The Consumer Bankers Association and six other groups are asking Congress to preserve credit reporting standards, saying that prohibiting the reporting of some financial information during the pandemic could increase the costs of future loans. The groups sent a letter to Senate Banking Committee Chairman Sen. Mike Crapo and the committee's ranking member, Sen. Sherrod Brown.
A Connecticut lawmaker plans to introduce legislation that would establish a public bank in the state. State Rep. Susan Johnson, D-Windham, said the goal was not to hinder private banks, but to target local banking needs and keep money from flowing out of the state.
Congress is being asked by more than 170 trade associations to ensure that costs incurred in applying for Paycheck Protection Program loan forgiveness are tax deductible. The Internal Revenue Service issued a ruling in April that reversed a provision in the CARES Act to that end.
Several Black financial executives share stories of how their career paths have been forged, the resistance they've encountered and what it's like being the representative of a community that is vastly underrepresented in the financial industry.
Perceptions of divergence between stock markets and the actual economy is caused largely by movements in the most vulnerable market sectors, writes Barry Ritholtz. Problems encountered by highly visible sectors such as retail actually carry little weight in stock indexes which are based on market capitalization, while just a few highly capitalized companies can produce major swings in value.
Disproportionately more Black-owned than white-owned businesses have closed permanently due to the coronavirus crisis, studies by the New York Federal Reserve, the National Bureau of Economic Research and other sources have found. "These firms had weaker financial cushions, weaker bank relationships, and preexisting funding gaps prior to the pandemic," stated one of the authors of the Fed study.
Enhanced unemployment benefits, loan deferrals and tax payment delays are making it especially challenging for lenders to decide who is credit worthy. Some banks are tightening their credit standards, while credit card companies mailed out a historically low number of offers in June.
Senate Republicans are proposing a forgiveness plan for Paycheck Protection Program loans of $150,000 or less in their proposed Health, Economic Assistance, Liability Protection, and Schools Act, but more improvements to the PPP need to be made, the Consumer Bankers Association says. "While the HEALS Act does call for streamlined forgiveness, it does not specify what that form should look like or set a timeline for SBA to issue the form," a CBA spokesperson said.
US credit card debt has declined during the coronavirus crisis, but consumers may not be able to make their payments without further financial support from the federal government as unemployment rises. More than half of consumers surveyed by CreditCards.com said they would not be able to make their payments without additional help.