Comment of the Day
October 28, 2009 | Uncategorized | Comments (0)The significance of the APR is proportional to the term of a loan. For a 30-year home loan at 6% APR, adding one percent to the APR increases the total cost by over 20%, whereas with a two-week payday loan at 400% APR, adding one percent to the APR increases the total cost by less than a quarter of a percent.
APR caps are unscientific, eliminate short-term loans from the marketplace, and hurt consumers who only qualify for short-term loans by cutting off their access to credit, even in emergencies, or driving them to the dangerous black market.
Industry supports financial literacy
October 27, 2009 | industry, positive media coverage | Comments (0)And Larry Meyers gives credit where credit is due….even to the Cleveland Plain Dealer:
However, I have to credit reporter Sheryl Harris of the Cleveland Plain-Dealer for providing a balanced article on the payday loan industry in Ohio. Ms. Harris reported on Checksmart providing free financial literacy seminars in conjunction with the Ohio Black Legislative Caucus and Congress of Racial Equality.
Naturally, those opposed to the industry somehow see these seminars as evil. Why? Because they are utterly biased against the industry. Why? Because they are naturally in a position to see what happens to irresponsible borrowers, or those harmed by a handful of bad apple lenders. Why? Because they belong to Cleveland Diocesan Social Action Office and the Faith Community United Credit Union. It is these types of organizations that people go to for help. What these organizations always do is draw a conclusion based on sampling bias — since all they see are people in trouble, they conclude that nobody is actually being helped by payday loans — which they are, in droves.
Taking it to the streets
October 27, 2009 | alternatives, industry | Comments (0)In what seems to me to be a misguided effort to force banks to change. Seems to me these people are just venting:
The group, which included supporters from community group National People’s Action and the Service Employees International Union, has organized the protests to coincide with the annual meeting of the American Bankers Association. The group is demanding that “banks end their over-reliance on greed and profits and commit to using their taxpayer bailouts and backstops to help America’s economy recover,” said a news release from the Service Employees International Union.
The protests, similar to ones that have flared up in other cities throughout the financial crisis, pick up on popular sentiment that big banks are partly to blame for the financial crisis. Last week, a government pay czar proposed slashing compensation for bank executives whose companies received government bailout money.
“Over-reliance on greed…”? What does that mean?
This sums it up
October 27, 2009 | Uncategorized | Comments (0)
More on Sheila Bair’s remarks
October 27, 2009 | federal legislation, industry | Comments (1)Huffington Post has a good video while this particular comment caught our eye:
“In looking at indecipherable credit card statements and documents, mortgages you can’t understand and APRs from payday loans and high overdraft fees, I don’t see how anyone can say we’ve done a good job protecting consumers from financial services.”
This is the epitome of nanny-statism. Ms. Bair, consumers need access to credit and can make their own decisions about financial services.
Perfect credit doesn’t pay
October 27, 2009 | alternatives, industry | Comments (0)From the story:
Loraine Mullen-Kress carries a Bank of America credit card and religiously pays off her balance.
“Flawless credit,” she boasted.
Yet now, her good credit habits could cost her. Earlier this month Bank of America started notifying customers like Mullen-Kress that they will be charged a new annual fee of $29 to $99.
“There is a big segment of their population that they will have never made money on, which is people who pay their bills on time every month,” said Ben Woolsey, Director of Consumer Research at CreditCards.com.
Great website name
October 27, 2009 | alternatives, federal legislation, industry | Comments (0)The Payday Pundit has URL envy. A story on overdraft protection up at Mainstreet.com:
While Washington has been whispering for weeks about new bank consumer protection
rules, up until now nobody has put any numbers or specifics on the table. The Dodd bill does so by pinning down banks on the number of times overdraft fees can be levied as well as taking dead aim at the size of the overdraft fees.
Congress isn’t happy with banks these days. Many financial institutions were bailed out by taxpayers, only to turn around and raise consumer overdraft fees — or, as the banks called them, overdraft protection
Dodd calls for credit card rate freeze
October 27, 2009 | alternatives, federal legislation, industry | Comments (0)From the article:
Senate Banking Committee chairman Chris Dodd on Monday announced plans to introduce a bill to immediately freeze credit card interest rates on existing balances.
In May, Congress passed The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, which outlaws arbitrary increases in interest rates, fees or finance charges. But Dodd argues the new bill is needed because credit card companies have been “jacking up” interest rates in “a last ditch effort to squeeze customers” before the Credit CARD Act goes fully into effect next February.
I’m guessing banking lobbyists have the clout to beat this back.
The campaign is on
October 27, 2009 | federal legislation, industry | Comments (0)The Administration is sending it’s top economic officials out to promote the CFPA. Sheila Bair, FDIC Chairman, spoke in Chicago yesterday:
"I will be speaking to the American Bankers Association later this morning and one of my messages will be to get in there and support the Consumer Financial Protection Agency (CFPA). The Administration has proposed a new Consumer Protection Agency to establish consistent consumer protection standards for banks and non-banks. I strongly support this new agency....Looking at indecipherable credit card statement and documents and mortgages you can't understand and APRs from Payday Loans and high overdraft fees - I don't see how anybody can say that we've done a good job protecting consumers and financial services. I just don't see it..... The absence of a national standard was a contributing factor to our current economic turmoil - this uneven nature of regulatory protections and this lack of strong standards that apply across the board.
Durbin still on our case
October 27, 2009 | federal legislation, industry | Comments (0)He spoke to a group in Chicago.
