Archive for category Banks
Banks Apply Pressure to Keep Fees Rolling In
Posted by Tetyana Matychak in Banks on February 22nd, 2010
For many households trying to improve their finances, tossing out pitches from the bank has become almost automatic. But in recent weeks, Chase has been fanning special letters out to consumers with an offer that it urges them not to refuse.
“Your debit card may not work the same way anymore, even if you just made a deposit. Unless we hear from you,” the message, emblazoned in large red type, warns. “If you don’t contact us, your everyday debit card transactions that overdraw your account will not be authorized after August 15, 2010 — even in an emergency,” with “even in an emergency” underlined for emphasis.
As the government cracks down on the way banks charge fees for overspending on debit cards, the industry is mounting an aggressive campaign aimed at keeping billions of dollars in penalty income flowing into its coffers. Chase and other banks are preparing a full-court marketing blitz, which is likely to include filling mailboxes with various aggressive and persuasive letters, calling account holders directly, and sending a steady stream of e-mail to urge consumers to keep their overdraft service turned on.
Starting this summer, banks must get consumers to agree, or “opt in,” to a service covering purchases on a debit card when there is not enough money in their account. The Federal Reserve has ordered the same restriction for banks that want to let people withdraw more than their balance at an automated teller machine. Many banks now automatically provide such coverage for fees of up to $35 or more. Read the rest of this entry »
Proposed Bank Regulations Would Limit Risk Taking
Posted by Tetyana Matychak in Banks on February 4th, 2010
The President proposed new regulations for the banking industry this week, in an effort to curb risk taking as well as limiting the size of some of the nation’s largest banks. Former Federal Reserve Chairman Paul Volcker now one of Obama’s key economic advisers has been advocating stricter limits on the banking sector or some time.
The proposed regulations would eliminate proprietary trading at banks as well as the investment or running of equity and hedge funds. It would also seek to slow consolidation in the banking industry by putting new caps on market share of liabilities.
They want banks to be more like banks and limit the activities that put customer deposits at risk. It’s also clear the government wants to avoid the “too big” to fail scenario that the nation went through last year. Read the rest of this entry »
Stiglitz: Regulate Banks. Now. Everywhere.
Posted by Tetyana Matychak in Banks, Favourites on February 1st, 2010
Officials in Davos should try to reach a global consensus about the need for a new regulatory regime for banks, Nobel Prize laureate Joseph Stiglitz told CNBC Friday.
Banks threaten to move to another location as soon as new taxes or regulation are announced, so the main problems that led to the financial crisis are not addressed, Stiglitz explained.
“If there was a broad consensus… this could stop this race to the bottom which got us into the mess we’re in now,” he said.
Bankers have incentives to take risk and one way to restrain them would be limiting the leverage that banks can have, according to Stiglitz.
“When they win they walk off with the profits, when they lose the taxpayer pays,” he pointed out. “We really need to go more directly at these issues like incentives.” Read the rest of this entry »
Steps you can take to build credit, get a card
Posted by Tetyana Matychak in Banks, Favourites on January 19th, 2010
Gone are the days when credit card companies barraged you like a lovestruck suitor. Today, bruised by economic losses and consumer defaults, many credit card companies are spurning the customers they once wooed.
And if you’ve got a dinged-up credit score or no credit history, getting a new credit card is next to impossible.
We know one young man – a recent college graduate with a decent-paying job and no major credit dings – who’s been turned down for a credit card repeatedly, even from department stores like Macy’s.
“Credit is still tight, so issuers are not approving as many people with no credit or bad credit as they did 18 months ago when the economy was good,” said Bill Hardekopf, founder of LowCards.com. “It is a very big challenge for them.”
Those with bad credit have long had trouble getting credit cards or finding cards with affordable interest rates. Read the rest of this entry »
China takes new steps to curb bank lending
Posted by Tetyana Matychak in Banks on January 15th, 2010
China took new steps Tuesday to control bank lending, ordering institutions to set aside more reserves in a move to avert a surge in credit that Beijing worries might fuel inflation or asset price bubbles.
China’s nascent rebound from the global crisis was fueled by a flood of lending by state-owned banks last year. Bankers cut lending under government orders toward the end of 2009 but regulators worry credit might rebound this year.
The move indicates Beijing is confident growth can be sustained and has shifted focus to preventing financial excesses and economic overheating. The government is forecasting growth of 8.3 percent for 2009, up from a low of 6.1 percent for the first quarter of the year.
The central bank raised the amount of reserves that banks must hold by 0.5 percent to 15 percent of their deposits. Also Tuesday, the bank raised interest rates paid on one-year bills for the first time since August to absorb money from the market and cool credit growth.
“This series of moves by the central bank provides a clear sign that policymakers are following through on their pledge to guide credit in order to pre-empt rising inflation and avoid asset price bubbles,”said Jing Ulrich, chairwoman of China equities for J.P. Morgan, in a report. Read the rest of this entry »
New and improved mortgage forms
Posted by Tetyana Matychak in Banks on January 7th, 2010
Starting Jan. 1, new rules go into effect that simplify and clarify exactly what mortgage lenders will charge for a loan.
The initiative from the Department of Housing and Urban Development (HUD)requires that a new “Good Faith Estimate” form be given to all applicants, one that makes it easier to compare true costs of loans from different lenders.
“The main purpose is to give consumers the tools to be able to compare apples to apples,” said Robert Grosser of Luxury Mortgage, a New Jersey-based direct lender. “All lenders must use a specific form and disclose fees in the same spots on the same forms.” (See the new form.)
Until now, borrowers might have focused on interest rates or monthly payments to compare mortgages options. But fees play a big part in total cost, said Vicki Bott, HUD’s Deputy Assistant Secretary for Single Family Programs.
There are generally two blocs of fees. Read the rest of this entry »
Best 24-Month CD Rates Edge Lower
Posted by Tetyana Matychak in Banks on December 28th, 2009
The banks are pretty much the same. But the returns are worse. That’s the sorry story of our latest rankings of the best, nationally available 24-month CD rates.
In November our top-paying banks were offering 2-year certificates of deposit for 2.60% to 2.55% APY and you only needed a $1,000 minimum deposit to qualify for the top rate. This month you’ll earn 2.50% to 2.30% APY and need a whopping $50,000 to qualify for the top rate.
Although that’s still twice as much as you can make with the typical 2-year CD, it’s not saying much. The average rate on these CDs plunged to a record low of 1.26% APY last week.
The best, nationally available deals on 24-month CDs are:
2.50% APY with a minimum deposit of $50,000 for “Silver CDs” from Frontier Bank, which has 50 branches in Washington and Oregon. You can also earn 2.45% with a $25,000 minimum deposit and 2.40% with a $500 minimum deposit. Read the rest of this entry »
What to do when a debt collector calls
Posted by Tetyana Matychak in Banks, Favourites on December 11th, 2009
When the debt collectors come calling, know your rights.
Collection companies are governed by the Fair Debt Collection Practices Act, a federal law. Enforcement is overseen by the Federal Trade Commission and state authorities, usually the office of the state attorney general.
The federal law prohibits collectors from:
— Harassment, including use of profanity, threats of violence or repeatedly calling to annoy;
— False statements, including misstating who they are, how much you owe or that you have committed a crime;
— Calling at inappropriate times, including before 8 a.m. or after 9 p.m. Read the rest of this entry »
Why Treasury Needs a Plan B for Mortgages
Posted by Tetyana Matychak in Banks on December 8th, 2009
AFTER months of playing pretend, the Treasury Department conceded last week that the Home Affordable Modification Program, its plan to aid troubled homeowners by changing the terms of their mortgages, was a dud. The 10-month-old program is going nowhere, the Treasury said, because big institutions charged with implementing it are dragging their feet.
“The banks are not doing a good enough job,” said Michael S. Barr, assistant Treasury secretary for financial institutions, in an article published last Sunday in The New York Times.
After the government spent hundreds of billions of dollars bailing out banks, the Obama administration rolled out the $75 billion loan modification plan to show its support for beleaguered homeowners. But if the proof of the pudding is in the eating, homeowners are going hungry.
A stalled loan modification plan might not be worrisome if the foreclosure crisis were abating. Yet at the end of September, a record 14.4 percent of borrowers were either in foreclosure or delinquent on their mortgages, the Mortgage Bankers Association reported.
It’s time for the government to acknowledge the flaws in its program and create one that might actually succeed. Only then will the supply of homes for sale, and the pressure on prices associated with that overhang, be reduced. Read the rest of this entry »
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