Peer-to-peer lending?  Maybe, maybe not.  From the story: 

Peer-to-peer lending rests on the idea that traditional banking is gummed up by unfair bureaucracy. For one thing, advocates of these sites say, credit scores don’t accurately reflect a person’s ability to pay—people with low credit scores are charged too much for loans even though they may be likely to pay. (This problem has become worse after the financial crisis, when sudden job losses forced even people with high credit scores to default on their loans). There’s also a lack of competition. The only companies willing to lend to people with less-than-stellar scores are credit card firms—whose terms are punishingly variable—and payday loan centers, which charge 400 percent or more in interest on an annualized basis.

A group in Mississippi made a few errant remarks regarding payday lending in an op-ed, but the main focus of the article is promoting financial education. The Pundit sees that as a noble goal.

The Foundation for the Mid South believes that financial education is essential. Every resident should have a basic understanding of financial concepts and what it takes to live within their means.

Pay the credit card bill first or the mortgage?

Could mess up your ability to get credit.

From Haggard’s song, “Are the Good Times Really Over”: I wish a buck was still silver, it was when the country was strong….

From an FBI news release:   “Bernard von NotHaus, 67, was convicted today by a federal jury….of making coins resembling and similar to United States coins; of issuing, passing, selling, and possessing Liberty Dollar coins; of issuing and passing Liberty Dollar coins intended for use as current money.”

From The Economist: 

THE storefront for Mango Financial, a young Texan company, was designed by one of Austin’s most fashionable architecture firms. It looks slightly out of place. Its neighbours are a pawnshop, a petrol station and a couple of fast-food restaurants. But its snazzy appearance is deceptive. Mango is aiming at an unglamorous market, the unbanked. It offers prepaid debit cards, free as long as clients deposit $500 a month. Its savings accounts offer a decent 5% interest rate, but only on balances up to $5,000. Neither product would tempt a billionaire. Both are better than a cookie jar.

At least 17m American adults are in households with no bank account, according to a 2009 survey from the Federal Deposit Insurance Commission. A further 43m people occasionally turn to payday lenders or cheque-cashing stores to get them through the month.

We never hear about the overwhelming majority of payday lending customers who successfully and happily use their loans to pay important bills.   You almost only here these stories.

President Obama launches a financial literacy advisory panel.  From the story: 

In the wake of the nations’s economic meltdown, financial literacy and financial consumer protections have taken on an urgency in the Obama White House. On Tuesday, Obama’s new Advisory Council on Financial Literacy was launched at a meeting chaired by Jonathan Rogers with fellow Chicagoans, White House senior advisor Valerie Jarrett and Public Engagement chief Tina Tchen at the table.

“There was a consensus that we work with younger people and get people exposed to all the issues around financial literacy at younger ages,” Rogers told me after the meeting at the Treasury Department. “Not only does it make them better investors and savers when they get older, but their parents and their aunts and their uncles can learn from the young people.”

From the story: 

More than 8 million consumers stopped using credit cards over the past year. The decline stems from a combination of consumer choices and bank actions.

An analysis by credit reporting agency TransUnion found that use of general purpose credit cards bearing MasterCard or Visa logos, or issued by Discover or American Express, fell more than 11 percent in the third quarter, compared with the July to September period last year.

About 62 million people now have an active card, compared with 70 million a year ago.

The Chicago company found that consumers in the subprime category, or those with low credit ratings, were believed to be without cards mostly because they were shut down by banks after payments fell behind or balances were written off.

So where do our critics think consumers should go for short-term credit?

The Kardashian sisters are pulling the plug on their debit card in the wake of criticism from so-called “consumer advocates.”