June 20, 2019

This big bank is eliminating all fees on checking and savings accounts

Discover is doing away with fees of any kind on its checking, savings, money market and certificate of deposit accounts.

The move would be a first for a large bank and comes as smaller online fintechs offer no-fee options and high-yield savings to woo younger and more price-conscious Americans.

Going forward, Discover won't charge fees for monthly maintenance, checkbook orders, replacement debit cards, insufficient funds, excessive withdrawals, falling below minimum balances and stop-payment requests.

The change will affect the bank's 1 million customers who have a Discover deposit account and comes after the bank piloted a program that forgave the first fee a customer incurred.

"What we keep hearing resoundingly - and not just from millennials and Gen Z - is that there's been a fundamental change in how people think about fees," said Arijit Roy, vice president of deposits at Discover. "They create a very negative emotion, so we thought we take the next step to eliminate all fees." Read more at USA TODAY

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How states can step in when Trump doesn't enforce laws

It's no secret that the Trump administration wants to "deconstruct" the administrative state, in part by refusing to enforce federal laws designed to protect workers and the environment. This is happening at the same time that corporations are pushing more and more ordinary Americans into forced arbitration, limiting their ability to file lawsuits to vindicate their rights. With the federal government unwilling to enforce the law and private parties unable to do so, ordinary Americans are caught in a pincer between these two trends.

But there's another option: states. State governments that have the political will have several tools they can use to enforce federal laws when the Trump administration doesn't.

The enforcement crisis is rooted in the spread of arbitration beyond business-to-business cases. Historically, arbitration was used to resolve commercial disputes between businesses that negotiated on more-or-less equal footing. But over the past few decades, corporations have begun inserting forced arbitration clauses into contracts that individuals do not - and often cannot - freely negotiate. These arbitration clauses, which are now ubiquitous in consumer and employment contracts, force people into confidential individual arbitrations that may not provide the same due process as the courts. Read more at POLITICO


House advances IRS reform bill

The U.S. House of Representatives advanced last week the Taxpayer First Act, which proposes several changes to the Internal Revenue Service.

The bill would establish an independent office of appeals within the IRS and require the IRS to redesign the structure of the agency to improve efficiency, modernize technology systems, enhance cybersecurity, and better meet taxpayer needs.

The bill was introduced by Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR).

"This bipartisan, bicameral bill represents years of hard work and consensus building. It's a big first step toward strengthening taxpayer protections and turning the IRS into the customer service organization it ought to be," Grassley said. "I look forward to President Trump signing it into law so the IRS can begin implementing long-overdue reforms that will put taxpayers first."

The legislation also includes several provisions to protect taxpayers from tax ID theft and improve taxpayer interaction with the IRS should they become a victim of this crime.
Read more at Financial Regulation News

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Consumer Protection and Financial Inclusion
Remarks to the CATO Institute's Summit on Financial Inclusion (as prepared for delivery)

Thank you very much for the invitation to be here with you today. I understand that today's summit is the first event as part of Cato's new "Initiative for Financial Inclusion." Cato has been recognized for decades as a vanguard of the liberty movement, and I am grateful that your scholars, especially Todd and Diego, are focused on this vital issue. We at the Bureau have much to learn from you. I look forward to a continued dialogue about your innovative policy proposals to expand access to financial services and bolster consumer protections.

My remarks today are focused on the relationship between financial inclusion and consumer protection. But before I begin, let me dispense with one minor formality: "While I am here today as a representative of the CFPB, my remarks do not constitute legal interpretation, guidance, or advice of the CFPB, and any personal opinions or views expressed are my own and may not represent the official views or position of the CFPB in all cases or in connection with specific matters."

Let me start with basic definitions. The phrases "financial inclusion" and "consumer protection" can mean different things to different people in different contexts, so let me clarify.
Read more at CFPB

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CFPB celebrates record of consumer protection - except for the whole watchdog thing

Kathleen Kraninger marked her first six months as head of the Consumer Financial Protection Bureau this week, and the agency celebrated by releasing a scorecard of her accomplishments.

The listed achievements highlight Kraninger's stated goal of shifting the bureau to more of an educational role, rather than being at the forefront of holding businesses accountable for illegal or abusive practices.

They also illustrate what consumer advocates have been saying since President Trump took office: The Consumer Financial Protection Bureau is now barely in the consumer-protection game.

"Despite the handful of enforcement cases cited by the CFPB to commemorate this dubious anniversary, the number of enforcement actions completed by the bureau has plunged in the Trump era," said Alan Zibel, research director of Public Citizen's Corporate Presidency Project, which tracks changes amid the current push for deregulation.

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Facebook announces Libra cryptocurrency: All you need to know

The use cases, technology and motive behind the new digital money

Facebook has finally revealed the details of its cryptocurrency, Libra, which will let you buy things or send money to people with nearly zero fees. You'll pseudonymously buy or cash out your Libra online or at local exchange points like grocery stores, and spend it using interoperable third-party wallet apps or Facebook's own Calibra wallet that will be built into WhatsApp, Messenger and its own app. Today Facebook released its white paper explaining Libra and its testnet for working out the kinks of its blockchain system before a public launch in the first half of 2020.

Facebook won't fully control Libra, but instead get just a single vote in its governance like other founding members of the Libra Association, including Visa, Uber and Andreessen Horowitz, which have invested at least $10 million each into the project's operations. The association will promote the open-sourced Libra Blockchain and developer platform with its own Move programming language, plus sign up businesses to accept Libra for payment and even give customers discounts or rewards.

Facebook is launching a subsidiary company also called Calibra that handles its crypto dealings and protects users' privacy by never mingling your Libra payments with your Facebook data so it can't be used for ad targeting. Your real identity won't be tied to your publicly visible transactions. But Facebook/Calibra and other founding members of the Libra Association will earn interest on the money users cash in that is held in reserve to keep the value of Libra stable.
Read more at TECHCRUNCH

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Are Big Banks Really Serving Cash-Strapped Americans?

A few weeks ago, I wrote a check from my checking account with one of the nation's largest banks. To cover it, I had to transfer money from the account I have with my mobile banking company. This took a day longer than expected, and I was grateful when my bank cleared the check for me even though I had insufficient funds. It was nice of them.

But, of course, that's not the full story. At some point in the distant past, my checking account was connected to an overdraft line of credit. The interest rate on this line of credit is exorbitant. There was no courtesy email to tell me I had a new balance on this credit line. I paid $58.47 for the "courtesy" of having this line extended to me for two days.

Overdraft "protection" can feel like a misnomer, as anyone who has ever been charged an overdraft fee - or a collection of them - knows. "Violation" would be a more appropriate term in many cases.

Americans pay billions annually in overdraft fees. And they don't bear the burden equally. The Americans most likely to overdraft their accounts are those already living on the financial edge, where owing $140 in unexpected fees can be a major destabilizing event.

As I detailed in my last article, this affects millions of Americans. What these people could use are fee-free bank accounts and financial tools to help them save. But can big banks provide that?
Read more at FORBES

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Trump's Tax Law Made Americans Less Charitable, Nonprofits Say

Americans gave less money to charities last year partly because the Republican tax law changes made many people ineligible for tax breaks that can inspire donations.

Giving by individuals fell an estimated 3.4%, after adjusting for inflation, last year, according to a report released Tuesday by Giving USA. The numbers reflect the first year of the 2017 tax overhaul that expanded the standard deduction, a simpler way of filing taxes, but also excluded millions of taxpayers from claiming a tax break for donating to charity.

Total estimated giving, by corporations, foundations, as well as individuals, fell about 1.7%, after inflation, to $427.7 billion. Individuals account for more than two-thirds of all charitable giving. Increases in donations from corporations and foundations helped offset some of the losses from individuals.

"The environment for giving in 2018 was far more complex than most years, with shifts in tax policy and the volatility of the stock market," Rick Dunham, chair of Giving USA Foundation, said in a press release. The report is based on data provided by donors, fund-raisers and non-profits.
Read more at YAHOO FINANCE

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Americans say finances are taking a toll on their mental and physical health: report

Americans are stressed about their finances Opens a New Window. and it's taking a toll on their physical and mental health, according to a new survey.

The latest Merrill Edge report Opens a New Window. surveyed 1,000 respondents between April 17 and May 9, 2019 in the U.S.

Approximately 60 percent of recipients said managing their money took a toll on their mental health while 56 percent said it affected their physical health. Women were more likely than men to be impacted physically and mentally by their finances.

More than 40 percent of recipients said they would give up all forms of social media in order to not have to manage their personal finances.

Aron Levine, the head of Bank of America's consumer banking & investments, told FOX Business Friday that he was alarmed about how stressed people were about their upcoming financial situation. Read more at FOX BUSINESS

Dreher Tomkies LLP
Dreher Tomkies LLP is a law firm concentrating in the areas of Banking and Financial Services law.
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The 10 Biggest Banks in the World

International banks continue to grow their assets as the world economy expands. If no major economy falters, the expansion may continue. While there is some debate whether China's economy is bigger than that of the United States, there is no questioning which nation is home to the largest banks. The power in banking is unquestionably shifting eastward to China. Out of the top 10 largest banks by assets, only two are American banks. They rank number six and nine. The leading banks by far are Chinese banks. China holds the top four slots in the top 10.

Japan and France are also represented, and England has the No. 5 bank. In short, only five countries are represented on the list of top 10 banks in the world. This concentration of financial activity does not necessarily represent a concentration of wealth. All of the banks on our top 10 list do international business, so wealth from countries with smaller banks is flowing through the top 10 players.

We have listed the world's banks from largest to smallest and indicated the dollar value of their assets. All figures are current as of April 23, 2017.

1. Industrial & Commercial Bank of China     Read more at Investopedia

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Do your employees do personal tasks during the workday? Here's why you should let them

As an employer Opens a New Window. , it's natural to want to get the most out of your employees Opens a New Window. during the workday. The more productive they are, the more your business benefits. In fact, when you're on the management side, you may not take kindly to catching your employees engaging in personal tasks during the day, whether it's scheduling appointments, answering emails from friends, or confirming weekend plans. But actually, doing personal tasks during the workday is pretty common -- and also pretty necessary.

A good 77% of professionals today feel that personal activities have become a workday necessity, according to Captivate's Office Pulse new survey. (Those elevator and lobby displays you see in big office buildings? That's what Captivate does.) If your policy is to discourage workers from going this route, here are a few reasons why you may want to rethink that.

1. They'll be less stressed
Stress can be a huge distraction for workers to contend with, and the more your employees feel they're falling behind on life's many tasks,
Read more at THE MOTLEY FOOL


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