News Bulletin: COVID-19 Scams, States Extend Unemployment Benefits, What We Know About A Second Round of Stimulus Checks, and More.

1. Americans Lost Over $77 Million to COVID-19 Scams | CNBC
   • According to the Federal Trade Commission (FTC), Americans have lost over $77 million to coronavirus-related fraud, but advocacy groups expect that the actual losses are much higher since consumer fraud is historically an under-reported crime. Scammers have taken money from stimulus checks, often under the guise of helping people receive their checks faster. Scammers have also stolen unemployment benefits by pretending to offer individuals help with filing for unemployment. Other COVID-19 related scams include offering fake treatments and cures for COVID-19, as well as fraudulent threats of utility shutoffs. Learn more about how to protect yourself from crisis scammers.

    

2. Americans More Secure About Jobs, But Earnings Expectations Drop According To New Survey | Reuters
   • In a recent survey conducted by the New York Federal Reserve, American consumers report feeling that the worst of the coronavirus economic crisis is behind them and more confident that they won’t lose their existing jobs, but they also report that they are still concerned about their earnings and finding new employment if they become unemployed. According to the Bureau of Labor Statistics (BLS), real hourly wages dropped by 1.7% from May to June.¹ The BLS also reported that the unemployment rate dropped by 2.2% to 11.1% in June, while the total jobless rate has risen by 7.6% since February.²

    

3. States Extend Unemployment | Yahoo! Finance
   • As Congress continues to decide whether to extend the $600 weekly unemployment benefit previously provided under the CARES Act, individual states (other than South Dakota) have extended unemployment benefits available through the Extended Benefits (EB) Program. The EB Program is a federally funded program that extends unemployment benefits by up to 13 weeks for states experiencing high unemployment and up to an additional 7 weeks (up to 20 weeks total) for states experiencing extremely high unemployment.³ To be eligible for EB, an individual must have exhausted other unemployment insurance benefits.  Additionally, not everyone that qualified for regular benefits will qualify for EB. If you or someone you know is currently unemployed and looking for options, visit the Department of Labor here for guidance and answers to frequently asked questions about unemployment insurance relief during the COVID-19 pandemic. You can also go here for additional information about how to file for unemployment and what to expect.

    

4. What We Know About the Current Proposal for a Second Round of Stimulus Payments | CNET
   • White House Economic Advisor Larry Kudrow announced that a second round of stimulus payments is reportedly in the works, which is likely to include the same $1200 stimulus payment for eligible individuals as was provided in March under the CARES Act.⁴ The new Republican proposal, called the Health, Economic, Assistance, Liability Protection, and Schools Act (HEALS Act), offers benefits that include a stimulus payment and federal unemployment benefits up to 70% of worker’s prior earnings, plus an additional $200 a week. While eligibility has not yet been finalized, reports suggest that, similar to the CARES Act, single-income earners who made less than $75,000 would qualify for the full $1,200 payment, while those who earned more would see a decrease of $5 for every additional $100 they earned. Payments would phase out entirely for earners who made more than $99,000 in 2019.⁵ According to Kudrow, the second round of stimulus payments is targeted towards those without jobs or who have low-incomes.

    

5. IRS Offers Additional Retail Partners that Accept Cash Payments for Federal Income Taxes | IRS.gov
   • The IRS has announced⁶ that taxpayers can now make cash payments for federal income taxes without a bank account or credit card at ACE Cash Express, participating 7-Eleven stores, and Casey’s General Stores nationwide. This new cash payment option is available for both individual and business taxpayers.

 

6. FICO Will Now Score Your Readiness For a Financial Crisis | Washington Post
   • To minimize the risk of consumers falling behind their credit card payments, lenders have started to reduce credit limits or cancel credit cards with little or no notice. This can be true for customers with excellent credit scores, but those with poor or subprime credit may be disproportionately impacted by the measures taken by lenders. To give lenders more insight on which consumers are most likely to be financially resilient enough to withstand an economic crisis, FICO has launched a new ‘Resilience Index’. The objective of the new index is to provide lenders a manner to better assess which consumers can withstand a financial downturn, thereby allowing lenders to keep extending credit to consumers deemed to be more resilient. The Resilience Index score ranges from 1 to 99, with scores in the 1 to 44 range being viewed as most prepared for economic stress. Learn more.

 

7. Student Loan Rate Drops to Historic Lows | USA TODAY
   • Federal student loan rates for the upcoming 2020-2021 academic year have dropped to the lowest rates in a decade, falling to 2.75% for undergraduate direct loans and 4.3% for graduate direct loans.⁷ These new rates are predicted to save borrowers billions of dollars over the next decade. Unfortunately, the rate decreases do not apply to private student loans or loans that were taken out before July 1, 2020.

 

8. US GDP Drops 9.5% from First Quarter to Second Quarter, Consumer Spending Increasing | Yahoo! Finance
   • The U.S. GDP, an indicator of the size of a country’s economy and its growth rate, shrank by 9.5% from the first quarter to the second quarter in 2020,⁸ according to the U.S. Commerce Department, and by nearly 33% on an annualized basis. According to the New York Times, the second quarter contraction is expected to be the worst quarter recorded in the over 70 years that GDP statistics have been collected.⁹ The drop likely relates to the economic shutdowns across the country as shelter-in-place orders were given and many industries, including tourism, retail, and hospitality, were forced to close. While many states have since reopened, some have shut down again after experiencing a rise in coronavirus cases. Despite the contraction for much of the second quarter, economic activity began to pick up at the end of the quarter. Forbes reports that consumer spending increased in June, especially on homes and autos.¹⁰

9. Global Car Sales Estimated to Drop 22% This Year | GoBankingRates
   • According to research company IHS Markit, global car sales will decline by about 22% overall in 2020.¹¹ Downturns in car sales and car rentals could have a lasting impact on the automotive industry as supply increases and demand decreases. If you’re considering buying or leasing a new car, you may have more affordable options. According to GoBankingRates, it’s now easier to comparison shop online, make auto deals over the phone, and even secure financing online. GoBankingRates breaks down some of the ways the coronavirus has upended the auto industry here.

Sources:

1. https://www.bls.gov/news.release/realer.nr0.htm
2. https://www.bls.gov/news.release/pdf/empsit.pdf
3. https://oui.doleta.gov/unemploy/extenben.asp#:~:text=Purpose,State%20is%20experiencing%20high%20unemployment.
4. https://www.cnbc.com/2020/07/26/kudlow-says-coronavirus-relief-will-include-1200-checks-and-extension-of-eviction-moratorium.html
5. https://www.rpc.senate.gov/policy-papers/update-on-the-coronavirus-response-heals-act
6. https://www.irs.gov/newsroom/irs-offers-additional-retail-partners-that-accept-cash-payments-for-federal-taxes
7. https://www.usatoday.com/story/money/2020/07/01/student-loan-rates-covid-19-college/5354301002/
8. https://www.bea.gov/news/2020/gross-domestic-product-2nd-quarter-2020-advance-estimate-and-annual-update
9. https://www.nytimes.com/2020/07/29/business/economy/us-gdp-report.html
10. https://www.forbes.com/sites/advisor/2020/07/31/how-bad-was-second-quarter-gdp-   really/#5896ccd44430
11. https://ihsmarkit.com/research-analysis/global-light-vehicle-sales-to-decline-to-70-million-units.html