August 15, 2019

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Seniors have more household debt now than they did during the financial crisis

The financial crisis hit many Americans hard, but for seniors, the present is even worse.

Americans in their 60s held $2.16 trillion in debt during the second quarter of 2019, just short of the record $2.17 trillion they had during the first quarter, according to newly released data from the Federal Reserve Bank of New York report on Tuesday. That's significantly more than the $1.47 trillion they had during the second quarter of 2008, shortly after the Great Recession began.

Those who are 70 and older are in double the household debt collectively now than they were during the financial crisis in the late 2000s - $1.16 trillion in the second quarter, versus the $0.54 trillion 11 years ago.

People in their late teens through 20s as well as those between 30 and 39 are in just about the same financial position as those same age groups were during the recession, having both $0.92 trillion and $2.88 trillion in debt in the second quarter of 2019 and the second quarter of 2008, respectively. Forty-somethings are in $3.49 trillion of household debt this past quarter, down from $3.73 trillion during the spring of 2008. Read more at MARKETWATCH


These four states have the highest bankruptcy rates in the US

Bankruptcies rose last month nationwide, hitting a total of 64,283. That was up 3% from July of last year. Bankruptcies are on a pace to reach nearly 800,000 in 2019. The highest rates by state were in four states in the South.

The American Bankruptcy Institute posted the figures, based on data from the managed technology company Epiq Systems. The organizations separate consumer bankruptcies from commercial ones. Consumer bankruptcies rose 3% to 61,025, while commercial bankruptcies rose 4% to 3,258.

The nationwide average bankruptcy rate per capita in July was 2.5 per 10,000. Rates were higher by far in five states, four of which are in the South: Alabama (5.61), Tennessee (5.39), Georgia (4.31), Mississippi (4.25) and Nevada (3.79).

While bankruptcies generally peak in recessions, there is evidence that is not always true. According to 24/7 Wall St., bankruptcies have soared this year: "In the first seven months of 2019, nearly 43,000 workers lost their jobs when the companies they worked for filed for bankruptcy. That's higher than the full-year total for any year since 2009."
Read more at USA TODAY


Fintechs, banks target Gen Z consumers with mobile apps, financial education

Millions of Gen Z consumers, including students and struggling workers, remain either locked out or limited by the traditional banking and credit industries, leading a growing number of fintechs and traditional banks to target that segment of the population with easy-to-use mobile banking and credit apps and financial education tools to help those customers gain better spending habits.

Bill Carter, a partner in Fuse Marketing, a Vermont-based firm that specializes in helping brands target the teen and young adult segment, said that Gen Z represents the largest demographic set of consumers in the U.S. and globally.

He also said that smart brands want to establish a relationship with consumers early and bring them along as they mature, and as their preferences and lifestyles change.

"For example, in the auto industry, car makers target young consumers with fuel efficient, inexpensive models and continue to target those consumers with other models as their lives and needs change - say when they have kids or more disposable income," Carter told Mobile Payments Today via email. "Banking is no different in wanting to develop a relationship and engage consumers based on their life stage - today it's opening a checking account, tomorrow it's student loans, down the line it's a mortgage." Read more at MOBILE PAYMENTS TODAY


The Wait for Payday Doesn't Have to Be So Long

As lawmakers push for a faster payments network, companies may look for other ways to deliver paychecks faster

The rhythms of payday are familiar to millions of Americans. Sometimes, it's a fun excuse to splurge; other times, it's a painful wait that forces hard choices.

Increasingly, however, it may not have to be anything at all, according to financial-technology firms, lawmakers and others who want to change the infrastructure underlying paychecks so that workers get paid faster.

A clutch of tech startups, with more than $300 million in venture funding, have come up with ways to front workers their wages early and collect later on, when payday arrives. To do it, they are experimenting with charging some form of fee, or selling companies' future payroll obligations to investors. Some startup banks also advertise faster paycheck access.

Democrats including presidential hopeful Sen. Elizabeth Warren of Massachusetts, as well as Sen. Chris Van Hollen of Maryland, Rep. Ayanna Pressley of Massachusetts and Rep. Jesús García of Illinois, have taken up the issue, pushing for a faster network to carry payments to consumers.



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Regulators and the Fed reportedly looking to roll back Volcker Rule, giving banks leeway on investments

Wall Street banks may be catching a break as regulators rework a rule that restricts their ability to invest their own money, Bloomberg reported Tuesday.

Regulators are trying to make it easier for banks to trade securities using their own funds by reworking the so-called Volcker Rule, a centerpiece of legislation from the post-financial crisis bank crackdown, people familiar with the matter told Bloomberg.

The Volcker Rule, named after former Fed Chairman Paul Volcker, who originally proposed the regulation and enacted under the Dodd-Frank Wall Street Reform and Protection Act, prevented banks from investing their own money in hedge funds and private equity funds.

The overhaul, led by a group of agencies and the Federal Reserve, could happen as soon as next week, the report said.

The regulators are changing the definition of proprietary trading, which is when financial firms make direct investments for direct market gain instead of investing on behalf of clients.
Read more at CNBC


Young Americans are less trusting of other people - and key institutions - than their elders

Americans believe trust has declined in their country, whether it involves their fellow citizens' faith in each other or their confidence in the federal government, according to a wide-ranging new Pew Research Center survey. And adults ages 18 to 29 stand out for their comparatively low levels of trust in a number of these areas.

Around three-quarters (73%) of U.S. adults under 30 believe people "just look out for themselves" most of the time. A similar share (71%) say most people "would try to take advantage of you if they got a chance," and six-in-ten say most people "can't be trusted." Across all three of these questions, adults under 30 are significantly more likely than their older counterparts to take a pessimistic view of their fellow Americans.

All told, nearly half of young adults (46%) are what the Center's report defines as "low trusters" - people who, compared with other Americans, are more likely to see others as selfish, exploitative and untrustworthy, rather than helpful, fair and trustworthy. Older Americans are less likely to be low trusters. For example, just 19% of adults ages 65 and older fall into this category, according to the survey, which was conducted in late 2018 among 10,618 U.S. adults. (You can read more here about how the study grouped Americans into low, medium and high trust categories.)
Read more at Pew Research Center


Bankruptcy filings rising across the country and it could get worse

Bankruptcies are back - flashing warnings that more Americans are knee-deep in debt in big cities like New York.

While total bankruptcy petitions nationwide by consumers and businesses are still well below Great Recession levels, analysts say there is an unmistakable trend upward.

New York state's bankruptcy filings, for instance, have risen steadily the past three years, hitting 34,711 in 2018, up from 30,112 in 2016, according to the American Bankruptcy Institute (ABI), based on data from Epiq Systems.

More consumers nationwide are falling behind on their payments and filing for bankruptcy to resolve overwhelming debt loads. And low unemployment, an uptick in average wages and the latest Fed interest rate cut have not restrained the debt monster. Some cash-strapped consumers are even finding relief at food pantries.

"In high-cost cities like New York, personal incomes are not often enough to pay the household bills," Zac Hall, vice president of anti-poverty programs at the Food Bank For New York City, told The Post. "We are seeing people using consumer debt as a way to make ends meet when they come here," he added, citing the pressures his nonprofit faces to keep up the distribution of food and meals at no cost to some 1.5 million New Yorkers. Read more at NY POST


Bill Introduced to Require Data Brokers to Register With FTC. by Hinch Newman LLP

On July 30, 2019, Sens. Peters and McSally introduced S.2342, a bill to provide for requirements for data brokers with respect to the acquisition, use and protection of brokered personal information, and to require that data brokers annually register with the Federal Trade Commission.

Congress should bring more transparency to data broker practices through the FTC, Sens. Gary Peters, D-Mich. and Martha McSally, R-Ariz. have stated.

According to Peters, policymakers and the public deserve to know the identities of data brokers. According to McSally, data is gathered and consumers scored without any knowledge of the industry practices. McSally also believes that brokers are potentially circumventing laws like the Fair Credit Reporting Act, which requires data collected by credit reporting agencies to be transparent and allows consumers to correct the record. In doing, however, McSally has dismissed the idea that Facebook's Cambridge Analytica scandal played any role in the construction of the bill.
Read more at National Law Forum, LLC


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Loan defects continue to decline

The frequency of defects, fraud and misrepresentation in mortgage loan applications decreased 7 percent in June compared with the previous month, according to the First American Loan Application Defect Index.

However, year-over-year defects in June increased by 3.9 percent compared with June 2018, First American said.

"This month, the Loan Application Defect Index for purchase transactions continued its downward trend, declining 7.8 percent in June compared with the month before, the third consecutive month defect risk in purchase transactions has fallen," First American Chief Economist Mark Fleming said in a release.

According to the index, four of the top six spots among the top cities where fraud risk declined the most on an annual basis were in Florida, including Jacksonville (-15.1 percent); Tampa (-11.5 percent); Orlando (-11.1 percent); and Miami (-7.3 percent).


Money stress traps many women into staying in unhappy marriages

For many women, financial security is one of the biggest considerations that factor in when deciding whether to stay in an unhappy marriage or divorce. As a result, a significantly large number of women stay in marriages that are unhealthy and even border on dysfunctional.

Various studies show that women are typically more stressed about money than men. According to PricewaterhouseCoopers' 2019 Employee Financial Wellness Survey, 65% of women and 52% of men said that financial matters cause them the most stress. Money is a top cause of stress for Americans, in general.

"For many, talking about money is more difficult than talking about sex - even in the therapy room," claims New York-based therapist Ann Springer. According to the American Psychological Association survey Stress in America: Paying With Our Health, the majority of Americans (64%) admit that money is somewhat or a very significant source of stress.
Read more at CNBC

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CFPB study shows alternative credit models lead to more loans, cheaper loans

Test shows one alternative credit model leads to 27% more loan approvals

Over the last several years, there's been a serious push to get Fannie Mae and Freddie Mac to use newer credit scoring models that consider factors such as a person's bank account history, work history, or utility payments as part of the formula to determine a borrower's creditworthiness.

That movement grinded to a halt last year, when the Federal Housing Finance Agency announced that it will not be authorizing the use of any new credit scoring model for several years, but a newly released study from the Consumer Financial Protection Bureau shows that using alternative credit models will not only lead to more borrowers getting loans, the loans they get will be cheaper too.

The CPFB this week released a report that's the result of study conducted by Upstart Network, a company that uses alternative data and machine learning in making credit and pricing decisions.

In 2017, the CFPB issued its first "no-action letter" to Upstart Network to allow the company to provide insight into whether alternative data, like education and employment history, would have an impact on credit decisions. Read more at HOUSING WIRE


'Flabbergasted': Chase Bank forgives all credit card debt for Canadian customers

Canadians who had credit cards with Chase Bank can breathe a sigh of relief as the company says it will "forgive" all outstanding debt.

Chase Bank, part of the New York-based JPMorgan Chase & Co., closed all credit card accounts in the country in March 2018, the company said.

Originally, customers were told to continue paying their debt, Reuters reported, but the company confirmed Friday to USA TODAY that the debt was now cancelled.

"Chase made the decision to exit the Canadian credit card market. As part of that exit, all credit card accounts were closed on or before March 2018. A further business decision has been made to forgive all outstanding balances in order to complete the exit," Maria Martinez, vice president of communications for Chase Card Services, said in a statement.
Read more at USA TODAY


FTC chief willing to break up Big Tech

The head of the Federal Trade Commission (FTC) said he's prepared to break up big tech companies by undoing past mergers as the agency probes whether the firms are hurting competition.

Joe Simons, the FTC chairman who is leading a wide-ranging review of Silicon Valley mainstays like Facebook, said Tuesday that breaking up a corporation can be challenging -- but it could be the right tool to rein in companies that have broken the rules of fair competition.

"If you have to, you do it," Simons told Bloomberg. "It's not ideal because it's very messy. But if you have to, you have to."

Facebook purchased Instagram and WhatsApp in 2012 and 2014, respectively. Both of those acquisitions were approved at the time by the FTC. However, antitrust regulators could still unwind such mergers. They would need a court order.

"There's a question about what caused Instagram to be as successful as it is," Simons said. "Was it the fact that the seed was already there and it was going to be germinated no matter what, or was the seed germinated because Facebook acquired it?"
Read more at FOX NEWS


WASHINGTON, August 1, 2019-The Federal Communications Commission today adopted
new rules banning malicious caller ID spoofing of text messages and foreign calls. These new
rules will close a loophole in the law that prevented the agency from pursuing scammers
sending spoofed text messages and international fraudsters making spoofed calls to Americans.

The Truth in Caller ID Act of 2009 prohibits anyone from causing a caller ID service to
knowingly transmit misleading or inaccurate caller ID information ("spoofing") with the intent
to defraud, cause harm, or wrongly obtain anything of value. However, until passage of the
RAY BAUM'S Act last year, the Truth in Caller ID Act did not extend to text messages or
international calls. The new rules extend these prohibitions to text messages, calls originating
from outside the United States to recipients
Read more at The Federal Communications Commission

Dreher Tomkies LLP

Microsoft warns Windows 10 users to update immediately

New York (CNN Business)Microsoft is warning Windows 10 users to update their operating system immediately because of two "critical" vulnerabilities.

The company said the vulnerabilities are potentially "wormable," meaning affected computers could spread viruses and malware without any action on the user's part.

There are "potentially hundreds of millions of vulnerable computers," Simon Pope, Microsoft's director of Incident Response, wrote in a blog post Tuesday.

"It is important that affected systems are patched as quickly as possible because of the elevated risks associated with wormable vulnerabilities like these, and downloads for these can be found in the Microsoft Security Update Guide," he said.

Windows 10 users that have enabled automatic updates are already protected. For those who update manually, they can click the search button and type "Windows Update" to access the update tool. Read more at CNN BUSINESS


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