The Government Accountability Office says banks can't effectively offer small-dollar loans. (Photo Credit: CC BY-ND/DRScoundrels)

There is a “tremendous demand” for unsecured personal loans in the U.S., says FDIC Chairwoman Sheila Bair. This means small-dollar loans are attractive to consumers and to mainstream financial institutions like banks and credit unions. Banks have tried to get in on the same day loans origination action – but not without complications, says a Government Accountability Office report.

Payday loan alternatives – and the banks that can’t deliver them

Due to more stringent terms and fee structures, payday loan alternatives offered by most banks and credit unions are a completely different animal than personal loans from a small lending outlet. The GAO suggest that the Dodd-Frank Act and other FDIC changes in recent months may increase traditional financial institutions’ willingness to offer same day loans, but the results may not be what banks expect:

“Recent statutory and regulatory changes and FDIC initiatives may encourage more institutions to offer small-dollar loan alternatives to payday loans or expand their availability, but many consumers may still chose to use payday loans for their wide availability and relative lack of eligibility,” says the GAO report.

A two-year FDIC pilot program illustrated that without the involvement of charitable organizations or government subsidies, banks and credit unions have been unable to popularize payday loan alternatives. Extensive underwriting requirements also tended to exclude the customer base that most wanted access to personal loans.

Same day loans will not exclude you from a government job

The notion that taking out same day loans is harmful to one’s financial reputation is disproved in the Government Accountability Office report. Federal agencies like the Department of Homeland Security, Transportation Security Administration and even the Federal Bureau of Investigations put applicants through an intense employment screening process that includes a thorough financial history. Credit reports are run and other financial evaluation tools are used.

According to the GAO, screening agencies stressed that whether or not applicants to high security clearance positions had used short term loans was not a determining factor in the hiring process. The presence of risky patterns of financial behavior is important, however, which underscores the important of financial responsibility – for government employees and consumers in general. If banks and credit unions could ever free themselves from the policy maze and judge same day loan applicants over a more broad range of financial responsibility, perhaps the institutions could sell personal loans directly to consumers.

Sources

Community Financial Services Association of America

Government Accountability Office

Don’t live beyond your means, even with payday loans

Large banks may soon pay more into the FDIC deposit insurance fund – and small banks may pay less. (Photo Credit: CC BY-SA/MBisanz/Wikipedia)

Big banks are going to have to wait before doling out annual bonuses, reports the Associated Press. In order to minimize risky transactions that could damage the United States’ ongoing economic recovery, the Federal Deposit Insurance Corp. voted Monday on a rule that would require half of bankers’ bonuses to be postponed by at least three years. The rule would apply to financial institutions with $50 billion or more in assets.

Big banks to pay bigger insurance fees

In addition to the proposed banker bonuses provision, a clause within the Dodd-Frank Act will require the same large U.S. financial institutions to contribute more in insurance costs to the FDIC in order to protect bank deposits nationwide. Those banks that hold the most in assets – rather than deposits – minus tangible equity will contribute more to the deposit insurance fund. In general, those institutions that pose the greatest risk to the U.S. financial system due to high-risk assets and less stable liquidity will be charged more.

Startlingly, the insurance fund has run in the red for some time, going as low as $15.2 billion in the hole during the height of bank closures and bailouts. On the bright side, by the end of the third quarter 2010, the deficit had been cut nearly in half to $8 billion.

Smaller banks will pay less

According to small bank trade group the Independent Community Bankers of America, 98 percent of banks that possess less than $10 billion in assets will pay less money into the insurance fund, thanks to various rule changes. The ICBA says this will save smaller U.S. banks $4.5 billion over the next three years.

“ICBA led the charge throughout the Wall Street reform debate to create fairness within the deposit insurance system so that Main Street community banks can continue to serve their customers and keep money where it belongs — in the community,” said chairman James MacPhee.

The need to improve

With the assistance of greater deposit insurance contributions, Bair believes that the FDIC will be able to bring the fund back to a positive balance. Once that happens, banks should be able to depend upon more predictable rates for unsecured loans.

“The financial crisis provided ample evidence of the need to improve the assessment system,” said Bair. “The banking industry, the Deposit Insurance Fund and the financial system will benefit from this rule in both the short and long term.”

Sources

Associated Press

Housing Wire

Imagine all the bankers living for less pay

A recent Department of Education study found that students who attend for-profit colleges default on student loans the most. Image from Wikimedia Commons.

The rate of default on student loans is higher for students who attended a private, for-profit university. New data from the U.S. Department of Education indicates 25 percent of students who attended for-profit schools defaulted on their student loans. Public school attendees had a default rate of less than 11 percent.

Nonprofit school students default the least on student loans

Students who attend institutions of higher education often get saddled with a lot of debt. The huge loans students have to borrow to finance education means some are going to default on repayment. Those who attend a private, for-profit university are most likely to default on the unsecured loans needed to cover tuition, according to Reuters. A recent report by the Department of Education examined default rates from the year 2008 and found students who were borrowing money to fund an education at a private, for-profit college defaulted 25 percent of the time. Students at public universities had a default rate of 10.8 percent.  Students from private, non-profit universities defaulted least, defaulting 7.6 percent of the time.

Government could pull funding

Pending legislation could yank the rug out from under private, for-profit colleges when it comes to federal funding. A new proposed rule would cancel any federal advance cash to any university with a loan default rate of 30 percent or more. Numerous for-profit universities already fit that criteria. A trade group of for-profit universities, the Association of Private Sector Colleges and Universities, protested the proposed ruling and the DOE report, saying that the dismal economy contributed to those figures. The APSCU also contends that data from 2008 doesn’t apply to 2011.

Students under growing strain

Worries about post-education employment and debt, among other factors, has led to far more students having a negative view of their own mental health, according to the New York Times. Whether someone is off to be an Arizona Wildcat or to roll with the tide in Alabama, having to take out larger loans and come out of college needing debt consolidation is not the most pleasant prospect.

Sources

Reuters

New York Times

Why should students strive so hard only to disappear into a black hole of debt? Image fom Wikimedia Commons.

There are many components to the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, and one of the big items concerns aggressive marketing of credit cards to college students. College is an increasingly expensive undertaking, and many a student has wanted for debt relief upon graduation having to pay back the money lenders that helped finance their education as well as high credit card premiums. The State University of New York system, or SUNY, the state network of public universities that has 68 campuses, has decided to put barriers in place to help keep Joe and Jane college student and their credit scores out of harm’s way.

SUNY says no to marketing practices

According to CNN, SUNY has placed restrictions on marketing practices relating to credit cards on SUNY campuses. The action was spearheaded by Mario Cuomo, the State Attorney General. SUNY schools cannot provide information to credit card companies for the purpose of offering cards to students, without the written prior consent of students. Also, schools cannot receive any funds for doing so. Cuomo has recommended all universities in New York schools adopt the same reforms. Credit card company advertising on campus will also be monitored and controlled by the university.

Students uniquely susceptible

College students are one of the most vulnerable groups when it comes to credit card debt. Sallie Mae found that the average college student carries more than $4,000 in credit card debt upon graduation, on top of their unsecured loans to finance college. There are students that end up dropping out of college to pay off debt or go through lengthy loan modification in order to boost credit scores after graduation. Many employers check credit scores, and students that have had their credit score shot by cards have to put off their dream jobs even longer as a result.

The American Dream becoming a debt nightmare

The American Dream of going to college, getting a good job and making a start in this world is getting further out of reach for the middle class. It seems logical to address the spiraling cost of tuition.

Sources

CNN Money

The VIP loans Countrywide made in 2002 and 2003 are sparking ethics investigations. Image The Truth About/Flickr.

Several Washington D.C. lawmakers have been caught up in an ethics investigation over VIP cash loans given to their staffs. These “VIP” or “sweetheart” loans were all made by Countrywide, which was recently purchased by Bank of America. These VIP cash advances may end up causing ethical or legal problems for a few senators.

Countrywide’s VIP loans

In documents recently released by Bank of America, it was revealed that Countrywide wrote a huge number of “sweetheart” loans. These low interest rate, no credit check loan products appear to have been targeted to senators’ staffs. Republican Senator Issa, who filed an ethics complaint stemming from these loans, points out a “high concentration” of loans to D.C. staffers. The theory is that Countrywide wrote these fast cash loans in hopes of influencing Senator’s staff members and the Senators. The loans were made mostly in 2002 and 2003.

Ethics complaints over loans

Senator Issa filed the ethics complaints against several senators. Last year, Senator Dodd and Senator Conrad were both “scolded” by the Ethics Committee. These two senators were told to “be more careful to avoid the appearance of favoritism from Countrywide.” Despite the scolding, both senators were cleared of actual rules violations. Senator Robert Bennett has been named in the most recent ethics complaint. Twelve of the 30 named “VIP loans” went to members of his staff.

Naming the loan recipients

The Senate Committee on Oversight and Government Reform is doing the latest investigation on Countrywide VIP cheap loans. A subpoena has been issued to Bank of America to provide all loan documents where the VIP loan department issued loans to borrowers who listed “U.S. Senate” as their employer. Thus far, Bank of America has provided 37,000 documents related to Countrywide and their lending practices. If the loan recipients are actually named, it could be a serious issue in upcoming elections.

Senator Burnett responds

Republican Senator Burnett, who is not running for re-election, has responded in detail to the ethics complaint filed against him. In short, Senator Burnett said that he does not make it a point to find out where his staffers do their banking. Mortgages and unsecured loans, he said, are personal matters that he did not specifically ask his employees about.

Is your hometown one of the Money Magazine "Best Places to Live?" (Photo: Flickr; Allen Armstrong)

It’s time for this year’s Money Magazine “Best Places to Live,” and the fact that small towns dominate the list of 100 cities should come as no surprise. Overcrowding in America’s modern metropolises presents a wide array of safety and logistical problems for families, not to mention exorbitant costs. CNN Money claims that the major criteria used to pick the Money Magazine “Best Places to Live” for 2010 included job availability, quality schooling, public safety, recreational opportunities and the x-factor of the city’s overall charm. Money Magazine “Best Places to Live” are intended to be America’s most family-friendly cities.

Top Five Money Magazine ‘Best Places to Live’

As a sneak peek at the full list of Money Magazine’s “Best Places to Live” for 2010, here are the five best places to live in America. Data provider Onboard Informatics provided CNN Money with stats on population size, median income, area sales tax and other categories to assist in the decision-making process. The overall rate of installment loan origination – whether they be secured loans or unsecured loans – is also below the national average in these cities, as job availability, average income and overall quality of life make financial emergencies somewhat less frequent.

1. Eden Prairie, Minn. (Pop. 64,000; Unemployment 5.1 percent)

One of several Minnesota cities in the top 100, Eden Prairie boasts rolling hills and access to many lakes. Outdoor activities are plentiful and schools rate highly. Economically, the city is four points below the national unemployment average and has a perfect AAA bond rating from Moody’s. With multiple major employers in town, it’s no wonder that Eden Prairie has as many as 50,000 jobs in town.

2. Columbia/Ellicott City, Md. (Pop. 155,000; 5.2 percent)

Diverse population, excellent schools, lots of affordable housing and an attractive downtown are just some of the best features here. The NSA and Fort Meade provide more than8,000 jobs, with thousands more to come. Baltimore and Washington D.C. are within commuting distance , where more job options exist.

3. Newton, Mass. (Pop. 82,000; 6.0 percent)

Boston College and Newton-Wellesley Hospital are major employers in the area, and a great deal of public transportation is available, thanks to Newton’s proximity to the Greater Boston area. Newton is divided into multiple “villages,” and each reportedly has its own New England charm.

4. Bellevue, Wash. (Pop. 124,000; 5.8 percent)

Microsoft, T-Mobile, Verizon and Expedia have brought new jobs to the area, making Bellevue more secure than nearby Seattle on the job front. Cultural activities and the natural beauty of forests and Lake Washington beckon families. While housing is far from cheap, everything else about Bellevue makes it a cinch for the Money Magazine “Best Places to Live” list.

5. McKinney, Texas (Pop. 125,000; 7.8 percent)

A downtown area filled with lovingly restored 19th century buildings pops out when one visits McKinney. And with employers like defense contractor Raytheon in town providing jobs, the need to drive an hour to Dallas for work is far from inevitable, even during the recession. Add lots of parks and hiking trails, and you have a very nice place to live.

Sources:

CNNMoney.com

What do some people do for residency in expensive places like London? They squat – legally!

Why would I need an unsecured bad credit loan?

With an unsecured bad credit loan, you can avoid the hassle of needing a credit check or upfront collateral to secure a loan with a bank. Why chance being rejected by banks when you can instantly be accepted by online loan companies today?

How long does it take to receive cash in my account?

Upon approval, you can receive cash in your account within 24 hours — sometimes in just a couple of hours.

How can I contact the loan company?

Visit the company’s website and look for the contact section. There you should find email information, phone number and a business address.

What are the requirements?

1. 18 years of age or older
2. A social security number
3. Be employed for at least three months and still working
4. Be a legal U.S. citizen

When can I get this loan?

Whenever it is convenient for you! There is no set time frame to start applying for this loan.

Can I get this loan if I am in the military?

Yes. Military personnel can also apply for this type of financing.

Where can I get this loan online?

You can apply for an unsecured bad credit loan right here. The short application form should only take 3 to 5 minutes to complete. Once you submit your application, you should get an e-mail notifying you of your status. Better yet, a message should pop up on your screen within seconds of submitting the form, so be sure not to exit your browser.

Need unsecured bad credit loans online? Apply HERE

Get important things paid off quickly, with instant unsecured loans

When you get the loan, you will be able to solve your most urgent financial needs. You can use this loan for things like paying a light bill, car payment or rent on your home. The ability to apply for an instant unsecured loan is a great benefit to have, especially when options are limited.

Bad credit does not matter with instant unsecured loans

Instant unsecured loans are not only created for people with good credit; they are designed for those who find it hard to obtain funding, based on their bad credit. Even with a bad credit score, you can apply and have your loan application accepted quickly.

Unsecured loans versus bank loans

People are moving away from banks as a source for borrowing money. It is much easier to apply for a loan online than it is to drive 30 minutes to a bank, only to be rejected. The process is quick and easy, and you can have immediate access to the cash you need, sometimes in as little as two hours.

Basic requirements needed to apply

Loan companies require that you are at least 18 years of age or older to apply. You must also have a valid social security number, three months of active employment and a legal U.S. resident address. If you meet all these minimal requirements, you are more than half way there to getting an instant unsecured loan today.

Start your instant unsecured loan application HERE!

South Carolina Governor Mark Sanford attempted to defend payday lending with his veto of the H.3790 bill, but the SC House overturned his veto. (Photo: Wikipedia)

On June 7, South Carolina Governor Mark Sanford issued a veto of H.3790, a payday loan bill that would have extended the payment term of the standard loans to an untenable 120 days or more while still requiring the same fees. Furthermore, H.3790 would have eliminated unsecured loans in South Carolina and outlawed the common practice of a customer presenting a lender with a post-dated check. However, S.C. Politics Today reports that the South Carolina House of Representatives has overridden Gov. Sanford’s veto. The bill also affected regulation of licensing fees for the state’s mortgage industry.

Why Mark Sanford said no to payday loan-crippling H.3790

In a letter to the state House, Governor Mark Sanford writes regarding his veto of the payday loan bill that

“Although this type of regulation is intended to protect the public, these kinds of laws ultimately decrease the number and type of available financing options and make it harder for new lenders to enter the market. In other words, consumers have fewer choices and the available options become more expensive. … Some people will benefit from payday–style loans and some will not, and we continue to believe that individual consumers are better equipped than a government bureaucracy to know whether a short-term loan is a wise decision in any given circumstance.”

Allow the people to decide

As state legislators are less likely than credit-constrained consumers to have ever had the need for a payday loan or similar loans with no credit check – whether they are unsecured loans or not – it seems more logical that consumers should be allowed to decide whether the payday loan is a good deal for them. Governor Sanford clearly sees the matter in those terms, even if his state’s legislature does not. Currently, the payday loan regulation in South Carolina limits borrowers to $550 at a time, and they can only have a single active loan. This activity is tracked in an electronic database.

Another bill, another overturned veto

Another overturned veto ventures into territory of Mark Sanford’s alleged history of impropriety with South Carolina taxpayer funds. The House nixed Gov. Sanford’s veto of a bill that would “allow information to be made public in a state ethics investigation of the governor when it indicates possible cause that a violation may have occurred,” reports S.C. Politics Today. The vote against Sanford’s veto of the governor investigation bill was a landslide, 102-2 in favor of overturning his veto. Sanford has gone on record as saying that he vetoed the bill because he wanted the language of that bill expanded to include all state lawmakers, not just the governor.

Sources:

S.C. Politics Today

State of South Carolina – Office of the Governor

Related Video:

The OECD is a quiet little organization of 31 countries that wields surprising power. Image from Flickr.

The OECD, or Organization for Economic Cooperation and Development, isn’t a group Americans usually hear much about. The OECD, though, is an important player in international economic and political policy. The OECD does several things including forecast growth, suggest interest rates and provide development assistance to member and non-member countries.

OECD tackles a wide range of issues

The OECD is an organization with several committees that focus on a wide variety of world issues. There are 200 committees, working groups and groups of experts. There are also nine “special bodies” within the OECD. These special bodies include the International Energy Agency and Nuclear Energy Agency as well as a special body designed to provide semi-unsecured loans to African countries.

History of the OECD

The OECD was founded in 1961 as a successor to the OEEC — Organization for European Economic Cooperation. The OEEC had been created as a framework to administer the Marshall Plan for re-constructing Europe after World War II. Since 1961, the OECD has been enlarged and reformed a few times. Currently, the OECD has 31 member states. The OECD describes itself as “a forum of countries committed to democracy and the market economy.” The OECD operates mostly with “soft law” recommendations and suggestions, though occasionally OECD recommendations are rolled into binding international treaties.

OECD Economic Outlook

Published twice a year, the OECD Economic Outlook is one of the most closely-watched reports of the organization. The most recently published OECD Economic Outlook report projected a rise in combined GDP of the 31 member countries for 2010 and 2011. For 2010, the European area is expected to grow about 1.2 percent, Japan by 3 percent and the U.S. by 3.2 percent. The report, however, is not entirely rosy. The OECD report warns of a boom-and-bust scenario that could be spurred on by inflation and economic overheating. Even with these concerns, the OECD report is an improvement compared to the November 2009 Economic Outlook report.

The SEC today announced that Goldman Sachs would be prosecuted for their part in the mortgage crisis. Image from Flickr.

This morning, the Securities and Exchange Commission brought charges up against Goldman Sachs for fraud. The SEC alleges that Goldman Sachs defrauded investors by “misstating and omitting key facts.” The SEC suit against Goldman Sachs is an outgrowth of the investigation into the collapse of the U.S. housing market, urged on by unsecured loans at all levels of the financial system.

The SEC suit against Goldman Sachs

The downfall of the housing market and much of the associated U.S. economy is the “fault” of many different entities such as Goldman Sachs. Specifically, the SEC is alleging that Goldman Sachs had a cut-and-dry conflict of interest that they lied about. Specifically, Goldman Sachs allowed a hedge fund that was making bets on mortgages to have a say in the “quality” of those mortgages. Goldman Sachs then told investors that an independent third party had verified the quality of these investments.

Goldman Sachs responds to the SEC filing

At the same time that the Securities and Exchange Commission filed its  suit against Goldman Sachs, Goldman Sachs released a response. The response was all of one sentence:

The SEC’s charges are completely unfounded in law and fact, and we will vigorously contest them and defend the firm and its reputation.

The products Goldman Sachs was selling

The basis of the SEC filing against Goldman Sachs is a product called Collatoralized Debt Obligations, or CDO. A Collateralized Debt Obligation is simply a group of mortgages. Once a homeowner gets a mortgage, the bank bundled it up with lots of other mortgages, and sold that bundle. Because the homes acted as collateral, many banks and investment firms saw these CDO products as safe investments. The idea is that payments on the mortgages would continue to come in, and the investment firm would make money. What many banks – like Goldman Sachs – did not tell investors is that these mortgages were not all good. In fact, many of these home loans were practically payday loans – given with no credit check and no certainty that the mortgage would actually be paid.

The specifics of the Goldman Sachs CDO

The debt obligation that the SEC filing against Goldman Sachs is based on is the ABACUS CDO. Goldman Sachs bundled up all these bad mortgages, known as Residential Mortgage Backed Securities, or RMBS. Goldman Sachs then asked ACA Management LLC to analyze how risky the investment might be. What Goldman Sachs did not tell ACA Management or investors was that these mortgages had been selected by a group of people who had taken out a bet that the mortgages would fail. In other words, investors bet that the mortgages would fail, then selected mortgages they knew would fail. When Goldman Sachs sold these mortgages in groups, the company didn’t tell investors that huge bets had been taken out against the mortgages. To put it simply, Goldman Sachs knew that this was a bad investment and didn’t say a thing about it.

Find out more about the Goldman Sachs inside job

A great resource to find out more about how these financial products work and how some companies made billions of dollars off the housing collapse is the This American Life episode Inside Job

Sources

Securities and Exchange Commission
MarketWatch

Two young ladies looking to prepare a fertile sod on Dyngus Day. (Photo: Wikipedia)

Dyngus Day is a big deal for the Polish, Slovak and Czech people. Also known as Easter Monday or Wet Monday (Śmigus-Dyngus or lany poniedziałek in Polish; velikonoční pondělí or pomlázka in Czech; or Šibačka/Polievačka or Oblievačka in Slovak), Dyngus Day is essentially a celebration of the end of Lent. But the real reason Dyngus Day is so important is that traditionally, boys wake up unmarried girls in the early morning by pouring a bucket of water on them. They also whip their legs with long, thin decorated tree branches, a nod to pagan antiquity that is the Śmigus part of Dyngus Day ritual. Modern times have seen the branches replaced with polka, Polish food, water gun fights and other things that don’t cause leg welts. Thankfully, Dyngus Day has steered away from Wicker Man territory. Payday loans won’t save from that type of heated situation.

Dyngus Day – Why “Dyngus” and “Śmigus?”

According to Wikipedia, Dyngus (from din gus – thin soup or dingen – nature) is a pagan god of water and moist earth. His twin, Śmigus (from śmigać, to make a whooshing sound) represents thunder and lightning. Pouring water was an ancient spring cleansing rite, and also indicative of fertility. Hence, boys pour water on girls. The striking with tree branches element comes from either some form of flagellant purification or was borrowed from the ritual slapping of Christian Confirmation. Śmigus , which tends to be forgotten, also features striking prominently, but this time it’s the parents striking children on Good Friday while praying about “God’s wounds,” Boże rany in Polish. Of course, we have unsecured loans to help pay to dress our wounds and keep the ashes out. In modern times, celebrating the twin Śmigus aspect of Dyngus Day gave girls equal permission to chase boys with the switch.

Other Dyngus Day customs

Exchanging decorated eggs (pisanka)is also big. If you don’t have your fertility symbols, you get doused by Dyngus and struck by Śmigus. In areas of Poland like Mazuria and Masovia, there is a related Dyngus Day custom of sprinkling ashes on people and their homes for consecration and cleansing for the upcoming year. This is referred to as półpoście, but it is done a few weeks before Dyngus Day.

Related Video:

Defaulting loans in 2009 – the huge write-off amount

In 2009, banks wrote off over $83 billion in credit card debt. That is a record-high number, and it shows how much strain consumers were under as a result of the recession. Since that makes up for the bulk of the decline in credit lending totals, is proves that lenders are going to move cautiously into the future. The Federal Reserve’s reports on outstanding loans reveal larger problems for future credit lenders. They are going to face a consistent lowered priority if the economy falters again. People become focused on survival and paying off mortgages, cars and monthly expense, rather than paying down debt. More and more consumers are willing to ignore debt and risk their credit scores in turn, in lieu of their property.

The Federal Reserve’s report also showed that credit card borrowing fell for 16 straight months prior to January of this year. That suggests that consumers have been paying down debt and spending less. People are no longer reliant on credit because they saw what credit lenders did when the economy got bad. They hiked up interest rates, lowered limits and added fees to mitigate their own losses. That was great for them, but exacerbated the problem of defaulting on unsecured loans.

More conclusive data

The report by the Federal Reserve also focused on last year’s overall performance when it comes to credit lending. Though borrowing fell, it wasn’t replaced by additional borrowing. Rather, people were just paying down their own debt, but also focusing on keeping their balances low. When experts consider how much banks are writing-off in bad debt, the question of consumer ability to repay debt comes into play again. In 2009, there was only one quarter where consumers were consistently paying down their debt. Early in Q1, debt was a priority, and consumers had the ability to chip away at it. In fact, over $46.9 billion came in from consumers trying to bring their balances down. After that though, credit balances either remained steady or went up.

The Future Financial Outlook

The charge-off rate was highest during the third quarter of 2009, and it hit a record 10.1% during that time. By comparison, around the same time in 2006, that rate was just 4%. Experts are predicting that the credit situation may get worse for banks in 2010. Moody’s Investor Service predicts that the charge-off rate may top out at 12% by the end of this year. The biggest part of the issue is that the unemployment rate is still high, and that may make paying down unsecured loans next to impossible for consumers for the remainder of the year.

Need quick unsecured loans? Apply HERE!

Young people and lenders

Now that the recession is over, companies are trying to find new ways of bringing in cash. Part of that includes finding and targeting a new market. That new market has been clearly carved out by credit companies, and it is the college-aged students who are now the new generation of borrowers. Credit companies know that this is a good sector to hone in on.

What qualified the new market?

The new market has no credit history and no steady income, so how does that make them the perfect group? Despite those shortcomings, they also have no history of defaulting. In a world where there are millions of defaulting customers to deal with and few ways of recouping the debt, a prospective customer without financial baggage can be enticing. In addition, lenders are focusing on college-aged consumers who have a high income potential. They are hoping that in future years, these are the customers who will have the income to buy high-ticket items and have the resources to pay for them.

Is it good for the consumer?

The question remains, though, whether or not this extended credit to the college-aged borrower is good for them. New studies are showing that recent college graduates leave school with thousands of dollars in unpaid credit card bills, and that trouble early-on carries over to their adult lives. According to a recent study done by Sallie Mae, provider of student loans, a large number of students are relying already on credit cards for their daily lives. The average undergraduate has $3,173 in credit card debt and half of all college students have four or more credit cards.

Unsecured loans are growing in numbers and amounts in society today. Younger and younger people are falling victim to the problem and the future is not showing any signs of improvement. Though the college-aged student has income potential, there is also a bigger picture to look at. They have credit card debt to deal with and once they graduate, they also will have student loans to deal with. That can put a strain on even the top-earners in the most lucrative fields.

There is some education on the way

The Credit Card Accountability, Responsibility and Disclosure Act, or Credit CARD Act, was just signed into effect a few weeks ago, and it aims to help consumers with education. The act looks at the past history of practices credit lenders use to draw in students, without giving them a clear picture of the potential consequences of holding the cards. The CARD Act strives to limit what banks can do to market their loan products to consumers between the ages of 18 and 21. There are also additional restrictions on how they handle college students’ accounts, and in many instances parents have to be involved in credit acceptance for anyone under 21-years of age.

Credit in the future

Credit in the future is going to be monitored more closely by watchdog groups, and that is good news for college students. Though unsecured loans are available, that doesn’t mean they are a good idea. More and more young consumers are learning the hard way that credit, though it can provide financial relief, comes with a high price. Without understanding that high price, they are setting themselves up for future disaster.

If you need unsecured loans, apply HERE!

The Denver International Airport is expecting delays from weather and security today. Image from Flickr.

Spring Equinox 2010 may be on its way, but at Denver International Airport, spring is the furthest thing from most people’s minds. Denver International airport recently celebrated its 15th birthday, and its marking the 15th year of operations with delays and new security procedures – not exactly what every airline passenger who had to use unsecured loans to buy their ticket wants to hear.

Delays and cancellations at Denver International Airport

Denver International Airport, like the rest of the Denver area, is bracing for a brutal winter storm that is supposed to hit today. This morning, the FAA web site was reporting delays of less than 15 minutes at Denver International Airport, but the winter storm is expected to drop a foot of snow or more on Denver International Airport and surrounding areas. If you’re planning on flying into, out of, or through the Denver area, you may want to get no fax payday loans to ensure that you’ve got enough cash with you to camp out for a while.

New security procedures at Denver International Airport

Denver International Airport, as reported by KDVR News in Denver, is also participating in the TSA’s newest screening procedure. Passengers will be randomly selected to have their hands and carry-on luggage swabbed for explosive trace materials.

This particular security procedure that is being implemented by the TSA at Denver International Airport is not entirely new — liquids or gels that were not in a zipper-lock bag have been routinely screened for explosive residue. The new, random testing, however, was implemented in response to the so-called Christmas Day bomber that had explosives hidden in his underwear.

Get the latest information about Denver International Airport

When your travel takes you to Denver International Airport, it is important to keep yourself informed. You can see the live weather video feed of Denver International Airport at cbs4denver.com. The front page of the Denver International Airport website lists the estimated security wait time. You can also check the status of any flight at Denver International Airport here.

The struggle to handle student loans

There is a catch-22 for recent graduates who got their educations for higher-paying careers. Though many targeted law or medicine as their perfect careers, now they are having a hard time finding jobs. Without finding jobs, paying back the higher cost of their education is next to impossible.

There are a growing number of consumers who are falling into this category, and the economy isn’t doing much to help. When it comes to other forms of debt, there are some outs to help ease the strain. For example, mortgage payments can be negotiated or properties sold to ease the tension. Credit card debt can be paid off or eliminated in bankruptcy. Car loans can be eliminated via a discharge in bankruptcy, negotiation or payments, or if necessary, selling off the vehicle. Then there are student loans. There really is no such thing as getting rid of student loan debts. They can’t be discharged in bankruptcy or negotiated down. The amount can’t be touched and neither can the interest rate charged to hold them. That means that consumers are never going to find a way out of paying for their student loans without some legislative changes.

Reworking the student loan

Due to issues with student loan repayment there is a growing consumer base hoping to revamp rules regarding the debt. In fact, a Facebook group that calls themselves “Forgive Student Loan Debt” is making a case for an economic stimulus plan to forgive outstanding student loan debt. There are plans of attack to help manage mortgage, credit card and unsecured loans, so they believe there should be some relief with education expenses.

They are basing their argument on the fact that education is good for society. Elevating the skill sets of mass groups can be a powerful tool for economic advancement. By allowing some negotiation option or payoff, the Facebook group hopes that consumers under heavy student loan debt would be able to focus on using their education, rather than stressing over how to pay for it. They are calling on the government to make changes that would bring a stimulus target to former students under a capped level of debt.

Will negotiating student loan debt become a reality?

Whether student loan debt will be looked at by legislators has yet to be seen. With growing numbers of defaulting and deferred student loan accounts though, there is a strong call for some changes to benefit recent graduates who are struggling. The fact that those holding mortgage, credit card and unsecured loans have government-built options and those with student loans don’t may be the best argument for change.

Start your unsecured loan application HERE!

Katie Spotz, before her Atlantic mission. (Photo: Picasa)

“Endurance is patience concentrated.” – Thomas Carlyle

Katie Spotz, 22, knows something about endurance. After 2,817 miles of rowing across the Atlantic Ocean, she endured all that the elements and her body could throw at her. Now she is the youngest person ever to row across an ocean solo. Her 70-day, five-hour, 22-minute journey from Dakar, Senegal, to Georgetown, Guyana, is complete, and while Katie Spotz reaps the rewards of her momentous achievement, the real winners are those in need of clean water. According to the New York Times, Katie Spotz’ “Row for Water” raised more than $70,000 for The Blue Planet Run, a San Francisco-based non-profit committed to providing safe drinking water for people in need. These dollars aren’t unsecured loans; they’re gifts of life.

‘You really have to dig deep,’ said Katie Spotz to the Times

Considering that ocean currents forced her to change course – a move that added about 400 miles to her trip – there’s no doubt that Katie Spotz had to tap into an inner strength and determination. Yet her view of it was very pragmatic: You’re trapped in that boat, so what else are you going to do? Wind, currents, 20-foot waves, exposure and difficulty sleeping come with the territory.

What did Katie Spotz eat?

A better question would be if she had enough food to last the trip. Fortunately, she did. In fact, she had packed 110 days worth of food – from freeze-dried meals to granola and dried fruit that wouldn’t easily expire. Even if things had gone wrong and her life was at risk, Katie Spotz had a satellite phone and GPS. Her boat had solar panels as well, so dead batteries weren’t going to be an issue. Those panels also powered a machine that made it safe for her to drink ocean water, so she wouldn’t become dehydrated.

And what did Cleveland-born-and-bred Katie Spotz do to keep from getting bored when rowing wasn’t enough? Her iPod was loaded with audio books. Thank goodness for solar panels.

From Cleveland to the shores of greatness

Many things are said about what makes a person great. When it comes to physical achievement, our society tends to reward athletes with special status – and why shouldn’t we? Human achievement can be measured in many ways, including those physical accomplishments that cause some to simply wonder in awe while inspiring others to reach beyond limits in everything that they do. Katie Spotz becoming the youngest ever to row an ocean solo once again proves that humanity will constantly push the boundaries of what is possible. Dedicating her “Row for Water” as a cash advance to such a good cause proves that a noble heart beats within.

Related Video:

The changing face of credit

Once the recession happened, however, things drastically changed in the world of credit. Lenders shut their doors quickly and even high-credit scoring borrowers suddenly had to deal with hefty fees, slashed limits and higher percentage rates. It made for a difficult time and many borrowers are still trying to recover. The good news is that lenders are willing to negotiate with customers in an effort to recoup as much as possible from them.

Negotiating with lenders

New studies are showing that some people are having problems with paying down debt and looking to negotiate but don’t know how. The true test is a three-point questionnaire.

• Is the borrower clear about his or her finances and aware of how much they can afford to pay?
• Does the borrower understand the timelines involved with the debt?
• Is the borrower willing to forgo a high credit score to take care of debt now?

For those who answered yes to the above three questions, a debt repayment plan may be closer than they think. First, the borrower who is ready to face debt needs to be in trouble. It may sound odd, but borrowers who still have the ability to pay but don’t aren’t given much leeway in terms of payments. The only true reason for falling back on payments is when a consumer simply doesn’t have the funds. Due to wanting to mitigate losses, lenders normally approach borrowers who are several payments behind and offer some dialogue to fix the issue. They have forbearance and hardship programs ready for borrowers who need help. Though missing a payment may be a sure-fire way to get a lender to notice and offer help, it will do little for the borrower’s credit. In fact, two missed payments can bring a credit score down by as much as 100 points. In addition, going through any forbearance plan or hardship program will also show up negatively on a credit report.

Before formal negotiations

Before a consumer starts to negotiate with lenders, he or she should look into alternatives that are less damaging to credit. Financial institutions offering unsecured loans are still competitive and some offer much better deals than others. Consumers in debt could try to find a lower-rate credit card, a three-year fixed-rate personal loan from a credit union or a three-year fixed-rate loan from a peer-to-peer lending website. It’s critical for borrowers who are in trouble to still think clearly. Experts caution that grabbing any option is never a good idea. Though there may seem to be fewer options, in today’s market there are still levels of service for bad-credit borrowers. Consumers are cautioned to look into a few options prior to choosing one.

When negotiating isn’t an option

There are still a group of people who will try as hard as they can but still be unable to negotiate with their lender. If that is the case, then they need to heed some additional suggestions. They should work on a viable budget as soon as possible. It’s always a good idea to get to where the problem actually started, and that’s true with credit chaos. Consumers should look at their incoming money and outgoing expenses and find out where their issues are. Another tip is to get realistic without the use of credit. Though credit helped in former years, it also gave people a false sense of security. Unsecured loans are not always there to help people and now the general public is finding that out. Now more than ever, having financial wisdom is crucial to personal money management.

Now that the recession has officially been deemed over by experts, it’s still a difficult time for business owners. For a long time, legislators have been focused on health care and that has taken the focus off of good lending practices and financial aid for businesses. Small businesses are now seeing some hope at the end of a long tunnel because President Obama is refocusing on credit lending for small businesses in an effort to increase jobs.

Unsecured loans and the unemployment rate

The unemployment rate skyrocketed during the recession. That was a main part of the problem; without money, consumers stopped spending. When consumers stopped spending, businesses suffered and were forced into layoffs that added to the number of unemployed. Jobs were eliminated and millions of Americans were left scrambling to make ends meet.

Legislators know that to truly turn the economy around they need to find ways of spurring businesses into creating jobs. One way to do that is to start lending. If businesses can find money for expansion, they can start creating full-time work to employ the millions of Americans who are currently in need of steady work. This is why the news that the Obama administration is focusing on revamping lending laws is so critical to the business world.

Concerns of business owners

Since the recession has been deemed over, the top priority is to get the economy functioning efficiently.  People are creating jobs and pushing growth, and unsecured loans are an important part of prompting a change. That and handling the heightened cost of health care for employees top the list of small business owners’ concerns. In addition, federal taxes are also high on the list of issues owners would like squared away more quickly. A January report by the National Small Business Association showed that only 61 percent of small businesses were able to procure adequate financing and that number was down from 78 percent in August of 2008.

Handling health care costs

Healthcare cost regulation is an important part of the small business world. Though the president put it on the back burner for a few weeks, that doesn’t mean it won’t come up again in the very near future. Some analysts are hoping that the competition between private and government-back healthcare providers helps to regulate the industry and bring costs down. Not only would that give small businesses some financial relief, but it also it would open the door for money to be utilized elsewhere.

The future of unsecured loans

In the future small business owners should expect to see considerable changes in the world of unsecured loans. Though rules will still be strict, there will be newfound focus on where the money, once procured, should go. The government is doing all it can to help businesses try to put the money into creating jobs, but only time will tell if that is truly the result of its efforts.

A personal loan could be your best solution to fast cash

Since a personal loan is usually cheaper than other types, they may require collateral, such as is required with a secured loan. Collateral can be taken away at any time when payments are missed. Even so, anyone who maintains a clean financial history, or cleans up the messy one that they have, can enjoy low interest rates as long as they are able to follow all of the loan’s requirements. Besides, getting accepted for this brand of money loans depends more on trust between you and the lender than anything else.

Unsecured loans, or no collateral personal loans, are more lenient, but in return, require you to follow stricter guidelines like a higher interest rate and a shorter repayment term.

Taking out a good low-interest personal loan is a give-and-take

Unlike payday loans, which provide a greater acceptance rate, low-interest personal loans require you prove that you are able to pay the loan on time. They will usually look into your employment and credit history, taking note of any prior loans that you have taken out. For instance, if you are currently paying off a loan, then they will look at whether you have met all of your payments. It is a good idea to choose a bank or financial institution that you have previously done business with as long as you have a good track record with them.

Loans for people with bad credit are harder to come by, but a personal loan is still available, except you will not benefit from low interest rates. So whether you want fast cash or need to borrow money for school, you are covered. Practicing good money management skills, like following good spending habits and making all of your payments on time, is the key to your success in taking out the best low-interest personal loan.

Start your quick personal loan application HERE!