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ConsumerAffairs News: Personal Finance News

Last Build Date: Tue, 24 Apr 2018 13:44:11 +0000


Iran’s banks banned from using cryptocurrency

Tue, 24 Apr 2018 13:44:11 +0000

The decision was made to address money laundering and financial terrorism concerns

By Sarah D. Young of ConsumerAffairs
April 24, 2018

(image) Irans central bank has issued a ban on the use of Bitcoin and other cryptocurrencies by banks and other financial institutions, the Islamic Republic News Agency (IRNA) reported.

The decision to ban digital currencies was made in an effort to prevent money laundering and financial terrorism.

According to CBI public relations department, CBI made the decision by its supreme committee in charge of fight with money laundering last Iranian calendar year, the state news agency said in a statement.

Virtual currencies have the option to be used for money laundering, supporting terrorism, and exchange of sums between wrongdoers, pointed out the CBI circulation.

Shielding Iranians from cryptocurrency risks

The decision was preceded by months of doubt and uncertainty about the idea of cryptocurrencies coming out of Iran. Last November, deputy director of new technologies at the Central Bank of Iran said Bitcoin was risky and that the bank planned to conduct a comprehensive review of the currency.

"Given that Bitcoin and other currencies have not been introduced by the central bank as the official currency, as well as the risk of buying it and the activity of traders in this field, more precautions are coming into the market because of the possibility of malice, Naser Hakimi said at the time.

In February, the countrys central bank released a statement indicating that it did not recognize the legitimacy of any cryptocurrency within the country's borders. It discouraged Iranians from purchasing cryptocurrencies in the interest of protecting them from risk.

"The wild fluctuations of the digital currencies along with competitive business activities underway via network marketing and pyramid scheme have made the market of these currencies highly unreliable and risky," the statement said.

The move to officially ban the use cryptocurrencies comes weeks before a May 12 deadline when President Trump will decide whether to restore economic sanctions on Tehran, which would be a blow to the 2015 pact between Iran and six major powers. Irans currency, the rial, hit an all-time low amid concerns about a possible return of crippling sanctions.

To avoid unnecessary risk, the IRNA is advising Iranian banks and financial institutions to avoid any sale or purchase of cryptocurrencies or taking any action to promote them.

Yield on the 10-year Treasury bond nearing 3 percent

Mon, 23 Apr 2018 14:09:55 +0000

Economists explain why consumers should care

By Mark Huffman of ConsumerAffairs
April 23, 2018

(image) The yield on the U.S. government's 10-year bond, which had been struck at around 2 percent for years, is suddenly rising and is almost at 3 percent today.

For Wall Street investors, rising bond yields can be a warning sign. Stocks that were cheap at a 2 percent yield look more expensive when these interest rates rise. Consumers with stock portfolios can expect this year's volatility to continue for a while.

Five percent is about average

But rising bond yields may mean more than that for consumers. Robert Frick, corporate economist for Navy Federal Credit Union, doesn't think the jump in bond yields is the result of fundamental changes in the economy. Rather, he says rates are just getting back to normal.

"The long-term average of the 10-year is about 5 percent, but that's easy to forget considering we've had artificially low rates since the Great Recession," Frick told ConsumerAffairs.

Economist Joel Naroff, of Naroff Economic Advisors, believes rising bond yields serve as an inflation warning. In fact, he predicted rising prices when Congress passed the landmark tax cut and stimulus bill last December.

"What did anyone expect when you cut taxes when the economy is solid and the labor markets are tight?" Naroff asked. "Rising inflation was going to happen, was forecast by most economists and only the naive among us thought that you could implement massively expansionary fiscal policy when it wasnt needed without any negative impacts."

Benchmark for interest rates

The 10 year Treasury note is a key benchmark for many interest rates consumers pay, so when yields rise, so do interest rates.

"The impact on consumers will be higher rates for those with variable rate loan products and on mortgages," Naroff said. "For many who have had variable rate products for a while and who didnt see much change, they could be in for a shock, especially if the Fed keeps raising rates, as expected."

Frick agrees that rising interest rates may be the effect consumers feel most. Since mortgage rates are affected, he says 2018 may be an opportune time to purchase a home, while rates are still relatively low.

There may also be a positive effect for consumers, especially those who put money away in savings. For well over a decade the interest paid on savings has been paltry, often less than 1 percent. This month, several banks have increased the interest rate paid on a one year certificate of deposit (CD) to over 2 percent.

That's still low by historical standards, but its much higher than typical interest paid on deposits over the last decade.

New York Attorney General opens probe into Bitcoin exchanges

Thu, 19 Apr 2018 12:06:13 +0000

The AG is asking for more information about each platforms practices and policies By Sarah D. Young of ConsumerAffairs April 19, 2018 New York Attorney General Eric Schneiderman has announced the launch of a fact-finding inquiry into the policies and practices of cryptocurrency trading platforms. In sending the letters, which include detailed questionnaires intended to glean insight into the practices of each platform, Schneiderman aims to increase consumer protection within the digital currency space. Too often, consumers don't have the basic facts they need to assess the fairness, integrity, and security of these trading platforms," Schneiderman wrote. "Our Virtual Markets Integrity Initiative sets out to change that, promoting the accountability and transparency in the virtual currency marketplace that investors and consumers deserve." Schneidermans office sent letters to the following major crypto-exchange platforms: GDAX, Gemini, bitFlyer USA, Bitfinex, Bitstamp USA, Kraken, Bittrex, Poloniex, Binance, Tidex,, itBit Trust Company, and Huobi.Pro. Improving transparency The questionnaire in each letter asks for specific details on exchange fees, trading policies and procedures, internal controls, and privacy and money laundering, among other topics. Trading platforms have until May 1 to respond. Ensuring that enforcement agencies, investors and consumers have the information they need to understand the practices and the risks on these platforms is critical, given reports of the theft of vast sums of virtual currency from customer accounts, sudden and poorly explained trading outages, possible market manipulation and difficulties when withdrawing funds from accounts, a statement for the Initiative reads. Most exchanges welcomed the inquiry, and Gemini was one of the first to announce that it will happily comply with the Attorney Generals request. Gemini applauds the Attorney General's focus on this industry and the Virtual Markets Initiative, and we look forward to cooperating with and submitting our responses to the questionnaire that has been circulated," Tyler Winklevoss, CEO of Gemini, said in a statement to CNBC. Kraken, which left New York in 2015 due to the states foul cryptocurrency regulatory framework, has said it wont respond to the Attorney Generals request for information. "Why don't you try extracting this information from those businesses actually operating in your state?", said Kraken CEO Jesse Powell. In response to Powells remarks, a spokesperson for the Attorney General's office told CoinDesk that the requested information should not be hard for exchanges to find. "Legitimate entities generally like to demonstrate to their investors that their money will be protected. This is basic information that credible platforms should all have on hand," the spokesperson said. [...]

Coinbase set to open cryptocurrency-oriented venture capital firm

Fri, 06 Apr 2018 13:13:13 +0000

The company feels its just scratched the surface of whats possible with digital currency

By Gary Guthrie of ConsumerAffairs
April 6, 2018

(image) Coinbase, a digital currency exchange, is opening Coinbase Ventures, a venture capital arm set on funding promising, early stage cryptocurrency companies.

Our goal is simply to help the most compelling companies in the space to flourish, the company said in an announcement. Our focus is on building strong relationships and helping to spur on the development of the ecosystem. The digital currency ecosystem has the opportunity to transform the lives of billions of people, but we have only just scratched the surface of whats possible.

Asiff Hirji, Coinbases President & Chief Operating Officer, reiterated his companys intent on CNBCs Fast Money on Thursday. "It's not about investing in a token, it is really about helping these investments to mature," Hirji said.

If successful, the companys new enterprise could help flip the shady narrative of cryptocurrency and give the Securities and Exchange Commission (SEC) the type of firms it wants to see.

Coinbase intends on being as fair-minded as possible with who it invests with. The company will tap into the braintrust of its alumni base to look for ideas to invest in, as well as companies in the same monetary exchange space Coinbase is in. In a statement, the company accentuated the positive side of those kinships.

We may be comfortable investing in companies that are potentially competitive, because its in everyones interest to see the ecosystem innovate, it said.

One good turn deserves another

Coinbase itself was built on the beliefs of others and seems glad to pay it forward. Since its 2011 launch, Coinbase has raised more than $100 million and has become the first Bitcoin start-up to achieve a valuation of at least $1 billion. Its 2017 revenue also topped $1 billion.

Over the course of the exchanges rise, it formed partnerships with Dell, Expedia, Time Inc. PayPal, and others to leverage cryptocurrency as a viable and trustworthy payment option.

Now, seven years later, the company has more than 13 million users. Contrast that to Charles Schwab, which reported 10.6 million active brokerage accounts last year.

In short, its in all of our interest to see this space evolve, expand, and mature. Well learn a lot along the way, and were excited to get started, the company concluded in its announcement.

Wells Fargo threatens Alaska cannabis lab with foreclosure

Tue, 03 Apr 2018 18:30:55 +0000

A lab that conducted cannabis testing for legal weed consumers says that Wells Fargo is calling in their building loan By Amy Martyn of ConsumerAffairs April 3, 2018 An Alaska cannabis lab that is permitted to operate under state law is being forced to relocate after Wells Fargo apparently discovered what they were doing. We have to relocate because Wells Fargo called in the loan on our building, announced Steep Hill Alaska, an Anchorage-based lab that tests legal marijuana for THC content and mold per state regulations. They will foreclose if we do not move out -- just because we are a Cannabis business, the lab said via a post on Instagram. Wells Fargo spokesman Brian Kennedy responded with a statement explaining the decision to the Associated Press: It is currently Wells Fargos policy not to knowingly bank marijuana businesses, based on federal laws under which the sale and use of marijuana is still illegal. Only two labs left Alaska established a marijuana control board shortly after voters pass an initiative to legalize recreational and medicinal marijuana in 2014. It mandates that all dispensaries must contract with independent labs to test their products for possible contaminants and THC content. The labs play an important role for the states legal weed consumers, but they were the subject of a controversy in January when state regulators found wide inconsistencies in their test results. Regulators said that Steep Hill had detected a dangerous type of mold growing in an edible product, while another lab in the state did not, among other inconsistencies. Steep Hill CEO told KTUU at the time that they employ scientists who follow the highest standards of scientific integrity and testing practices. Steep Hill, which did not return a message from ConsumerAffairs, was one of only three permitted labs in the state. Federal laws keep weed money out of banks As states have embraced regulating marijuana sales and cultivation, a growing number of banks or credit unions have agreed to do business with state-legal cannabis businesses. However, federal law officially considers any marijuana transaction to be money laundering. While the Obama administration in 2014 issued guidance to banks on how to handle marijuana money without getting in trouble, most major financial institutions have remained reluctant to accept any marijuana business, especially since Trump Attorney General Jeff Sessions has shown a willingness to enforce federal drug laws in legal states. That means that the majority of businesses in the multi-billion dollar legal weed industry are operating in cash -- putting many business owners at risk of robbery and creating headaches at the tax office. In January, a group of 18 attorneys generals from states that regulate marijuana sent a letter to Congress asking for legislation that would allow banks to accept marijuana money without running afoul of federal anti-drug laws. A group of bipartisan senators, including Alaska Republican Sen. Lisa Murkowski, are now sponsoring the SAFE Banking Act, a bill that would prevent the feds from prosecuting banks simply because the depository institution provides or has provided financial services to a cannabis-related legitimate business. [...]

Young Americans have less consumer confidence than their parents

Tue, 03 Apr 2018 14:43:34 +0000

New research finds millennials are less confident than baby boomers for the first time ever By Sarah D. Young of ConsumerAffairs April 3, 2018 Consumer confidence surged to its highest level since 2004 towards the end of last year, but millennials now have less consumer confidence than their parents. Thats according to data from the University of Michigan, Haver Analytics, and Deutsche Bank Global Research. Optimism among those under 35 hasnt dropped below that of those aged 55 and older in the last 60 years, since the University of Michigan began recording the consumer sentiment of these two generations. Economic hardships Millennials diminished confidence is likely rooted in the economic hardships many of them have faced as they came of age. Student loan debt has reached $1.4 trillion as the cost of college has soared. Burdened by student loan debt and higher housing costs than their parents faced at their age, many young Americans are finding it almost impossible to spend only 30 percent of their income on rent or a mortgage, MarketWatch notes. Additionally, for the first time in more than 130 years, millennials are more likely to live with their parents than with a spouse or partner in their own household. Researchers say thats because younger Americans tend to get married later in life and/or have more student loan debt than they can feasibly manage while also paying for rent or a mortgage. Higher cost of living Peter Schiff, the chief executive of Euro Pacific Capital, believes the middle class has been gutted by over-regulation, an escalating cost of living, and stagnant wages. Families are smaller, Schiff told MarketWatch. "They cant afford to raise their kids or send them to college without taking out a lot of student debt. Its too expensive. People are getting married later in life and many dont get married at all." But there may still be reason for optimism. Although many millennials have nothing saved for retirement, reports indicate that some millennials do have assets. A recent Bank of America report found that nearly half (47 percent) of working millennials have $15,000 or more in savings and 16 percent have $100,000 or more in savings. Concern for the next generation Americans appear to be concerned about the economic prospects of those who come after them. A 2017 Pew study found that just 37 percent of Americans believe todays children will grow up to be better off financially than their parents. Half (49 percent) of 18- to 29-year-olds believe that the next generation will be worse off, while more than half (61 percent) of Americans aged 50 and over believe the next generation will be worse off. The U.S. may be one of the richest countries in the world, with one of the highest per capita gross domestic products among major nations, but Americans are fairly pessimistic about economic prospects for their countrys children, said the Pew study author, Bruce Stokes. [...]

Survey highlights consumer struggles with bills and savings

Tue, 03 Apr 2018 13:55:45 +0000

Research shows millennial women are particularly vulnerable

By Mark Huffman of ConsumerAffairs
April 3, 2018

(image) Consumers are falling behind on their bills and have a slightly increased chance of having a bill in collections, according to the latest financial literacy survey conducted for the National Foundation for Credit Counseling (NFCC).

NFCC's 11th annual survey also uncovered generational and gender differences, with millennial women more likely to be struggling financially.

The survey, conducted by Harris Poll, found one in four consumers don't always pay their bills on time, a major factor in dragging down a credit score. About 8 percent said they had at least one bill in collections.

Trouble signs for young women

Drilling deeper, the poll found that the increase in late payments is primarily driven by women between the ages of 18 and 34. Nearly two in five women in that age group admit to being delinquent on at least some of their bills.

Millennials, and more specifically millennial women, continue to face unique financial challenges," said acting NFCC CEO Jeff Faulkner.

Among those challenges, Faulkner cites recent data from Pew Research that shows women, more than men, are completing college degree programs. While that can be a long-term positive, he says it could lead to significant student loans, coupled with a delayed start in a career.

Because such circumstances can sometimes contribute to missed bill payments and debts in collection early in a persons adult life, we continue to provide financial counseling and coaching services that help struggling consumers with their evolving financial challenges, he said.

Lack of savings

The survey shows women also lag behind men when it comes to saving money. More than 35 percent of women in the survey said they had no savings, outside of funds set aside for retirement. When women do save, the survey shows they save less than men.

Consumers generally report increased barriers to homeownership in 2018, with the biggest barrier being the price of the home. Thirty-eight percent of those surveyed said they encountered at least one obstacle making homeownership more difficult.

In addition to the price of a home, consumers cite down payment requirements, a poor credit score, and an existing debt as factors keeping them out of the housing market.

NFCC says the results are concerning because paying bills on time, and keeping them out of collection, are important steps in raising credit scores. Also, a lack of personal savings is often a sign of financial instability.

Consumers earned more last month but spent less

Thu, 29 Mar 2018 13:34:54 +0000

Inflation ticked up but remains in check

By Mark Huffman of ConsumerAffairs
March 29, 2018

(image) Consumers showed some increased financial discipline last month, taking home more pay but not spending all of it.

A report by the Bureau of Economic Analysis, part of the Commerce Department, shows incomes rose a healthy 0.4 percent in February. Consumer spending increased, but only by 0.2 percent.

Inflation increased in February, but not enough to cause concern. The Personal Consumption Expenditures Price (PCE) index, closely followed by the Federal Reserve as it tracks inflation, rose 0.2 percent during the month. Over the last 12 months, the rate rose slightly, but last months increase was the biggest in a year.

Consumers also saved more. The nation's savings rate went up for a second straight month to 3.4 percent, recovering after a consumer spending binge at the end of last year.

Analysts say the numbers suggest consumers are moderating their spending habits after running up huge credit card bills last year.

The Federal Reserve, under new chairman Jerome Powell, is keeping a close eye on inflation this year. The Fed's Open Market Committee hiked its discount rate a quarter point in mid-March, signaling it will do so again if prices begin to rise too quickly.

Wall Street bonuses in 2017 were the highest since 2006

Tue, 27 Mar 2018 15:04:27 +0000

Experts say tax law changes have benefited bankers By Sarah D. Young of ConsumerAffairs March 27, 2018 The average Wall Street bonus in 2017 was three times what most U.S. households make all year, according to data released by the New York state comptroller on Monday. Wall Street bonuses increased 17 percent last year compared to the previous year, hitting an average of $184,220 -- the highest average payout since before the financial crisis. Experts say bigger bonuses for bankers reflect a revival on Wall Street as the Trump administration begins dialing back federal efforts to rein in pay by the Securities and Exchange Commission and other agencies. Bank stocks rebounded last year under the prospect of rising interest rates, faster growth, and deregulation. Last year, Wall Street bankers raked in a total of $31.7 billion in bonuses. Five times higher than private sector The latest figures highlight just how much more Wall Street executives earn compared to the rest of the private sector. The comptroller's annual report said the average salary, including bonuses, in New York Citys securities industry was $375,200 in 2016. That's five times as high as the rest of the private sector, with an average of $74,800. The large increase in profitability over the past two years demonstrates that the industry can prosper with the regulations and consumer protections adopted after the financial crisis, said Thomas P. DiNapoli, the New York comptroller. About 25 percent of the industrys employees earned more than $250,000 compared with 2 percent in the rest of the citys workforce, the report said. The median U.S. household income reached $59,039 in 2016, according to data from the Census Bureau. Tax changes pay dividends Tax law changes likely helped drive bigger bonuses in 2017, the annual report noted. Changes to the tax code passed last year encouraged some banks to move up payments to December 2017. Lowering the corporate tax rate to 21 percent is expected to pay off biggest for banks. The massive size of the Wall Street bonuses is disturbing not just because of how it contributes to economic inequality in this country, Sarah Anderson, the global economy project director at the Institute for Policy Studies, told the Washington Post. Its also a sign that the reckless Wall Street bonus culture, which contributed to the 2008 financial crisis, continues to flourish. [...]

Bankruptcy makes loans more expensive, but not impossible

Tue, 27 Mar 2018 14:49:51 +0000

A study shows that most consumers can qualify again within two years

By Mark Huffman of ConsumerAffairs
March 27, 2018

(image) People file for Chapter 7 bankruptcy protection for many reasons, whether because of a major financial setback or a series of smaller ones. The status gives a consumer the opportunity to discharge some debt and get a fresh start.

A bankruptcy carries a number of negative consequences, but it doesn't end a consumer's ability to borrow money; it just adds to the cost.

Online lending marketplace Lending Tree has produced a study that puts a price on bankruptcy when it comes to the extra costs of getting a loan. The findings may prove useful to a consumer contemplating a bankruptcy declaration.

On a credit report for seven years

A bankruptcy will stay on a credit report for seven years. While that initially causes a credit score to plunge, the study found the recovery time is much less than seven years.

The study found that 43 percent of consumers with a bankruptcy on their credit file have a credit score of 640 or higher within a year of the bankruptcy. After two years, 65 percent have a credit score above 640.

A 640 credit score is high enough to qualify for many loans, but it is also low enough to make those loans more costly because of a higher interest rate. However, Lending Tree found those extra costs go down quickly.

For example, an auto loan of $15,000 will cost an extra $2,171 in interest if you apply less than a year after a bankruptcy. If you wait at least two years, the extra charges fall to an average of $799.

The savings, of course, are based on an improving credit score. The authors stress that scores can recover quickly, as long as the consumer pays all bills on time and engages in other sound credit practices.


Even applying for a mortgage with a bankruptcy on the books isn't that costly. The study found that a three-year-old bankruptcy typically results in an interest rate that is only 0.19 percent higher than a borrower without a bankruptcy.

Over the life of the mortgage, that costs $8,887 more than the terms offered to someone without a bankruptcy.

While the costs of bankruptcy may be less than imagined, it is not a legal step to be taken lightly. Getting legal advice is highly recommended. To learn more, check out ConsumerAffairs' resource guide on the subject.

Twitter announces a ban on cryptocurrency ads

Mon, 26 Mar 2018 20:05:46 +0000

The social media platform says the decision will help keep users safe

By Sarah D. Young of ConsumerAffairs
March 26, 2018

(image) Today, Twitter announced that it will be joining the likes of Facebook and Google in banning advertisements for initial coin offerings (ICO) and token sales.

The decision comes after weeks of speculation that the social media platform would begin blocking ads for cryptocurrency exchanges, initial coin offerings (ICO), cryptocurrency wallets, and crypto token sales.

Advertisement of Initial Coin Offerings (ICOs) and token sales will be prohibited globally, a Twitter spokesperson said in a statement. We know that this type of content is often associated with deception and fraud, both organic and paid, and are proactively implementing a number of signals to prevent these types of accounts from engaging with others in a deceptive manner.

Discouraging fraud and deception

Tokens, wallets, and exchanges carry potential risks (such as scams, fraud, or other financial crimes) and tend to be volatile. Twitter says its new policies will help it ensure the safety of its users.

Going forward, cryptocurrency exchanges and wallet services ads will be limited to those that are provided by a public company listed on major stock markets.

Earlier this month, Google announced an update to its financial services policy that will restrict advertising for "cryptocurrencies and related content" starting this summer.

The new policies on cryptocurrency ads that have recently been adopted by major social media platforms have caused the value of the digital asset to decline rapidly. Bitcoin approached the $8,000 level today and has decreased in value dramatically since December when it hit an all-time high of $20,000.

Experian launches free tool to remove mistakes from credit reports

Wed, 04 Apr 2018 14:28:35 +0000

The company says consumers shouldn't spend money on credit repair

By Mark Huffman of ConsumerAffairs
March 23, 2018

(image) Experian has launched a free service for consumers who need to correct errors on their credit reports, saying it eliminates the need to spend money on so-called credit repair companies.

The company says its dispute center tool is an easy way for consumers to dispute information on their Experian credit report, which could negatively affect their ability to get a good interest rate, or even be approved for a loan.

The credit monitoring agency makes a point of saying consumers need not pay a credit repair company to act on their behalf since taking care of the problem themselves is simple and free. Using a PC or mobile device, consumers just look for inaccurate information in their credit report, dispute it, and request its removal.

Staying engaged in the process

Experian says consumers who dispute credit reports mistakes themselves stay engaged in the credit process and don't have to rely on third parties who charge big fees based on promised results that aren't always delivered.

"We believe everyone deserves access to quality credit," said Alex Lintner, president, Experian Consumer Information Services. "We're constantly innovating to empower consumers with greater control over the accuracy of their data.

To use the tool, consumers first access their Experian credit report. If they find a mistake, they upload documents that support their argument. For example, if the credit report wrongly lists an unpaid bill, you can upload a copy of the paid receipt.

After that, Experian will review the dispute and provide updates on the status of its investigation.

Based on consumer feedback

"Consumers can access their free online Experian credit report from the Experian dispute center and select items to dispute right from the same screen," said Michelle Felice-Steele, senior director of Product Management at Experian. "These are some of the enhancements we've made in response to consumer feedback, and we'll continue to improve and collaborate with consumers as they pursue their financial goals."

The Federal Trade Commission (FTC) says it has taken action in the past against a number of credit repair scams.

These operations lure consumers to purchase their services by falsely claiming that they will remove negative information from consumers' credit reports even if that information is accurate, the FTC warns on its website.

Consumers should understand that only erroneous information can be removed from a credit report. If there is negative information that happens to be true, it must remain until the information is no longer applicable.

Two-thirds of millennials haven’t saved anything for retirement

Thu, 22 Mar 2018 19:32:03 +0000

Researchers cite a harsh economic landscape as the main reason

By Sarah D. Young of ConsumerAffairs
March 22, 2018

(image) Two-thirds of working millennials havent saved anything for retirement, according to a new report.

The National Institute on Retirement Security (NIRS) found that about 66 percent of people between the ages of 21 and 32 havent even put the first dollar toward their retirement fund. The report is based on Census data collected in 2014.

The numbers are even worse for millennial Latinos; 83 percent of working millennial Latinos have nothing saved for retirement.

Of the 66 percent of millennials who havent started saving, only slightly over one-third (34 percent) participate in their employers plan.

Harsh economic realities

Many millennials may be falling short of their retirement savings goals due to the harsh economic landscape they encountered when they first entered the workforce, said Jennifer Erin Brown, manager of research for NIRS.

Given that most Millennials entered the workforce at a time of depressed wages, high levels of unemployment, and major structural changes in the American economythe Great Recession exacted a heavy price from this generation, Brown wrote.

While only 34 percent of millennials are able to participate in an employer-sponsored retirement plan, more than 94 percent of those who have the option take their employer up on it. Most of those who have started saving through an employers plan have less than $20,000, but some have much more. The average account balance is $67,891, according to the report.

However, about 25 percent of millennial workers arent eligible for an employer-sponsored retirement plan even if their company offers one because some only work part-time; others havent been with their company long enough.

Loosening these eligibility requirements would increase the number of Millennials saving for retirement, the report said.

Allowing part-time workers and new employees to participate in an employer-sponsored retirement plan would greatly increase Millennials participation in an employer-sponsored retirement plans, Brown said.

Coinbase bug allowed users to send themselves unlimited amounts of cryptocurrency

Thu, 22 Mar 2018 14:29:37 +0000

The finding is yet another bump in the road when it comes to cryptocurrency security By Gary Guthrie of ConsumerAffairs March 22, 2018 Dutch financial tech firm VI Company uncovered a flaw in digital currency exchange Coinbases system that allowed users to add an unlimited amount of the digital currency Ether (ETH) -- a cryptocurrency running on the Ethereum network -- to their Coinbase account. In technical terms, Coinbase users were able to exploit a smart contract to send Ether to as many wallets they could set up in their Coinbase account. A smart contract is a computer protocol designed to digitally facilitate the negotiation of a contract. The bug has been patched, but the exploit is yet another example of how digital cryptocurrency platforms are not yet foolproof when it comes to security or design. Merry Christmas to myself! In the spirit of giving, VI Companys discovery of the bug came out of designing a Christmas present it would give out to clients. VIs present was a small amount of Ether, but delivered in a way that gave the recipient a first-person look into how the technology behind Ether, smart contracts, and blockchains worked. What we didnt expect was that one of our colleagues, who decided to use Coinbase as his wallet, told us he received the Ethereum, wrote blockchain specialist Jesse Lakerveld in a VI blog post. After checking, we found out that no Ethereum had been sent to our colleague according to the smart contract. But according to his Coinbase wallet, he did receive it. Lakerveld decided to try to reproduce the issue on a smaller scale and found that users could indeed add Ethereum to Coinbase wallets without sending the asset from a smart contract. Now what do we do? The bug VI uncovered was, in the companys words quite big. The conundrum was how to clue in Coinbase in a proper way. VIs team decided to go with HackerOne, a hacker-powered security platform that connects businesses with cybersecurity researchers. HackerOne is one of the good guys in the hacking world where its clients -- which include GM, Starbucks, Spotify, Nintendo, and the U.S. Department of Defense -- offer bounties to hackers who identify bugs in their systems and products. Lucky for VI, Coinbase was a HackerOne client. In late January, the platform confirmed that the bug had been fixed and happily paid a bounty of $10,000. Analysis of the issue indicated only accidental loss and no exploitation attempts, Coinbase officials said. Coinbase hasnt always been so lucky Loopholes similar to what VI dug up have put Coinbase in a bind before. In January, a website glitch at allowed users to pay and request refunds in either Bitcoin or Bitcoin Cash. Overstock uses Coinbases merchant integration API. Coinbase was also blamed for a bug that accidentally charged users as many as 17 times for the same purchase. However, the company was found not to be responsible, and both Visa and Worldpay exonerated it. Coinbase has announced that it will issue refunds to any consumer who was affected by the bug. [...]

Debt collection still a big source of consumer complaints

Wed, 21 Mar 2018 16:19:20 +0000

A joint report shows federal agencies still receive thousands of complaints By Mark Huffman of ConsumerAffairs March 21, 2018 Illegal actions by debt collectors remained a huge source of consumer complaints in 2017, according to two federal agencies filing a joint report. The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) say they fielded thousands of complaints about debt collections, with nearly 85,000 filed with the CFPB alone. The report says follow-up investigations revealed a large number of violations of the Fair Debt Collections Practices Act (FDCPA), consumers' chief protection against debt collection abuses. In two federal court cases, CFPB filed "friend of the court" briefs. It resolved one FDCPA enforcement case, resulting in both consumer relief and a payment to the civil penalty fund, and continued to litigate five others. The agency also produced five sample letters for consumers to use when they have contact with a debt collection. The letters were downloaded more than 517,000 times last year. The FTC filed or reached resolution in 10 cases against 42 defendants, collecting more than $64 million in judgments. It also banned 13 operators from the debt collection business due to serious and repeated violations. More protection needed Consumer groups say the report is evidence that consumers need more protection from debt collectors through tougher laws and more vigilant regulators. Far too many consumers continue to report that debt collectors hound them about money they have already paid off or never owed in the first place, said Suzanne Martindale, senior attorney for Consumers Union. Debt collectors often lack proof that the debt even existed let alone that the person they are targeting is responsible for it. We need reasonable standards and better oversight to ensure consumers are treated fairly and protected from abusive debt collection practices. The Trump administration has made clear it will do nothing to get in the way of debt collectors who are seeking payment of student loans. Last week it served notice that the Department of Education plans to block states from regulating student loan servicers who are attempting to collect on past-due payments. The federal agency published a notice of its intention to preempt states' consumer protection laws that have attempted to regulate student loan debt servicers in how they go about collecting money owed on federal student loans. "The Department believes such regulation is preempted by Federal law," the declaration states. "The Department issues this notice to clarify further the Federal interests in this area." Abusive communications According to the FTC-CFPB report, complaints about abusive communication tactics were the third most common debt collection complaint category, including frequent or repeated phone calls and the failure of debt collectors to stop calling after the consumer requested them to stop. Under the FDCPA, a debt collector may contact you in person or by mail, telephone, telegram, or fax. A debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you explicitly agree to be contacted during off hours. A debt collector is also forbidden from contactingyou at work if they knowthat your employer disapproves of such contacts. Learn more about your rights under FDCPA here. [...]

Study finds huge knowledge gaps about student loans

Mon, 19 Mar 2018 13:55:31 +0000

The authors say misinformation can lead to costly mistakes By Mark Huffman of ConsumerAffairs March 19, 2018 A recent study suggests the student loan problem has grown, in part, because most borrowers had little or no understanding of the process before taking out huge loans. In its study, Student Loan Hero -- a firm offering tools to organize student loan debt -- found that people who borrow money for higher education often walk into the process blindly, uneducated about how their loans work, not understanding how interest accrues, and being unaware of which loans are eligible for forgiveness. These myths about student loans can lead borrowers to poor financial decisions, not to mention trap them in debt for longer than they need to be, said lead researcher Rebecca Safier. Borrowers should look to trusted resources to learn about their loans so they can make the right repayment choices. An analysis of government data by the Consumer Federation of America (CFA) found 1.1 million student loan borrowers were in default in 2016. By the end of that year, 42.4 million Americans owed $1.3 trillion in federal student loans. That doesn't count money borrowed through private student loans, credit cards, and home equity loans. A year ago, the Federal Reserve put total outstanding student loans at $1.4 trillion. A number of misconceptions The Student Loan Hero survey of borrowers uncovered a number of misconceptions. Seventy-one percent of student loan borrowers believe their private student loans are eligible for Public Service Loan Forgiveness. In fact, only certain federal loans are eligible. More than half thought the monthly payments on a standard repayment plan are based on income, when in fact it requires fixed payments over 10 years. More than half also said they aren't worried about accruing interest on their unsubsidized student loans while still in school. The truth is that interest accrues on unsubsidized loans from the date theyre disbursed. Serious mistakes Erroneous beliefs about student loans can lead to serious mistakes. As an example, the study's authors say a borrower might choose a public service career, only to discover that their student loans aren't the kind that can be forgiven that way. At the same time, borrowers who would benefit from an income-driven repayment plan might not realize they have to apply for it. There also other factors that can ease the student loan burden, but only if the borrower is aware. "Family size is an important factor in the IDR (income driven repayment) calculation," said Tom Knickerbocker, executive vice president of Ameritech Financial. "Borrowers who do not report an accurate family size risk an inaccurate and potentially unaffordable payment. Therefore, it's important to put some thought into it. And if family size changes, just like if income changes, it's important to recertify an IDR to accurately reflect those changes." To clear up the confusion, Student Loan Hero concludes that lenders need to do a better job of educating borrowers and their families about student loans and how they're repaid. To learn more about the student loan process, check out ConsumerAffairs' resource guide. [...]

Twitter may soon ban ads for cryptocurrency products

Mon, 26 Mar 2018 18:24:19 +0000

Reports suggest the social media giant will join the fray to protect consumers from fraudulent and manipulative pitches

By Gary Guthrie of ConsumerAffairs
March 19, 2018

(image) Recent reports suggest that Twitter may decide to block ads for cryptocurrency exchanges, initial coin offerings (ICO), cryptocurrency wallets, and crypto token sales.

The decision would follow in the footsteps of Google, Facebook, and credit card companies, and it would also be in line with the U.S. Securities and Exchange Commissions (SEC) new stance on cryptocurrency. The ban will likely go into effect within the next two weeks.

Twitter is a prime promotion forum for cryptocurrency. On an average day, more than 110,000 crypto-related tweets show up on the platform, and the kings of crypto have follower bases to rival the biggest celebrities.

Charlie Lee, the creator of Litecoin, has 738,000 Twitter followers. Vitalik Buterin co-founder of decentralized cryptocurrency platform Ethereum and known as the boy genius of crypto has 703,000 followers.

Why the concern?

Ever since Bitcoin became the digital investment darling, there have been 1,661 new crypto offerings that have seen the light of day. All that activity spurred a total market cap of more than $317 billion and more than $18 billion of trading volume in a single day.

And with any goldrush, theres usually carpetbaggers and opportunists. The crypto company Confido (which means I trust in Italian) vanished with $374,000 of investors money in its pocket last November.

In January, the Commodity Futures Trading Commission filed complaints against My Big Coin Pay, claiming that the company was behind a Ponzi scheme that resulted in $6 million being misappropriated.

With social media being a sizeable meeting place for billions around the world, platforms like Twitter are natural hunting grounds for crypto peddlers. While Twitters move will have some impact, killing off all the deceptive snakes behind the currency wont be easy, so government agencies have stepped up efforts to protect the consumer.

The SEC has taken up the consumers case as best as it can, laying down the law that any exchange platform dealing with the new digital cash needs to register with the SEC as a national securities exchange or be exempt from registration.

The Better Business Bureau and U.S. Commodities Futures Trading Commission have also produced guides to help consumers get a grip on virtual currency pump-and-dump schemes and IRS-approved virtual currency IRAs before they make an investment.

Fed likely to raise interest rates this week

Mon, 19 Mar 2018 12:37:24 +0000

The decision will boost rates on credit cards and home equity loans

By Mark Huffman of ConsumerAffairs
March 19, 2018

(image) The Federal Reserve Open Market Committee meets this week and is widely expected to boost a key interest rate by 0.25 percent.

The Fed meeting, the first under new chairman Jerome Powell, may indicate how aggressive the Fed intends to be in raising its discount rate back to "normal" levels. Rates have not been normal since the 2008 financial crisis, when the Fed cut them to zero percent in an effort to revive the economy.

Since then, the economy has slowly recovered and unemployment remains near historic lows. A 0.25 percent increase in the discount rate this week would only raise it to 1.75 percent.

By comparison, the Fed's discount rate in May 2007, just before the housing market crash, was 6.25 percent.

Rate hike would affect consumers

Whether the Fed raises rates, and by how much, is largely a concern of stock market investors. Rising rates will make stocks appear overvalued and send their prices lower.

However, consumers also have a stake. Holden Lewis, a research analyst at NerdWallet, says a rising discount rate will make it more expensive for both businesses and consumers to borrow money.

"If you have credit cards or a HELOC (home equity line of credit), every Fed rate hike affects your bottom line," Lewis told ConsumerAffairs. "The interest rates on your credit cards and HELOC go up whenever the Fed raises short-term rates."

So if the Fed increases the discount rate by a quarter of a percentage point, that means your credit card interest rates will go up by the same amount. You should notice it in a billing cycle or two.

Three or four rate hikes this year

Last year, when the Fed raised interest rates three times by 0.25 percent, consumers with credit cards and homeowners with home equity lines of credit saw their interest rates increase by three-quarters of a percentage point.

"Expect the Fed to keep raising rates this year, with this being the first of what's expected to be a total of three or four hikes of a quarter-point each in 2018," Lewis said.

That's because all indications show the economy is fairly strong and getting stronger, which raises the possibility of inflation. The Fed policymakers use their discount rate as a way to slow the economy a bit when things start to heat up.

By any measure, interest rates are still very low. Lewis says the Fed will likely use this opportunity to push them back toward normal levels so that it can reduce them again when the economy eventually softens.

Court strikes down proposed fiduciary rule

Fri, 16 Mar 2018 12:27:58 +0000

Justices say the Obama Labor Department exceeded its authority in drafting it By Mark Huffman of ConsumerAffairs March 16, 2018 A federal appeals court has driven the final nail in the coffin of the fiduciary rule, an Obama Administration proposal designed to protect investors and retirement savers. The Fifth Circuit Court of Appeals Thursday struck down the yet to be fully implemented policy, saying it was unlawful. The court held that the Department of Labor exceeded its authority in expanding the definition of what constituted fiduciary investment advice. As proposed by the Obama Labor Department, the fiduciary rule had a simple premise. It stated that financial advisers must give clients investment advice that is in their best interests, without regard to the interests of the adviser. Conflict of interest The measure was proposed as a way to root out conflicts of interest in the financial services industry, preventing advisers from recommending investments that rewarded themselves with high commissions but might not help their clients build wealth. The Trump Administration delayed key provisions of the rule from going into effect, but the U.S. Chamber of Commerce and other groups challenged the entire rule in court. They claimed the rule was too burdensome and would deprive the average investor of any financial advice. That suggests that if financial advisers were required to give advice that did not reward themselves in some way, they would be forced to charge steep fees for their unbiased advice, fees the average investor could not afford. Because of that, the Chamber of Commerce, Financial Services Institute, Financial Services Roundtable, Insured Retirement Institute, and Securities Industry and Financial Markets Association, say the appeals court ruling is a victory for retirement savers, preserving their access to free advice. In a joint statement, those groups said they support the development of a "best interest standard of care," and called on the Securities and Exchange Commission (SEC) to take the lead in developing one. Favored by consumer groups AARP was one of the original backers of the fiduciary rule, warning that retirement savers were being shortchanged by financial advice that was not always in their best interests. Last year the Economic Policy Institute (EPI) put a price on it. Heidi Shierholz, policy director of EPI, told the Labor Department that just delaying the key elements of the rule would end up costing retirement savers $10.9 billion over 30 years. Shierholz said she arrived at that figure by assuming the delay of the enforcement provisions would result in about a 50 percent compliance rate. The numbers, she says, could actually range from $5.5 billion to $16.3 billion, based on actual compliance with the rule. There are steps investors and retirement savers should take to make sure the financial advice they are receiving will benefit them as much as the adviser. Ask specific questions about fees and commissions associated with any recommended investment. When offered a recommendation, ask the adviser to suggest a couple of alternatives that are similar. Also, make sure you are dealing with an actual adviser and not a salesperson. You can do that by asking the person you are dealing with how he or she is paid. [...]

Google cracks down on ads for Bitcoin and other cryptocurrencies

Wed, 14 Mar 2018 18:24:16 +0000

The company says the assets have too great a potential for harm

By Amy Martyn of ConsumerAffairs
March 14, 2018

(image) Google is banning all advertisements relating to cryptocurrency, the company recently announced.

Google ads, which run on Google pages and third-party websites, will no longer feature initial coin offerings, wallets, online exchanges, or even trading advice relating to cryptocurrency beginning in June 2018.

In an interview with CNBC, Googles director of sustainable ads cited consumer harm as the reason for banning the ads. "We don't have a crystal ball to know where the future is going to go with cryptocurrencies, but we've seen enough consumer harm or potential for consumer harm that it's an area that we want to approach with extreme caution," he told the station.

While cryptocurrencies have made instant millionaires out of some investors, they are not regulated by financial institutions and have proven to be especially vulnerable to hacking.

Exchanges dont meet standards

Googles move follows a similar policy implemented by Facebook and a recent warning by the Securities and Exchange Commission (SEC) about cryptocurrencies.

Last week, the SEC said that operators of online trading platforms, or sites where investors can trade cryptocurrencies such as Bitcoin, were misleading consumers by portraying themselves as exchanges. The SEC reminded consumers that it does not regulate such platforms, despite what the term exchange might imply.

Many platforms refer to themselves as exchanges, which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange, the SEC said.

Although some of these platforms claim to use strict standards to pick only high-quality digital assets to trade, the SEC does not review these standards or the digital assets that the platforms select, and the so-called standards should not be equated to the listing standards of national securities exchanges.

A bubble waiting to burst?

Proponents of cryptocurrencies cite limited regulations, and a decentralized, universal currency as the major appeal of the trade. But financial institutions and banks have repeatedly claimed that online cryptocurrencies are a dangerous investment.

Goldman Sachs, in a report last year, said that Bitcoin is seven times more volatile than gold. More recently, a major investment firm in Europe described Bitcoin as essentially worthless.

Allianz Global Investors, the investment arm of Europes largest insurer, published a report last week about the Bitcoin bubble.

... it appears to us that bitcoin mania is a textbook-like bubble and one that is probably just about to burst, author Stefan Hofrichter wrote.

Senate makes final tweaks to Dodd Frank revisions

Fri, 16 Mar 2018 14:08:07 +0000

Small community banks would come under less regulation

By Mark Huffman of ConsumerAffairs
March 13, 2018

(image) A procedural vote in the Senate has cleared the way for passage of revisions to the Dodd Frank Financial Reform Law, which was passed in the wake of the 2008 financial crisis.

Thirteen Democrats joined Republican senators in voting to cut off debate after the chamber settled on an amended bill, which will now head back to the House where final passage is expected.

The changes mostly affect banks, freeing smaller institutions from Dodd Frank's strict oversight from the Federal Reserve. Foreign banks, no matter their size, will remain under the tougher Fed rules, but domestic banks with less than $250 billion in assets will not.

Opponents' complaints

Liberal Democrats in the Senate are highly critical of that provision, saying it gives a pass to many large regional banks, not just smaller community banks for whom the exception is intended.

"Sure, our financial regulations need work," Sen. Elizabeth Warren (D-Mass.) said in a speech on the floor of the Senate. "There are things we could do to reduce the load on community banks. And there are still big dangers to consumers we should take up. But this bill isn't about the unfinished business of the last financial crisis. This bill is about laying the groundwork for the next one."

Opponents also attacked provisions of the bill that they said would roll back protections for minorities seeking home mortgages. They argue the revision would disrupt data collection and reporting on the ethnicity, race, and sex of borrowers.

Community bankers back the bill

The Independent Community Bankers of America, a trade group that has been a strong advocate for the legislation, said changes to Dodd Frank would not affect this information collection, known as HMDA data.

Those community banks that have been required to collect and report HMDA data on covered mortgage loans will continue to do so and report on an annual basis as they did for decades until the Consumer Financial Protection Bureau dramatically expanded reporting mandates in 2015," said ICBA President and CEO Camden R. Fine. "S. 2155 takes a common-sense approach to ensure necessary data will continue to be reported without overburdening low-volume lenders.

The bill's opponents also take issue with a provision that requires credit reporting agencies to provide free credit monitoring for consumers whose records are hacked, but it requires consumers who receive free credit monitoring to waive their right to sue.

How much money does it take to achieve personal happiness?

Mon, 12 Mar 2018 16:16:42 +0000

Researchers say its more than what most people in the U.S. make

By Sarah D. Young of ConsumerAffairs
March 12, 2018

(image) How much money does it take to achieve happiness and personal fulfillment? Researchers say theyve pegged the perfect salary at $95,000 -- more than most U.S. consumers take in each year.

Researchers from Purdue University and the University of Virginia reached that figure after surveying 1.7 million individuals from 164 countries. They say that people making this amount of money each year are best able to manage their work/life balance.

Satiation points

While a salary of $95,000 is optimal for achieving long-term life satisfaction, the study suggested that making $60,000 to $75,000 may be sufficient for those seeking day-to-day feelings of happiness.

Its been debated at what point does money no longer change your level of well-being. We found that the ideal income point is $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being, said lead author Andrew T. Jebb.

This amount is for individuals and would likely be higher for families, the researchers noted.

Once these thresholds are reached, the benefits of making more money tend to decrease. Thats because making more money than the optimal amount required to meet basic needs, purchase conveniences, and maybe pay off loans may result in a mindset that ultimately lowers well-being.

Too much money can fuel social comparisons

People making more money than what is optimal may be driven to pursue more material gains and compare themselves to their peers, the authors say.

At this point they are asking themselves, Overall, how am I doing? and How do I compare to other people? Jebb said. The small decline puts ones level of well-being closer to individuals who make slightly lower incomes, perhaps due to the costs that come with the highest incomes.

The average household income for the U.S. is $65,000, and 75 percent of American households earn less than $75,000.

SEC makes clear that cryptocurrency exchanges must be registered

Thu, 08 Mar 2018 21:21:19 +0000

The agency is stepping up its plan to make sure all investors are protected By Gary Guthrie of ConsumerAffairs March 8, 2018 The U.S. Securities and Exchange Commission is turning up the heat on its promise to apply securities laws to everything relating to cryptocurrency. The SECs primary concern is protecting investors and preventing fraudulent and manipulative trading practices. The agency views cryptocurrency as a security -- just like any stock, bond, or debenture -- and mandates that any exchange platform dealing with the new digital cash needs to register with the SEC as a national securities exchange or be exempt from registration. Many of the unregistered platforms give investors the power to buy and sell digital assets hastily. While some of these platforms claim to use strict guidelines, the SEC believes many of those so-called standards are out of sync with the integrity of the listing standards that national securities exchanges have to subscribe to. SEC urges caution to protect investors Cryptocurrency has been quite a temptress for the daring investor, and everybody seems to know somebody else whos got a fantastic crypto story to tell. The SEC hears those stories, too, but its also in a position to objectively separate the ripe from the rip-off. To anyone who wants to trade digital assets online, the SEC thinks there are 13 questions you should ask. Do you trade securities on this platform? If so, is the platform registered as a national securities exchange? Does the platform operate as an ATS? If so, is the ATS registered as a broker-dealer and has it filed a Form ATS with the SEC? Is there information in FINRA's BrokerCheck about any individuals or firms operating the platform? How does the platform select digital assets for trading? Who can trade on the platform? What are the trading protocols? How are prices set on the platform? Are platform users treated equally? What are the platform's fees? How does the platform safeguard users' trading and personally identifying information? What are the platform's protections against cybersecurity threats, such as hacking or intrusions? What other services does the platform provide? Is the platform registered with the SEC for these services? Does the platform hold users' assets? If so, how are these assets safeguarded? We encourage market participants who are employing new technologies to develop trading platforms to consult with legal counsel to aid in their analysis of federal securities law issues, the SEC advised in a statement on the matter. The agency said that consumers who have questions should reach out to the SEC at BitCoin feels the pinch immediately On news that the SEC would be insisting on proper registration for digital platforms, the mother of all cryptocurrencies -- Bitcoin -- dropped sharply. The value of the digital asset fell as much as 13 percent before the end of the trading day on Wednesday to finish at $9,856, according to CoinDesk. It was only a month ago that the cryptocurrency world was in panic mode when Bitcoin fell hard and fast from its December high of near $20,000 to under $6,000. A Harvard economics professor predicts regulation will trigger a falloff for Bitcoin. Kenneth Rogoff, the International Monetary Funds (IMF) former chief economist, told CNBC. I would see $100 as being a lot more likely than $100,000 10 years from now. [...]

Harvard economist expects huge drop in Bitcoin value within next decade

Tue, 06 Mar 2018 19:23:52 +0000

Regulation will drive down the price of Bitcoin, economist Kenneth Rogoff says By Sarah D. Young of ConsumerAffairs March 6, 2018 A Harvard professor and economist has suggested that its far more likely that Bitcoin will be trading at $100 in ten years rather than $100,000. I think Bitcoin will be worth a tiny fraction of what it is now if were headed out 10 years from now, Kenneth Rogoff, the International Monetary Funds (IMF) former chief economist, told CNBC. I would see $100 as being a lot more likely than $100,000 10 years from now. The value of the digital currency fell from $19,000 in December to just above $6,000 at the start of February, but has since recouped some of its losses. Its value currently sits at around $11k per coin. Regulation will trigger falloff Rogoff believes regulation will trigger a fall in the price of Bitcoin, but he says it isnt likely to happen any time soon. It will take time for regulators to come up with a way to regulate cryptocurrency around the world, he said. It really needs to be global regulation, said Rogoff. Even if the U.S. cracks down on it and China cracks down, but Japan doesnt, people will be able to still launder money through Japan. Money laundering and tax evasion are fueling Bitcoins success at the moment, he suggested. Basically, if you take away the possibility of [Bitcoin] money laundering and tax evasion, its actual uses as a transaction vehicle are very small, said Rogoff. Rogoff isnt the first economist to have a less-than-optimistic outlook for the future of the cryptocurrency. Last month, Berkshire Hathaway vice president Charlie Munger told the audience during an AGM speech that Bitcoin was totally asinine and that people investing in it disgusted him. Rogoff has also previously spoken out against the digital currency, telling CNBC last October that Bitcoin prices would collapse under attempts by governments to regulate the market. Key members of Congress recently said they are open to developing new rules to address the risks that have surfaced in the volatile cryptocurrency market. [...]

Partial rollback of financial reform law on track to pass Senate

Wed, 14 Mar 2018 16:29:58 +0000

Some Democrats are joining Republicans to ease rules on smaller banks By Mark Huffman of ConsumerAffairs March 5, 2018 Ten years after the financial crisis nearly crashed the world's economy, Congress is removing some of the rules put in place to prevent a future crisis. The financial reform framework falls under what is known as the Dodd-Frank Financial Reform Act, which created the Consumer Financial Protection Bureau (CFPB), required banks to increase the amount of capital held in reserve, and placed limits on certain types of investments. Almost from the start there were claims that the rules needed tweaking, especially when it came to treating small community banks the same as large national banks. While leaving the law's major provisions in place, the proposed legislation reduces the law's regulatory impact on smaller financial institutions. Community banks rally support The Independent Community Bankers Association (ICBA) is backing the legislation, saying its provisions relieve much of the regulatory burden on smaller banks. For example, it would: Exempt many community banks from escrow requirements Simplify capital requirements for community banks Ease appraisal requirements to facilitate mortgage credit in local, rural communities, Exempt most community banks from the Volcker Rule, which restricts banks investments S. 2155 (the rollback bill) offers much-needed relief for our nations nearly 5,700 community banks to promote localized lending and economic growth, ICBA CEO Camden Fine said. This important legislation is the culmination of a years-long effort to tailor regulations to our nations smaller and less risky community banks. If youre against S. 2155, youre against community banks and the communities they support. Democrats are split Some Democrats agree, but some don't, revealing a split in the party on the issue. The measure has gained the support of a handful of moderate Democrats, many of whom are up for re-election in the fall. The rollback measure also has the support of Sen. Mark Warner (D-Va.) who worked on drafting the Dodd Frank bill in the Senate a decade ago. Liberal Democrats largely oppose the changes to the financial reform law. Sen. Elizabeth Warren (D-Mass.) told the Chicago Tribune the proposed bill would allow 25 of America's 40 largest banks to fall under the same regulatory rules as small town community banks. But enough Democrats have joined Republicans in the Senate to nearly ensure the bill's passage when it comes up for a vote later this week. The House has already passed similar rollback legislation that goes farther than the Senate bill. If the Senate passes its version, the two chambers will have to arrive at a consensus before the bill heads to President Trump's desk. [...]