Mortgage debt and other consumer liabilities have fallen to 105% of disposable income in the fourth quarter, down from 123% in 2007. But many homeowners still owe more than their homes are worth, which is dampening their spending habits. In addition, student debt is rising, weighing down particularly young Americans whose spending is key to the economy, some economists say.
President Barack Obama plans to announce an executive order restricting colleges' practices for recruiting military veterans. The order will require schools to give students a "Know Before You Owe" form from the Consumer Financial Protection Bureau and the Education Department. It also seeks to curb inappropriate use of the term "GI bill" and sets up a clearinghouse for complaints.
The Durbin Amendment has diminished banks' ability to make money from campus bank cards, so the industry's focus has shifted to building long-term relationships with students. A CR80News survey shows that overall campus partnerships between schools and banks grew 8% last year among seven banks, including PNC Bank, U.S. Bank and Wells Fargo.
KeyBank says it will decide on a case-by-case basis whether to forgive student debt when the borrower dies.
According to Harrison Wadsworth, special counsel to the CBA's Education Funding Committee, most banks forgive student debt in cases of death, which is what the federal government does. KeyBank previously faced protests for not forgiving the debt of a late Rutgers University student whose father co-signed for his loans.
An Infosys survey found that far more consumers think mobile banking is easy and convenient than reliable. Ninety-four percent of respondents said mobile banking is easy and 77% said it is convenient, while 42% said it is reliable. Top reasons for not using mobile banking were lack of confidence in security and slow speed.
Sixty-day delinquencies on prime auto loans fell to 0.35% in March, the lowest level in more than 10 years, reports Fitch Ratings. Delinquencies for subprime auto loans dropped to 2.56%, which was the lowest level in nearly a year. Losses on securities backed by auto loans hit a record low in March, Fitch said.
With federal student loan rates set to double in July unless Congress acts, some financial planners are recommending private student loans as an alternative for parents with good credit. Private loans with variable rates, which now start at around 3%, are a good option for those planning to pay off the debt within a couple of years, planners say.
Pinterest, which lets users "pin" interesting images on the social media website to share with others, offers opportunities for financial institutions, Corporate Insight says. Seven financial themes that could be used include retirement, savings and investment goals and credit card rewards, the company says.
American Express, Visa and MasterCard are partnering with telecom companies to expand mobile-payment platforms to consumers in emerging markets who don't use banks but have ready access to mobile devices. "We are quite certain that the real opportunity lies in non-traditional growth," said Gordon Cooper, head of emerging-market solutions for Visa.
The Federal Deposit Insurance Corp. is quietly winding down a program launched during the financial crisis that guaranteed financial institutions' corporate debt. The program, part of the Temporary Liquidity Guarantee Program, officially ends later this year. This week the FDIC said it had begun moving unused fees paid into the program to its Deposit Insurance Fund. Analysts say the effort was more successful than the Treasury's Troubled Asset Relief Program.
Debate over how to cover the cost of keeping the federal student-loan rate low for another year has escalated before today's planned House vote. House Minority Leader Nancy Pelosi, D-Calif., said Speaker John Boehner's plan to pay for the extension by tapping a health care fund shows he considers women's health a "luxury." Meanwhile, Boehner, R-Ohio, blasted President Barack Obama for attacking Republicans on an issue he said they already support.
Whenever you feel like the brainiest person in the room, remind yourself that can be smart or effective, Patty Azzarello writes. Know-it-alls only anger people and slow down progress, so learn to consider ideas that aren't yours and appreciate the strengths of others, she writes.
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