. Much of the funds will be used to combat climate change, reduce prescription and healthcare costs, and enact tax reform. But when? And how does any of this affect taxpayers?

Here’s a look at some of the key changes of the Inflation Reduction Act that are being implemented over the next five years — and what they may mean for your wallet — as broken down by CPAs and other finance experts.

Health Insurance Costs

“Of interest to people who buy their health insurance on an exchange under the Affordable Care Act is that the Inflation Reduction Act increased the premium tax credit available to people enrolled in a qualified health plan,” said Bruce A. Tannahill, director of estate and business planning with MassMutual.

Read more at GOBankingRates