Banking

Consumers could win big if Dodd's financial reform package becomes law

Lita Epstein Nov 11th 2009 @ 7:15PM EST Filed Under: Banks, Credit, Debt, Recession, Credit cards

Senate Banking Committee Chairman Chris Dodd unveiled his financial reform package on Tuesday and consumers could win big if the bill becomes law. Dodd proposes a strong Consumer Financial Protection Agency whose sole job will be to protect American consumers from fraud and abuse. He wants to be sure people get the clear information they need on loans and other financial products from credit card companies, mortgage brokers, banks and others.

Dodd introduced the bill along with fellow committee members Jack Reed, Charles Schumer, Robert Menendez, Daniel Akaka, Jon Tester, Mark Warner, Jeff Merkley and Michael Bennet -- all Democrats, so at least it looks as though this may be a partisan effort, but the issue is so important I hope it can become a bipartisan bill.

Continue reading Consumers could win big if Dodd's financial reform package becomes law

Citi scraps fee waivers; low-balance account holders will pay

Martha C. White Nov 11th 2009 @ 12:00PM EST Filed Under: Banks

As reported in the New York Post, Citibank plans to eliminate the two fee waivers that had been available on its two basic checking accounts nationwide early next year.

Previously, customers who had an "EZ" or "Access" checking account and didn't keep a minimum balance of $1,500 could avoid paying $7.50 or $3 per month, respectively, by arranging a monthly direct deposit or using the account to auto-pay two monthly bills.

Beginning in February, those fee waivers are being eliminated, so the only way a person who has one of these accounts can avoid the fee is to keep $1,500 or more with Citibank. Now, that $1,500 doesn't all have to be in that checking account; it can be in another Citi account or a CD, but it needs to add up to $1,500 if you don't want to pay the fee.

Continue reading Citi scraps fee waivers; low-balance account holders will pay

What to tell your bank when they say something you don't want to hear

Geoff Williams Nov 10th 2009 @ 2:00PM EST Filed Under: Banks, Banking-checking-account

There's a lot of public anger at banks these days. Pick a bank topic, any topic -- bailouts, executive pay, interest rates, ATM, NSF, overdraft fees -- and it's hard to imagine anyone nodding happily. But all this anger begs the question: When we're frustrated and being thwarted by our bank, what can we do to make ourselves... well, happy?

If you've heard any of the following from your bank lately, here's what you ought to say in return.

"You have six overdraft charges." One or two overdraft charges certainly aren't fun, but five or more, and you can suddenly feel your monthly budget going to ruin. If your bank isn't one of those that's curtailing its overdraft fees (Bank of America), or it is but hasn't stopped yet (yeah, you heard us, U.S. Bank), you may, unfortunately, know that feeling.

Continue reading What to tell your bank when they say something you don't want to hear

Brits bust up banks; will the U.S. follow suit?

Martha C. White Nov 10th 2009 @ 1:00PM EST Filed Under: Banks, Recession

In a move that could be an indication of how the U.S. will handle the problem of banks deemed "too big to fail," the United Kingdom is forcing some of Britain's biggest banks to split themselves up.

According to this article in the Washington Post, the Royal Bank of Scotland, Lloyds Banking Group and Northern Rock have all been ordered to scale down. RBS and Lloyds are shedding branches and spinning off various divisions; Northern Rock is being split in half.

Continue reading Brits bust up banks; will the U.S. follow suit?

GMAC's performance shows that we're not out of the woods yet

Geoff Williams Nov 10th 2009 @ 8:00AM EST Filed Under: Banks

It's been an interesting year for GMAC, if interesting means humbling.

Back in May, the government conducted a series of stress tests and determined that 10 of the largest 19 banks needed to have more capital, if they were going to survive any more economic troubles that might come our way. Then, the 10 were given six months to raise a grand total of $74.6 billion in capital.

Well, here's the good news. Monday, the Federal Reserve announced $77 billion was raised.

But the bad news involves the bank hold company, GMAC Financial Services, the 14th largest bank and the lending device used by many Americans to pay for their cars -- those cars that are built by General Motors and Chrysler. GMAC, which is now 35% owned by the American government, has fallen short of raising its required $11.5 billion and will need what will be its third loan from the U.S. Treasury, which it will likely get through the TARP Automotive Industry Financial Program. That will mean American taxpayers will own even more of GMAC Financial Services.

GMAC is believed to need $5.6 billion in capital.

Continue reading GMAC's performance shows that we're not out of the woods yet

My 5-year-old opens a savings account -- you can, too

Aaron Crowe Nov 9th 2009 @ 4:00PM EST Filed Under: Banks, Banking-savings-account

As with too many lessons I try to teach my daughter, now 5, I end up caving in and the lesson I set out to instill is lost.

We'll see if it turns out the same way with her savings account we recently opened together, but it couldn't have been a strong lesson in how to save money when immediately after leaving the bank, we went to a store where I bought her a promised toy.

I'll get back to the toy spending in a bit, but first I'd like to focus on the good part of that afternoon -- opening a savings account in her name in an effort to teach her about saving money.

Continue reading My 5-year-old opens a savings account -- you can, too

Credit card reform to come sooner?

Martha C. White Nov 9th 2009 @ 9:30AM EST Filed Under: Banks, Credit cards

We here at Walletpop have decried the rate-raising, fee-slapping tactics of the credit-card companies making one last grab at America's wallets before the new credit card reform legislation passed by Congress earlier this year goes into effect. Credit card companies' practices got so out of hand that the House of Representatives voted this week to put the changes into effect sooner.

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The plight of the unbanked: Why 50 million Americans don't use a traditional bank

Gina Roberts-Grey Nov 6th 2009 @ 1:30PM EST Filed Under: Banks, Banking-checking-account, Banking-savings-account

Millions - possibly billions - of dollars are homeless, lacking a warm, dry bank account providing a roof over their heads. Although it might seem hard to imagine a day where we're stuffing mattresses with money instead of depositing paychecks in the bank, analysts say that scenario isn't too far fetched.

According to Directo, a company providing paycards to unbanked workers, the recession has sent the number of unbanked Americans soaring to about 50 million. That's up from the estimated 28 million unbanked consumers in 2007.

While you might assume those who are unbanked are jobless, low income or even homeless Americans, that's not the case. A majority of them are employed, middle-income earners, many of whom are parents.

Continue reading The plight of the unbanked: Why 50 million Americans don't use a traditional bank

Your high-rate CD in a failing bank won't stay high-rate

Martha C. White Nov 6th 2009 @ 1:00PM EST Filed Under: Banks, Investing

More than 100 banks have failed this year, and even the government acknowledges that many more will probably fold before 2009 draws to a close. In most cases, ordinary citizens who have accounts are protected by FDIC insurance. Yes, there's certainly a hassle involved, especially if you have bills set up on auto-payment with the failed bank, but the FDIC guarantees that they'll make good on your money up to $250,000.

Unfortunately, this guarantee doesn't extend to the interest rates on long-term savings vehicles like certificates of deposit. As this article reports, a growing number of people are losing the high interest rates on their CDs when a bank with which they have money invested folds.

Continue reading Your high-rate CD in a failing bank won't stay high-rate

Bad actors continue to prey on seniors

Amy Pyle Nov 4th 2009 @ 5:00PM EST Filed Under: Banks, Borrowing, Home, Insurance, Real Estate, Retire, Fraud, Mortgages

Bad actors have solidly shifted their attention to reverse mortgages, causing a top consumer organization to warn seniors to choose such loans carefully.

A new report by the National Consumer Law Center likens the aggressive lending practices in today's reverse mortgage lending to those common in the sub-prime mortgage heyday -- featuring some of the same players.

"Well-funded marketing campaigns and perverse incentives to brokers are targeting seniors' home equity and using reverse mortgages as their tools," attorney Tara Twomey said in the NCLC news release.

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Suze Orman says: Switch to a credit union!

Zac Bissonnette Nov 4th 2009 @ 1:30PM EST Filed Under: Banks

In an interview with KMBC's Donna Pitman, First Lady of Personal Finance Suze Orman trashed the big banks for inexplicable fee and interest rate hikes on consumers -- and offered a ringing endorsement of credit unions.

"Don't get me started with these credit card companies, these banks -- it's like, 'What are they thinking?'" Orman said.

"Here's the answer: Credit unions," she said. "They are different than banks. Most banks are owned by their shareholders. They're responsible to these shareholders and it happens to be on the stock exchange, so anything to increase earnings and profits. Credit unions have members. They're responsible to the members. So, many credit unions -- not all -- are giving you no balance-transfer fees, low interest rates. They're being ethical and honest."

Another key advantage to working with a credit union instead of Chase, Bank of America, or Citi, is that most credit unions are not staffed by the dumbest people you will ever meet in your entire life -- which matters when your financial well-being is on the line.

To find a credit union in your area, visit the National Credit Union Administration's credit union locator.

Mortgage rates may be rising, thanks to Bernanke

Charles Feldman Nov 3rd 2009 @ 5:30PM EST Filed Under: Banks, Real Estate, Mortgages

Premature withdrawal could prove painful -- to your pocket.

Federal Reserve Chairman Ben Bernanke is apparently set to stop the central bank's purchase of mortgage-backed securities in a few months, which could contribute to a full percentage point increase in the rates of 30-year mortgages.

Talk about shooting the alleged economic recovery in the foot before it has a chance to really get going.

Seems that Bernanke feels strongly, says a Bloomberg report, that by March it will be time for private investors to step in and start making the purchases in place of Uncle Sam -- or, in this case, Uncle Ben.

Continue reading Mortgage rates may be rising, thanks to Bernanke

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