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Overdraft U: Student Bank Accounts Often Loaded With High Overdraft Fees

May 22, 2015 Comments off

Overdraft U: Student Bank Accounts Often Loaded With High Overdraft Fees
Source: Center for Responsible Lending

Some colleges and banks enter into exclusive agreements to offer students checking accounts – usually these accounts come furnished with a debit card that prominently displays the school logo and can sometimes be used as student ID.

For banks, these exclusive agreements mean a captive audience for their bank products (checking accounts, credit card accounts) and usually a customer for life. Studies suggest that banks are a “sticky” product – once a consumer chooses one, they’re unlikely to change.

For colleges, these exclusive agreements mean increased revenue. These partnerships may include revenue sharing (based on the number of accounts opened by their students) and/or in-kind benefits (like the bank offering to manage the school’s financial aid disbursement).

The benefits to students are unclear at best. Some schools negotiate for some reductions in up-front costs (like waiving monthly maintenance fees), but – as this report shows – many of these accounts do not have better terms than what a student could find on their own.

Payday Mayday: Visible and Invisible Payday Lending Defaults

May 22, 2015 Comments off

Payday Mayday: Visible and Invisible Payday Lending Defaults
Source: Center for Responsible Lending

This paper’s findings highlight that the lack of underwriting for payday loans creates economic distress for borrowers from the very first loan:

  • Nearly half of all payday borrowers defaulted within two years of their first loan.
  • Of borrowers who defaulted, nearly half did so within the first two payday loans.
  • Default does not necessarily signal the end of payday borrowing, with many defaulters going on to repay their loan and even borrow (and possibly default) again at a later date.
  • Nearly one in five borrowers had a loan charged off by the lender.
  • One-third of payday borrowers experienced at least one invisible default in which their account was overdrawn on the same day that they made a payment to a payday lender.
  • For payday borrowers, overdrafts and bounced transactions frequently occurred close in time to the use of payday loans. Nearly half of payday borrowers incurred an overdraft or NSF fee in the two weeks after a payday loan transaction, and 64% paid overdraft or NSF fees at some point.

Environmental Sustainability in the Hospitality Industry: Best Practices, Guest Participation, and Customer Satisfaction

May 18, 2015 Comments off

Environmental Sustainability in the Hospitality Industry: Best Practices, Guest Participation, and Customer Satisfaction
Source: Cornell University School of Hotel Administration, Center for Hospitality Research

Certain sustainability practices could be considered nearly universal in the lodging industry, based on a study of 100 resorts in the United States. Among the common green practices are water conserving fixtures and linen-reuse programs. A separate survey of 120,000 hotel customers finds that guests are generally willing to participate in sustainability programs, but the presence of green operations still do not override considerations of price and convenience in selecting a hotel. Additionally, the study finds an increased willingness to participate when hotels offer incentives, such as loyalty program points, for participating in environmental programs. Although the link between environmentally sustainable programs and improved customer satisfaction is weak compared to standard drivers like facilities, room, and food and beverage quality, hotels are increasingly expected to maintain sustainability programs as a regular feature of their business. At the same time, the study did find that environmental sustainability programs do not diminish guest satisfaction. Consequently, the decision regarding which programs to implement should rest on cost-benefit analysis and other operating considerations.

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Non-Group Health Insurance: Many Insured Americans with High Out-of-Pocket Costs Forgo Needed Health Care

May 15, 2015 Comments off

Non-Group Health Insurance: Many Insured Americans with High Out-of-Pocket Costs Forgo Needed Health Care
Source: Families USA

The Affordable Care Act has increased access to health insurance and financial assistance for millions of Americans. But even with the new assistance that helps consumers pay their premiums and out-of-pocket health care costs, one-quarter of consumers who buy insurance on their own still have problems being able to afford needed care.

This report looks at the portion of adults who went without needed medical care because they could not afford it, as well as the possible causes of those affordability issues. We also discuss actions that health insurers and state and federal governments can take to make out-of-pocket health care costs more affordable.

CRS — An Introduction to Health Insurance: What Should a Consumer Know? (April 30, 2015)

May 14, 2015 Comments off

An Introduction to Health Insurance: What Should a Consumer Know? (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Congress has seen a renewed interest in the market for private health insurance since the passage of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended). This report provides an overview of private-sector (as opposed to government-provided) health insurance.It serves as an introduction to health insurance from the point of view of many consumers under the age of 65. No background in health insurance is assumed, and all terms are defined in the body of the report.

Consumers’ Attitudes and Their Inflation Expectations

May 12, 2015 Comments off

Consumers’ Attitudes and Their Inflation Expectations (PDF)
Source: Federal Reserve Board

This paper studies consumers’ inflation expectations using micro-level data from the Surveys of Consumers conducted by University of Michigan. It shows that beyond the well-established socio-economic factors such as income, age or gender, other characteristics such as the households’ financial situation and their purchasing attitudes are important determinants of their forecast accuracy. Respondents with current or expected financial difficulties, pessimistic attitudes about major purchases, or expectations that income will go down in the future have a stronger upward bias in their expectations than other households. However, their bias shrinks by more than that of the average household in response to increasing media reporting about inflation. Equivalent results are found during recessions.

What’s Required in Your State? The Role of Personal Financial Education in the Southeast

May 12, 2015 Comments off

What’s Required in Your State? The Role of Personal Financial Education in the Southeast
Source: Federal Reserve Bank of Atlanta

Throughout the Southeast, personal finance instruction varies how and whether it is included in the curriculum. What follows is an overview of the current status of personal finance instruction for states in the Sixth Federal Reserve District. Note that the curriculum in each state continues to change and evolve as standards are revised and new legislation is passed.

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