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Archive: Nancy Trejos

Congress Asks Bush to Help Seniors on 401(k) Withdrawals

President Bush on Tuesday signed legislation that temporarily suspends a tax penalty for senior citizens who do not take a minimum withdrawal from their 401(k)'s and other retirement accounts in 2009. But dozens of Republican and Democratic members of Congress are asking the President to help senior citizens whose retirement savings plans have been hit by market losses this year. Spearheaded by Rep. Spencer Bachus (R-AL) and Rep. Rodney Frelinghuysen (R-NJ), 61 members of Congress on Friday asked the President to direct Secretary of the Treasury Henry Paulson to waive the so-called required minimum distribution rule for 2008. Retirees older...

 

By Nancy Trejos | December 24, 2008; 07:00 AM ET | Comments (15)

Senator Asks Credit Card Companies to Comply with New Rules

U.S. Senator Robert Menendez (D-NJ) is calling on the nation's credit card companies to comply with federal regulators' new rules against "unfair and deceptive practices" sooner than they have to. Last week, the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration finalized a new set of regulations that would ban such practices as raising interest rates on existing balances unless a payment was more than 30 days late, charging late fees without giving the borrower a reasonable amount of time to pay and applying payments so that debts with higher interest rates are repaid last....

 

By Nancy Trejos | December 23, 2008; 07:00 AM ET | Comments (1)

FDIC Criticizes Banks' Overdraft Fees

Banks received an estimated $1.97 billion in overdraft protection fees in 2006, representing 74 percent of the $2.66 billion in service charges on deposit accounts that they reported, according to a Federal Deposit Insurance Corporation study released this week. In fact, total overdraft fee income made up about 6 percent of the total net operating revenues earned by banks. The findings confirmed that overdraft programs have become lucrative for banks even as consumer advocates have fought against them because they typically come with significant fees. Consumer advocates, as well as the Federal Reserve, have especially criticized banks for automatically enrolling...

 

By Nancy Trejos | December 5, 2008; 07:00 AM ET | Comments (1)

A Knee-Jerk Reaction to a Loss in Retirement Savings

If you think you're the only one losing money in your 401(k), think again. In its analysis of 2.7 million employees' plans, Hewitt Associates, a global human resources consulting company, found that the average 401(k) balance dropped 14 percent in 2008 to $68,000, down from $79,000 last year. In just two months, on average, employees have lost 18 percent of their assets, with some losing up to 30 percent. This is how American workers are responding: They're moving their 401(k) retirement savings into less risky investment funds. According to a study released this week, the amount of 401(k) assets in...

 

By Nancy Trejos | November 26, 2008; 07:02 AM ET | Comments (0)

If You Need Help, You're Not Alone

In another sign of how much consumers are hurting these days, more and more of them are turning to credit counselors for help. The National Foundation for Credit Counseling (NFCC), the largest national nonprofit credit counseling organization, reports that the number of calls to its National Locator Line, which automatically connects consumers with counselors, has set new records each week. In October, calls were up 70 percent over the same month in 2007. Year-to-date, the number of calls is up 31 percent over the same period last year. Meanwhile, year-to-date visits to the organization's Web sites through Oct. 31 are...

 

By Nancy Trejos | November 20, 2008; 01:15 AM ET | Comments (0)

Yet Another Victim of Global Financial Crisis: Your Retirement

Americans are scaling back their contributions to their retirement savings plans, a new study has found. In a survey conducted by Opinion Research Corporation on behalf of TD Ameritrade Holding Corporation, 35 percent of respondents said they have reduced their contributions to their 401(k) or other similar retirement plans. Sixty-three percent said they have completely suspended their contributions. Half of them said the financial strain caused by the economic downturn was the reason for tucking less money away for retirement. Thirty-two percent blamed unemployment and 25 percent attributed the decrease to health care costs. The people cutting back most were...

 

By Nancy Trejos | October 29, 2008; 10:59 AM ET | Comments (0)

What Do Consumers Think About the Bailout?

On Monday, Federal Reserve Chairman Ben S. Bernanke said Congress should consider implementing a second stimulus package. According to at least one survey, though, many Americans are not yet convinced that the $700 billion bailout package already approved by Congress is even going to work. In a survey commission by Truecredit.com and conducted by Harris Interactive, only 1 percent of the 2,021 adults polled said they believe the bailout initiative will be "very effective." Sixty-two percent said they believe it will be at least somewhat effective at improving the current economic climate. Truecredit.com, which is run by Transunion, one of...

 

By Nancy Trejos | October 21, 2008; 07:05 AM ET | Comments (2)

Got Your Money in a Credit Union? You Too Are Safe

The National Credit Union Administration wants you to know that your money is safe not just in banks, but in the nation's more than 8,000 credit unions. The NCUA is to credit unions what the Federal Deposit Insurance Corporation is to banks. So when Congress passed the bailout plan that raised FDIC insurance limits from $100,000 to $250,000 until the end of 2009, the NCUA agreed to go along with the new limits. In all the discussions about the bailout plan, there has been little talk about credit unions. That's because credit unions have been largely untouched by the subprime...

 

By Nancy Trejos | October 10, 2008; 10:12 AM ET | Comments (2)

Want Some Free Advice?

Have you ever thought about getting a financial adviser? Many of us probably can't afford one, especially now, as we watch our net worth plummet along with the stock market. But for two days, you'll be able to get free financial advice, down on the National Mall of all places. Financial Planning organization TD Ameritrade Institutional, the National Association of Personal Financial Advisors (NAPFA) Consumer Education Foundation and Kiplinger's Personal Finance magazine have gathered hundreds of financial advisers across the country to give free advice on the Your Money Bus Tour. The bus is traveling to 60 cities over the...

 

By Nancy Trejos | October 1, 2008; 07:00 AM ET | Comments (1)

Credit Card Debt Is Up

No surprise here. Credit card debt is ticking up. TransUnion, one of the three main credit bureaus, reported that in the second quarter of this year, national credit card debt per borrower increased 2.63 percent to $1,717 from the previous quarter's $1,673. That is also an 8.6 percent jump from a year ago, when average debt was $1,581. What state has the most debt-ridden people? Alaska, with $2,494 per borrower. What state has the least? Iowa, with $1,281. How are we faring around here? The District of Columbia has the fourth highest average debt, with $2,009 per borrower. The District...

 

By Nancy Trejos | September 17, 2008; 07:12 AM ET | Comments (0)

Even the Small Loans Can Hurt

When we think about abusive lending practices, we often think about credit cards and subprime mortgages. But folks, there are many types of loans you can get out there that can get you into trouble. Recently, the Consumer Federation of America, the Consumers Union, and the National Consumer Law Center rated states on how well they protect consumers from excessive interest charges on four types of loans: auto title loans, which are short-term, usually lasting no more than 30 days; payday loans, which are small-dollar, short-term loans that borrowers promise to repay out of their next paycheck; six-month $500 unsecured...

 

By Nancy Trejos | September 9, 2008; 07:42 PM ET | Comments (1)

Pay Attention to Source of Your 401(k) advice

You may not think this U.S. Department of Labor move affects you all that much, but it will. The agency has announced the Aug. 22 publication in the Federal Register of two proposed rules under the Pension Protection Act. Both rules would govern how you can get investment advice when you're trying to figure out what to do with your 401(k)-type retirement plan or your Individual Retirement Account. Yes, there are rules for that. There have to be. Back in the day, most Americans had company-sponsored pensions to look forward to. Those gave employees no options on investments. Now more...

 

By Nancy Trejos | August 21, 2008; 07:53 PM ET | Comments (0)

An Emptier Mailbox

Have you noticed that there are fewer credit card offers arriving in your mailbox lately? If so, you're not alone. According to global market research firm Synovate, which has an ongoing Mail Monitor survey, mailed credit card offers during the second quarter of 2008 were down 17 percent from the same time period last year. In fact, card mail volume was the lowest it's been since the fourth quarter of 2003, the survey found. Andrew Davidson, vice president of Competitive Tracking Services for Synovate's Financial Services Group, attributes it to ongoing concerns about the economy and the exposure many card...

 

By Nancy Trejos | August 12, 2008; 06:37 PM ET | Comments (0)

An Overwhelming Response

Here's an update on the Federal Reserve's proposal to crackdown on "unfair and deceptive" credit card practices: Yesterday was the deadline for submitting public comments about the proposal, which would ban such practices as arbitrarily raising interest rates, charging interest on debt that has been repaid and assessing late fees when consumers are not given a reasonable amount of time to make a payment. The agency, which has proposed the new rules along with the Office of Thrift Supervision and the National Credit Union Administration, received almost 16,000 comments, and another 27,000 form letters that it is not posting on...

 

By Nancy Trejos | August 5, 2008; 11:00 AM ET | Comments (3)

Credit Card Bill Passes One Hurdle

For a while last night, it seemed that Rep. Carolyn Maloney's bill proposing a crackdown on the credit card industry was doomed. Rep. Mike Castle (R-Del.) was pushing an amendment that would kill the bill and substitute a congressional resolution in support of the Federal Reserve's proposal to rein in "unfair and deceptive" credit card practices, such as arbitrarily raising interest rates on outstanding balances. The Fed is accepting public comments on that proposal until Monday. Consumer advocates said such a move would have weakened both Congress' and the Fed's resolve to reform the industry. After much debate, though, Maloney's...

 

By Nancy Trejos | August 1, 2008; 09:52 AM ET | Comments (0)

Cracking Down on Hidden Fees

A bill that would allow merchants to negotiate interchange fees directly with credit card companies cleared a hurdle this week. In a 19 to 16 vote, the House Judiciary Committee approved the Credit Card Fair Fee Act of 2008. And what exactly are interchange fees? You may not know this but every time you use your credit card to buy something, the merchant has to pay a fee to your card company. That fee is non-negotiable. You, the consumer, end up incurring the cost of that fee because retailers include them in their prices. Supporters of the proposal say it...

 

By Nancy Trejos | July 18, 2008; 07:18 AM ET | Comments (170)

It Pays to Know Your Score

Consumer understanding of credit scores has improved over the past year, according to an annual survey commissioned by the Consumer Federation of America (CFA) and Washington Mutual Bank (WaMu). But that's not saying much. Credit scores are important. Very important. That's how lenders decide if you're too risky to lend money to. According to this survey, the results of which were released Thursday, fewer than one-third of Americans know that credit scores indicate risk of not repaying a loan. "Lack of consumer knowledge about credit scores not only increases the costs of their credit and insurance, but also reduces the...

 

By Nancy Trejos | July 11, 2008; 07:01 AM ET | Comments (3)

A Temporary Pullback in Credit Card Debt

Here's some interesting, and somewhat positive, data I recently came across. According to TransUnion, one of the three major credit reporting bureaus, average credit card debt has declined for the first time since early 2007. Nationwide, the average debt per credit card borrower dropped 1.25 percent to $1,673 in the first quarter of this year from $1,694 in the previous quarter. In the District, the average borrower had $1,884.79 in credit card debt in the first quarter, down from $1,971.25 in the last quarter of 2007. The same trend held true for some Virginia and Maryland suburbs. In Fairfax, for...

 

By Nancy Trejos | June 30, 2008; 07:05 AM ET | Comments (5)

Too Young to Handle Credit?

Congress should consider legislation that would regulate credit card issuers' marketing tactics on college campuses, Rep. Carolyn B. Maloney (D-NY), chairman of the Financial Institutions and Consumer Credit Subcommittee, said during a meeting she convened on the topic Thursday. "Students want and often need credit, but may not realize all the consequences of applying for or getting a credit card," she said. A number of witnesses, including a college student and a representative from New York State Attorney General Andrew Cuomo's office, testified for and against legislation to control how credit card issuers market to college students. Benjamin Lawsky, deputy...

 

By Nancy Trejos | June 27, 2008; 12:16 PM ET | Comments (2)

On a Fixed Income and Paying for Overdraft Protection?

Here's an interesting twist to a topic I wrote about on this blog not too long ago. It's about overdraft protection. When you overdraw your account, many banking institutions will cover that payment -- for a fee. Often it happens without your permission. According to the Center for Responsible Lending, Americans 55 and older pay $4.5 billion in fees annually for overdraft loans they haven't asked for and typically don't want. Nearly $1 billion of that amount is taken from people who are heavily dependent on Social Security income. Typically, the fee is $1.65 for every $1 advanced. Unauthorized overdrafts...

 

By Nancy Trejos | June 23, 2008; 02:20 PM ET | Comments (2)

Uncovering those Hidden Fees

There are yet more steps being taken on Capitol Hill to change the credit card industry as we know it. Last week Sen. Richard Durbin (D-Ill.) introduced legislation that would allow businesses to negotiate directly with credit card issuers interchange fees that are charged on every transaction. The card companies currently set non-negotiable fees for covering the cost of a transaction. Consumers end up incurring the cost because retailers include them in their prices. Durbin's office estimates that interchange fees cost Americans about $42 billion last year. About $2 of every $100 spent on credit cards goes towards interchange fees....

 

By Nancy Trejos | June 9, 2008; 09:41 AM ET | Comments (2)

Did Boomers Enjoy the Boom a Little Too Much?

By 2010, households headed by people over the age of 50 will have control of more than half of U.S. spending. So wouldn't it be nice to know that this generation, the Baby Boomers, has its financial act together? A new study released today by McKinsey Global Institute, an economics research firm, has found that that is not necessarily the case. In fact, more than two-thirds of early Baby Boomer households, meaning those between the ages of 50 and 63, are financially unprepared for retirement. There are a number of factors contributing to that, the study found. Among them: Inadequate...

 

By Nancy Trejos | June 5, 2008; 12:09 PM ET | Comments (10)

Is Ignorance Bliss?

Here's an interesting study I came across that examines how our attitudes can affect our finances. Published in the Journal of Consumer Affairs this summer, the study suggests that many of us tend to overestimate our creditworthiness and that when we do, we take less care of our finances. Author Vanessa Gail Perry, assistant professor at the George Washington University School of Business, examined the Freddie Mac Consumer Credit Survey of about 23,000 people. She found that 32 percent of respondents overestimated their credit ratings, or credit scores, which lenders use to determine how risky a consumer is. Only 4...

 

By Nancy Trejos | June 5, 2008; 07:08 AM ET | Comments (3)

Do You Know Why You're Getting that Higher Rate?

The Federal Reserve is at it again. After going after credit card companies for deceptive practices, the agency has joined the Federal Trade Commission in proposing another seemingly pro-consumer set of rules. The latest effort has to do with risk-based pricing. Most lenders determine the interest rate for a customer based on his or her credit report. If your credit score is low, lenders will think you pose a higher risk of not repaying the loan and give you a higher rate. Together with the Federal Trade Commission, the Fed has proposed requiring lenders to notify borrowers taking out a...

 

By Nancy Trejos | May 14, 2008; 07:07 AM ET | Comments (3)

Does Overdraft Protection Really Protect You?

Last week, the Federal Reserve proposed new rules forbidding "unfair or deceptive" practices by credit card issuers, such as arbitrarily raising interest rates and applying finance charges to debt that has already been repaid. That, not surprisingly, grabbed the average consumer's attention, judging by all the e-mails and phone calls this personal finance writer received. But there was a part of the 510-page proposal that was largely overlooked. The Federal Reserve also proposed banning "unfair or deceptive" practices related to overdrafts in deposit accounts. You may know it as overdraft protection. If you overdraw your account, many banking institutions will...

 

By Nancy Trejos | May 9, 2008; 07:00 AM ET | Comments (6)

Credit Where It's Due

Have you ever had your credit card interest rate increase for no apparent reason? Have you ever been charged interest on a late fee? Or have you ever been charged an overlimit fee twice for going over your limit just once? If so, you're not alone, and several lawmakers have taken notice. In recent months, one member of Congress after another has introduced a bill to curb "unfair" and "deceptive" practices by credit card companies. The latest bill was unveiled this week by Sen. Chris Dodd (D-Conn.) and Sen. Carl Levin (D-Mich). Their Credit Card Accountability, Responsibility and Disclosure...

 

By Kathy Lally | May 2, 2008; 10:00 AM ET | Comments (11)

Your 401(k) Can Cost You

The number of Americans with 401(k)-style retirement plans has grown to about 50 million. But how many of those people know how much they're paying their providers in administration fees? Not many, according to the AARP. A study the organization commissioned last year found that of 1,584 people aged 25 and over who had 401(k) plans, a whopping 83 percent had no idea how much they pay in fees. Even if you were vigilant, you would still probably end up losing out. The fees usually appear deceptively small, ranging from less than 1 percent of assets to more than 2...

 

By Kathy Lally | April 28, 2008; 08:00 AM ET | Comments (2)

Financial Worries

Lately, I've gotten one e-mail after another telling me about yet another new study or survey declaring this: Americans are worried about their finances. The other day, it was from financial services company The Hartford, which found that 55 percent of parents with children aged 16 to 24 are afraid their children won't be able to support themselves financially. Then came one from the non-profit Employee Benefit Research Institute, which found that fewer American workers and retirees are confident that they will have enough money to retire comfortably. And there was this: A poll conducted by Harris Interactive for the...

 

By Kathy Lally | April 16, 2008; 11:05 AM ET | Comments (0)

Where's the Refund?

It's tax time, and here's one figure that might startle you: The number of thieves who have gotten refunds by using another person's Social Security number increased 579 percent from 2002 to 2007, according to a report from the Treasury Inspector General for Tax Administration, a government watchdog. The report, which was released this week, also found that the theft of taxpayers' names and Social Security numbers to get work, then not pay federal taxes on the wages, is also on the rise. In those cases, the thieves take off with the wages while the lawful taxpayer is left...

 

By Annys Shin | April 11, 2008; 08:00 AM ET | Comments (0)

 

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