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• OLA meets with Google About Payday Loan Industry Issues

  • The Online Lenders Alliance (OLA), including OLA President, Lisa McGreevy, met with Google representatives at the Google complex.   The meeting took place the week of February 6, 2012 and was dominated by issues related to advertising.

    OLA represented the meeting as positive with Google having a better understanding of the industry and with OLA members having a channel of communication with Google through OLA.

    OLA members who feel that their companies have been restricted in advertising as a result of Google’s new policy should contact Lisa McGreevy at lmcgreevy at onlinelendersalliance dot org.  OLA will then send the complaint to Google.

    OLA will now convene their Advertising and Marketing Best Practices group and update the Best practices of OLA members.

• MicroBilt releases Instant Bank Verification (IBV)

  • MicroBilt, a business risk management systems company, has introduced Instant Bank Verification, (IBV)a proprietary technology system designed to help non-traditional lenders assess the risk and bank account status of applicants in real time.

    According to the MicroBilt website, “IBV automatically and instantly provides a lender with six distinct attributes making it easier than ever to gauge the repayment abilities of a loan applicant.”

    Included in the applicant data is the existence of a real account, the length of time the account has been active, and whether or not the applicant has direct deposit.  The system also determines the frequency of the deposits, as well as to how many NSF instances from the account.  IBV also tells you what the account balance is – all this is done in real-time.

    The goal of the new technology is to procure more accurate information faster than it was available previously, thus allowing alternative lenders the ability to make more informed decisions. 

    MicroBilt estimates that their clients serve over 100 million consumers in the U.S.

• “There is clearly a demand for small consumer loans”

  • Since the newly appointed head of the Consumer Financial Protection Board (CFPB) made comments about short term loans and his desire to examine them, he has had the industry on pins and needles.  His first public appearance in Alabama went slightly better than expected, as both consumers and payday lenders were allowed to speak.

    This week (January 24, 2012) he testified before a House panel, and forgetting the politics of his appointment, this event also held positives for the payday industry.  
    http://www.marketwatch.com/story/cfpb-we-need-more-data-about-payday-lenders-2012-01-24?link=MW_latest_news

    His comments include:
        "I don't look at these provisions in terms of banning products," CFPB head Richard Corday tells House subcommittee.
        "There is clearly a demand for small consumer loans"
        Corday says he wants agency to be transparent about regulatory goals, "we're not intending to hide the ball"

    The comments do represent a balanced look at the payday industry and are initially positive.  T3Leads will continue to monitor the progress of the CFPB and how it affects affiliate marketers and lenders alike.

• CFPB Proposes to Include Debt Collectors and Consumer Reporting Agencies to its Purview

  • The Consumer Financial Protection Bureau proposed adding some debt collection and consumer reporting firms to its nonbank supervision program.  In a phone call with the Online Lender’s Alliance (OLA), Peggy Twohig, head of the CFPB’s non-bank supervision program, defined the term of the proposal.  Debt collectors with more than $10 million in annual receipts and credit bureaus with more than $7 million in annual receipts are affected.  Ms. Twohig said she believes this to include 175 debt collectors and 30 credit bureaus.  These numbers are based on figures from the latest federal business census.  

    The CFPB estimates that these 30 companies account for about 94 percent of the annual receipts from consumer reporting.

    This is the CFPB's first in a series of rulemakings to define larger participants. The CFPB chose annual receipts as the criterion for both debt collection and consumer reporting because it approximates market participation in these two markets. As the CFPB adds new markets, it will choose the best criteria and the appropriate thresholds for each market.

    Ms. Twohig specifically mentioned "specialty" credit bureaus -- including "payday loan databases" and "check verification firms" -- as being worthy of supervision.
    According to Peggy Twohig, this proposal is the "first in a series" of Larger Participant Rule proposals.  It is expected that other types of financial institutions, such as finance companies, prepaid card issuers, money transmitters and check cashers will be added to the nonbank list.

    The proposed rule will also allow a company to challenge the CFPB’s determination that they are a “larger participant.”

    Comments on the proposal will be due 60 days after its publication in the Federal Register (we estimate April 20).  As proposed, the rule would take effect 30 days after its publication in final form.  The CFPB has a deadline of July 21, 2012, to complete this initial rule, and Peggy Twohig said that she had every expectation that the CFPB would make that deadline and that examinations would begin in August or September of this year.

    More information about the CFPB's Nonbank Supervision Program is available here:  http://www.consumerfinance.gov/pressrelease/consumer-financial-protection-bureau-launches-nonbank-supervision-program/

• CFPB: We need more data about payday lenders

  • In further comments regarding the payday loan business, CFPB (Consumer Financial Protection Bureau) Head Richard Cordray said he needs to learn more about the industry. 
    “We need to analyze this and think carefully about it, hear from people and then make judgments. In terms of the structure and core essence of the product itself, we felt we needed to know more about it.  I don’t look at these issues in terms of banning products.”

    Cordray told the committee that he has begun a new “supervision regime” for payday lenders.  The CFPB’s purpose is to oversee financial products offered to consumers, including items as diverse as mortgages, credit cards and payday loans.

    He said that so far the bureau is forming two advisory panels, one comprised of small bankers and another with credit unions.  He is open to forming a third that would include payday lenders and non-bank institutions.

    When asked about the agency’ agenda, Cordray said he would publically provide guidance. In that vein, he said his agency is working on a simplified mortgage disclosure form, so that borrowers can compare offers from various lenders more effectively than they can now.

• UK Bank Overdraft Charges are so Complex…

  • …Even a math Phd student could not figure them out.  True.
    
    According to consumer watchdog which? and reported by Paul Farrow in the Telegraph bank overdraft charges in the UK are so complicated that even a math Phd candidate did not get all of the calculations correct.  It further found that practically no ordinary bank customers could figure them out.
    
    The study found that due to their complicated structures it is virtually impossible to calculate the overdraft fees as well as it being practically impossible to compare the charges between banks.
    
    In the test a group of customers was given mock bank statements and asked to calculate the cost of an unauthorized overdraft at four different banks.  Between them they got seven of 48 calculations correct.
    
    The watchdog wants the new financial regulator, the Financial Conduct Authority, to stop unfair overdraft charges, with clear powers to tackle excessive fees and complicated structures.
    
    Peter Vicary–Smith, the chief executive of Which? said, "It's extremely disappointing to find that bank charges are still too high, too complex and impossible to compare."

• California to Raise Payday Loan Limit?

  • Another classic legislative battle is brewing in California.  A bill has been introduced in CA that would raise the loan limit of a payday loan to $500.  It is currently $300.  The other side of the argument…well, they aren’t in favor.

    Rick Jurgens of the San Francisco Public Press recently did an article that raised several solid points in favor of the the payday industry.  It starts with the following scenario.  A client takes out a $300 loan, in which they receive $255.  The lender withholds a $45 fee.  The APR on this is 459%.

    Greg Larsen, a spokesman for the California Financial Service Providers Association, a trade group of check-cashers and payday lenders, said that using an APR was an “apples to oranges” measure of the cost of a payday loan. “People don’t use the product for 52 consecutive weeks,” he said.

    Several customers they talked to had not taken out a payday loan, but said they would consider it if they needed to.  They cited the ease of obtaining one as the primary reason.  The difficulty of a bank loan was brought up by one interviewee.

    Larsen went on to point out that consumers “will always find credit that is the most cost effective,” when offered a choice.  Others in the industry acknowledge that for most customers price is a secondary consideration.  Convenience and ease are the driving forces.

    Consumer Advocates say payday loans are targeted to people who can least afford them.  They say it creates a cycle of debt that they are unable to get out of.  Industry insiders say that the loans are vital for “cash strapped borrowers.”

    A payday loan is a “convenient, short-term financial option” that provides “a fix for families faced with the prospect of bouncing checks, shutting off utilities or worse, skimping on basic needs such as medical emergencies,” according to written comments submitted by the California Hispanic Chambers of Commerce to the state Senate’s Judiciary Committee.

    It’s safe to say that the back and forth on the issue will continue for as long as the loans are around.

• UK Internet Rates

  • The latest report on internet usage in the UK exposes some interesting insights into not just computer usage, but maybe even life in the UK overall.

    The study was conducted in 2011 by the European Commission (EC.)  11% of UK citizens have never used the internet.  Considering its use by business, that’s a surprisingly high number.  But the EC said that the number is down from 2006, when 29% of the population had not used the internet.

    In 2006, only 63% of homes were connected to the internet.  In 2011, that number has risen to 85%.  But of those connected, 17% still use a dial up connection.  So what hypotheses can you draw, given how large a percentage that is, to still be using a dial up connection?  These numbers show that the UK is somewhat slow in integrating computers into their lives in total.  It may also point to the possibility that UK citizens are not married to “I need it now” mentality that Americans are certainly addicted to.  Either way, these numbers act as a reminder to always remember where and to whom, you are marketing to.

    The study also revealed that Sweden is the most connected European country at 95% and Romania is the worst, with a connection rate of 54%.

• UK Payday Loans Transparent

  • Insolvency researcher R3 painted a “gloomy picture” of the UK’s consumer debt.  But the Consumer Finance Association (CFA) has questioned assumptions made about payday loans.   On their website, the CFA reports:   John Lamidey, chief executive of the CFA says: “We are surprised to see some of the figures and assertions in the R3 research. Our own independent research, and that of our members, has shown that on the contrary, 94% of payday customers are satisfied with the service and that more than nine out of ten customers of a CFA member said they had never felt they were being pressured by staff to extend existing loans. This is in contrast to the R3 assertions.”

    The Association says that in the case of payday loans offered by its members, complaint levels are extremely low, as demonstrated by Financial Ombudsman Service data – fewer than 60 in a six month period. The most complained about finance products between July and September 2011 were Payment Protection Insurance (19,259) credit cards (5,751) and current accounts (4,197). There was also a considerable increase in the number of new complaints regarding bank overdrafts and loans (1,718).

    John explains: “The research points out that it is primarily mortgages and credit cards that are the real problem areas. Research undertaken by a CFA member found that 92% of their customers agreed that they are treated fairly and honestly and 61% agreed that charges and fees are reasonable. In contrast, when bank customers were quizzed just 55% said they felt they received fair and honest treatment from the banks and only 33% of bank customers felt that bank charges are fair.”

    The CFA believes that when a payday loan is used for the purposes of which it is designed (short-term borrowing of small sums) it is an ideal product; this is supported by evidence that over 85% of payday customers would recommend the service to friends.

    John explains: “Whilst we would not suggest that people replace regular income with a payday loan, our service is often the most competitive short-term credit option when people are faced with more month than money. CFA members are highly-regulated and operate stringent affordability tests to ensure that loans are provided responsibly and that customers have the ability to repay. More than 90% of applicants for on-line loans are turned down after checks have been carried out.”

• New Research Showing Payday Loans as Solid Options

  • A recent story aired on the Today Show which examined Payday Loans actually included an interview with a person who is helped by them.  It also warned of the dangers not repaying the loans when they are due, (what loans don’t have consequences when you break the terms?,) but also showed how they can help when people need it the most.

    Payday Pundit reminded us of a couple recent studies that gave additional evidence of payday loans being a solid option for people in need of emergency cash.  A report by the FDIC showed how overdraft fees on small overdrafts could have APR’s as high as 3,520%.

    An additional report by the Federal Reserve Bank of New York, showed how these flat overdraft fees hurt the lower classes far more than the upper classes, by virtue of being flat fees.  If you “bounce a $3,000 check and get a $27 fine, that will amount to a small APR, but if you bounce a $20 check, that same $27 fee will carry a very large APR.

    It’s important for all involved if the facts are presented in an even-handed manner.

• UK Consumer Opinions on Payday Loans and More

  • Consumer Focus, a UK consumer advocate group, recently conducted a study examining many aspects of the UK loan industry.  We covered some of it here:
    https://www.t3leads.com/en/affiliate-articles.html#uk-payday--numbers-to-consider

    Here are some additional highlights.  The survey respondents were asked to rank their views on a variety of financial products; Payday loan, credit card, overdraft, personal loan, credit union loan, store cards, car manufacturer finance, pawnbrokers, loans from friends and family.

    Of those when asked which is “Quick to get”, Payday loans, pawnbrokers and loan from family/friend ranked highest.  “Easy to access” again scored highest for payday loans and pawnbrokers.  When it came to “Trust myself/gives me control” a family loan scored highest, with payday loans, store cards and car manufacturer finance coming next.  Credit cards received the lowest possible score in this area, with overdraft not far behind.

    Keep an eye on this column for further results of this study.

• CFPB Reports on First Six Months

  • The Consumer Financial Protection Bureau released a report on its first six months in existence reporting on the changes it has made, but more importantly what changes are to come.
    They said they plan to release rules requiring a lender to verify a borrower’s ability to repay a mortgage loan.  This is obviously directly targeted at the practice of issuing bad loans, then “betting” they will fail.  This practice contributed in a big way to the near-financial collapse of 2007.

    The Bureau also wants to streamline disclosures required by the Truth in Lending Act and the Real Estate Settlement procedures Act, as well as a host of new rules for the mortgage market. 
    Of further importance to T3Leads affiliate marketers, they also plan to propose rules defining the scope of its nonbank program.

    So far the Bureau has opened offices focusing on fair lending, older Americans, students, minorities and community affairs.  It has also established supervision programs of banks and nonbanks, which collect data and information about the industries from consumers and the industry itself.

    The Bureau has hired 750 employees, including transferring 230 from other agencies.

• Mexican Payday Company Coming to US?

  • A Mexican billionaire, who provides payday loans, Ricardo Salinas Pliego, wants to bring his venture to New York City.  Mr. Salinas owns Banco Azteca and would need a charter from the state legislature to open in NYC.   State law prohibits lenders from charging more than 25% APR. 
    Mr. Salinas said that the high rates are necessary for small loans.  His loans in Mexico average $400.  He said the rates are inescapably higher because the administrative costs are the same whether the loan is $400 or $40,000.

    He is estimated to provide the short term, or payday loans, to over 9,000,000 consumers in Mexico; the majority of which he collects from on motorcycle.  He went onto explain that what the “do-gooders” don’t understand is that just because you outlaw a practice does not mean it goes away.  He said banning the short term loans in Mexico would result in people going to loan sharks or other such illegal entities for the money.

    There was no word on whether he would collect from customers in NYC on motorcycle.  We’re guessing not.

• UK Payday Meeting Needs of More and More People

  • According to a Consumer Focus recent study the number of people taking out payday loans has quadrupled since 2006.  There are likely a number of factors impacting this, but the near global financial collapse ranks at the top.

    Marie Burton, financial services specialist at Consumer Focus, summarized a line of thinking:

    “With the credit crunch, demand for short term borrowing has significantly increased despite the eye-watering interest rates charged by some payday lenders. Such expensive rates can leave consumers who defer payments, or take out repeat loans, caught in a debt trap.  Her response is, “these products are controversial, but we don’t agree with calls for them to be banned. Outlawing payday loans could leave some borrowers vulnerable to illegal loan sharks. Instead we need sensible safeguards now to stop borrowers becoming dependent on this high cost credit and prevent even more stringent controls being needed in the future.  We also need banks to provide alternative short-term credit to suit the needs of cash-strapped consumers.”

    Consumer Focus’s further in-depth qualitative research with payday loan users suggests that some borrowers like payday loans, despite the high interest rates, because they are quick, convenient and it is easy to understand how much it will cost them to repay the loan. Some consumers in the study choose them over mainstream borrowing from banks because they fear being hit by unexpected overdraft and credit card charges or that these credit options will tempt them into long-term debt. Indeed payday loans can be cheaper than running up an unauthorised overdraft.

• UK Payday Loans: Why They Help

  • A recent study by Consumer Focus of UK addressed the question of banning payday loans.  Three points stood out.
    •    Payday loans may be cheaper than other types of lending, including unauthorised overdrafts.
    •    They ease the financial problems of many and removing them might deepen the financial issues.
    •    There is a risk that loan sharks would prosper in a scenario where payday loans are banned.  Because many borrowers do not have access to a full range of financial options, banning one of their primary lenders could have catastrophic results for many.  This is a problem for a number of reasons.  Payday borrowers are less likely to own a home therefore do not have access to a home equity line of credit.  Additionally, banks very often do not have retail locations in the low income neighborhoods that need the help.

• More Good News for UK Payday Industry

  • According to a study recently released by the Financial Services Authority (FSA), banks are receiving 10,000 complaints a day.  A day!  That translates to almost 2 million complaints in the first six months of 2011.  The survey also showed that 61% of a Payday loan business thought the charges were reasonable, while this same group only felt that 1/3 of the banks’ charges were reasonable.

    
    Maybe even more important for industry was the evidence showing that over 90% of the customer surveyed never felt pressure to extent their loans.  This is important because many who attack the industry say that customers are pressured into extending their loans – labelling the industry as predatory.

• UK Payday: Numbers to Consider

  • Payday loans are designed for people who have bank accounts, a job and disposable income.  Half of all payday loan borrowers make more than £19,200.  Three quarters of all recipients earn over £15,000.  
    The Consumer Finance Association reports that the typical payday loan customer is 21-35 and mostly free of financial commitments such as a mortgage or children.  In many cases they choose a payday loan in order to avoid racking up personal debt.
    A study done by the same organization showed a 94% overall customer satisfaction rating, as well as finding that 86% said that they would recommend the lender to a friend, and 66% said that they believed the products to be a good value.
    The CFA makes a valid comparison to the rental car industry.  They suggest that describing the cost of a payday loan by using APR, is a like saying that the cost of a rental car is £15,000 rather than the daily rate of £40.
    
    
    

• A Google Search Algorithm Change That Affects Affiliate Publishers

  • On Thursday, January 19, 2012 Google announced some search changes that we know will affect some of you, so we thought it important to review. 
    Here are the important parts:

    “As we’ve mentioned previously, we’ve heard complaints from users that if they click on a result and it’s difficult to find the actual content, they aren’t happy with the experience. Rather than scrolling down the page past a slew of ads, users want to see content right away. So sites that don’t have much content “above-the-fold” can be affected by this change. If you click on a website and the part of the website you see first either doesn’t have a lot of visible content above-the-fold or dedicates a large fraction of the site’s initial screen real estate to ads, that’s not a very good user experience. Such sites may not rank as highly going forward.”

    “We understand that placing ads above-the-fold is quite common for many websites; these ads often perform well and help publishers monetize online content. This algorithmic change does not affect sites who place ads above-the-fold to a normal degree, but affects sites that go much further to load the top of the page with ads to an excessive degree or that make it hard to find the actual original content on the page. This new algorithmic improvement tends to impact sites where there is only a small amount of visible content above-the-fold or relevant content is persistently pushed down by large blocks of ads.”
    Go to http://googlewebmastercentral.blogspot.com/ for more information.

• Consumers don’t understand credit card policies

  • The CFPB (Consumer Financial Protection Bureau) released its first report on the nature of consumer complaints regarding credit card companies.  In the first four months of existence, the CFPB has received over 5,000 complaints.  Consumer confusion over disclosure of policies, objectionable advertising and marketing practices, high interest rates, privacy intrusions and unsolicited issuance of credit cards were some of the major subjects of complaints. 
    There was good news in the report.  Of the 5,000 complaints, more than 3,100 were resolved, with 400 cases still disputing the responses.  It should also be pointed out that 5,000 complaints in four months for a business that has approximately 177 million customers, is a relatively low number.

    To rectify the problem of confusing policies, it has been suggested that credit card companies submit their revised (plain English) policies to a group for approval.  It is believed that this will force credit card companies to drop the “legalese” that currently amounts to public disclosure.

• Banks Rake in $16 Billion

  • While the federal government debates reforms to the banking industry, overdraft fees on credit cards are likely to top $16 Billion in 2011.  Many banks automatically enrolled customers in overdraft protection plans, without their knowledge.  The Federal Reserve declared this practice illegal last year.  Customers must now be informed and agree to overdraft protection.  Typical charges are $35 to $40 per overdrawn item.

    In addition to the fees consumers have complained about how they are collected.  Many consumers believe that when the ATM card is “swiped” and the transaction is approved that that means there is enough money in the account.  This is not true.  The approval means that the bank will cover the charge, not that there is necessarily enough money in the account to cover it.

    Banks are also engaging in another practice the Feds are looking at:  re-ordering purchases.  By putting the highest ticket item first, they can apply the fee to numerous smaller transactions, thereby generating even higher fees.

    Expect further debate and customer weariness towards the financial industry.

• 2011 UK Business Search Engine Usage

  • In a report done and released by Econsultancy in association with Guava, here are some numbers to ponder for marketers in the UK.  650 respondents comprised of in-house marketers, supply-side firms including agencies and consultants replied online to make-up the data.

    63% of the firms said they were planning to increase 2011 social media spending.
    30% of the respondents said they used local search, but a further 21% were planning to do so.
    2/3 of the respondents said they increased their Google PPC budgets, and 12% said they decreased them.

    Integration of paid search and display is slow in coming.  46% said there was some integration, while 45% said there was none, leaving just 9% who said they were totally integrated.

    Just over half (53%) of the direct advertisers (clients) said they follow up search with display ads; 64% of agencies and consultants said their clients did so.

    2/3 of companies surveyed said they carry out their own social media marketing in-house, vs. 42% for paid search and 52% for SEO.

    Companies were asked what their primary objectives for paid search were.  49% reported that “driving traffic” was the main objective; direct online sales was reported by 45%.  Branding was reported by 26% (respondents could choose more than one.)

• Missouri Religious Leader Pushing for Payday Restrictions

  • Reverand Jim Bryan, a retired United Methodist Church pastor, is speartheading a consumer ballot drive that would place restrictions on the payday loan industry in Missouri.
    
    Bryan, as well as other religious and civic groups, are attempting to qualify the proposal for the 2012 ballot.
     
    Rev. Bryan retired from the Missouri United Methodist Church in June, 2010. He is an officer in the Missourians for Responsible Lending organization.
    
    The group's proposal would cap payday and car title loan annual percentage rates at 36 percent.

• CFPB Website Overview

  • The newly launched Consumer Financial Protection Bureau (CFPB) is now open for business and has been busy trying to implement rules regarding the oversight of numerous financial services business categories.
    
    One component of the CFPB that is in place is their website: http://www.consumerfinance.gov/the-bureau/
    
    The CFPB site includes sections on:
    
    * Information about the CFPB's mission and how it was formed
    * How to submit credit card complaints
    * How to check on the status of a complaint
    * How to get help with financial services products
    * How to get mortgage help
    * Providing information on specific "stories." ("Tell My Story" is not intended to be a complaint section, but area where visitors can post details of their experiences they'd like to share.)
    * There is also a jobs section on the site.
    
    There are also several videos posted throughout the site with overviews of the CFPB's services.
    
    The website describes the core services offered by the CFPB:
    
    The consumer bureau is working to give consumers the information they need to understand the terms of their agreements with financial companies. We are working to make regulations and guidance as clear and streamlined as possible so providers of consumer financial products and services can follow the rules on their own.
    
    Congress established the CFPB to protect consumers by carrying out Federal consumer financial laws. Among other things, we:
    
    * Conduct rule-making, supervision, and enforcement for Federal consumer financial protection laws
    * Restrict unfair, deceptive, or abusive acts or practices
    * Take consumer complaints
    * Promote financial education
    * Research consumer behavior
    * Monitor financial markets for new risks to consumers
    * Enforce laws that outlaw discrimination and other unfair treatment in consumer finance
    
    Visit http://www.consumerfinance.gov/the-bureau/ to browse the website for yourself.

• Mobile Advertising: Who’s Doing it?

  • According to Millennial Media’s 3rd quarter 2011 “SMART” report, Finance became the company’s top vertical for mobile advertising.  Millennial Media is the largest independent mobile ad network.

    Within the vertical of “finance” insurance comprised 38% of the total, followed by 22% for financial services such as investing or loans.  Banks and credit cards are regarded separately and made up 18% of the total. 
    Millennial Media also pointed out that people who access financial information or apps using a mobile device are twice as likely to own a smartphone as the general population and the financial audience is 76% more likely to own a tablet or e-reader.

• CFPB Opens Its Doors; Issues a Bunch of New Rules

  • The controversial Consumer Financial Protection Bureau (CFPB) officially began operations in July, 2011. The agency that was mandated by passage of the 2010 Dodd-Frank Financial Reform Act immediately enacted several rules, including:
    
    * Notice provisions for state officials to notify the CFPB of certain matters;
    * Procedures for investigations;
    * Procedures for certain adjudications; and
    * Freedom of Information Act procedures.
    
    In addition, the CFPB is taking an active role with social media sites such as Facebook, Twitter, YouTube and Flickr. The agency will:
    
    * interact with the public in effective and meaningful ways,
    * encourage the wide sharing of consumer financial information and the strengthening of an online community of consumers, and
    * ensure that critical information about the agency and key consumer finance issues is distributed.
    
    If you're interested in checking out updated information on the Dodd-Frank Act, you may want to visit www.dodd-frank.com.

• More Than 1 Million Brits Use Payday Loans Each Year

  • Talk about a popular product!  Records show that over one million UK residents take advantage of payday loan services each year.
    
    According to reports by the advocacy group Consumer Focus, the number of payday loan customers in the UK has soared by over 400 percent since 1996.
    
    The recent study by Consumer Focus indicated that 1.2 million UK consumers take out a payday loan, and they borrow a grand total of £1.2bn.
    
    Clearly, the UK payday loan industry is thriving, despite critics who complain about the annual percentage rate. However, many Brits are turning to these short-term loans as a way to resolve their immediate money emergency.
    
    When managed properly and repaid on time, payday loans are clearly not as risky as critics say. Borrowers must hold down a steady job or have a source of income in order to qualify for the cash advance. And, the loans are intended to be repaid by the next payday. When UK consumers adhere to these guidelines and take out only the amount of money they know can be paid off promptly, payday loans offer peace of mind to millions of UK residents.

• Payday Stocks on the Rise

  • How's this for solid evidence that consumers are in favor of payday loan operations?
    
    According to an Associated Press (AP), stocks for services such as payday loan lenders, discount stores and pawnshops are on the rise -- even though stocks for many other industries are floundering.
    
    The AP has reported stocks for payday loan firms such as Advance America and Cash Advance Centers has soared by over 100 percent over the past year; and another outfit, Cash America International, has improved by 64 percent.
    
    The stock surge for payday lenders could very well be a reflection of an economy that continues to struggle, as consumers search for ways to pay for urgent expenses.
    
    Other industries that tend to serve financially strapped consumers -- rental centers and pawn shops -- are seeing positive gains in the stock market, as well. Rent-A-Center, for example, is up over 57 percent from 12 months ago. Texas-based pawnshop chain Ezcorp Inc. has
    
    With one out of seven Americans now below the poverty line and consumer confidence waning, this trend is likely to continue.

• Native American Organizations Defend Payday Outfits

  • There has been a lot of news lately about payday loan firms that have sprung up throughout Native American tribal communities. Critics have alleged the payday loan stores are online entities who have opted to run their service through tribal communities in order to avoid state licensing regulations.
    
    Now the Native American Fair Commerce Coalition (NAFCC) is taking offense to these critics. NAFCC is an advocacy group comprising "like-minded tribes and tribal members that are committed to protecting the sovereign rights of Native Americans to pursue business and economic opportunities for their tribes nationwide."
    
    NAFCC issued a statement that responds to the Community Financial Services Association of America's (CFSAA) claims that Native American payday operations are "a group of Internet-based lenders who choose not to license themselves in the states in which they operate." NAFCC alleged the CFSAA's comments are discriminatory and they are "impeding Native Americans from lawfully exercising the rights of Native Americans to the same economic opportunities available to members companies of the CFSAA."
    
    The NAFCC statement noted: "The CFSAA's admonition to its members to avoid Native American tribal involvement in online short-term lending is discriminatory and violates the cross-generational, hard-fought gains achieved by Native Americans to maintain tribal identity and culture and protect their economic development," NAFCC Executive Director Darold Stagner said in a statement provided to TheStreet. "The CFSAA, with its constant attacks on the expanding presence of Native Americans in online lending, is causing harm to all three areas of our mission."
    
    The NAFCC defended short-term lenders, saying they "fill a need for consumers and provide revenue vital to the welfare of the tribes" and that profits from payday lending are used to fund "tribal law enforcement, poverty assistance, housing, nutrition, preschool, elder care programs, school supplies and scholarships."
    
    "Native American sovereignty, recognized by the United States Congress, aims to protect those rights that Native American tribes never bargained away since before the inception of America," says Charles Moncooyea of the Otoe-Missouri Tribe in Red Rock, Okla. "This right is designed to provide the economic benefits and opportunities general society has that are simply not available to Native American tribes. Those seeking to further victimize our tribes by singling out Native American-owned businesses are on the wrong side of the issue and on the wrong side of history. Just as retail and service business sectors are migrating to the Internet, the continuing growth of online short-term lending is inevitable. Native Americans have a sovereign right to engage in online short-term lending in order to pursue economic opportunities and equality in commerce for the betterment of our tribes and our families."

• U.S. Consumer Bureau Plans to Write Rules for Mortgage Servicers

  • Are you ready for the Consumer Financial Protection Bureau (CFPB)?
    
    The new CFPB is the government entity mandated by the 2010 Dodd-Frank Act. One of the initial duties of the CFPB will be to develop new rules and regulations for numerous sectors of the various U.S. financial services industries. The mortgage community will most certain be impacted by these new rules.
    
    One mortgage-related area in particular that the CFPB plans to tackle is concerning mortgage service firms and the consumer's ability to shop for competitive services. In fact, Congress has conducted hearings recently on how to make the mortgage service industry more consumer-friendly.
    
    The CFPB is open for business as of July 21, 2011. Expect a steady flow of rule changes impacting the mortgage community and numerous other financial services firms.

• Positive News About Payday Loans

  • Too much of the news about payday loans is negative. That's why we want to pass along information about payday loans that paint this product in a positive light. After all, many consumers take advantage of payday loans -- and many of them are able to use these short-term loans to resolve financial problems.
    
    For example ...
    
    * A report released by the Federal Reserve Bank of New York noted payday loans should not be considererd "predatory" because they can improve the financial condition of one's household. The Fed report was titled, "Defining and Detecting Predatory Lending."
    
    * Petru Stelian Stoianovici, a researcher with The Brattle Group; and Michael T. Maloney, professor at Clemson University, reported that there should be no link between payday lending and bankruptcies. The researchers found no empirical evidence that payday lending leads to more bankruptcy filings.
    
    * A 2010 report found neighborhoods with the presence of payday lenders actually could boast lower property crime rates than areas with no payday loan facilities.
    
    * In 2009 Professor Adair Morse with the University of Chicago's Booth School of Business found that in regions hit by natural disastgers, consumers fared better if there were payday loan stores present. Morse's study also found there were fewer people in areas served by payday lenders who were treated for drug and alcohol addiction than in areas with no payday lenders in the community.
    
    Needless to say, consumers should be grateful for the presence of payday loan stores.

• Why Faxless is Best

  • These days more and more consumers are taking advantage of short-term/payday loans to pay off urgent expenses. And, a growing percentage of these loans are being purchased online.
    
    Two major reasons why online payday loans have become so popular are because of their speed (approved applicants typically have their money within one business day); and because there are no forms or documents that need to be faxed to the lender.
    
    There are many reason why faxless payday loans have become so popular:
    
    * Faxless payday loans help to speed up the process of obtaining money. All the forms are online and transmitted immediately to the prospective lender.
    
    * Faxless payday loans are extremely secure. Online data is protected with the most up-to-date security software for personal information is never exposed to any unwanted party.
    
    * Faxless payday loan applications are typically reviewed instantly by the lender. There is no need to wait for days until the lender gets to your application.
    
    * One of the most convenient aspects of faxless payday loans is that the application process can take place anywhere you have Internet access. Uncomfortable discussing your personal information in front of other customers? Then look into a faxless short-term loan that you can apply for online from the comfort of your home.

• Regulation Z

  • Passage of the 2010 Dodd-Frank Act mandated a new rule -- "Regulation Z" -- also known as the Truth in Lending Act (TILA). Now the Board of Governors of the Federal Reserve System are proposing a rule amendment that would expand Regulation Z.
    
    The Board is looking for public comments on their proposed rule amendments to Regulation Z. Currently, Regulation Z prohibits a creditor from making a higher-priced mortgage loan without regard to the consumer's ability to repay the loan. The proposed change would expand the scope of the Regulation's "ability-to-repay" requirement to cover any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan).
    
    In addition, the proposal would:
    
    * Establish standards for complying with the ability-to-repay requirement, including a "qualified mortgage'' standard.
     
    * Implement limits on prepayment penalties.
    
    * Require creditors to retain evidence of compliance with the rule for three years after a loan is consummated.
    
    General rulemaking authority for TILA is scheduled to transfer to the Consumer Financial Protection Bureau (CFPB) on July 21, 2011.
    
    Comments on the proposed rule must be received on or before July 22, 2011. All comment letters will be transferred to the CFPB.

• Online Banking Safety

  • Many consumers conduct much of their banking business now online. Most major banking brands offer this convenient and efficient method for numerous bank-related transactions and information.
    
    But the biggest concern for some consumers is security. With hackers and other online threats floating around the Internet, consumers want to make sure their information is as private and secure as possible.
    
    Consumers should use common sense to help avoid Internet scams.
    
    To protect yourself, consumers should:
    
    * Make sure the bank is legitimate and that the deposits are federally insured.
    
    * Read about the bank's history. It will usually include the firm's headquarters and information about its relationship with the FDIC.
    
    * Scam artists may create fake websites that look like the real deal. They lure consumers into these sites to collect their account numbers and passwords. Most legit banks also have a site key system. If the website you are in does not show a site key in order to verify your account, you should be suspicious.
    
    * A legitimate website will have an official FDIC logo. In addition, the FDIC website provides a service where you can search for banks covered by the FDIC.
    
    * Whether you are on a bank website -- or any other site, for that matter -- be careful providing your social security number. Be 100 percent confident your data is secure and protected before offering that kind of personal information.
    
    * Make sure your passwords are unique. And, try to avoid using the same password for everything. Avoid easy passwords such as your birthday, anniversary, etc.

• Important Points to Cover Before Buying a Home

  • Stop!
    
    Make sure you determine the answers to these critical pre-purchase questions:
    
    * How long the home been on the market? If the home has been out there for too long, it may be over-priced.
    
    * Does it make more sense to rent or to own? Depending on yor financial situation and the market value of rental properties, it may actually make more sense to rent for some consumers.
    
    * What is the true market value of the property I am attempting to purchase?
    
    * This home looks great -- but what's wrong with it? Some buyers are so eager to purchase a home that they will over-look certain problems. For example, maybe the inspection uncovers some structural issues. You may love the home and the location, but the underlying problems may not be worth the long-term hassle.
    
    * Will the seller help out with the closing costs? This is a big consideration. Some sellers will pitch in on the closing costs, which could be a huge factor for some buyers.
    
    * Have there been foreclosures in the neighborhood? If so, you may be able to offer a lower price.
    
    * How close is the home to a high risk flood plain? The area may look secure, but flash floods happen and you will probably want to make sure your home is in a secure location.
    
    * Is the home a "short sale"? In some cases, the bank will not permit a home to be sold for less than the market value.
    
    * Is the seller willing to negotiate on the asking price? If the seller is not flexible, and you go in with a low-ball offer, you may lose out on the house of your dreams.

• Be Smart, Be Prompt

  • One of the most frequent complaints about payday loans is that some borrowers do not pay their debt promptly and the consumer incurs hefty additional fees. Payday lenders are clear about the terms of their loans. Borrowers are required to repay the loan at the next payday (hence, the term "payday" loan). When the borrower requests extensions, then the fees can start mounting.
    
    We want to offer some advice to those who may need assistance in paying off their payday loans.
    
    * First and foremost -- do not borrow more money to pay off your existing loan. This could lead to what critics call a "cycle of debt" that can send consumers finances spiraling down the drain.
    
    * You may want to communicate with your lender and explain your situation. Tell the lender you do not want to continue extending the payday loan. They may come up with a new payment plan that is more amenable to the borrower's financial situation.
    
    If this doesn't work, you may want to consult a debt advisor who can come up with some other options.

• Major Financial Services Player Seeks UK Expansion

  • Dollar Financial Corp. has announced plans to offer 5 million shares of common stock to help fund the purchase of a UK-based payday loan lender. Dollar Financial provides check-cashing and other financial services products.
    
    The company has not yet indicated how money the common stock sale should generate. It expects to transfer the revenue to its subsidiary, Dollar Financial U.K. Limited, which recently bought the payday loan lender Purpose U.K. Holdings for $195 million, using revolving credit for the purchase. Revolving credit is sometimes used to provide liquidity for a company's day-to-day operations.
    
    Dollar Financial operates approximately 1,200 stores, including 100 franchise locations, under various brand names such as Money Mart and American Payday Loans. The company operates in several nations, including the U.S., United Kingdom, Ireland, Sweden, Finland, Poland and Canada.

• Payday Borrowers Need to be More Responsible

  • The Center for Responsible Lending (CRL) has released a report, "Payday Loans, Inc.: Short on Credit, Long on Debt," that shows many payday loan borrowers should be more responsible when it comes to repaying the loan on time.
    
    The CRL tracked some 11,000 payday loan borrowers over a two-year span. The study found some borrowers remained indebted for as long as 24 months following their initial loan.
    
    The report shows borrowers who repeatedly use payday loans tend to borrow increasingly larger amounts, which raises the risk of default. The CRL study also shows the average payday loan recipient takes about six months to repay the loan.
    
    Payday loans are designed to be repaid within 15 days -- the length of time until the borrower's next payday.  

• Mortgage Company Slapped With Huge Fine

  • The state of Massachusetts will receive nearly $10 million from a $125 million settlement resolving claims of unfair and discriminatory lending practices and Sand Canyon (formerly known as Option One) will have to modify thousands of Bay State homeowners’ loans, Attorney General Martha Coakley has announced.
    
    The settlement requires the mortgage originator, a subsidiary of H&R Block, Inc., to pay the state $9.8 million and to direct American Home Mortgage Servicing Inc., the current servicer of 5,500 Massachusetts loans, to enact an aggressive loan modification program that will provide an estimated $115 million in additional relief.
    
    “Option One made loans that it knew were likely to fail and it discriminated against African-American and Latino borrowers,” Coakley said in a statement. “Its blatant disregard for prudent underwriting standards contributed to the economic downturn we still find ourselves in today. Like our other cases against mortgage lenders and their Wall Street facilitators, this case holds this corporation accountable and provides much needed relief to homeowners.”
    
    Option One originated approximately 32,400 loans in Massachusetts between 2004 and 2007, at which point the subprime market collapsed and it ceased its lending operations nationwide.
    
    The attorney general alleged that Option One’s discretionary pricing policies let mortgage brokers charge excessive and unjustified fees, causing black and Latino borrowers to pay more money, on average, for their loans. In 2008, when the lawsuit was filed, it was the first by a state attorney general’s office alleging civil rights claims against a subprime lender. Option One originated loans to approximately 4,400 black and Latino borrowers between 2004 and 2007.

• UK's CFA Introduces Payday Loan "Code of Practice"

  • The British Consumer Finance Association (CFA) has implemented a "code of practice" geared toward short-term loan providers such as payday lenders.
    
    Members of the CFA represent many of the largest payay loan lenders in the UK.
    
    The code of practice is intended to serve as a guidelines for short-term loan providers.
    
    Although there have been some critics to the cFA's code of practice, the group's CEO John Lamidey explained the code is designed to better educate consumers on the payday loan process; and to discourage consumers from borrowing more than they could afford.
    
    Still, some liberal members of Parliament are warning that if the code of practice does not sufficiently regulate the industry to their liking, there could be a stronger push by the government for stricter regulations.
    
    Currently, the UK short-term loan industry is mostly self-regulated.

• Eliminating Home Mortgage Deduction Could Pose More Problems

  • As the housing market begins to show slight signs of climbing out from its three year slump, one move could potentially erase any gains and set the housing market back in the negative direction.
    
    Of course, we are referring to the home mortgage deduction.
    
    There have been rumors leaking out of D.C. that some lawmakers are considering the elimination of the mortgage deduction. An estimated 40 million families use the deduction, including 65 percent of those earning under $100,000 a year and 90 percent of families with income under $200,000.
    
    Real estate groups such as the National Association of Realtors have gone on record stating the elimination of the home mortgage deduction would lead to a 15 percent reduction in home values.
    
    Let's say the change takes effect only for higher value homes. Such a move would eventually impact all homes, as the value of the larger homes decline and the other home values follow soon after.
    
    There appears to be no cause to panic just yet. House Republican Whip Kevin McCarthy has commented that there is no way such a plan to eliminate the home mortgage deduction could get passed by Congress.

• Housing Prices Inch Up

  • The depressed U.S. housing market may be showing some signs of life.
    
    Recent surveys have indicated prices for new and existing homes are rising a bit.
    
    According to the Commerce Department, sales of new homes dropped in June, but prices grew -- possible a result of the limited number of homes on the market.
    
    The Commerce Department data shows sales of new homes dropped 1 percent in June, 2011. The median price of a new home grew by 5.8 percent. The median new home price is now $235,200.
    
    Another housing market study conducted by S&P Case Shiller has found home prices in the 20 major metropolitan areas jumped in May. It was the second consecutive month of growth in these areas, as the median price of an existing home grew 1 percent from April to May. Comparing year-over-year data, housing prices were down 4.5 percent from May 2010.

• New Report Shows Scots' Debt is Growing

  • A study released by the British insolvency trade group R3 has found the debt level is growing for more Scottish residents than anywhere else in the UK.
    
    R3's second quarter 2011 study found 13 percent of Scots had taken on additional debt through sources such as credit cards, loans and more overdraft sources. Thirteen percent of residents throughout the remainder of Great Britain have taken on more debt.
    
    The news gets worse for the Scots. The survey indicated 43 percent of Scots are struggling to make ends meet. Believe it or not, that is better than in the rest of the UK, where 46 percent say they are having trouble making it to the next paycheck.
    
    It makes sense that payday loans have become incredibly popular in Scotland. More than 200,000 Scots have obtained a payday loan in past year. Throughout all of the UK, about 2 million Brits have received a short-term loan in the last year.

• Foreclosure Filings at 3-Year Low

  • RealtyTrac is reporting foreclosure filings during the first six months of 2011 dropped by 25 percent compared with the last half of 2010. The foreclosure filed during Q2 of 2011 was the lowest total in over three years. The drop may be more related to delays in the filing process that an improvement in the economy.
    
    Insiders are saying the decline in foreclosure filings is helping to temporarily stabilize housing prices. The result is what has been called an 'artificial floor' in home prices, because prices would actually plummet if more foreclosures are processed at a quicker pace.
    
    Nevada continues to see the highest foreclosure filing rate. One out of every 21 Silver State homes are receiving a foreclosure notice. Arizona is next, at one in 36 households; and California is third with one in 51.

• Is Dodd-Frank Helping Banks?

  • A year after the sweeping Dodd-Frank Act was enacted, mandating additional federal oversight of the nation's financial institutions, pundits are examining whether the measure has helped the banking industry.
    
    Jamie Dimon, the CEO of JPMorgan Chase & Co., believes Dodd-Frank has led to too much oversight. “Regulators, I can assure you, are much tougher in every way and shape possible,” Dimon commented.
    
    Bloomberg.com reports that since the 2008 collapse of the financial marketplace, a few large banks have dominated the industry, and their executives are reaping the benefits with higher salaries bonuses.
    In addition, Bloomberg.com points out that 12 months after Dodd-Frank, many regulations mandated by the Act are not yet written, as interested parties continue to debate the potential new rules and Republicans continue to pursue legislative amendments to Dodd-Frank.
    
    Roy C. Smith, an NYU finance professor disagrees with the contention that Dodd-Frank has not yet led to enough change. Smith says Dodd-Frank has influenced giant banks such as Citigroup Inc., which has sold off lines of business such as its consumer-lending unit.
    
    The new Consumer Financial Protection Bureau (CFPB), which was mandated by passage of Dodd-Frank,  officially opens its doors July 21. Bloomberg has reported that some banks are hiring internal consumer advocates to help police their internal policies to make sure they do not get an uncomfortable call from the CFPB.
    
    Another impact of Dodd-Frank has been an increase in lobbying expenditures from financial instutitions. The 10 largest U.S. banks shelled out $11.2 million on lobbying during Q1 of 2011. In addition, five of the 10 largest firms have spent more on lobbying during the first quarter of 2011 than they spent in the fiscal quarter prior to passage of Dodd-Frank.

• UK's Salaried Citizens Benefitting From Payday Loans

  • One of the largest segments of the UK population taking advantage of short-term loan products such as payday loans is the salaried class of employees.
    
    With the economy struggling, this portion of the UK society is in need of additional financial support. Oftentimes, workers are finding their salary just is not quite enough to cover all living expenses. Therefore, salaried employees from throughout the UK have been seeking out payday loan services in increasing numbers. And, in order to keep up with demand, there has been a surge in UK payday loan operations providing this financial service to Brits.
    
    Salaried workers -- even those earning good, steady pay -- are finding it difficult just to cover their normal living costs. So, when emergencies hit -- illness, accidents, car repairs, etc. -- salaried employees simply do not have the finances to rememdy those urgent financial needs.
    
    The speed and convenience offered by payday lenders -- especially online lenders -- makes these short-term loans even more appealing to UK residents who are short on cash. In many instances, approved borrowers can receive their money in their bank account within 24 hours.
    
    Typical UK payday loan amounts range from about £100 to £1500. The online payday lenders usually provide a short form that is electronically transmitted and the approval process takes a matter of seconds. The payday loan terms require repayment within about two weeks (upon the next payday), but extensions may be provided to those unable to repay.
    
    Another reason why salaried UK workers are flocking to payday loan products is because those who have had some credit score problems may still be eligible for these loans. As consumers wrestle with their finances, many credit scores have plummeted, as well.

• Obama Admin Offering More Assistance For Unemployed Homeowners

  • Good news for unemployed consumers having trouble making their mortgage payment.
    
    The Obama Administration has announced it is increasing the amount of aid available to unemployed homeowners. The program allows unemployed homeowners to miss as much as a year's worth of mortgage payments and still avoid foreclosure.
    
    Mortgage lenders who work with the Federal Housing Administration must extend their "forbearance" for 12 months. This is triple the current four-month forebearance requirement.
    
    The Obama Administration has also made it easier for homeowners to qualify for the mortgage assistance program.
    
    "The current unemployment forbearance programs have mandatory periods that are inadequate for the majority of unemployed borrowers,” Housing and Urban Development Secretary Shaun Donovan commented.  “Today, 60% of the unemployed have been out of work for more than three months and 45% have been out of work for more than six.  Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home.”
    
    President Obama added has been working to find creative methods for forestalling foreclosures, as unemployment still hovers over 9 percent. "We’ve had to revamp our housing program several times to try to help people stay in their homes and try to start lifting home values up," Obama said in response to a question on Twitter. "But of all the things we’ve done, that’s probably been the area that’s been most stubborn to us trying to solve the problem."

• New Credit Union Rules Proposed

  • The National Credit Union Administration (NCUA) is proposing a change to its rule governing credit union applications for loans and assistance grants. The change is intended to credit greater transparency, clarity and flexibility.
    
    The NCUA is asking for comments on their proposed rules changes to be submitted by July 25, 2011.
    
    Check out the background info on the proposed changes:
    
    The CDRLF was created by Congress in 1979 with an initial appropriation of $6 million and has been administered exclusively by NCUA since 1986. Through subsequent appropriations and earnings on Fund assets, the Fund has grown to over $19.7 million as of the end of the first quarter of 2011. The Fund serves as a source of financial support, in the form of both loans and technical assistance grants, for credit unions serving predominantly low-income members. It also serves as a source of funding to help low-income credit unions respond to emergencies arising in their communities. The NCUA Board has delegated to the Office of Small Credit Union Initiatives authority to make the determination of how to allocate the finite resources of the Fund among qualifying credit unions. Awards provided through the CDRLF Program have strengthened credit unions by enabling them to increase their capacity to support the communities in which they operate. This increased capacity has allowed credit unions to provide basic financial services to low-income residents of these communities, resulting in more opportunities for residents of the credit unions' communities to improve their financial circumstances.
       
    The technical assistance grant portion of the CDRLF provides funds to low-income credit unions so that they may extend services to their
    members and improve their operations. The source of awards includes appropriated funds, current year earnings, and a portion of prior
    years' retained earnings.
    
    Through the loan portion of the CDRLF, low-income credit unions may receive funds to support a variety of financial and related services
    designed to meet the particular needs of members and the low-income communities served. In years where Congress has not appropriated funds
    for loans, funding has come from scheduled loan repayments of prior loans.
     
    Part 705 has been largely unchanged, in substantive terms, since 1993. In the years following, significant enhancements, including changes in technology, have altered the way in which NCUA retrieves and uses data from credit unions. The proposed changes in this rule, which
    comprehensively revise part 705, reflect these changes and are designed to reduce the burden on credit unions. The proposed changes remove some of the detail in the current rule dealing with administrative aspects of the program to provide the agency with greater flexibility to make changes and variations to suit specific circumstances. Other changes add detail to the rule, for example, regarding how NCUA evaluates
    applications, to provide greater transparency and better knowledge and information to prospective applicants. The changes also add a new
    section addressing reporting to and monitoring by NCUA, which is designed to help the agency assure that an award from the Fund is used
    in the manner and for the purposes represented by the credit unions receiving loans or grants. On balance, the rule is streamlined and the
    burden imposed on credit unions seeking an award from the Fund is reduced.
    
    You may submit comments by any one of the following methods:
    * Federal eRulemaking Portal: http://www.regulations.gov.
    Follow the instructions for submitting comments.
    * NCUA Web Site: http://www.ncua.gov/
    RegulationsOpinionsLaws/proposed_regs/proposed_regs.html. Follow the instructions for submitting comments.
    * Email: Address to regcomments@ncua.gov. Include ``[Your name] Comments on Proposed Rule 705, CDRLF Amendments'' in the e-mail
    subject line.
    * Fax: (703) 518-6319. Use the subject line described above for e-mail.
    * Mail: Address to Mary Rupp, Secretary of the Board, National Credit Union Administration, 1775 Duke Street, Alexandria,
    Virginia 22314-3428.
    * Hand Delivery/Courier: Same as mail address.
    
    For more details visit: http://www.regulations.gov/#!documentDetail;D=NCUA-2011-0033-0001

• CRL Slices Lobbying Budget

  • The consumer advocate group the Center for Responsible Lending (CRL) has been cutting back considerably on their lobbying expenditures.
    
    CRL spent $96,000 in the first quarter of 2011 on their federal legislative advocacy efforts. The group focuses on issues such as lending fees and other political issues. That figure is a major drop off -- by about $130,000 -- from what they allocated toward lobbying during Q1 of 2010; and it is $102,000 less than their lobbying expense for the fourth quarter of 2010.
    
    CRL often lobbies against products such as payday loans, subprime credit cards and overdraft fees.
    
    The organization is a major proponent for the newly formed Consumer Financial Protection Bureau (CFPB). The CFPB will oversee numerous financial services sectors and products throughout the U.S.

• Fixing a Payday Loan Dilemma

  • Online payday loans are among the most convenient and fastest ways to resolve money problems. They help consumers to pay off bills, take care of urgent repairs, and settle numerous financial matters. But when the borrower is not able to repay the loan on time, they may incur mounting fees and interest that could present additional fiscal problems.
    
    There are several ways to help consumers dig themselves out of a payday loan-related hole, such as:
    
    * Communicate with your payday lender. The lender may be willing to make special arrangements for borrowers having a difficult time paying off their debt.
    
    * Look for ways to make extra money. Do not automatically seek more loans in order to pay off other loans. Can you put in some overtime at work? Can you take a temporary part-time job? Can you fix cars on the side? Mow lawms? Get creative. Be willing to put in the extra hours.
    
    * Try negotiating with your credit card companies to pay off your debt. They may accept a partial pay-off, which would be better than seeing you default on the total amount or filing for bankruptcy. (If you seek this option, please remember to speak with your tax advisor about possible tax ramifications
    
    * You may want to chat with a debt relief expert. They may be able to negotiate partial payments on your credit card and other debts that could give you a lot more cushion with your monthly bills.
    
    * As a last resort, you may want to talk with a bankruptcy attorney about the possible of filing chapter 7 or chapter 13 bankruptcy. No one wants to file bankruptcy. But, these laws are in place to help consumers get back on their feet when faced with seemingly insurmountable debt.

• Payday Shooter Sentenced

  • Last October Jaime Brock was shot in the forehead by a thief at USA Pay Day Loans in Hanover Park. IL. Now on trial for the shooting, Mississippi native Admise Wilson apologized to his victim: “I didn’t mean for it to happen that way. I’m sorry for the pain I caused to you and your family,” said Wilson, bowing his head repeatedly as he fought back tears. “I’m glad you’re up and moving around. ... (I’m going to) be gone for a long time.”
    
    Wilson also asked the judge permission to tell his mother that he loved her.
    
    Brock told Wilson: “I don’t know the reason why you did what you did. I have a daughter who just had her eighth-grade graduation ... I have a (4-year-old) son with cerebral palsy. I was the breadwinner in my family. You don’t know at all what you could have caused me that day if I had died."    
    
    According to prosecutors, on Oct. 5, 2010, Wilson came in twice to USA Payday Loans, where Brock worked. During his second visit he told Brock he’d return in five minutes so he could go to his bank. He came back with a 22-caliber handgun and walked up to Brock, put the gun to her forehead and pulled the shot her. Then Wilson stole $1,000 from the cash register. Before he left, he threw a paper shredder on top of Wilson, and aimed the gun at the back of her head. Wilson left without firing another shot.
    
    Brock actually managed to get up and call 911, text the employees at a nearby restaurant and call home to tell her family she’d been shot. She remained conscious long enough to tell police and paramedics the name of the gunman -- Admise Wilson.
    
    Wilson, 34, was later arrested and charged with several crimes, including attempted first-degree murder. When he was arrested, Wilson was found with the gun and $242. He confessed to the shooting while in police custody.
    
    Brock has made an amazing recovery, but she still must see a neurosurgeon on a regular basis and she has not yet been able to return to work.
    
    Judge Thomas Fecarotta sentence Wilson to 25 years in jail under a plea bargain approved by Brock.

• UK Consumer Fears About Home Buying

  • A study released by Legal & General Mortgage Club and the Association of Mortgage Intermediaries shows two-thirds of consumer are concerned they will not be able to buy a home.
    
    In addition, two-thirds of the survey respondents are concerned that they would not qualify for loans due to banks' strict lending criteria.
    
    The survey indicated:
    
    * Thirty percent of UK mortgage holders want to either move or refinance their home over the next year.
    
    * One-third of those who plan to move or refinance are confident they will qualify for a new loan; 25 percent believe they will not qualify for the amount they need; and 20 percent do not believe they wil lbe able to come up with a large enough down-payment.
    
    * Ten percent believe their credit problems will prevent them from obtaining a loan (3 percent said the had defaulted on non-secured debt; and 2 percent had recently fallen behind on the mortgage payments).
    
    * Sixty percent of consumers seeking a mortgage have a deposit or equity stake of under 25 percent of their home's value.
    
    The study polled 2,000 mortgage-holders.

• Good News for Homeowners

  • The number of U.S. homeowners who are "underwater" on their mortgage appears to be dropping.
    
    During the first quarter of 2011, the percentage of homeowners who were "underwater" fell slightly. The data showed that 10.9 million homes with a mortgage, or 22.7 percent of such properties, were underwater at the end of the first quarter. That was a slight decline from 11.1 million, or 23.1 percent, in the fourth quarter, according to data released by California-based CoreLogic.
    
    A mortgage that is "underwater" means the borrower owes more on the mortgage than the property is worth. As home values have taken a nose-dive over the past few years, a higher percentage of homeowners have seen their value dip below the loan amount on their home.
    
    The drop in underwater homes does not necessarily mean home prices are climbing. According to CoreLogic, the numbers are being bolstered by a rise in foreclosure sales, which often tend to remove underwater homes from the market.
    
    The states with the weakest percentage of underwater homes include: Nevada (63 percent), Arizona (50 percent), Florida (46 percent), Michigan (36 percent) and California (31 percent).

• Auto Loan Rates in Lead Among All Loans

  • Banks and credit unions are competing closely in nearly all loans with the exception of auto loans.
    
    According to rate tracking firm Informa Research Services Inc. of Calabasas, Calif., credit unions had an average rate of 3.92% on five-year, new auto loans compared to banks at 5.39% as of June 14. With two-year to four-year, used auto loans, credit unions had an average rate 4.05% and banks’ average rate was 5.64%.
    
    Meanwhile, the gaps are not as wide in other loans. On a 30-year, fixed conforming mortgage loan, credit unions had an average rate of 4.58% with banks close behind at 4.53%.  The same was true with 30-year fixed jumbo loans with credit unions at 5.03% and banks at 5.05%.
    
    The average rate at credit unions on a four-year, $5,000, unsecured personal loan was 10.62% and 10.95% at banks.
    
    Even in the indirect lending space, credit unions and banks are in close competition. The average rate on a five-year indirect tier A auto loan at credit unions was 4.81% and 4.92% at banks. On five-year indirect tier B auto loans, credit unions had an average rate of 6.65% while banks offered a rate of 6.60%. The pattern is also seen on five-year indirect tier C auto loans with credit unions at 8.65% and 8.60% at banks.
    
    Borrowers are considered to have A credit if their score is between 680 and 719, B for scores between 650 and 679 an C if scores fall between 625 and 649, according to Informa.

• Provo, Utah Courts Over-loaded With Payday Loan Cases

  • Over a five year span, there has been an 80 percent rise in the number of small claims filed in the Provo, Utah court system related to payday loans.
    
    The report was produced by the Coalition of Religious Communities, a consumer advocacy group that focuses on poverty-related issues.
    
    The group has reported that between Jan. 1, 2005, and June 30, 2010, nearly 80 percent of the 24,707 small claims cases in Provo's district court were payday loan cases. More than 70 percent of Provo's justice court cases were payday loan cases. Over 62 percent of all cases in Utah County were filed by payday lenders.
    
    One lender, Utah County-based Check City, includes a provision in its lender contract that requires cases to be prosecuted in Provo. This could be one reason for the large percentage of payday-related court cases in Provo.
    
    In addition, a 2010 policy change moved all small claims cases -- including payday loan cases -- out of the district court and into the justice court.

• Mortgage Rates Hit Lowest Point in 60 Years

  • Mortgage interest rates are lower than they have been since the 1950s. So -- with home prices continuing to dip, why aren't we seeing a spike in home purchases? Many real estate insiders are speculating too many consumers are missing a golden opportunity.
    
    Rates have been falling for several consecutive weeks -- but that has not yet lit a fire in the housing market. Median rates for 30-year loans are now around 4.49 percent; and rates for 15-year fixed mortgages have plummeted to 3.68 percent.
    
    How low do rate have to go in order to entice consumers?
    
    Realtors may have to dig deep in their bag of tricks in order to lure more buyers in the market. In the late 1970s and 80s, when interest rates were ballooning to 20 percent or more, it was common to see sellers offer a mortgage at no interest or under market rates. Of course, back then the price tag on a home was typically less than $100,000, so the high interest rates were not quite so difficult to swallow.
    
    Needless to say, the real estate community may need to put on their collective thinking cap and devise some clever ways to spark greater interest in home sales.

• PA Woman Pleads Guilty to Mass PayPal Thefts

  • A Coraopolis, PA woman who was accused of stealing about $900,000 through some 140 electronic bank transfers has pleaded guilty to bank fraud and money laundering.
    
    The woman, Elexa Manos-Becton, found a bank that mistakenly allowed her to use PayPal for electronic transfers that were worth significantly more than the amount she had in her account.
    
    Manos-Becton used the funds to repay payday loans and make her car and house payments. The illegal transactions took place between Oct. 2007 and Dec., 2008.
    
    Facing 21 counts, the woman and pleaded guilty to just two of the charges. She's looking at up to 500 years in prison, and/or a staggering $14.75 million fine.

• Prepaid Debit Cards Are Big Business

  • Many consumers without standard bank accounts are turning to prepaid debit cards to conduct a wide variety of financial transactions.
    
    For example, nearly two million people are participating in Visa's Americas group, a program that uses prepaid debit cards for unemployment benefits, disability insurance, and paid family leave programs. There is huge consumer demand for these types of programs. In 2010, prepaid debit cards were used for about $65 billion in transactions. That was an increase of some $17 billion over 2009.
    
    This type of activity generates roughly $1 billion in transaction fees. Banks collect two types of fees from these types of transactions. They get receive swipe fees from payment networks when consumers use the cards to make a purchase. Banks also may charge users for instances such as multiple ATM withdrawals, using a non-network ATM or overdrafts.
    
    Fees vary by state. California -- with its massive number of potential transactions -- was able to negotiate a program with almost no consumer fees. In other states, such as Michigan, prepaid cards for unemployment insurance include a charge of $1.50 for each denied transaction. U.S. Bancorp's charges Ohio residents $17 for each overdraft.
    
    The cards may assist some 60 million Americans who do not utilize standard bank accounts.
    
    It is expected that in the near future a bunch of prepaid card products will spring up on the market. By 2014, insiders predict there will be some 5.4 million prepaid cards provided by employers -- a 100 percent increase over current figures.
    
    The federal government ran a pilot program to load tax refunds on prepaid cards. The test program worked well. Starting in May, 2011, new Social Security recipients must choose between direct deposit or prepaid cards from Comerica Bank (CMA), as paper check payments will be completely phased out.

• Band of America Reaches Settlement on Illegal Fees

  • Bank of America Corp. has received preliminary court approval for a $410 million excessive overdraft fee settlement.
    
    The agreement will impact some one million consumers with BofA accounts.
    
    U.S. District Judge James Lawrence King in Miami today tentatively approved the accord between about 1 million account holders and the bank, according to minutes from a hearing posted on the court’s website. A final approval hearing is set for November. The judge will award plaintiff attorneys’ fees from the $410 million fund, said one of the lead lawyers for the consumers, Jeremy Alters.
    
    Anne Pace, a spokeswoman for Charlotte, North Carolina- based Bank of America, said the bank already has made changes to its overdraft policies, including the elimination of overdraft fees for debit card transactions and reduced fees for customers who overdraw their accounts.
    
    “We’re pleased to reach a fair resolution to this matter,’’ she said.
    
    Institutions including Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. were named in related lawsuits. Today’s settlement is only with Bank of America. Bank of America didn’t admit any liability in the cases, Alters said.
    
    The case is In Re Checking Account Overdraft Litigation, 09-02036, U.S. District Court, Southern District of Florida (Miami).

• Mortgage Disclosure Documents Should Help Consumers

  • The Consumer Financial Protection Bureau (CFPB) -- the new federal financial services watchdog group mandated by passage of the 2010 Dodd-Frank Act -- is in the process of developing two mortgage disclosure forms aimed at unraveling the secrets to calculating one's true mortgage costs.
    
    The agency is actually utilizing social networking to obtain consumer feedback on the proposed forms. The CFPB's effort has been dubbed, "Know Before You Owe."
    
    The group cites several reasons why more clarity is needed:
    
    • Buying a home is the most valuable asset for the majority of consumers; and buyers have a right to know how much their home truly will cost.
    
    • One reason attributed to the recent real estate market crash is consumer ignorance due to poor disclosures.
    
    Consumers Union, one of the most prominent advocate group in the U.S., is supporting the CFPB's efforts to enhance consumer mortgage cost disclosure. The organization points out that:
    
    • Five years ago, just about the time the nation discovered Chicken Little wasn't crying "Wolf!" the AFL-CIO and BankRate.com issued studies that revealed mortgage consumers were confused, concerned and craving more regulatory protection.
    
    The AFL-CIO found 73 percent of adjustable rate mortgage (ARM) holders, didn't have a clue how much their monthly mortgage payment will increase or decrease the next time their rate adjusts. Nearly half, 49 percent, said they weren't very informed about their mortgage's terms and conditions. One in five did not know their current interest rate.
    
    Bankrate.com found more than one in three homeowners didn't even know what kind of mortgage they had, a fixed-rate mortgage (FRM) or an ARM.
    
    • A November 2010, Consumer Reports (which is published by Consumers Union) national poll found 76 percent of respondents wanted the CFPB to make clearer mortgage and financial disclosures a priority. In addition, 84 percent who had applied for or received a loan or credit card in the past 12 months indicated difficulty with financial disclosures; and 31 percent said the disclosures were not clear.
    
    • Early this year a MortgageMatch survey noted the mortgage application process was so excruciating, 21 percent said the ordeal was more stressful than waiting to hear if they got a job. Technical jargon was too much for 21.6 percent of those surveyed and 20.7 percent said it was a challenge to find a lender who was easy to work with. More than 32 percent of survey respondents ranked the application process more challenging than getting the mortgage itself (23 percent) or negotiating the sale price on the home (25.3 percent).
    
    • A Zillow.com survey indicated 57 percent of prospective home buyers did not understand how ARMs work. Also, 45 percent believed they should always buy mortgage discount points. Some 34 percent did not realize lender fees vary by lender and are negotiable.

• UK Payday -- A Good Business Opportunity

  • It's no secret the payday loan industry  in the UK is booming. The nation's economy is still suffering, and many Brits who are faced with financial woes need a place to turn for fast cash.
    
    Many smart entrepreneurs are jumping into the UK payday loan corporations. This phenomenon is just not just restricted to the United Kingdom; UK payday loan retailers are appearing all through Australia, the USA, Canada, the Caribbean and Central America.
    
    Payday loan businesses rank among the most lucrative enterprises in the UK, whether you are a merchant that provides the loan; or a website publisher who generates the leads. Consumers are cahrged between £15 and £25 for every £100 borrowed. The UK payday loan industry generates about £50 billion a year in total revenue.
    
    In addition, affiliate marketing firms such as T3LEADS.COM offer extremely high payouts to online publishers who generate UK Payday leads.
    
    Of course, launching a Payday Loan operation will take some resources and management skill. There are also rules and business practices that you should adhere to in order to run a smooth operation. If you lack this kind of experience, you are probably better off developing a Payday Loan lead generation program.
    
    Either way, Payday Loans can be a successful business venture for many entrepreneurs in the UK.

• Final Dodd-Frank Whistleblower Rules in Place

  • On May 25, 2011, the Securities and Exchange Commission (SEC) narrowly voted in favor of adopting final regulations for implementing the “Securities Whistleblower Incentives and Protection” provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
    
    Despite arguments submitted by corporate America and the two dissenting Republican SEC commissioners (Kathleen L. Casey and Troy A. Paredes), the Commission refused to incorporate a requirement that employee whistleblowers report possible violations of the federal securities laws to their companies before contacting the SEC directly. The opponents argued the whistleblower rules would replace companies’ existing internal compliance programs, as mandated by the Sarbanes-Oxley Act of 2002. Instead of implementing the recommendations, the SEC added a few more incentives to encourage internal reporting. The Commission also amended the definition of “whistleblower” and the anti-retaliation provisions within the regulations. The amendment are designed to help avoid frivolous claims.
    
    For thorough details on the whistleblower rules, courtesy of Pepper Hamilton LLP, click on the link below:
    
    http://www.pepperlaw.com/publications_update.aspx?ArticleKey=2117

• U.S. Firms Impacted by India Privacy Law

  • It has been a growing trend in the U.S. for many years: the outsourcing of customer service and data processing jobs to India. But India has implemented some new restrictions regulating the transfer of data to the United States.
    
    This year, India enacted new Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules. The rules impact India companies that gather personal data.
    
    The rules mandate that no India-based firm may send personal consumer information to a third party outside the country, unless the company receiving the data can provide the high level of data security required under the India IT Rules. The private information includes:  passwords, certain health conditions and medical records; and sexual orientation.
    
    What does this mean for online retailers in the U.S.? American firms that obtain this kind of data from Indian companies must adhere to Indian privacy regulations if they want to continue receiving the data. The regulations also may apply when information is collected about non-Indian residents.
    
    Needless to say, companies doing business with Indian customer service firms need to make sure they are in compliance with the nation's IT Data Rules.

• UK Payday Loan Business Continues to Soar

  • Talk about a popular product! UK consumers are gobbling up payday loans like bears eat honey.
    
    Thanks largely to the high cost of living, demand for payday loans in the UK shot up by 58 percent in April 2011, compared with April 2010 figures, according to short-term loan website moneysupermarket.com.
    
    Payday loans are designed to help tide consumers over financially until their next paycheck.
    
    Tim Moss, head of loans and debt at moneysupermarket.com, commented, "It's no surprise to see the demand for payday loans rise so sharply in the current climate, and particularly around bank holiday periods when people have been spending more. These products act as a barometer, giving a unique insight into the state of the nation's finances, and as people continue to feel the pinch, we can expect to see the popularity of these products continue to increase."
    
    Moss added that, although payday loans comes with high annual percentage rates, consumers who need money quickly can utilize payday loan services more inexpensively than many other financial options, provided the loans are repaid promplty.
    
    Moss concluded, "The golden rule for consumers is not to borrow money unless it is absolutely necessary. Consumers feeling the pinch need to sit down, go through their finances and try to work out where they can reduce their outgoings before considering any kind of loan..."

• Cost to Run a Home in UK on the Rise

  • Thanks in part to soaring utility bills, the average cost to manage a home in the UK is on the rise -- despite a slight dip in mortgage rates.
    
    The rise has been felt most by Scotland residents, whose home-related expenses have risen dring the first quarter of 2011 by £116.
    
    Economists report that mortgage payment have dropped, but the rising cost of energy bills and repairs has led to an overall increase of 1.4%; or £8,641 for the entire year.
    
    In London, the results were promising. The cost of managing a London home dropped by 5.9%, thanks in large part to the dip in mortgage payments. Lower mortgage interest rates have fallen by 21% on average.
    
    Utility bills -- electricity, gas, etc. -- are up 19% since 2008. That's an average of £259 per year.
    
    Renters are impacted by the spike in utility costs, as well. Their expenses have risen over a three-year span by 10%.

• Long Term Loans Vs. Short Term Loans

  • With the U.S. financial industry in upheaval, banks have been a lot more strict about shelling out long term loans. Therefore, many consumers are seeking assistance from non-bank institutions and various products such as short term loans.
    
    There are pros and cons for both long term and short term loans. We've put together a list:
    
    Long Term Loans - Pros:
    
    * Of course, the most obvious advantage of the long term loan is the loan amount. If you qualify, long term bank loans are used to start a business, purchase a car, buy a home, consolidate debt and anything in between.
    
    * Long term loans typically come with more competitive rates than short term loans. Banks are extremely competitive with each other and they often offer interest rates that are more appealing than what their competitors offer.
    
    * Long term loans -- because they are spread out over a lengthy time period -- include relatively small monthly payments.
    
    * Some banks will also offer balloon loans where there are little or no payments until the loan is due. At the due date the balloon payment is made. This is beneficial for a borrower who may be launching a business with a small amount of capital, but there is significant growth potential for the business or investment.
    
    Short Term Loans - Pros:
    
    * Simplicity. One of the major reasons why short term loans such as payday loans have become so popular is the ease in which a consumer can obtain the loan. This is especially true for online payday loans. There are an abundance of payday loan vendors online, and the application process and electronic transmission of the loans are extremely user-friendly.
    
    * Speed. Short term loan applicants are typically informed immediately whether they qualify. And, as soon as the borrower agrees to the loan terms, the money is usually transmitted to the customer's bank account within 24 hours.
    
    * Weak credit is OK. Oftentimes, customers who have been rejected for loans from a bank due to credit issues will have an easier time qualifying for a short term loan. With payday loans, for example, customers can qualify as long as they have a steady source of income and no other outstanding payday loans.
    
    * Short term. As the name implies, the short term loan is designed to be repaid quickly -- usually within 8-24 days. When repaid promptly, the debt -- and the customer's financial problem -- are quickly resolved.
    
    Long Term Loans - Cons:
    
    * Be prepared to jump through many hoops. The application process is very cumbersome and time-consuming. There are numerous lengthy forms to complete and the financial institution will ask a lot of personal financial-related questions.
    
    * Interest adds up. Although the payments are spread out over a long period of time, and the interest rate may seem low, the interest adds up and the total amount repaid may be almost double the loan amount or more, depending on the length of the loan, the interest rate and the amount borrowed.
    
    * Risk.  If you have trouble paying off your loan, you risk losing your property: your car, your home, etc.
    
    Short Term Loans - Cons:
    
    * Short term = small loan. Borrowers can usually only take out up to around $1,500; and that figure is typically much smaller until the borrowers have established themselves as a good customer.  Therefore, short term loans can only be used to pay for minor expenses such as bills, car or home repairs, etc.
    
    * Interest rates. One of the most common criticisms of short term loans is the annual interest rate (APR). Although state regulations usually prevent borrowers from rolling over short term loans for more than around two months, the APR (which is about 400 percent) scares off some consumers. 
    
    It is important for consumers to understand the benefits and the pitfalls of all available loan options. In addition, borrowers must be very disciplined when it comes to their outstanding debt. Make sure you stay within your budget and do not get over-extended financially.

• Will a Bankruptcy Ruin Your Chance for an Auto Loan?

  • The number of bankruptcies filed in the U.S. reached staggering proportions in 2010 (see chart below). But, even those who have been forced to file bankruptcy still need to purchase items such as cars from time to time. So, if one is still trying to repair their credit rating, is it possible to qualify for a car loan?
    
    One positive aspect of having filed bankruptcy under chapter 7 is that the auto loan lenders realize the consumer cannot file bankruptcy again for another eight years. And, most car loans are less than eight years. Therefore, the lender knows the consumer cannot file bankruptcy to avoid paying off the loan.
    
    Another way to increase your chances of obtaining a car loan after filing chapter 7 is to work on improving your credit score. Pay off bills promptly. Obtain a reliable credit score periodically so you know where you stand. The better your credit score, the better rate you will likely be offered.
    
    There is a significant difference between a chapter 7 bankruptcy and a chapter 13 bankruptcy. A chapter 7 is going to impair the consumer's credit rating because the debts are erased. With a chapter 13 bankruptcy, debt payments are restructured, not eliminated as they are in a chapter 7. Those who file a chapter 13 bankruptcy will not have their credit rating impacted as dramatically as those who file chapter 7. This is a major consideration for those looking into bankruptcy, who may still want to maintain a decent credit rating.
    
    If you are unable to obtain a bank loan for a new vehicle, another option to consider is an online auto loan. There are numerous online auto loan websites that may be more lenient than traditional lenders.
    
    _________________________________________________
    Business and Non-Business Filings
    Years Ended September 30, 2006-2010
    
    Year     Total             Non-Business    Business
    2010     1,596,355     1,538,033        58,322
    2009     1,402,816     1,344,095        58,721
    2008     1,042,993     1,004,342        38,651
    2007     801,269        775,344          25,925
    2006     1,112,542     1,085,209        27,333

• Get Out of Debt

  • The Federal Reserve Bank of New York has recently estimated the total U.S. consumer debt is a whopping $11.4 trillion. That means the average American household debt is an incredible $99,303.
    
    Americans love to accumulate debt: mortgage payments, credit cards, payday/short-term loans, lines of credit, etc., etc. The question is, when a consumer's debt is piled sky-high, how can they eliminate their debt without filing bankruptcy?
    
    Check out these suggestions:
    
    * The first step a debt-riddled consumer should take is to create a strict budget -- and adhere to it. Start crossing off the unnecessary items from your expense list and look into ways to reduce the other expenses, as well. Do you really need the NFL TV package? Do your children need to play for that expensive club team?
    
    * Look for a second job. Maybe you can find something that can done at home. Maybe there are services you can provide your friends and neighbors that can earn you some extra money.
    
    * eBay! Tired of looking at those bookshelves stuffed with novels you've already read? Sell them on eBay. Or have a garage sale. You might be amazed how much money you can earn by selling off your old stuff.
    
    * Trade down. Do you need that big gas-guzzler? Can you move to a smaller, more economical townhome or condo? These are major decisions that are impacted by the state of the real estate and auto market, but they are certainly considerations for those dealing with a mountain of debt.
    
    * Pay off your credit cards as quickly as possible. Start with the cards that have the lowest balance. Once you pay off that card, then work off the next one ... and the next. Another option is to work out a settlement with your credit card company. Sometimes the company would prefer to work out a settlement rather than have the total debt wiped out by a bankruptcy. However, the IRS may consider these settlements income, so make sure you consult with a tax advisor if you go down this path.
    
    If these steps are not effective, you may want to consult with a money manager, credit counselor or bankruptcy attorney.
    
    Good luck!

• Will the NFL Lockout Lead to More Short-term Loans?

  • Yahoo! Sports has uncovered a new trend among National Football League (NFL) players: a surge in players taking out short-term loans.
    
    That's right -- with the NFL owners and players engaged in a nasty labor union battle and lockout, some players are resorting to short-term loans to make ends meet.
    
    Yahoo! also found that some short-term loan lenders are requiring players to obtain an insurance policy to cover the loans, in case an injury ends or dispurts their career. The insurance policy can be quite pricey and could potentially increase the cost of taking out a short-term loan by several thousand dollars.
    
    This is creating quite a "Catch-22" situation. The players need the loan to cover their expenses, but if the labor situation is not resolved they will not be able to earn a paycheck to repay the loan. That, of course, would reduce the risk of injury (and the need for an insurance policy), but a prolonged strike or lockout would lead to even more drastic financial problems for many players -- especially those who are not stars with multi-million-dollar contracts.