The Digest: December 2020

By on December 17th, 2020 in Industry Insights

Between the COVID-19 vaccine rollout, a potential second stimulus package, and the incoming Biden administration, big changes are upon us in the United States. How will these changes impact the worlds of finance, fintech, and collections? Here are the headlines we’re watching as we consider the changes to come in 2021:

• As we covered in November, the CFPB’s new debt collection rule signals a continued shift towards more protections for consumers in debt. With the incoming Biden administration, more regulatory news from the CFPB could be imminent, including announcements of more aggressive oversight of the student debt industry and regulations to help homeowners who are facing foreclosure.

• According to Bloomberg, “Americans’ household finances are in the best shape in decades,” despite the surging pandemic. While 2020 has been much harder on working-class families, data from the Federal Reserve shows that “they too have more money in the bank now.” Unfortunately, this good news regarding household finances is complicated by the recent jump in unemployment claims and an increase in food insecurity among low-income families.

• Lawmakers are currently in stimulus negotiations, which means some financial relief could be on the way for families and businesses. Even if a deal is not achieved in the coming weeks, the Biden administration has indicated that “it will push for a multi-trillion-dollar package in 2021,” according to Business Insider. As we’ve noted, a large stimulus could have wide-ranging effects on consumer finances, including a possible sharp increase in debt repayment.

• On the fintech front, we are still closely watching the rising success of BNPL (Buy Now Pay Later) startups, such as Affirm, Afterpay, and Klarna. PYMNTS.com recently released a study, Buy Now, Pay Later: Millennials and the Shifting Dynamics of Online Credit, that sheds light on the audience factors encouraging this emerging landscape. As we’ve noted before, flexible payment options can be a real win-win: better for the customer experience, as well as a positive for payment plan retention.

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