Today: Huge Financial Flows as the U.S.A. Aids the Business Community and Workers, Families…How Is the Flow Facilitated?

April 28, 2020 –   #WeRise2FightCOVID-19  Excellent in Corporate Citizenship on Display in the Coronavirus Crisis – #18

Introduction
These are the times when actions and reactions to crisis helps to define the character of the corporation and shape the public profiles of each of the corporate citizens. For the managements of companies, these are not easy times.

Important decisions are to be made, many priorities set in an environment of unknown unknowns — and there are many stakeholders to be taken care of.

The Good News 
Corporations are not waiting to be part of the solution – decisions are being made quickly and action is being taken to protect the enterprise.  This is no easy task while protecting the corporate brand, the reputation for being a good corporate citizen, watching out for the investor base and the employee base — and all stakeholders.

What are companies doing? How will the decisions made at the top in turn affect the company’s employees, customers, hometowns, suppliers, other stakeholders?  Stay tuned to our series.

by Hank Boerner – Chair & Chief Strategist – G&A Institute 

The government of the United States of America is directing hundreds of billions’ of dollars toward individuals, families, business enterprises, and local and state governments to aid in the response to the coronavirus emergency.  How do the much-needed funds reach the intended recipients?

As the U.S. Congress, the Federal Reserve System and the Treasury Department (and other agencies) make the moves to provide continuing financial support for small businesses, laid off and furloughed employees, and major industries like airlines, the ramping up of the enabling technologies to facilitate the financial flow is a herculean task.

Take the first round of financial aid to small business, with funds channeled from the Small Business Administration (SBA) through big banks, regional banks, community banks, credit unions, and other qualified lenders.

As U.S. banks and credit unions faced the “instant” onslaught of a huge volume of applications for financial aid, FIS (working with a growing number of financial institutions) leveraged its “Real-Time Lending Platform” to digitize and automate the lending process. The platform is now processing a high volume of loans and can be scaled to meet demand as needed.

FIS created a COVID-19 Online Resource Center to provide its clients with options and information to “adapt and rebound” to virus emergency challenges. Link:  https://www.fisglobal.com/response-center

About the Company
FIS is a leading provider of technology solutions for merchants, banks and capital market firms worldwide.  The company has more than 55,000 people “globally dedicated to advancing the way the world pays, banks and invests by applying its scale, deep expertise and data-driven insights”.  FIS is a Fortune 500 enterprise and is included in the S&P 500® Index. (FIS:NYSE)

FIS is now using its technology platforms to enable U.S. banks and credit unions to provide loans and other economic relief to small businesses and merchants under the Small Business Administration (SBA) “Paycheck Protection Program” (that is within the CARES ActCoronavirus Aid, Relief and Economic Security Act).

The PPP authorizes lenders (in the first round) to provide up to $349 billion in funds to U.S. small business and merchants that are impacted by COVID-1. Loans can be forgiven in time if used for payroll costs and certain other expenses; all funds must be used by June 30th.

FIS is also waiving minimum monthly service charges for April for U.S. and U.K. merchants and providing free virtual terminal access for U.S. merchants and retailers enrolled in the Worldpay from FIS IQ online portal (for remote processing).

The company is also providing online grocery shopping for SNAP benefit recipients (SNAP is a U.S. Department of Agriculture program – the Supplemental Nutrition Assistance Program).

Using FIS technology, SNAP benefit recipients in a piloted program (rolled out in Washington State, Oregon and Nebraska) can use their Electronic Benefit Transfer (EBT) cards to make online purchases of groceries through authorized retailers – such as Walmart and Amazon.

FIS government agency clients in the states of Arizona, Florida, Idaho and California were next in line for the program. (Typically, EBT users have to make their purchases at brick & mortar retailers.)

In 2017 CEO Gary Norcross became a signatory of CEO Action for Diversity and Inclusion, a network of 500-plus CEOs in 85 industry categories.

Talk About Overload
In the context of describing FIS’ involvement in the Federal aid programs, consider the complexity of banks, credit unions and lenders managing the load of loan applications.  In FY 2019, SBA managed just $28 billion in loans.  That was for 52,000 loans totaling $23 billion under the flagship 7A program and 6,000 loans for $5 billion under the SBA 504 program.

As of April 24, 2020 the volume is:  38,984 loans totaling $7,967,174,888 under just the SBA Disaster Assistance Nationwide National Economic Injury Disaster Loan program!

And no doubt there is more Federal financial aid to be on the table as the coronavirus continues.

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G&A Institute Team Note
We continue to bring you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency.

The new items will be posted at the top of the blog post and the items today will move down the queue.

We created the tag “Corporate Purpose – Virus Crisis” for this continuing series – and the hashtag #WeRise2FightCOVID for our Twitter posts.  Do join the conversation and contribute your views and news.

Do send us news about your organization – info@ga-institute.com so we can share.   Stay safe – stay healthy — keep in touch!

 

Examining Corporate Citizenship: How Ride-sharing Companies Respond to COVID-19? What They Promise – and How It Turns Out

G&A Institute Team Note
We continue to bring you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency.  This is post #12 in the series, “Excellence in Corporate Citizenship on Display in the Coronavirus Crisis” – April 6 2020    #WeRise2FightCOVID-19   “Corporate Purpose – Virus Crisis”

By Yuyou Chen – Sustainability Reporting Analyst Intern at G&A Institute

Just four months after surfacing in Wuhan, China, the Coronavirus has been spread all over the world and affected about 1.3 million people in total to date.

Up until April 6, 2020, the Centers of Disease Control and Prevention (CDC) has reported 330,8919 COVID-19 cases and 8,910 deaths in the United States. CDC has recommended statewide citizens to practice social distancing and working from home.

With less on-site working, there is a sharp decline in the usual daily commuter activity. According to the Cities Commuter Activities report by Visual Capitalist, Los Angeles and New York experienced 95% and 97% reduction respectively in commuter activity respectively over the past three months.

The same thing is happening to the driver’s side. Ride-sharing companies face challenges in keeping their drivers at work.

Uber and Lyft in the Crisis

While some Uber and Lyft drivers who work on a part-time basis refuse to take any orders due to infection concerns, other full-time drivers may still stay on the frontlines to serve travelers for basic needs – or, they will face unemployment.

Ride-sharing, featured with convenient apps and affordable prices, has become a popular mode of commuting among people nowadays. With algorithms matching passengers to nearby drivers, the businesses are operated based on sufficient numbers and balance between commuters and drivers.

Uber and Lyft are two leading North America-based ride-sharing companies, both of which are headquartered in San Francisco, California.

For the past month, ride-sharing companies experienced a slight turndown in the stock market: For Lyft, share prices are down 2.00% (Nasdaq: LYFT); for Uber, down 3.63% (NYSE:UBER).

While each company declares that it puts well-being and safety of employees and customers as priority during the COVID-19 crisis, they set out somewhat differentiated business and risk management strategies.

Similarity: both companies state they enforce cleaning practices among their drivers and partially suspend their operations in some cases.

Looking at Uber

Uber says on their official website that they will temporarily suspend the accounts of riders or drivers who “confirmed to have contracted or been exposed to COVID‑19”.

Uber provides drivers with disinfectants to keep their cars clean for free, with manufacturers and distributors keeping enough cleaning supply. In particular, the surfaces being touched most often should be wiped.

In addition, Uber enforces “no contact” policy in their sub-brand – UberEats – specializing in local food delivery.

With the social distancing order from California Governor Gavin Newsom, the state’s residents are encouraged to work at home.

UberEats expects an increase in demand for food delivery given the less commuting population. To support local restaurant businesses, UberEats waived the delivery fee for more than 100,000 restaurants in North America.

For safety concerns, they allow customers to ask for leaving food at the door by leaving a note in the app. Food delivery companies like Doordash and Grubhub undertake similar policies. UberEats also provides free meals to health care workers, according to JUMP website.

Looking at Lyft

Similar to Uber, Lyft also says in their official website that they will distribute hand sanitizers and other cleaning supplies to their drivers.

Further, to comply with California state order of social distancing, Lyft paused shared riding in all metropolitan markets, including San Francisco and Los Angeles. They also enforce cleaning activities in their bikes and scooters.

Lyft has established the COVID-19 fund to help drivers who are diagnosed with the Coronavirus disease survive the individual quarantine. (Uber also builds an employee relief fund for impacted restaurant workers.)

However, it turns out that Uber and Lyft are unable to guarantee their sick leave compensation at this moment, according to CNET reporting.

What Is Happening With the Local Drivers?

CNET recently spoke with three Uber drivers and one Lyft driver — all from San Francisco — who exhibited COVID-19 or other disease symptoms and had asked for paid leave. All of them said their companies need an extended period of time to review and process requests for sick leave.

Similar situations are reported to be happening in New York, Illinois and Washington State.

According to The Washington Post, such delay in unemployment aid issuance resides in the fact that “gig” workers are categorized as independent contractors.

In contrast to full-time laborers, they are not eligible for unemployment benefits such as paid leave and health insurance under the current U.S labor system. Without guaranteed labor protection, the Coronavirus has been posing a threat to their economic survival.

While the U.S. Congress and local government officials seem to be progressing to list self-employed labors to be protected under the Coronavirus Aid, Relief, an Economic Securities (CARES) Act, the realization of unemployment benefit issuance still depends on the corporate themselves.

The Coronavirus infections are increasing at this moment, and the spread across the United States is projected to slow down no earlier than the next two months. It will certainly further affect the economy of the ride-sharing companies financially.

While struggling to maintain financial stability, the ride-sharing companies still need to spend time prioritizing drivers and customers’ interests and concerns in facing up the unprecedented challenge.

In the midst of bad news, a glimmer of good news: The Coronavirus is stressful to all of us, of course, but viewing it from an environmental perspective, the nation’s overall GHG emission would be reduced due to such a large decline in commuting all over the United States.

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About the Author
Yuyou Chen works as a Sustainability Reporting Analyst Intern at G&A Institute. She is currently a senior working towards a B.S in Environmental Science and Management and a B.A in Economics at the University of California, Davis. She is interested in ESG investing, Sustainability Reporting, and Urban Mobility. She had previous internship experience in a British environmental consulting firm where she engaged on research and analysis of an eco-labeling project for a China paper making company.

Relief For IRA Account Holders – Minimum Distribution Changes

April 2 2020

By Daniel P. DoyleFellow, G&A Institute

Information that individuals can use if they are in the age bracket where they are required to make withdrawals from their IRA accounts, or if they are approaching the age for minimum withdrawals. The coronavirus crisis has resulted in rule change.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law on 27 March. Section 2203 of that Act suspends the Required Minimum Distributions (RMDs) that would otherwise be required of owners of IRAs and of certain defined contribution plans.

Individual owners of such plans who were born before 1 July 1949 are normally required to initiate distributions starting for calendar year in which they reach 70 ½.

Under recent legislation — the Secure Act — individuals who were born after 30 June 1949 would normally be required to initiate distributions at age 72.

Distributions are taxed as ordinary income. If a taxpayer does not need all or part of his or her RMD for current income, it can be beneficial to let the funds remain invested until future years.

There is no provision in the CARES Act for a taxpayer to reverse distributions that may already have been taken in 2020.
Congress passed a similar suspension for 2009.

Daniel P. Doyle – Bayside, New York – Fellow, Governance & Accountability Institute – https://www.ga-institute.com/about-the-institute/fellows-of-the-institute/daniel-p-doyle/daniel-p-doyle-career-information.html