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December 2, 2018

Financial Tips 2018: How to get ahead on taxes, savings and insurance

It's 2018 and now's the time to get your finances in order.

To help you and your family make all the right money moves next year, here's a financial game plan that could help you grow your 401(k), avoid financial ruin and adjust to the new tax rules signed into law by President Trump.

Just as a New Year's resolution to get fit can fail if you don't hit the gym, getting ahead financially is tough if you don't set up a plan and stick to it, says Dana Anspach, founder and CEO of Sensible Money, a wealth management firm in Scottsdale, Ariz.

Doing an annual financial check-up, she stresses, is only worthwhile if you use it as a jumping off point to "build good habits."

"It's figuring out the baby steps you can take that moves you and your money in the right direction," Anspach says. "Every family should put together a playbook for the year."

Here are steps to take to get you on the road to financial success. Read more at USA TODAY
Financial New Year's resolutions that will pay off

It's time for New Year's resolutions, and what better one could Americans choose than to become financially literate in the coming year.

Want to get out of that credit card debt you rang up over the holidays? How about paying off your mortgage? Setting up an IRA for retirement?

It's not surprising that Americans fail to do simple things that will ensure their financial future. Part of the reason they don't act is a lack of confidence.

It's easy to understand why: Folks are not learning this at home. Parents are nearly as uncomfortable talking to their kids about money as they are sex.

Only one in five adults say they participated in personal finance education in K-12 schools, colleges or the workplace. That's really unfortunate.

We know that financial literacy leads to better personal finance behavior. There are a variety of studies that indicate that individuals with higher levels of financial literacy make better personal finance decisions.

Those who are financially illiterate are less likely to have a checking account, rainy day emergency fund or retirement plan, or to own stocks. They are also more likely to use payday loans, pay only the minimum amount owed on their credit cards, have high-cost mortgages, and have higher debt and credit delinquency levels. Read more at THE HILL
Consumers still not benefiting from bank overdraft programs

A survey shows many use it as an expensive short-term loan

Most consumers still don't know they are not required to accept their bank's overdraft protection service, according to the Pew Charitable Trusts' latest consumer finance project.

The study examined the behavior of consumers who use bank overdraft programs and the fees they incur as a result.

Before the law was changed in 2010, banks automatically enrolled consumers in overdraft protection. If consumers made purchases that overdrew their accounts, the banks covered the expense and then assessed an overdraft fee, which often cost as much as $35.

However, that led to instances where a consumer might overdraw their account four or five times on a single shopping trip, incurring a $35 fee each time.

Consumers must opt-in
Since the law changed, consumers must opt-in to this coverage -- banks cannot automatically enroll them. Thaddeus King, officer of The Pew Charitable Trusts' consumer finance project, says it's clear consumers don't understand that overdraft protection is not only costly, but unnecessary.

"Most consumers don't know they can have transactions declined at no cost- that's a multi-billion dollar problem," he told ConsumerAffairs. Read more at CONSUMER AFFAIRS
CFSA Conference
CFPB Releases Report on the State of the Credit Card Market

WASHINGTON, D.C. - The Bureau of Consumer Financial Protection (Bureau) today released its biennial report on the state of the credit card market. The report found that the total amount of credit line, number of accounts, average amount of card debt, and enrollment in online services have all increased over the past several years. The report found also that cardholders average fewer credit cards than before the recession, and more are signing up for secured cards that require a cash deposit.

The credit card market is one of the United States' largest consumer financial markets. The Bureau is required by Congress to monitor credit card marketplace developments and report on a biennial basis. Today's report, the Bureau's third, found that the cost of card credit in general and across credit score tiers remains largely stable since the Bureau's last report in 2015. The composition of overall consumer costs - interest rates and fees - has also proved largely stable since the Bureau's last report. The report also found that delinquency and charge-off rates, which were high during the financial crisis and then fell to historical lows in the years following the recession, have modestly increased over the last two years. Among the other findings in the report: Read the CFPB REPORT

Low-income consumers deserve access to better financial services

When was the last time you went into a store to buy one item and actually came out with just that one item? We walk in for eggs and fill up a cart; we go in to pick a prescription and walk out with a new type of shampoo or four other things we "need."

A recent news article featured the headline "7-Eleven Gives Unbanked the Opportunity to Shop Amazon." The word "opportunity" is not one I would use, and it represents just one more way the world is preying on the un- and underbanked. What is seen as a "service" is actually just another way to drive sales - and a potentially predatory one, at that.

Let's first talk about the target demographic. This so-called service is aimed at people who are under- or unbanked, meaning they don't have a checking account and likely can't get one. I have been teaching financial literacy to un- and underbanked low- and middle-income teens in Chicago for nine years. I have seen how hard it is for them to open a bank account, thus becoming easy prey for predatory financial services.

Think about how hard it actually is for someone in a low-income neighborhood to have a relationship with a financial institution - especially if they are under the age of 18. First, there needs to be a bank or credit union branch in their neighborhood. There are no none; high-income neighborhoods in Chicago have almost three times as many bank branches as low-income, according to a 2014 report from SNL Financial. Most of my students live in financial services deserts. Read more at CREDIT UNION JOURNAL
O_Keefe _ O_Malley

1. Fifty-four percent of underbanked hold only a high school diploma.

2. Twenty-six percent of underbanked consumers' have an open and active retail loan.

3. Of the top 10 largest US employers in the FactorTrust database, one is a top five bank, with a default rate of 33 percent.

4. The average length of residence of a consumer in this market is about three years.

5. While the tendency to overdraw on an account reduces with age, it doesn't necessarily translate to lower default rates; 20-year-olds have default rates of about 31 percent, while 70-year-olds have default rates of about 43 percent.

NEVADA: Court restricts suits over certain payday loan defaults

CARSON CITY - The Nevada Supreme Court has stopped payday loan companies from filing lawsuits to collect outstanding debts in certain cases.

The court, in a 6-1 decision Tuesday, held that loan companies cannot bring a civil action in a case where a person received a second loan to pay off a first loan.

The decision overturns the ruling of a Clark County District Court judge who ruled in favor of Dollar Loan Center and against the state Financial Institutions Division. The entities entered into a suit to clarify the law after conflicting legal opinions.

Justice James Hardesty, who wrote the majority decision, said the law bars a licensed loan company from taking any enforcement action on a defaulted refinancing loan in which the borrower used the money to pay off the first outstanding loan. Read more at LAS VEGAS SUN
Community Involvement
Advance Financial
Nashville financial company passes on over $1M in tax saving to employees 
and communities it serves
In response to President Trump signing the tax reform bill, Advance Financial Chief Experience Officer Tina Hodges announced that the company will be sharing tax savings with its employees and with the communities it serves.
In an e-mail sent to all employees this morning, Hodges outlined three ways in which Advance Financial is passing on tax savings: Read more at NASHVILLE PRIDE
The pros and cons of prepaid debit cards

Debit cards are arguably the easiest way for consumers to purchase what they need and be on their way. And prepaid debit cards are convenience on overload. In fact, in 2016, nearly 40 percent of Americans used prepaid debit cards both online and in stores, according to Blackhawk Network, which was nearly often as shoppers used gift cards.

Aside from their expediency, prepaid debit cards have the added benefit of controlling debt. Users simply contribute the amount of funds they want their card to carry and draw from it wherever they're honored, which is increasingly growing, given their practicality. In fact, at least 10 major banking institutions have issued their own prepaid cards over the past several years, The Wall Street Journal reported. But the unbanked and underbanked have access to them as well, offered by credit card companies, big box retailers and e-commerce organizations, just to name a few.

That being said, no payment avenue is perfect and the same is true for prepaid debit cards. Here are some of the pros and cons to be mindful of before swiping. First, here are some of the lesser lights:

Can't be used to improve credit score
The beauty of buying with plastic or some other form of credit is it can help you increase your credit score, provided you pay it off on time. But this isn't the case with prepaid debit cards. None of the major credit bureaus use them for reporting purposes. And by the same token, neither do regular debit cards. Read more at MicroBilt
Dreher Tomkies LLP
Sources: Trump Considers Politically Safe Choice to Head Up the CFPB

Mark McWatters is under consideration to be nominated as head of the Consumer Finance Protection Bureau (CFPB), sources tell Breitbart News. McWatters is a Republican tax lawyer and former Assistant Dean at the Southern Methodist University School of Law.
McWatters was appointed to the Board of the National Credit Union Administration (NCUA) by President Obama and named Chairman of that agency's Board in January of this year by President Trump.

The NCUA's mission is to "Provide, through regulation and supervision, a safe and sound credit union system, which promotes confidence in the national system of cooperative credit." Its board consists of three members, no more than two of which can be from the same party.

"I have no information that would allow me to comment on this either way," a spokesperson for the NCUA told Breitbart News when asked if McWatters is under consideration for the top spot at CFPB. Read more at BREITBART
A_S Management

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