CFPB’s NSF Fee Proposal Is More Than It Seems

Viewpoint: The Consumer Financial Protection Bureau's non-sufficient funds fee proposal comes off as a mere companion to the proposed bureau overdraft rule. But hidden in the proposal lies an attempt to make a major change to the 'abusive' part of UDAAP rules.

At first glance, the Consumer Financial Protection Bureau’s proposed non-sufficient funds (NSF) fee regulation would not seem to merit bankers’ serious attention.

By the CFPB’s own admission, the NSF fees the proposal would prohibit are “rarely charged.” However, the proposal deserves bankers’ serious attention.

Simply stated, the CFPB’s incredibly broad approach to unfair, deceptive or abusive acts or practices (UDAAP) in the proposal could readily be expanded to attack other lawful bank fees.

NSF fees are typically charged when a check or ACH debit is submitted for payment against a consumer’s account and returned unpaid due to insufficient funds. The CFPB’s proposal would bar NSF fees on “attempt[s] by a consumer to withdraw, debit, pay, or transfer funds from their account that is declined instantaneously or near-instantaneously by a covered financial institution due to insufficient funds.”

Read more at The Financial Brand

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1099-K Frequently Asked Question has been updated to include details on the following information:



• If you are making money from selling things or providing a service online, you may need to report that income to the IRS.
• You may also receive a Form 1099-K from the payment apps or online marketplaces that you use. This form shows the total amount of payments you received, which you can use to calculate your taxable profit.
• To learn more about the Form 1099-K and how it affects your taxes, check out the IRS Publication 5731-B.
• This publication explains what the Form 1099-K is, what to do if you get one, and how to keep good records of your income and expenses.
• Don’t miss this important information that can help you file your taxes correctly and avoid penalties.
• Visit irs.gov/1099K today and download the Publication 5731-B.

Jose L. Santiago

Public Affairs Specialist

Tax Outreach, Partnership and Education

Email: jose.l.santiago@irs.gov

Many consumers use ‘buy now, pay later’ like a credit card, Fed study shows—but providers insist it’s safer than that

Buy now, pay later (BNPL) functions more like short-term credit for the financially fragile, but closer to zero-interest loans for the well-off, according to a New York Fed report released Wednesday. But the companies that provide these loans insist that regardless of how it’s used, BNPL is a safer alternative to buying something with a credit card.

As BNPL plans have taken off in the past few years, they’ve created a whole new way to buy stuff online—especially for Gen Z, who have been the most enthusiastic adopters of the popular payment option. But BNPL’s ease of use has generated fears about overspending and “loan stacking” that can leave users on the hook for big late fees and interest payments if they lose track of their outstanding BNPL plans.

The new Fed report finds that people with bad credit are using BNPL as they would a credit card, the thing BNPL was supposed to replace, and this could invite more regulatory scrutiny in a sector that the Consumer Financial Protection Bureau (CFPB) is already watching closely. But BNPL providers insist that’s not the case, and they’re so confident in their product that they actually welcome more regulation.

Read more at FORTUNE

Employers explore emergency savings benefits as workers struggle to stay afloat

Employee financial resilience has been a “significant challenge” in recent years, and a recent regulatory change may spur adoption of a new solution.

A growing share of U.S. adults believe they would struggle to afford an emergency expense, but a recent regulatory update may present an opportunity for employers to help.

An annual study published last month by financial services company Bankrate found that fewer than half of Americans would pay for an emergency expense of $1,000 or more from their personal savings, a figure that Bankrate said has remained steady since 2022. In September 2023, the company found that 81% of adults had not increased their emergency savings since the beginning of that year — and nearly one-third actually had less saved for emergencies.

“This has been a significant challenge for employers, especially over the last three to four years,” said Dave Amendola, senior director, retirement at WTW.

Read more at HRDive

Marketing Boosts Deposit & Loan Growth for Community Banks: Study

As banks of all sizes navigate an uncertain economy, marketing budgets are increasingly in the cross hairs. But an analysis of marketing spending by banks with under $2 billion of assets suggests an increase would be the wiser choice for those seeking growth in deposits or loans.

Cost-cutting is back in vogue as banks of all sizes contend with subdued growth. Marketing tends to get the gimlet eye of senior management early on — even though cuts there sometimes resemble a fisherman who economizes by using bare hooks to save money on bait.

“Many of our clients are being asked to reevaluate their marketing budgets for 2024,” says Ally Akins, a consultant at Capital Performance Group. “They are being asked to project the return they’re going to get from each marketing activity, which is something they haven’t been asked to do before.”

Read more at The Financial Brand

IRS is sending out collection letters for the first time in 2 years. Here's what to know.

The IRS collection letters are arriving in mailboxes once again. And if you get one, tax professionals say, please, don't throw it in a drawer and ignore it.

The automated reminder notices resumed in January and are set to go out in the regular mail on a staggered basis over the next several months. More than 3.7 million taxpayers in the IRS automated collection system are expected to receive these reminder notices.

"Taxpayers are urged to first read the notice carefully, then if there are any questions call the number on the notice itself," said Luis Garcia, a spokesperson for the IRS in Detroit, Michigan.

Don't worry. It's not an audit

The IRS is sending out what it calls an "LT38 Notice" to let you know that during the pandemic some collection notices were suspended. This isn't a letter to inform you of an audit. Instead, the IRS is resuming the reminders and providing an update on your outstanding balance and options to resolve the debt.

Read more at USA TODAY

4 Ways Personalization Is Evolving at Top Banks

While personalization is nothing new in the banking sector, companies are now using real-time client data to create the perfect customer experience. These novel strategies create stickier engagements — and turn casual users into life-long customers.

The quest for the perfect customer experience is driving digital transformation at top banks and new strategies that take advantage of generative AI and real-time data sets are creating real opportunities.

Financial institutions are increasingly focused on new ways to interact with consumers and are now leveraging large swaths of data to do it. Technologies like cloud computing and open banking are already helping banks improve digital experiences and connecting client data to all parts of their business lines. The challenge is quickly becoming how to best capture that data and utilize it in real time.

“Personalization is absolutely critical,” says Leslie Gillin, former JPMorgan Chase Global CMO and current Chief Growth Officer at the lending fintech Pagaya. “It’s the expectation in the world of Amazon – you need to be anticipating people’s needs.”

Read more at The Financial Brand

Empowering Native American Communities via Fintech Revenue

“I didn’t make it – I’m one of those statistics,” said Valandra, now principal at Sapa Un Jesuit Academy in St. Francis. “Most of my teachers were white, and at times I felt stupid, to be honest. I had a lot of reflecting to do when I came back to the reservation. I found my passion trying to show kids that there are possibilities out there, but you need to be prepared.” 

In the heart of our nation, Native American Indian tribes possess a unique blend of sovereignty and cultural heritage that can transform their economic landscape when leveraged with the right partnerships and technologies. Today, I want to share a story reflecting a broader narrative and propose a path that honors tradition and progress.

What:

- The Reality: A Native American woman, Valandra, shares her journey of feeling out of place and underprepared in "the white man's world," a sentiment too common among Native American youths. Despite her challenges, she found her calling upon returning to her reservation, dedicating herself to showing the next generation that there are possibilities beyond their immediate surroundings

Read more at LeaningRockFinance

The 5 states with the fastest job growth in 2023, and the 5 states with the slowest gains

The U.S. turned in another surprisingly strong year of job growth in 2023, defying forecasts of a sharp slowdown amid historically high interest rates and still elevated inflation.

But some states, such as Nevada and Texas, powered the gains while others, like Rhode Island and Iowa, barely treaded water. States with favorable climates, low costs and vibrant business hubs continued to attract residents and create jobs. Those losing population and stressed by high borrowing costs struggled.

Overall, the nation added 3.1 million jobs last year, or an average of 255,000 a month. That's the third-best showing ever behind 2021 and 2022 when the U.S. was climbing out of the pandemic-induced recession.

Read more at USA TODAY