People have a habit of thinking that they are always smarter than that ‘other guy.’ Whether it is the coworker who supports a different professional sports team than you do, or that uncle of yours who has radical political views, we all seem to think that we usually know what’s best for other people. Let’s face it – getting up on a soapbox and looking down on others can often be a real rush for some people. This has become even more obvious in the Information Age, as everyone and their sister has a point of view about things that they are sure is more informed than yours.payday-loans-61

This all applies to payday loans. Many people seem to think that payday lenders are predators and that the people who take out loans from these lenders are ill informed and in need of rescuing. The lenders charge supposedly sky-high interest rates and “trap” their customers into a never ending cycle of debt. At least, that’s how the story gets told online time and time again. Oh, and those customers who take out payday loans?? They simply don’t know enough about finances to understand just how much they are screwing up by taking out payday loans, right?

This mindset is poisonous, judgmental and, as it turns out, not at all correct. Recent information that was released by the Consumer Financial Protection Bureau seems to reveal the truth about both payday lenders and their customers, and this truth is not at all what you’ve heard or read about in all of those online exposes or local news stories. In fact, it looks like payday lenders are providing very much needed financial services, and, contrary to popular belief, the people who take out payday loans are actually pretty financially savvy.

The CFPB recently analyzed the complaints that they have received over the past three years. When all of the data was laid out on the table, it appears that payday lending really isn’t a problem at all. In fact, only about one percent of the consumer complaints logged online had anything to do with payday loans. The vast majority of complaints were related to mainstream financial services, like mortgages and regular old credit cards. Debt collection was also factored in, and those three areas all added up to over 66 percent of the complaints that were officially logged to the CFPB. This data is backed up by data from the FTC that pretty much reveals the same stats.

The date from the CFPB also disclosed that if people use overdraft protection – the mainstream financial alternative to payday or short term loans – and the APR terms used for payday loans were also used for those overdrafts that people would be much worse off. The APR on the typical overdraft protection fee would come in at an astonishing 1700 percent, while the average APR on a payday loan is only around 350 percent. The CFPB also noted that since people understand payday loan fees as flat, one time fees, rather than bloated APRs that they are better equipped to pay back their loans on time, without any misunderstanding.

We know that the websites and news organizations that love to beat up on payday lenders are not going to change their tactics any time soon. But knowing that even an organization like the CFPB understands that payday loans are not the scourge of the financial world, like so many people pretend that it is, goes a long way in helping to really understand how the payday lending industry compares to other types of financial service providers. And it’s nice to know that payday loan customers really are not the ignorant, helpless people that so many reporters from the mainstream news community like to make them out to be.

The Consumer Financial Protection Bureau (CFPB) officially commented on a proposal that will take direct action against No-Action Letters. The policy is designed to go after new financial products or financial services that promise to bring substantial benefits to consumers, but that are still a bit uncertain how regulatory or statutory provisions will be applied in the near future. The documents on this proposed policy are set to be released to the public on December 15, 2014.

Bringing up No-Action Letters reminds some of the SEC No-Action Letters which usually involve scenarios where the requester is not sure whether or not a particular financial service or product is in violation of existing federal security laws. In the letters that were released, SEC employees agreed not to ask for a legal action to be taken against the requester because of the facts that were presented. An alternative that exists is for SEC staff to draft a letter to bring clarity about a specific regulation or rule.

The CFPB No-Action Letters bare similarities to the SEC Letters. These letters would inform the business requesters that their staff is not going to recommend enforcement action due to specific aspects of a known legal requirement or policy. However, the CFPB No-Action Letters Policy is different from the SEC’s in that it only applies to financial products that are offered to the general consumer market, or for financial services which have no existing legal uncertainty.

By limiting the CFPB No-Action Letter Policy to only consumer-related products and services, the Bureau is able to remain consistent with how it interprets that Title X of the famous Dodd-Frank Consumer Protection Act of 2010, which provides governance for the CFPB, is intended to be helpful to consumers and to provide all consumers with access to transparent, fair, innovative financial markets. Additionally, the CFPB is bound to a statutory mandate that promises to promote and facilitate innovation and access in the market for consumer financial services and products.

To meet this goal, the CFPB created an innovative project called “Project Catalyst” in the fall of 2012. This project will support financial innovators that create consumer friendly financial products and services. The No-Action Letter Policy is quite simply the most recent module of Project Catalyst to be put into action.

Consumer friendly financial products and services can get assistance from the CFPB No-Action Letters. Recent consumer spending in the U.S. led to recent financial difficulties, although more complex financial institutions and high dollar deals greatly increased the financial woes of recent years. Quite a bit of effort has been put in to deal with more sophisticated financial businesses during the financial recovery that has been underway for the past few years. And while all of this has been underway, less attention has been focused on underbanked, unbanked and very low income communities around the country; not to mention consumers who may currently use traditional bank accounts but also use non-traditional payment methods too.

Not too long ago, the CFPB began to take steps to bring these sectors to the attention of the rest of the country when it began in inquiry into mobile financial solutions. The Bureau found that nearly 90 percent of United States consumers own cell phones and that this growing trend has led to a whole plethora of new mobile payment solutions that allow unbanked and underbanked households to take more control of their individual finances. We will all have to keep our eyes open to see whether or not these new mobile payment solutions continue to warrant scrutiny from the CFPB and to see how the No-Action Letters pan out for new financial services that are launched in the months and years to come.

When the economy took a negative turn the housing market suffered. Since 2007 foreclosure rates have been high. Now they seem to have dropped back down to the rate they were back then. This is giving many, new hope for the economy and the future of the housing market.

The good news is that the foreclosure crisis seems to be over. This is allowing many to breathe a sigh of relief as things have been rough for many for some time. While this is good news some are wondering what is causing the change.

New regulations in California have a big part to play in this. For years the state had been recording the highest number of foreclosure filings of any state in the country. A Homeowner Bill of Rights has been put into place. This offers more protections for the borrowers in this state that have gone into default. As a result of this foreclosure filings in this state alone dropped 62% in one month.

English: Sign of the times - Foreclosure

Under these new protections all mortgage servicers must cut short all foreclosure proceedings once the borrower applies for a mortgage modification. Servicers must also be careful because if they file multiple unverified documents in foreclosure proceedings they can face fines up to $7,500. No mortgage servicer wants to pay these fines, so they are watching their step, which is taking some stress off of the borrower.

Now that California is not the top state in foreclosures, Florida has taken that title. In Florida, one out of every three hundred homes files foreclosure applications. The next states to follow are Nevada and Illinois.

This does not mean that the foreclosure problem our nation has been facing is fixed. It does however; mean that we are getting closer to fixing it and ending it. Every step we take in the right direction means we are one step closer to this being over.

There is light at the end of the foreclosure tunnel. The crisis is over but the problem itself is not fixed. We are working toward fixing it but more time is necessary. It is obvious we are getting close. If we look we can see all around us that things are getting better. It may be slow, but it will be worth it.

03.05.2014

A shop window advertising payday loans.

About fifteen years ago payday lenders were almost unheard of. Now things are very different. In some places in this country payday lenders out number some fast food chains. This may seem strange to some, but others are incredibly grateful that these businesses have popped up, because without them some people would not get the help that they need.

Some may not see the appeal that these loans have for some people. These loans are very convenient and they are small. When someone needs just a little help to make it until their next payday these businesses can do that for them without all the trouble of going to a bank for help.

Banks do offer these small short term loans, but they do not advertise it. This leaves some not knowing if their bank offers them or not. Many people who do not know for sure if their banks offer small short term loans do not want to take the time to go to their bank and find out if they can get one from them. Instead it is much easier to find a storefront payday lender who they know will help them out and get their loan there.

Payday lenders realize that times are tough. They offer roll over on loans if it is needed. Some people do not know what this roll over for loans is. What it is, is if you take out a loan and agree to pay it back with your next check, but then when the time comes to pay back if something happened and they do not have the full amount, the lender will allow them to roll the loan over to their next paycheck for a fee.

Payday lenders to some seem to be all about making money. But to the people who need their services they are all about helping the people in the community that they serve. Everyone needs help from time to time, and not everyone has a lot of options as to where they get that help from. For those people having a payday lender nearby is exactly the help that they need.

Many people do not need the help of a payday lender, but many do. Those who do need the help are often grateful that these businesses are around. Many who do not need them do not like them and do not want them to be around. One must keep in mind however if you have never been in the position to need a payday lender you do not know just how much they help people out. If you have never needed on do not pass judgment on the lender or the borrower until you have been in their position.

budget

budget (Photo credit: Backdoor Survival)

No one wants to spend more money on anything than they have to, but without realizing it Americans all over are wasting money every day. Their intentions may be good, or they may not be thinking at all. Here are some tips to help you realize what does waste your money so you can stop wasting your money.

One thing that many people do not think about is that sticking with current providers for certain things can waste your money. Many people will stick with their current service providers for their cell phones, cable, or internet companies simply because it is easier. Others will stick with them because they think that if they do they will get discounts for loyalty. This is not always true. Search around look for the best deal that you can find. Why pay more than you have to.

Not unplugging electronics is a waste of money. This is something that many people simply do not think about. Many people think about turning them off, but not about unplugging them. It is true that turning them off will help keep you from wasting money, but unplugging them will help you keep from wasting even more. Even if the electronic device is off, if it is plugged in it is still using some electricity costing you money.

Paying ATM fees are a total waste of money. These can range anywhere from two dollars to three or four dollars. Think about how many times you get money out of an ATM. Know where all your bank’s locations are or where there are free ATMs. Do not pay for ATM fees unless you are desperate and do not have another choice. ATM fees add up to quite a bit over a year. Spend a month tracking how many times you use an ATM and think about if you paid a fee every time compared to getting your money for free every time.

Couponing is a great way to save money. However if you are couponing just for the sake of couponing then you are wasting money. If you are using a coupon on something you would not normally buy just because there is a coupon for it, then you are again wasting your money. Do not use coupons unless they are for something that you actually use and normally would buy. Otherwise the coupon is actually costing you money.

Saving money is something that almost everyone wants to do. If you are trying to save money do not forget to think about ways that you are wasting money. You have to watch out for anything that wastes your money because sometimes they are not very obvious, we simply let them slip past our money saving radar and then we waste money. Make sure you pay attention to anything and everything so you can stop wasting your money.

Not everyone can afford to buy a new car and often you can find a good deal on a used car from a private seller. Not all private sellers are honest though, some will try to scam you. Before you go to look for a used car from private sellers, know these various scams that they use to take your money and leave you with a hunk of junk.

If the seller wants money or a wire transfer but you have to wait to get the car, let this be a red flag that it could be, and most likely is, a scam. There may not even be a real car for sale. The supposed seller wants to take your money and then not contact you again. You should not have to give any money for a car until you are able to take the car from the seller.

If the deal seems too good to be true, then it probably is. If the car seems to be in great condition and the price seems to be super low, expect that something is wrong. Most private sellers who do this will not tell you that something is wrong with the car. The best thing you can do is take the car for a test drive to your mechanic and have them look it over and let you know what is wrong with it. If you do it that way, at least you know what you are getting into and are not buying a car thinking it works just fine just to have it break down a week later.

Ford Corsair V4 estate 1966. The stylish Corsa...

If the private seller is trying to offer you a third party protection plan on the used car that they are trying to sell you, know that it is a scam. The people who do this know how to make it seem like you are talking online with someone from the company when in reality it is just them reassuring you. Then when you purchase the plan, they get the money, but you do not get the protection plan.

If the seller suddenly changes gears in the middle of the negotiations take that as a red flag, it is a scam! If their story suddenly changes then you know that something is wrong. Take that as an opportunity to just get out of the situation before you get scammed and lose money.

If the seller tells you that the car that is for sale is not at their residence, then you should see a red flag. Typically when a vehicle is for sale it is either at the person’s home or somewhere it is easy to advertise that it is for sale. Depending on where they say it is, you should be able to determine whether or not it is a scam. If it is sitting out where it is easily seen then you do not need to worry as much. However, if the seller tries to tell you it is at their friend’s house, you might want to forget about that car all together.

When you are buying a car from a private seller you can get a better deal, if you are careful and know what you are doing. You always have to be careful of scams. There are plenty of people out there who would not think twice about scamming you and you should not think twice about walking away from a car if you feel a though you could be in a situation where you could be scammed. If you know the most common ways that people try to scam others then you will have a better defense against getting scammed, which is always a good thing.

Emergency

Emergency (Photo credit: Tax Credits)

Not everyone thinks about what would happen financially if an emergency were to happen. Often most people end up in a financial emergency when another emergency happens. They do not have the money to take care of whatever they are going through. Ask yourself, are you prepared?

If you do not want to end up in a financial emergency when you are in another emergency there are things that you can do. You probably already have a retirement savings account and a general savings account, but you should open another savings account. This account will be your emergency fund.

You do not have to stress yourself out trying to make sure that you build your emergency fund as fast as you can. You really only need to add what you can to your emergency fund. You still have a budget to stick to, but this should be added to it.

Everyone will have their own amount that they will need as a minimum in their emergency fund. It will depend of various things such as if you are single or married, if you have children and if so how many, how many bills you have, and so on. You need to sit down and figure it all out. Generally experts say take that amount and have a minimum of six to 12 months worth of income that will cover that amount in your emergency fund. Of course it does not hurt anything to have more than you need in this account.

Always remember that this account is for emergencies only. Do not use it for any other reason. Do not rationalize something as an emergency in order to use this money. This money is to be used for real emergencies only, this is important. If you do ever take money out of this account, even if it is because of an emergency, you should replace it as fast as you can.

It is a good idea to sit down with a pen and paper and make a list of what you consider a real emergency. If you have a list of what you will allow yourself to use your emergency fund for, you will be less likely to try and use that money for other things. This is not money to use because you want to go out and are short on cash, or because you forgot to budget for a haircut. This is for true emergencies only so that is what should be on your list.

Having an emergency fund will help you make it through any emergency, without having to go through a financial emergency on top of it. This is something not many people have thought about, but is really important to have. It is one of those things where it is better to have it and not need it than to need it and not have it, so go set up an emergency fund today.

payday-loans-for-people-with-bad-creditPayday loans are there when you need a small amount of Financial Relief after a particularly bad financial month. If you had to spend money on a car repair, or a trip to the emergency room, there is a pretty good chance that you may need a little bit of extra money to make sure that you pay your bills on time. You won’t get thousands of dollars with a payday loan, which is kind of the point of what makes it so beneficial for people. You don’t have to take on a bunch of money that you don’t need if you are simply looking to pay off a bill that you owe. You take a payday loan when you need that small amount of money to make sure that you get the relief that you need.

While a payday loan is something that can be beneficial to you, it should not be the type of thing that you make a habit out of. Loans are there for when you need them sparingly, not as a crutch. If you find yourself month after month needing what a payday loan can offer you, you need to adjust your finances so that you can get out of your habit. While there may be little risk to a payday loan, when one makes a habit of getting them run the risk of putting together some pretty substantial debt, especially if they are not paying them back in time. One can find more info by taking a look online.

English: Decision Problem Closure Diagram

English: Decision Problem Closure Diagram (Photo credit: Wikipedia)

The best piece of advice that you can get when you are looking into getting a payday loan is to not rush into a decision. While it is nice to sit back and think that you can get Financial Relief from your problems in a matter of hours, it will take a bit of time to research your options for a payday loan and really make a decision on what is worth your time. Sure, you might need to make a decision in a few days time, but because you have that time you need to take it in order to be sure that you make the right decision. You should never rush into making a financial decision until you fully understand what is involved in it, and which professional can give you the best option at getting exactly what they need.

This is not to say that you have to stress yourself out as you search, it just means that you have to be thorough in your research. Look up a loan company in your area, see what they have to offer and then read the small print on the loans that they offer. All of the info that you need on a loan is out there, you just have to be willing to ask questions; if you find a company that can give you a great rate, and can fully show you what they can offer you, you can be sure that you have made the right decision.

Christmas lights on Aleksanterinkatu.

We are getting to that time of the year where we all have to start thinking about getting holiday gifts for friends and family members. While there is nothing quite like the holidays, there is also nothing quite like the feeling of knowing that you have gone over budget after only getting half of the gifts that were on your list. Frankly, having a budget during the holiday season is kind of like having a schedule planned out for your toddler: as much as you might try to follow it, it is not going to last long. With that in mind, the months that come after the holidays are going to feature some tight economic circumstances for you. The financial Holiday woe’s, as many people like to call them, have a tendency to affect you in January and February, i.e. the months after the joy of the holidays have worn off.

This is not to say that you should be hopeless when the Holiday woe’s come your way. In fact, you should simply find ways to work within your income and move on with your life. If you need to take out a payday loan to pay bills on time for a month, you should do it. Just because you have a little less money left after the holidays does not mean that you aren’t going to get back on the right financial track in a couple of months, it just means that you have to be able to deal with a rough patch for a little bit

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