Oct 15

By Pymnts.com

The CFPB is worried about checking, particularly consumers’ access to it. In remarks recently released by CFPB head Richard Cordray, he affirmed the basic necessity of access to banking products for the American consumer.

“Checking accounts are an important part of a consumer’s financial life. They are used by some 200 million Americans, making them one of our most widely used financial products. They function as a basic tool for money management that provides a secure way for consumers to collect earnings, make payments, and transfer and hold funds.”

The CFPB is concerned that consumers access to these accounts might be compromised by the various and credit reporting vehicles banks make use of to determine whether an applicant is worthy to hold a checking account. Cordray noted that while most Americans are aware of the three major credit reporting agencies, the landscape is in fact populated by many, many other more specialized players who are also selling their reports to banks. This raises three concerns for the CFPB. [read more]

Oct 14

Oct 14

By Jonnelle Marte – The Washington Post

The kind of debt consumers take on is changing.

And the changes look very different by age, according to a TransUnion report released Wednesday that looks at the shifting make up of consumer debt loads over time. Not surprisingly, younger consumers are seeing student loans crowd out most other types of loans, says Charlie Wise, vice president in TransUnion’s Innovative Solutions Group.

For instance, student loans accounted for 36.8 percent of the total debt load for consumers ages 20 to 29 in 2014, up from the 12.9 percent reported in 2005, the study showed. Meanwhile, the share of debt due to mortgages shrank over that time period, to 42.9 percent in 2014 from 63.2 percent in 2005, as the number of young people buying homes declined. The share of debt loads from auto loans increased, to 14.1 percent from 11.6 percent in 2005.

At the other end of the age spectrum, consumers 60 and older saw their average debt loads increase for all types of loans — including student loans – likely because of their strong credit histories, Wise says.

While it is still rare for older consumers to have student loan debt — less than 5 percent of consumers in that age group have school loans, according to the report — those who did saw their average debt load grow to $27,168 in 2014 from $14,696 in 2005, similar to the average amount owed by younger consumers. (The average student loan balance for all consumers grew to $29,575 in 2014 from $17,442 in 2005.)

People in their 60s may be helping out family members with weaker credit scores, Wise says. A chunk of those loans, 42 percent, was due to older consumers co-signing on loans to help another borrower qualify, he says. But the majority of that debt is for loans taken out by a person in his 60s, either for his own education or to pay for college for a relative, he says. [read more]

Oct 14

By Jackie Beck – The Huffington Post

When you’re struggling with debt, combining all of your debts into one easy-to-pay loan sounds pretty good. The idea is that you’ll reduce the overall interest you pay, and be hit with fewer late fees since you’ll only have one payment to remember.

There’s just one problem.

Debt consolidation can actually leave you deeper in debt.

Consolidating debt often masks the real problem

Most likely, the real problem isn’t high interest rates or constantly having to manage making on-time payments to multiple debts. The real problem is usually something deeper. Typically, that’s a combination of the way you view money and what you do (or don’t do!) with the money you have.

When your financial house is a mess, it’s hard to get ahead. Things like tracking your spending, budgeting, building an emergency fund, getting adequate insurance and saving for retirement matter.

Look around you

Chances are, many of the people you know are using debt to pay for things they can’t afford. They’re living beyond their means, but that doesn’t have to mean they’re living high on the hog.

More likely, it means that they need or want to buy something today, but don’t get paid until Friday. Maybe it means they have an unexpected expense and don’t have the cash to cover it. Or maybe it just seems normal to borrow money for things like a new car or college. [read more]

Oct 13

By Tammie Fields – WTSP

There’s free help available to college students who are graduating with so much student loan debt that even with a new job they can’t afford to buy a home.

Christel Fleming is majoring in Marine Biology at the University of South Florida’s St. Petersburg campus. She says it’s been awhile since she looked at her student loan debt. “It’s between 20 and $30,0000. It’s pretty scary.”

She says a four-year degree won’t be enough, so she’s considering incurring even more student loan debt by going to graduate school to get a good job in order to pay it all back. She says, “Thankfully, I’ve had a lot of financial aid and grant money help me out, but it’s still kind of daunting… when thinking about getting a job when I get out with that much owed.”

She’s not alone, either. Kyle Malone is a business major at the university. He’s facing $20,000 in student loan debt. He says, “It’s deferred until I graduate, so at least that’s good.”

But a new study says when most college students graduate, their new jobs may not pay them enough to keep up with all the student loan payments and put a roof over their head. Buying a home may be out of reach. [read more]

Oct 13

By ACA International

The CFPB argues for expansive authority, including the right to regulate collection attorneys operating in a legal capacity and the right to bring actions outside of the statute of limitations period.

The Consumer Financial Protection Bureau is putting up a fight in its latest move in the enforcement action against the law firm of Frederick J. Hanna & Associates, characterizing Hanna’s behavior as “reprehensible” and arguing Hanna’s motion to dismiss should be denied.

As ACA International previously reported, the CFPB is alleging that the attorneys at Hanna violated the Fair Debt Collection Practices Act and Consumer Financial Protection Act by the manner in which they prepared and filed lawsuits and used client affidavits in Georgia state court proceedings.

In its response to the motion to dismiss, the CFPB rejects Hanna’s arguments that the CFPB’s enforcement action is unlawful, and argues instead for expansive powers to regulate debt collection attorneys. Significantly, the bureau rejects Hanna’s arguments related to the CFPA’s “Practice of Law” exclusion, claiming that Congress expressly preserved the bureau’s authority over attorneys who collect debts from consumers who are not their clients, even when they are engaged in litigation activities. [read more]