» July 18th, 2016
News out of Washington D.C. this week that may very well have some students and formers students jumping for joy. The Obama Administration made an announcement about steps that are being taken to help make sure that borrower know all the rights they have when they take out student loans. It turns out the Department of Education worked closely with the Consumer Financial Protection Bureau and the Treasury Department to come up with a listing of new guidelines that lay out exactly how loan servicers should interact with borrowers. Additionally, the CFPB put out a new prototype guide that is intended to help people get a better understanding of repaying student loans. This guide is being called the “Payback Playbook” and it is to be given to borrowers who take out loans from student loan servicers or via their online student loan accounts. It is believed by some experts on this topic that this resource will help people pick the payment plan that is best suited for them.
The Secretary of Education John King said, “These borrowers’ rights and protections will help ensure that borrowers receive information about loans that is consistent, actionable, accurate and transparent.”
Financial professionals and analysts predict that Millennials are on the verge of a nearly $30 trillion wealth transfer as baby boomers continue to approach retirement. These younger consumers will need assistance to make sure that they invest wisely. Some programs are being set up to help pair millennial investors with experienced advisors in order to make the best decisions. These kinds of programs may prove to be even more helpful than the Playbook the CFPB is offering.
Advocates for borrowers have long said that the companies that are hired to collect student loan debts do not take adequate steps to make sure that borrowers understand all of their rights. What was announced this week should help to build up to a stronger plan in the future that will help borrowers to be better informed and more savvy about the process. More importantly, these combined efforts may finally convince the student loan collectors to provide a higher level of service and support for their clients. As of now, though, some states are doing things on their own, and have been using state-level regulations to control how loan servicers work in their states.
Speaking on the subject of student loan debt, the Director of the CFPB Richard Cordray said, “Millions of Americans are burdened by this debt, we cannot leave them in the dark about their repayment options. Learning is hard enough on its own without living in fear of future financial hardship.”
There are multiple repayment programs that people can choose from when they take out federal student loans. Some of the plans are tied to income levels, and they may help borrowers to avoid defaulting on their loans by keeping payments at a manageable level. Consumer advocates, however, have regularly argued that the loan servicers don’t do an effective job of communicating with borrower about the loan repayment options available to them. About 70 percent of borrowers who have defaulted on their loans would have qualified for income-related repayment plans. This statistic makes it clear that information is either not getting to borrowers or that the borrowers are not paying attention to details/understanding what they are told. It is more than likely a combination of all of these factors. The fact remains, though, that student loan debt is projected to increase in the future. The news from the Obama Administration doesn’t indicate that repaying student loans will be painless, but it may become more manageable once all of the pieces fall into place.
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» June 6th, 2016
Even though the economy is certainly in a better place now than it was 5 years ago, there is still room for some major improvements. When the issue of finances is brought to the table, people often talk about debt, interest rates and even the rising cost of living. These are all very valid points, and should be discussed and worked on. Additionally, wage stagnation is a huge piece of the overall economic puzzle for the average American consumer. If you’ve been listening to the various parties that have hopes of being the next US President, you have probably heard them talk about how most Americans have not got a raise in a decade and a half. Many blame globalization for this metric, and it certainly does contribute to domestic wage stagnation. Some candidates even believe that all foreign trade deals should be halted in order to correct things.
This may not be the best solution. When you dig into the statistics, you can find that even though the averages prove that most American workers haven’t got a raise in 15 years, there is a huge sector of the population that has been hit harder than the rest, which has skewed the statistics just a bit. How things usually work is that as you get older, you earn more money. This is still true for plenty of people. However, when the earnings of members of Generation X were analyzed from 2000 to 2015, the results showed that they typically enjoyed increased earnings. The thing is, however, that wage increases for the Gen X group mostly took place prior to 2009. Since then, the increases have pretty much fallen flat. With a larger group of Americans retired now, and Millennials still working their way up the ladder, this is very significant. You see, Gen X workers, who are still in their prime earning years, have missed out on years of raises that would have helped to put them in a better financial situation. You simply cannot recover all of those missed years of wage increases, so Gen X is likely feeling the pinch of wage stagnation more than other age groups.
All of this should be alarming to people who keep track of financial issues. With the majority of wage stagnation happening after the recession, people need to stop to realize what that means. Factors, like new technology and globalization have certainly contributed to the halt in wage increases. But if we stop to think about it, those things were also around prior to the recession. During that time American workers were enjoying regular pay raises, per normal. What we may be seeing is a ripple effect from the Great Recession which is contributing to people getting stuck with less pay. Shutting down any trade agreements may very well distract those who can fix this problem from the true cause of American wage stagnation.
All of this does not imply that Baby Boomers and Millennials have it easy in the workplace, with regards to salary increases. The fact of the matter, right now, is that wage increases – if not completely gone – have certainly become smaller. Gen Xers simply have to realize that they have been cheated out of wage increases during some of their most productive working years. Regardless of how old you are, it is easy to see that there is simply no more relying on that big yearly raise to help you make it to another level. The focus right now should be cutting down on personal debt and doing all that you can to save money for the future.
» June 1st, 2016
It is no big secret that the Consumer Financial Protection Bureau is planning on implementing new rules that could dramatically change the payday lending industry. Some opponents of the new federal regulations being proposed have even said on record that these rules could very well destroy the industry entirely. Of course, since the mainstream media does nothing but fluff pieces about the cons of payday lending, and no big stories on the positive aspects of this industry, there are some that are chomping at the bit to see payday lenders get smacked down by the federal government’s watchdog group – the CFPB. But there’s more to the picture than meets the eye, and these new rules could spell financial disaster for some states.
Payday lending companies are not the old loan sharks from the movies who are seducing people to take out high interest loans. This may be the picture that some advocate groups would like you to believe, but it’s not true. There are payday lenders out there that perform hundreds of thousands of transactions each month. Some even have customers that drive over 50 miles or more to get loans to take care of unforeseen circumstances. In fact, a recent study showed that 95 percent of payday loans customers value the services they get from these lending companies. Many believe that without the payday loans that they take out, they would be left with no other options when they were in dire need of emergency cash. The potential for the CFPB’s new laws to decimate this industry have simply not addressed the millions of people who depend on these loans, often during the most difficult times of their lives.
New regulations on the payday lending industry would not just eliminate the loans the people depend on, but they could also stop consumers from getting access to money orders, check cashing and even wire transfer services. Many payday lending locations are the sole providers of these services in some areas. If these locations were to be forced out of business due to new CFPB regulations, tens of thousands of people could find that they no longer have reasonable access to some of the ancillary services that payday lending locations routinely offer.
An Example from Tennessee
There are broader, state-level economic issues to consider that are related to this issue as well. Take, for example, the State of Tennessee. A Nashville Area Chamber of Commerce crunched the numbers and found that the state could wind up losing over $3 billion if payday lenders are over regulated to the point of having to close up shop. Additionally, it is estimated that as many as 34,000 jobs would completely dry up in the state. That is a heck of a lot of revenue for any state to lose, and it would have rebounding negative effects that would likely last for generations.
Usurping the Power of State Government
The bottom line is that states already have payday lending rules and regulations in place. The federal government – by way of the CFPB – would be setting a dangerous precedent of nullifying the authority of individual states if the CFPB is allowed to cram in its new regulations and to impose them on every state in the nation. No matter what your political leanings are, you have to admit that it is extremely dangerous for an almost non-accountable government agency to swoop in and implement these kinds of changes; regardless of what industry they have set their sights on taking action against.
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» March 15th, 2016
It was not all that long ago that Dick Saslaw, Senate Democratic Leader, put together a deal that he came up with behind the scenes that would allow two of the most popular car title lenders in Virginia avoid regulatory penalties. While this has been going on, the state’s House of Delegates have been pondering their upcoming decisions/actions. Initially, it looked like the deal Saslaw put together would cause a serious problem. Why would reforms move forward when Virginia Auto Loans and TitleMax have pledged to change the way that they do business from here on out?
It did not take very long, however, for the gravity of the situation at hand to set in.
TitleMax and Virginia Auto Loans are not the only companies that have a stake in what happens next. LoanMax is another title lending company that has been given permission to have “dual licenses.” This means that they are able to offer both loans on car titles and consumer finance loans. However, LoanMax was not included in this new deal. There is also nothing that is going to stop 26 other title loan operations in the state from getting consumer finance licenses, and getting involved with the same types of actions that resulted in the new bills that have been introduced to increase the regulation on this industry. Factoring in the five car title loan businesses that are allowed to offer loans on the Internet – loans with no limits on the interest rates charged – and it becomes apparent that this situation is not one that will reach any sort of mutual agreement in the near future.
Democratic delegate, Jennifer McClellan, who hails from Richmond Virginia and who is also a member of a panel that is dedicated to title loan reforms, said, “I am not going to vote for anything that I think leaves a door open for predatory lending. If this leaves a door open for predatory lending, then I’m not going to support it.”
By far, the most interesting legislation was introduced by Republican delegate Randy Minchew. The bill he introduced would put a cap on all loans at just 36 percent. This cap would include care title loans that are currently capped at 264 percent. It would also include consumer loans, which have no limits on finance charges as long as the loan is for more than $2,500. Minchew said that he is dedicated to keeping this legislation moving forward, no matter what the status of Saslaw’s deal.
Minchew, who saw his bill mentioned by Governor Terry Macaullife earlier said, “We’ll have independent hearings, and talk about the concerns that gave rise to those bills being filed. That’s how a bicameral legislature works.”
Those who have been critical of the car title lending industry are also critical about whether or not Saslaw is the right party to negotiate with these lending companies. According to campaign finance reports, he has received nearly a quarter of a million dollars from the lending industry over the last ten years. That figure includes $37,000 from TitleMax and $55,000 from LoanMax. In a time that sees nearly every provider of alternative lending products under severe scrutiny, this situation is likely to remain one of interest for some time to come. Perhaps the best solution would be for the parties involved to come to an agreement that is fair to everyone involved. And that everyone includes the lenders and the consumers they serve – not necessarily those who are jockeying for political power.
» December 22nd, 2015
Spring of 2014: The Consumer Financial Protection Bureau released new proposals to change the rules that apply to the payday lending industry. These new proposals were applauded by consumer advocate groups, as a necessary measure to take against payday lenders; seemingly punishing them for the “sin” of offering alternative financial services to the underbanked and unbanked households of the United States. The end result – the new regulations that seek to penalize payday lenders for doing business – were no surprise to a particular nonprofit group.
Elizabeth Warren and other liberals like to denounce the fact that big banks and lobbyists had a part in helping to create this new legislation. For example, the agency Warrant created to help provide protection to consumers from predatory lending practices got a lot of support from nonprofit activist groups as it created the new regulations to make business more challenging for the 46 billion dollar payday lending industry. A group called the Center for Responsible Lending spent a lot of time with folks from the Obama administration to give their two cents about how to implement new rules that would put heavy restrictions on the majority of short term lending companies. This group just happened to also trade emails and to have meetings with some of the top elected officials; the same officials who would actually be drafting the new rule.
While all of this was going on, the group’s side-business – the Self Help Credit Union – was pressuring the CRPB to lend its support to their smaller-dollar loans. These loans would offer lower interest rates and would serve as alternative to traditional payday advance loans.
It is no secret that trade groups and companies spend millions upon millions of dollars to lobby the government and to promote their own agendas. However, the Center for Responsible Lending’s actions to effectively neuter the payday lending industry is a shocking example of how consumer groups and nonprofits can work the system in Washington to get laws that they want enacted and pushed through.
This proposal is especially significant, since it may serve as a model for how the CFPB creates new rules in the future. In fact, something called a “notice of proposed rulemaking” is expected to be released by the CFPB in the months to come.
The Consumer Financial Protection Bureau has already been criticized by conservatives and industry leaders, including an ad that was on TV during a recent Republican debate. The collaboration between the Center for Responsible Lending and the Consumer Financial Protection Bureau to penalize the payday lending industry could fan the flames of rhetoric which seem to indicate that the CFPB is against business.
The agency has long been under fire from industry and conservative groups, including in an ad that aired during the Republican debate last week. CFPB’s collaboration with the Center for Responsible Lending on payday lending rules could fuel attacks that the agency has an anti-business bias. Prior to the CFPB releasing its proposals for the new rule, the Center for Responsible Learning, along with other advocate groups, worked hand-in-hand to help create this proposal. It doesn’t take a genius to see that this type of policymaking really does help to bring certain groups to new levels of secrecy. The end result seems to be some shady deal making that may very well result in consumers getting shafted when it comes time to try to apply for short term lines of credit. The CFPB continues to use any and all means necessary to wage its very personal war against payday lending companies and other legitimate businesses.
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» June 17th, 2015
A bill that was aimed at lowering the maximum interest rates charged by Payday lenders recently died, after a major showdown between Senator Rosalyn Baker and Representative Justin Woodson. Both Woodson and Baker are from Maui County. Baker’s proposal, Senate Bill 737, if it would have passed, would have capped the APR on payday loans at 36 percent. Of course, most payday lenders configure their fees as flat rate loan fees. That fact, however, does not stop some opponents of payday loans from translating those flat rate fees into inflated interest rates charges. For the time being, however, it looks like payday lenders are pretty much wide open when it comes to their fee structures in Maui County. Woodson countered Baker’s proposal with a plan to help better enforce the current law, while maintaining the current fee rate caps.
Baker was not too happy with Woodson’s counter-proposal. However, the payday lending companies have been proven to offer much-needed financial services to customers. Many of these lenders would have to close up shop permanently, and leave their customers high and dry, if they were forced to cap their fees at the proposed 36 percent. Baker said, “Basically what your bill does is to put this kind of anti-consumer predatory lending thing in the statute in a different way than what it currently exists. That’s not acceptable to the Senate.” Woodson spoke his mind on the issue, saying “The House position is 18 percent transactional fee, the Senate position is 36 percent APR.” Woodson’s point of view notes that the law currently ensures that loans have to be paid back within 30 days and that APR does not appropriately measure the cost to borrowers.
Baker brought up the fact that many borrower take out more than one loan in a month and wind up owing on their loans for months. A recent study indicated that 80 percent of payday loans are rolled over or renewed within 14 days. This data runs counter to some other studies, but Baker continues to refer to it during her arguments.
Things got heated as Baker went on to say, “But if the House wants to be known as the group that is anti-consumer protection and wants to be standing up for a predatory lending practice, so be it. The Senate will not agree, and we can adjourn now. Is that your pleasure?”
“There’s a lot of misinformation …” Woodson replied
“Is that your pleasure?” interrupted Senator Baker
“We agree to disagree Senator,” Woodson countered.
“We’re adjourned.” Baker said, slamming the gavel dramatically.
This little exchange shows that there is no love lost between these two with regards to their viewpoints on the short term lending industry. It is unlikely that the two sides will reach any amicable agreement in the near future.
Payday loans have been legal in Hawaii since 1888, via a statute that was called ‘deferred deposits.’ The official law allows lending companies to charge 15 percent on loans of up to $600, and the money must be paid back within 30 days. For the most part, payday loans have a term of just two weeks. Lending companies are required to clearly communicate the fees associate with these loans, and study after study has shown that repeat borrowers understand the fee structure and make it a point to borrow responsibly, even when they take out multiple short term loans in quick succession. Hawaii may be a paradise for some, but for people who live from one paycheck to the next, payday lenders continue to provide financial lifelines, regardless of what Senator Baker thinks about the fees these lenders charge.
» March 25th, 2015
When lots of people think back on their younger days, they remember being care-free and having a bit of fun. These days, however, the younger generation is actually beginning to experience high stress levels because of debt, lower incomes and poor job prospects. In fact, there is a big financial storm brewing for Millenials in the form of exceedingly high student debt levels. In their efforts to become educated and viable to employers, this generation has found themselves in a struggle to repay their student loans.
This financial struggle has led lots of Millenials to have no other option but to live back at home with their folks. The younger people who are fortunate enough to live from paycheck to paycheck are still struggling with paying their debts every month. Some experts believe that this unique combination of financial difficulties is leading younger people to putting off important milestones, like getting married, having kids and saving money for the future.
The average student these days has student debts that rank in at $33,000. Nearly 70 percent of students are taking on educational loans these days, which is a big increase from only half of students taking out student loans back in 1994.
There is no doubt that the cost of a higher education, even with adjustments made for inflation, are higher these days than ever before. Employers demand more education from potential employees, which has made many Millenials feel as though they are being forced to get a bachelor’s degree at a minimum. Some even feel that they don’t have a chance at scoring a decent job without a graduate degree. Graduate school leads to even more debt, with 15 percent of students who leave school with a graduate degree owing more than $100,000 in education-related debts.
How bad is the whole student loan debt situation? Well it has reached a point where student loans now account for the second highest amount of consumer debt. Only mortgages account for more debt in America today. Even credit card debt doesn’t come close to touching the total amount of money owed on student loans in this country. Some Millenials are trying to deal with all of this debt by refinancing their loans or consolidating their debts. This can help to provide a bit of financial breathing room, but these methods will not put an end to the student loan crisis that so many young people are dealing with today.
Some private student loans, for example, are subject to variable interest rates. Refinancing these types of loans may help to take pressure off of Millenials for a bit, but they will not prevent today’s younger person from still having a lot more debt to deal with than the previous generations might have even dreamed about owing.
The fact of the matter is that the demand for educated employees is not going to go away any time soon. As such, potential students will have to be prepared for the fact that they may very well be paying on their student loans for many years to come. We may find that more young people begin to take on jobs while they are in school. It is not an ideal situation to have to work a job while important class work and studying needs to be done, but managing to bring in even a smaller paycheck, and saving that money for paying off debts in the future, may be the only alternative that some students have.
» January 21st, 2015
We can all pretty much agree, no matter how much we understand about finances, that staying out of debt is a pretty good idea. But if you are in debt to such a degree that it is impacting your life negatively, what can you do? Knowing that you are in a state that needs to be repaired means that you have taken the first step. We are about to share some tips with you that will help you to whittle down your debt and to stay in a state where debt is no longer an obstacle in your life.
The first thing you need to do is to learn to forgive yourself for past mistakes. Too many people walk around every day, beating themselves up because of past financial mistakes. You know that you made mistakes that resulted in too much debt. Learn from those mistakes, forgive yourself and move forward with a plan of action to never get in over your head in debt again.
So you have learned from those past financial mistakes, and that is a good thing. Now is the time to commit to yourself and to your family that you will save up enough money to make any major purchases in the future. Don’t ever use a line of credit to pay for the things that you want/need. The only exception to this rule would be if you are going to purchase a new home in the future. Even auto purchases should be made via money that you have saved up. And remember, before you purchase a home, make sure that you have saved at least 20 percent for your down payment.
Sticking with this step may make you feel like you are living on less money than you are used to. But by learning to save money for purchases, and for emergencies, you will find that you become more financially responsible over time.
How do I make purchases without going into debt again?
Here’s the quick answer to this important question: Only buy things with money that you have. Remember, when you use a credit card to make purchases you are really borrowing money, and at a high interest rate most of the time. You should also avoid borrowing money from friends or family members, as debt is debt and money issues can lead to major fallings out between people who care about each other.
Start a Budget
Now that you are on the path to not using your credit cards for purchases and saving money when you can, it is time to get on a budget. Budgeting is a bad word to the financially irresponsible, but it is the only way to track money coming in and going out of your bank account. By drafting a basic budget and tracking it every month, you can find expenses that can be cut and make better financial choices in the future. You don’t have to be an accountant to realize the importance of creating, and sticking with an organized, realistic household budget.
It is not an easy thing to honestly assess your financial situation, especially when you have made some mistakes in the past. However, if you put these basic financial tips into practice, and stick with them for the long haul, you will be able to significantly improve your financial situation. Living without excessive debt is the only way to live. You will be glad that you took the time to learn these tips and your family will be better able to enjoy life when you are not strapped to excessively high levels of debt!
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» April 7th, 2014
There are so many websites out there and there are more popping up every day. There are probably some that you know about but do not really visit, some that you visit regularly, and then there are some that you have no idea that they exist. Here are some great websites for 2014 that you should consider looking into.
If you are a mom you will surely love this blog. The site is Tend.com. It covers so many things from kids’ rooms, to birthday parties, to dinners your child will love. If you are a mom definitely check out this website for some great inspiration in your home.
Upworthy.com is a fairly new website. It has been around just over a year, it is a social news site. It wants to brin
g light to content that is not only inspirational but sharable, and they hope that people will care enough to share. If you like to stay up to date on news, give this social news site a try!
Everyone has a hobby, and for some people that hobby is watches. Where online would you go for such a hobby? Well, you should go to Hodinkee.com. It is all things watches from vintage to new you can find it there. It is a watch lover’s dream site1
Do you ever get tired of having to go from one social media site to another? Do you wish that you had them all on one page? Well now you can with RebelMouse.com. This website will allow you to bring all your social media pages to one page to manage easier. You can set your page up with just a few clicks and setting or you have the option of really personalizing it. For all those social media addicts out there, this is the website for you!
There is a brand new website out there called Curious.com. Its goal is to be a fun place to teach and be taught. According to the site instructions on just about anything can be uploaded to the site for all viewers to enjoy and learn. The proprietors of the website make sure that the content is appropriate and that the teachers are approved.
With the amount of websites available and the amount that will pop up in the future it is fairly safe to say that it would be near impossible to visit all the websites out there. Do not stress yourself out trying to find the best websites for 2013. Instead visit these websites and see if they are what you are looking for and go from there. These are going to be very popular websites this year, and possibly for the years to come.
» March 17th, 2014
If you track the evolution of cell phones since they first came on the market it is easy to see that they have come a long way. Once they were very large and you had to pull out an antenna to use one. Now they are sleek and are more like a pocket computer that you can use to make phone calls on and text with. New and exciting ideas are constantly being developed for these phones, and one new idea makes them more like a pocket computer than ever before.
How many of you have Microsoft office on your computer? There is a good chance that almost all of you do, I certainly do. Those of us who do have it may only use it ever once in a while or we may use almost every day. The point is that we find it to be useful. Now if you have the iPhone you can go to the Apple App Store and download Microsoft Office for your phone.
Now this is not going to be a free app of course. This app will be purchased on a yearly basis. The cost to own this app is $99 per year. If you are one who uses Microsoft Office on a regular basis and do use your iPhone as a pocket computer not just a cell phone, this may be a good deal for you. It could allow you to do more all from your phone. It could eliminate the need to carry additional devices everywhere you go, or in the event that you forget one, you can still use those programs on your cell phone.
Your documents, as you may know, live in Microsoft SkyDrive so you do not have to worry about getting documents mixed up by going from one device or computer to another device or computer. This is going to make things much more convenient for many people. You do not have to worry if you forget your laptop or tablet at home, as long as your iPhone is with you and you have downloaded the Microsoft Office app.
For those who use these programs for their work it can make life that much easier. It is a new way for a product that is used by many to meet the needs of those who use it. It could bring multitasking to a whole new level. I imagine there will be plenty of people who will have a need for this, that the app will be rather successful. In today’s society we always seem to be on the go so anything that helps us to get work done while on the go seems to be rather popular with those who use those programs.