How Consumers Are Using Latest Relief Checks

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DISCLAIMER: As the COVID-19 public health situation evolves, new regulations are being continually issued. This page/story/information may not include the most recent information.Nancy Marshall-Genzer     Apr 17, 2021 

The Federal Reserve Bank of New York released a study Wednesday on how people are spending — or not spending — their relief checks.

The report found that the consumers it surveyed who’ve already received their third relief checks are mostly hanging on to the money, just like they did with the first and second payments. It said that consumers are planning to spend only a quarter of the most recent check, and most of that will be spent on essentials.

Jason Calizar, an eighth-grade teacher who lives near Los Angeles, explained why he’s not opening his wallet, saying: “We’re savers.”

He said that before the pandemic, he, his wife and teenage son would go out to eat once or twice a month. But now, they will not be using any of their stimulus money for that. In fact, he doesn’t think they’ll set foot in a restaurant until next year. “We’ve spent the better part of 13 months just avoiding indoors, or people, strangers. It would just be a big hurdle to get over,” he said.

Calizar said they might reconsider once they’re all vaccinated. A lot of consumers feel the same way, said Kathy Bostjancic, chief U.S. financial economist at global forecasting and analysis firm Oxford Economics.

“The confidence to go out and spend on services is very directly related to the progress we’re making on the vaccinations,” she observed.

Bostjancic thinks we’ll make enough progress for consumer spending to jump about 3.5% over the next few months. Other economists are not quite as optimistic, like Joseph Minarik, senior vice president of the Committee for Economic Development of the Conference Board.

He said, “The people who work in hotels or in transportation, where getting up to full capacity is going to take some time — those folks are going to continue to hold back in terms of their spending.”

Minarik added that even some people who have jobs are worried they’ll get a pink slip. And economic growth will not recover without them, since roughly 70% of the U.S. economy is consumer spending.


Michigan license number:   DM-0016282 Available to the public and licensed in Michigan.

Section 13(1)  When a licensee establishes a debt management plan for a debtor, the licensee may charge and receive an initial fee of $50.00

Section 13(2)  A licensee shall attempt to obtain consent to participate in a debt management plan from at least 51%, in number or dollar amount, of the debtor’s creditors within 90 days after establishing the debt management plan. If the required consent is not actually received by the licensee, the licensee shall provide notice to the debtor of the lack of required consent and the debtor may, at its option, close the account. If the debtor decides to close the account, any unexpended funds shall be returned to the debtor or disbursed as directed by the debtor.

Sec. 14. (1) A contract between a licensee and debtor shall include all of the following:

(a) Each creditor to which payments will be made and the amount owed each creditor. A licensee may rely on records of the debtor and other information available to it to determine the amount owed to a creditor.

(b) The total amount of the licensee’s charges.

(c) The beginning and termination dates of the contract.

(d) The principal amount and approximate interest charges of the debtor’s obligations to be paid under the debt management plan.

(e) The name and address of the licensee and of the debtor.

(f) Any other provisions or disclosures that the director determines are necessary for the protection of the debtor and the proper conduct of business by a licensee.

Sec. 18. (1) In addition to the fee described in section 13(1), a licensee may charge a reasonable fee for providing debt management services under a debt management plan. The fee under this subsection shall not exceed 15% of the amount of the debt to be liquidated during the express term of the plan.

(2) A licensee may offer a debtor the option to purchase credit reports or educational materials and products, and charge a fee to the debtor if the debtor elects to purchase any of those items from the licensee.  Fees charged under this subsection are not subject to the 15% limitation on fees described in subsection (1).

(3) Except for a cancellation described in subsection (4), in the event of cancellation of or default in the performance of the contract by the debtor before its successful completion, a licensee may collect $25.00 in addition to any fees and charges of the licensee previously received by the licensee. This $25.00 fee is not subject to the 15% limitation on fees and charges under subsection (1).

(4) A contract is in effect when it is signed by the licensee and the debtor and the debtor has made a payment of any amount to the licensee. The debtor has the right to cancel the contract until 12 midnight of the third business day after the first day the contract is in effect by delivering written notice of cancellation to the licensee. A cancellation described in this section is not subject to, and a licensee shall not collect, the fee described in subsection (3).

(5) If a debtor fails to make a payment of any amount to a licensee within 60 days after the date a payment is due under a contract, the licensee may, in its discretion, cancel the debt management contract if it determines that the plan is no longer suitable for the debtor, the debtor fails to affirmatively communicate to the licensee the debtor’s desire to continue the plan, or the creditors of the debtor refuse to continue accepting payments under the plan.

(6) A licensee shall not contract for, receive, or charge a debtor an amount greater than authorized by this act. A person that violates this subsection, except as the result of an inadvertent clerical or computer error, shall return to the debtor the amount of the payments received from or on behalf of the debtor and not distributed to creditors, and, as a penalty, an amount equal to the amount overcharged.

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