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Your Money, Your Goals: Financial empowerment tools for social services

August 18, 2014 Comments off

Your Money, Your Goals: Financial empowerment tools for social services
Source: Consumer Financial Protection Bureau

Many people feel overwhelmed by their financial situations, and they may not know where to go for help. For many low-income Americans, frontline staff of nonprofit and public social services programs are in a unique position to provide that help.

Their clients already know and trust them, and in many cases, they’re already sharing financial information with them. Social workers and case managers know, however, that the financial stresses clients face may interfere with their progress toward other goals, like finding and keeping secure housing, staying in school, or even landing a job. As they make progress toward those goals, financial missteps can often erase their hard-fought gains.

That’s why social services programs across the country are taking steps to integrate financial empowerment into the work they do each day with their clients. To support their efforts, we’ve developed and field-tested a toolkit for financial services programs called Your Money, Your Goals.

The toolkit helps frontline staff understand when and how to introduce clients to financial empowerment concepts. It equips them to help consumers when it comes to:

  • Making spending decisions that help them reach their goals
  • Avoiding tricks and traps as they choose financial products
  • Ordering and fixing credit reports
  • Making decisions about repaying debts and taking on new debt
  • Keeping track of their income and bills
  • Deciding if they need a checking account and understanding what they need to open one
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Consumer advisory: Virtual currencies and what you should know about them

August 12, 2014 Comments off

Consumer advisory: Virtual currencies and what you should know about them
Source: Consumer Financial Protection Bureau

You may have heard about virtual currencies like Bitcoin, XRP, and Dogecoin. But what are virtual currencies? What’s this “to the moon!” business on the internet about? And, as a consumer, what risks should you be aware of?

While virtual currencies offer the potential for innovation, a lot of big issues have yet to be resolved – some of which are critical, including:

  • Virtual currencies are targets for hackers who have been able to breach sophisticated security systems in order to steal funds
  • Virtual currencies can cost consumers more to use than credit cards or even regular cash once you take exchange rate issues into consideration
  • Fraudsters are taking advantage of the hype surrounding virtual currencies to cheat people with fake opportunities
  • If you trust a company to hold your virtual currencies and something goes wrong, that company may not offer you the kind of help you expect from your bank or debit or credit card provider

Data point: Checking account overdraft

August 12, 2014 Comments off

Data point: Checking account overdraft
Source: Consumer Financial Protection Bureau

Our data point reports are prepared by our Office of Research to provide an evidence-based perspective on consumer financial markets, consumer behavior, and regulations to inform the public discourse. This third data point provides analysis of consumers’ experience with checking account overdraft.

Helping build financial capability across America

July 23, 2014 Comments off

Helping build financial capability across America
Source: Consumer Financial Protection Bureau

We just published our second annual financial literacy report to Congress. It outlines our strategy and what we’ve done over the past year to enhance financial literacy and capability. In the report, you’ll find out about the tools and information we provide to help consumers navigate financial choices. You’ll see how we collaborate with organizations that reach consumers where they are, and how we research effective approaches to financial education.

Financial literacy is gaining attention worldwide. For the first time, a study of educational achievement has compared the financial literacy of young people across the globe. The results show that 15-year-olds in the United States are in the middle of the pack, compared to their peers in 17 other nations and regions that participated in the study.

We’ll put these results to work—collaborating with other government and educational agencies to look at promising solutions, innovative approaches, and scalable strategies for educating the next generation of young Americans.

CFPB — Ensuring equal treatment for same-sex married couples

July 11, 2014 Comments off

Ensuring equal treatment for same-sex married couples
Source: Consumer Financial Protection Bureau

On June 26, 2013, in United States v. Windsor, the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act as unconstitutional. This decision has important consequences for our work.

In order to fully implement this decision, we took steps to clarify how the decision affects the rules that we are responsible for. Recently, Director Cordray issued a memo to staff clarifying that, to the extent permitted by federal law, it is our policy to recognize all lawful marriages valid at the time of the marriage in the jurisdiction where the marriage was celebrated. This aligns our policy with other agencies across the federal government.

This policy applies to all of the laws, regulations, and policies that we administer, including the Equal Credit Opportunity Act (ECOA), Fair Debt Collection Practices Act (FDCPA), Truth in Lending Act (TILA), and Real Estate Settlement Procedures Act (RESPA). That means that when it comes to administering, enforcing, or interpreting the laws, regulations, and policies within our jurisdiction, we use and interpret the terms like “spouse,” “marriage,” “married,” “husband,” “wife,” and any other similar terms related to family or marital status to include lawful same-sex marriages and lawfully married same-sex spouses.

CFPB — Community partnership guidebook for libraries: How libraries can build relationships to create financial education programs for their communities

July 8, 2014 Comments off

Community partnership guidebook for libraries: How libraries can build relationships to create financial education programs for their communities (PDF)
Source: Consumer Financial Protection Bureau
From website:

We want to partner with libraries interested in helping patrons make more informed decisions about money. The information below can be used to build and promote financial education programs in your library. Plus, we’ve included lists of materials you can order or link to from your website.

We’re helping long-term care facilities protect older Americans from financial exploitation

June 20, 2014 Comments off

We’re helping long-term care facilities protect older Americans from financial exploitation
Source: Consumer Financial Protection Bureau

We’ve heard a lot of stories about vulnerable adults falling prey to con artists, family members, fiduciaries, and professional advisers who steal their nest eggs and threaten their financial security.

A son steals $315,000 from his elderly mother’s retirement accounts and frequents casinos. When he doesn’t pay his mother’s rent, she’s evicted from her assisted living facility.

The pastor of a 77-year-old man with Alzheimer’s and Parkinson’s diseases makes 130 withdrawals from the man’s bank account but fails to make nursing home payments on his behalf for nine months. The man was nearly discharged from his nursing home.

These stories are all too common. We’d like to equip assisted living and nursing facility staff with the know-how to prevent and spot the warning signs of abuse, so we’re releasing a guide to protecting residents from financial exploitation.

Our action-oriented guide gives staff the tools to:

  • Prevent financial exploitation and scams by educating staff, residents, and family members about warning signs and precautions
  • Recognize, record, and report financial abuse as early as possible using a model protocol and a team approach
  • Get help from first responders in the community

Data point: Medical debt and credit scores

May 21, 2014 Comments off

Data point: Medical debt and credit scores
Source: Consumer Financial Protection Bureau

Our data point reports are prepared by our Office of Research to provide an evidence-based perspective on consumer financial markets, consumer behavior, and regulations to inform the public discourse. This second data point provides analysis of the use of medical collections in credit scoring models.

Snapshot of older consumers and mortgage debt

May 9, 2014 Comments off

Snapshot of older consumers and mortgage debt
Source: Consumer Financial Protection Bureau

Older homeowners are carrying more mortgage debt than ever before. Today, compared to a decade ago, fewer older Americans own their home outright. In this snapshot, we analyze data from the Census Bureau, the Federal Reserve, and the CFPB’s own consumer complaints to describe the growing number of older consumers carrying mortgage debt, and the risks that this trend presents to their financial security.

Consumer advisory: Co-signers can cause surprise defaults on your private student loans

April 22, 2014 Comments off

Consumer advisory: Co-signers can cause surprise defaults on your private student loans
Source: Consumer Financial Protection Bureau

Today, we released a report that describes complaints we received related to the private student loan industry’s practice of placing borrowers in default even when their loans are current and in good standing. We’re also warning consumers that they can avoid surprise defaults by pursuing a co-signer release.

The vast majority of private student loans today have a co-signer (typically a parent or a grandparent). Having a co-signer can often lead to a lower interest rate, which can save you money in the long-term, because the co-signer will have to repay the loan if you don’t.

However, your loan might also contain provisions that allow your student loan servicer to put you in default — even if you’ve been making your payments on time.

That’s because your co-signer is also on the hook for your loan and therefore changes in their behavior can impact your loan, causing your loan to default and making your entire balance due all at once. We’ve received complaints that private student loan servicers are placing borrowers into default when their co-signer dies or files for bankruptcy.

Explainer: Federal student loan interest rates to jump

April 18, 2014 Comments off

Explainer: Federal student loan interest rates to jump
Source: Consumer Financial Protection Bureau

Right now, many students and families across the country are receiving financial aid offers and deciding how to pay for college. Most students will need to shop for student loans now, and some of you have asked us what the new rates will be. While rates aren’t set in stone yet, interest rates on new federal student loans are expected to jump this July.

We’ve updated our Paying for College tool using our best guess of what the rates will be, so you can have a better estimate of what your monthly payment might be after graduation.

Interest rates on most federal student loans are based on a certain type of bond that the Treasury Department issues, known as the ten-year note. The yield is the rate at which investors charge the federal government for borrowing money. Next month, there will be a Treasury bond auction, and that rate will set federal student loan interest rates.

CFPB Orders Bank Of America To Pay $727 Million In Consumer Relief For Illegal Credit Card Practices

April 9, 2014 Comments off

CFPB Orders Bank Of America To Pay $727 Million In Consumer Relief For Illegal Credit Card Practices
Source: Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau (CFPB) has ordered Bank of America, N.A. and FIA Card Services, N.A. to provide an estimated $727 million in relief to consumers harmed by practices related to credit card add-on products. Roughly 1.4 million consumers were affected by Bank of America’s deceptive marketing of their add-on products. Bank of America also illegally charged approximately 1.9 million consumer accounts for credit monitoring and credit reporting services that they were not receiving. Bank of America will pay a $20 million civil money penalty to the CFPB.

CRS — The Consumer Financial Protection Bureau (CFPB): A Legal Analysis (updated)

April 3, 2014 Comments off

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis (PDF)
Source: Congressional Research Service (via University of North Texas Digital Library)

In the wake of the worst U.S. financial crisis since the Great Depression, Congress passed and the President signed into law sweeping reforms of the financial services regulatory system through the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), P.L. 111- 203. Title X of the Dodd-Frank Act is entitled the Consumer Financial Protection Act of 2010 (CFP Act). The CFP Act establishes the Bureau of Consumer Financial Protection (CFPB or Bureau) within the Federal Reserve System (FRS) with rulemaking, enforcement, and supervisory powers over many consumer financial products and services, as well as the entities that sell them.

The CFP Act substantially, though not completely, consolidates in the CFPB federal consumer protection powers that previously were held by seven other regulators. It has the authority to write rules to implement a broad array of federal consumer financial protection laws, as well as most consumer compliance supervisory and enforcement powers over larger depositories. However, the CFPB did not acquire from the banking regulators the primary supervisory and enforcement powers over smaller depositories. The Bureau also wields new federal consumer financial protection powers to regulate nondepository financial institutions, which previously were largely unregulated at the federal level. However, the CFP Act wholly exempts certain nondepository financial institutions from the Bureau’s regulatory reach and curtails the CPFB’s authority to regulate others.

FRB OIG — The CFPB Can Improve the Efficiency and Effectiveness of Its Supervisory Activities

April 3, 2014 Comments off

The CFPB Can Improve the Efficiency and Effectiveness of Its Supervisory Activities (PDF)
Source: Federal Reserve Board, Office of Inspector General

Since it began operations in July 2011, the CFPB has made significant progress toward developing and implementing a comprehensive supervision program for depository and nondepository institutions. The agency has implemented this program on a nationwide basis across its four regional offices. While we recognize the considerable efforts associated with the initial development and implementation of the program, we believe that the CFPB can improve the efficiency and effectiveness of its supervisory activities.

Specifically, we found that the CFPB needs to (1) improve its reporting timeliness and reduce the number of examination reports that have not been issued, (2) adhere to its unequivocal standards concerning the use of standard compliance rating definitions in its examination reports, and (3) update its policies and procedures to reflect current practices.

We completed our fieldwork in October 2013, using data as of July 31, 2013. Following the completion of our fieldwork, senior CFPB officials indicated that management has taken various measures to address certain findings in our report, including streamlining the report review process and reducing the number of examination reports that have not been issued. As part of our future follow-up activities, we will assess whether these actions, as well as the planned actions described in management’s response, address our findings and recommendations.

CFPB data point: Payday lending

March 25, 2014 Comments off

CFPB data point: Payday lending
Source: Consumer Financial Protection Bureau

Our data point reports are prepared by our Office of Research to provide an evidence-based perspective on consumer financial markets, consumer behavior, and regulations to inform the public discourse. This first data point provides detailed analysis of consumers’ use of payday loans with a focus on loan sequences, the series of loans borrowers often take out following a new loan.

CFPB — Complaints received from servicemembers, veterans, and their families

March 7, 2014 Comments off

Complaints received from servicemembers, veterans, and their families (PDF)
Source: Consumer Financial Protection Board
From blog post:

14,100. Sounds like a random number, doesn’t it? But to us, 14,100 represents the number of servicemembers, veterans and their family members whose stories have come to us through their consumer complaints.

I emphasize the word “stories” because each complaint is much more than a case number. Behind those case numbers are servicemembers with questions about mortgages, military spouses seeking to invoke consumer legal protections on behalf of their deployed spouse, veterans desperately fighting scams that threaten to steal their retirement income, and many more members of the military community with compelling, sometimes heartbreaking, real-life stories.

In the Snapshot of complaints received from servicemembers, veterans, and their families that we’re releasing today, you’ll find the types and trends of military consumer complaints that the CFPB has handled since opening our doors in July 2011. We have received complaints from all 50 states and from all branches and ranks of the military. Our complaint volume increased 148 percent from 2012 to 2013 as we spread the word about the resources that we provide to the military community. Mortgages continue to top the cumulative volume of complaints handled to date.

However, newer categories of complaints we began accepting last year, such as debt collection and payday loans, have climbed steadily and now factor prominently into our complaint totals. In fact, since we began taking debt collection complaints in July 2013, debt collection has quickly become the highest volume complaint category for military consumers over the last seven months. Within the report you will find a breakdown of the complaints by product as well as the top issues within each product for military consumers.

CRS — Privacy Protection for Customer Financial Information

January 24, 2014 Comments off

Privacy Protection for Customer Financial Information (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

One of the functions transferred to the Consumer Financial Protection Bureau (CFPB) under P.L. 111-203, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), is authority to issue regulations and take enforcement actions under the two major federal statutes that specify conditions under which customer financial information may be shared by financial institutions: Title V of the Gramm-Leach-Bliley Act of 1999 (GLBA, P.L. 106-102) and the Fair Credit Reporting Act (FCRA). Possible topics for congressional oversight in the 113th Congress include (1) the transition of power from the financial institution prudential regulators and the Federal Trade Commission to the CFPB; (2) CFPB’s interaction with other federal regulators and coordination with state enforcement efforts; and (3) the CFPB’s success at issuing rules that adequately protect consumers without unreasonably increasing the regulatory burden on financial institutions.

New CFPB Mortgage Rules

January 11, 2014 Comments off

New CFPB Mortgage Rules (PDF)
Source: Consumer Financial Protection Bureau

Beginning in January 2014, some new CFPB rules will provide homeowners and consumers shopping for a home mortgage with new rights and greater protection from harmful practices. These rules should eliminate or sharply reduce the runarounds and painful surprises that hurt so many homeowners during and after the financial crisis.

+ Here’s what the new mortgage rules mean for you
+ Qualified Mortgages – What are they and what do they mean for you?

Empowering low income and economically vulnerable consumers

December 10, 2013 Comments off

Empowering low income and economically vulnerable consumers
Source: Consumer Financial Protection Bureau

The low-income and economically vulnerable population includes as many as 100 million people. These consumers are diverse in culture, geography, stage of life, and financial status. Last year, the Office of Financial Empowerment hosted a forum to examine the unique consumer financial product and service needs of low-income and economically vulnerable consumers. This report captures the reflections and insights of attendees and describes some of the strategies we’re pursuing to address the issues identified.

Financial information — Navigating the market

November 22, 2013 Comments off

Navigating the market
Source: Consumer Financial Protection Bureau

To understand the wide range of information sources consumers could be exposed to in making financial decisions, we commissioned a study of the size and scope of the financial information field. The results give an overall indication of the relative amounts spent in the U.S. on financial education and on the marketing of certain types of financial products. The report found that for every dollar put towards financial education, $25 is spent on financial marketing, which can make it difficult for consumers to find objective information.

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