Economic Perspectives with Hopeton Hay on KAZI 88.7 FM in Austin, TX

Archive for the ‘Credit’ Category

Podcast: Learn About Credit Repair from Author Leslie Green

Posted by Hopeton on March 4, 2012

Leslie Green, author of The Jomar Credit Repair Guide Book 2012, was a guest on the January 30 edition of Economic Perspectives.  To listen to my 12 minute interview awith her about repairing your credit click here: Leslie Green Interview – Jan 30, 2012.

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Tips for Dealing with Debt Collectors

Posted by Hopeton on March 20, 2011

If you’re being overwhelmed by calls from debt collectors listen to this interview with Leslie Green, owner of JoMar Credit Repair.   She has been in the credit and collections industry for 16 years.  Her web site is www.jomarclass.com. To listen to the interview click here: Leslie Green Interview.

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Twelve-Steps to Financial Success in 2012

Posted by Hopeton on December 29, 2010

The following tips were provided by the National Foundation for Credit Counseling:

  1. Review your credit report – Much of your financial future depends on the contents of your credit report. Therefore, your first step should be to obtain your report, review it for accuracy and dispute any errors.  Since you can access your credit report free of charge, there is no reason to neglect this important piece of your financial life.  Consumers are allowed one free report from each of the three major bureaus once every twelve months.  You can get all three at once, which is a good idea if a major purchase is on the horizon, or stagger your requests to check for identity theft.  Access your report from www.annualcreditreport.com.
  2. Obtain your credit score – The three digits that comprise your credit score are a major dictator of whether or not the lender will extend credit, and at what interest rate.  It is likely that you’ll have to pay to purchase your score, but it will be money well-spent.  Be sure to understand the range within which your score falls, as each score has its own scale.  Further, take the necessary steps to improve your score.  Remember, a high score equals a low interest rate, saving you significant money over time.
  3. Reduce debt – If you’ve dug a deep financial hole, stop digging.  Piling new debt on top of old is a red flag that you are living beyond your means. Lock up the credit cards until they’re paid in full, and meanwhile, reach out for help from a legitimate credit counseling agency sooner rather than later.  Delaying only makes the problem worse.
  4. Commit to save – Americans are great spenders and lousy savers.  Without a well-funded savings account, you are on a very slippery slope, one that becomes treacherous with the next unplanned expense.  Put 10 percent of each take-home check into a savings account.  Find extra money to dedicate to saving by putting all raises, bonuses, birthday checks, and any other windfall monies into savings. This will create a cushion that should see you through most short-term emergencies.
  5. Get financially organized – Create your own personal financial center where you can instantly put your hands on your family’s financial records.  Your center doesn’t have to be a fancy home office.  It could be an accordion folder.  The point is that you know where everything is.  Place original documents such as a will or your mortgage in a safe deposit box, and keep a copy at home.
  6. Avoid incurring late fees – Pay your bills the day you receive them. This way you’ll never risk the creditor receiving your payment after the due date. Delaying could result in you being charged a late fee, a ding to your credit report and a lower credit score.  The risk of delay is simply too great.  If you travel for work or are a procrastinator, consider setting up online bill pay with payments large enough to cover at least the minimum amount due.
  7. Avoid paying overdraft fees – A receipt stuffed into your car visor isn’t simply being unorganized.  It can cost you. Many an account has been overdrawn due to neglecting to notate an ATM withdrawal or debit purchase.  Get into the habit of recording each transaction into your check register on the spot.  Also take the time to balance your checkbook each week, and reconcile your bank statement each month.
  8. Track your spending for 30 days – Have everyone in the household who spends money participate in this exercise.  Write down every cent that is spent, as it’s the small, miscellaneous expenses that often wreck the best of plans. At the end of the month, come together to review the spending.   This is the only way you can truly know where your hard-earned money is going.
  9. Create a spending plan you can live with – Once you’ve tracked your spending, you can then make conscious decisions as to how you want to allocate the money.  Continue tracking with the new plan in place.  Keep doing so until you find a plan that is right for your family.  Make it too strict, and no one will stay on board.  Make it too lenient and you won’t be accomplishing anything.
  10. Take advantage of free money – Contribute the maximum amount to your retirement plan at work, or at the very least, meet the matched amount or you’re throwing away free money.  Also inquire about the availability of Flexible Spending Accounts or Health Savings Accounts.  All of the above can lower your taxable income.
  11. Have an annual insurance check-up – No one wants to be over-insured.  Nor do you want to be under-insured resulting in an unpleasant surprise when making a claim.   Make an appointment with your provider and confirm that your coverage is exactly what you thought you were paying for.  Inquire about ways to lower your premiums, and ask about any discounts for loyalty, good driving and the bundling of multiple polices.
  12. Investigate refinancing your mortgage – Even though rates of late have been rising, they are still very low, potentially saving you significant money over the life of your loan.  There are multiple online calculators that can help you evaluate the options.  Do not extend the term of your loan, however, in order to get a lower monthly payment unless this is absolutely necessary to stay afloat.

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Building Perfect Credit, Young Entrepreneurs Focus of November 29 Economic Perspectives

Posted by Hopeton on November 29, 2010

Lynnette Khalfani-Cox, author of Perfect Credit: 7 Steps to a Great Credit Rating, is the guest of the first segment of the November 29 edition of Economic Perspectives.  Young entrepreneurs Ashton and Kamilah Powell will discuss how they got started in business at the respective ages of 22 and 19 on the second segment.  Listen to the interviews 5:30 p.m. – 6 p.m. on KAZI 88.7 FM, or live online at kazifm.org.

Perfect Credit is a roadmap for anyone hoping to establish picture-perfect credit, make improvements to have stellar credit, or simply maintain a fantastic credit standing. Right now, roughly 220 million Americans have credit files maintained by the “Big Three” credit bureaus: Equifax, Experian, and TransUnion. Of those individuals, about 40 million Americans (roughly 1 out of 5), have very poor credit, or “deep subprime scores,” according to Experian. Another 50 million adults in the U.S. have no credit files – either because they’ve never used traditional forms of credit, or because their credit files are “too thin” to generate a credit score. Perfect Credit offers all these consumers an easy-to-follow blueprint on how to get superb credit – and how to sidestep numerous credit traps and pitfalls along the way.

Lynnette Khalfani-Cox, The Money Coach, is a personal finance expert, television and radio personality and the author of numerous books, including the New York Times bestseller Zero Debt: The Ultimate Guide to Financial Freedom. Lynnette has appeared on such national TV programs as The Oprah Winfrey Show, Dr. Phil, The Tyra Banks Show, The Today Show and Good Morning America. Lynnette, an award-winning financial news journalist and former Wall Street Journal reporter for CNBC, has also been featured in top newspapers including the Washington Post, USA Today, and the New York Times, as well as magazines ranging from Ebony and Redbook to Black Enterprise and Smart Money.

Kamilah and Ashton Powell

Ashton and Kamilah Powell, who are married, got started in business in 2006 as the operators of an Avis Rent A Car location in downtown Austin.  Avis initially balked at allowing them the business opportunity because of their youth, but they were able to convince them of their abilities through the interview process.  Family members provided them the seed capital to help them get started.  The Powells have recently started an insurance agency In the interview, the Powells share the keys to their success as young entrepreneurs and some of the mistakes they made.

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New Credit Card Protection for Consumers Focus of November 22 Economic Perspectives

Posted by Hopeton on August 15, 2010

Gail Cunningham, Vice President of the  National Foundation for Credit Counseling (NFCC), will discuss  the provisions of the Credit Card Accountability, Responsibility, and Disclosure Act (CARD Act) that were implemented in August in on the November 22 edition of Economic Perspectives on KAZI 88.7 FM, 5:30 p.m. – 5:50 p.m.  Listen live online at kazifm.org.

This interview was orignally broadcast on August 16.

The new set of regulations includes the following protections:

  • The credit card company cannot assess a late fee of more than $25 unless one of the consumer’s last six payments was late, in which case the fee may go up to $35.  However, if the credit card company can demonstrate that the costs it incurred as a result of the late payments justified a higher fee, they are allowed to impose a higher penalty.
  • The issuer cannot charge a late payment fee that is more than the minimum payment.
  • When a charge exceeds the account’s credit line, an over-the-limit fee of more than the amount charged cannot be assessed.
  • The credit card company cannot charge a consumer an inactivity fee for not using their card.
  • Consumers can no longer be charged multiple penalty fees for the same transaction. For instance, both a late fee and an over-limit fee resulting from the same transaction cannot be charged.
  • The company must explain any increase in the card’s Annual Percentage Rate (APR).
  • If the APR is increased, the credit card company must re-evaluate the increase every six months, and if appropriate, reduce the rate within 45 days after completing the evaluation.

“As a result of the CARD Act, consumers have an added layer of protection related to their credit cards,” said Gail Cunningham, spokesperson for the NFCC.  “In addition to being familiar with these provisions, consumers need to open their credit card statements promptly, and read all inserts that accompany the monthly mailings.  These simple steps are a critical part of creating a financially stable life.”

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Wall Street Reform & Consumer Protection Act Focus of June 28 Economic Perspectives

Posted by Hopeton on June 27, 2010

Nancy Zirkin, executive vice president of The Leadership Conference on Civil and Human Rights and a key strategist for Americans for Financial Reform, will discuss the new Wall Street Reform and Consumer Protection Act on the June 28 edition of Economic Perspectives on KAZI 88.7 FM, 5:30 p.m. – 5:45 p.m.  Listen live online at kazifm.org.

The Leadership Conference on Civil and Human Rights is a coalition charged by its diverse membership of more than 200 national organizations to promote and protect the civil and human rights of all persons in the United States.

Americans for Financial Reform is a coalition of national and state organizations that have joined together to fix the financial sector and make sure it’s working for all Americans.  Members include the AARP, AFL-CIO, NAACP, National Association of Investment Professionals,  National Urban League, and many others.

Enclosed below are highlights of the Wall Street Reform legislation provided by the press office of the U.S. House of Representatives Committee on Financial Services.

HIGHLIGHTS OF THE LEGISLATION

Consumer Protections with Authority and Independence: Creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices.

Ends Too Big to Fail Bailouts: Ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Fed’s authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.

Advance Warning System: Creates a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy.

Transparency & Accountability for Exotic Instruments: Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated — including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders.

Executive Compensation and Corporate Governance: Provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation and golden parachutes.

Protects Investors: Provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses.

Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefits special interests at the expense of American families and businesses.

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House Committee Passes Legislation to Modernize Financial Regulations

Posted by Hopeton on December 4, 2009

From the press office of the U.S. House Committee on Financial Services
The House Financial Services Committee completed its work on a comprehensive set of reforms that responds to the recent economic crisis by modernizing America’s financial regulations. The Wall Street Reform and Consumer Protection Act (H.R. 4173), which will be considered on the House floor next week, incorporates nine major pieces of legislation approved by the Committee to address the myriad causes – from predatory lending to unregulated derivatives – that led to last year’s meltdown.

The Wall Street Reform and Consumer Protection Act includes the following provisions:

  • Consumer Protections: Creates the Consumer Financial Protection Agency (CFPA), a new, independent federal agency solely devoted to protecting Americans from unfair and abusive financial products and services.
  • Financial Stability Council: Creates an inter-agency oversight council that will identify and regulate financial firms that are so large, interconnected, or risky that their collapse would put the entire financial system at risk. These systemically risky firms will be subject to heightened oversight, standards, and regulation.
  • Dissolution Authority and Ending “Too Big to Fail”: Establishes an orderly process for dismantling large, failing financial institutions like AIG or Lehman Brothers in a way that ends bailouts, protects taxpayers, and prevents contagion to the rest of the financial system.
  • Executive Compensation: Gives shareholders a “say on pay” – an advisory vote on pay practices including executive compensation and golden parachutes. It also enables regulators to ban inappropriate or imprudently risky compensation practices, and it requires financial firms to disclose any compensation structures that include incentive-based elements.
  • Investor Protections: Strengthens the SEC’s powers so that it can better protect investors and regulate the nation’s securities markets.  It responds to the failures to detect the Madoff and Stanford Financial frauds by ordering a study of the entire securities industry that will identify needed reforms and force the SEC and other entities to further improve investor protection.
  • Regulation of Derivatives:  Regulates, for the first time ever, the over-the-counter (OTC) derivatives marketplace. Under the bill, all standardized swap transactions between dealers and “major swap participants” would have to be cleared and traded on an exchange or electronic platform. The bill defines a major swap participant as anyone that maintains a substantial net position in swaps, exclusive of hedging for commercial risk, or whose positions create such significant exposure to others that it requires monitoring.
  • Mortgage Reform and Anti-Predatory Lending: Would incorporate the tough mortgage reform and anti-predatory lending bill the House passed earlier this year. The legislation outlaws many of the egregious industry practices that marked the subprime lending boom, and it would ensure that mortgage lenders make loans that benefit the consumer.  It would establish a simple standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold.
  • Reform of Credit Rating Agencies: Addresses the role that credit rating agencies played in the economic crisis, and takes strong steps to reduce conflicts of interest, reduce market reliance on credit rating agencies, and impose a liability standard on the agencies. 
  • Hedge Fund, Private Equity and Private Pools of Capital Registration: Fills a regulatory hole that allows hedge funds and their advisors to escape any and all regulation.  This bill requires almost all advisers to private pools of capital to register with the SEC, and they will be subject to systemic risk regulation by the Financial Stability regulator.
  • Office of Insurance: Creates a Federal Insurance Office that will monitor all aspects of the insurance industry, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis and undermine the entire financial system.

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Fed Chair Testifies About Financial Markets and Economy at Senate Confirmation Hearing

Posted by Hopeton on December 4, 2009

Enclosed below is the testimony of Federal Reserve System Board of Governors Chairman Ben Bernanke at his confirmation hearing before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C. on December 3, 2009.  Bernanke was nominated for a second term as chairmen by President Obama.

Chairman Dodd, Senator Shelby, and members of the Committee, I thank you for the opportunity to appear before you today. I would also like to express my gratitude to President Obama for nominating me to a second term as Chairman of the Board of Governors of the Federal Reserve System and for his support for a strong and independent Federal Reserve. Finally, I thank my colleagues throughout the Federal Reserve System for the remarkable resourcefulness, dedication, and stamina they have demonstrated over the past two years under extremely trying conditions. They have never lost sight of the importance of the work of the Federal Reserve for the economic well-being of all Americans.

Ben Bernanke

Over the past two years, our nation, indeed the world, has endured the most severe financial crisis since the Great Depression, a crisis which in turn triggered a sharp contraction in global economic activity. Today, most indicators suggest that financial markets are stabilizing and that the economy is emerging from the recession. Yet our task is far from complete. Far too many Americans are without jobs, and unemployment could remain high for some time even if, as we anticipate, moderate economic growth continues. The Federal Reserve remains committed to its mission to help restore prosperity and to stimulate job creation while preserving price stability. If I am confirmed, I will work to the utmost of my abilities in the pursuit of those objectives.

As severe as the effects of the crisis have been, however, the outcome could have been markedly worse without the strong actions taken by the Congress, the Treasury Department, the Federal Reserve, the Federal Deposit Insurance Corporation, and other authorities both here and abroad. For our part, the Federal Reserve cut interest rates early and aggressively, reducing our target for the federal funds rate to nearly zero. We played a central role in efforts to quell the financial turmoil, for example, through our joint efforts with other agencies and foreign authorities to avert a collapse of the global banking system last fall; by ensuring financial institutions adequate access to short-term funding when private funding sources dried up; and through our leadership of the comprehensive assessment of large U.S. banks conducted this past spring, an exercise that significantly increased public confidence in the banking system. We also created targeted lending programs that have helped to restart the flow of credit in a number of critical markets, including the commercial paper market and the market for securities backed by loans to households and small businesses. Indeed, we estimate that one of the targeted programs–the Term Asset-Backed Securities Loan Facility–has thus far helped finance 3.3 million loans to households (excluding credit card accounts), more than 100 million credit card accounts, 480,000 loans to small businesses, and 100,000 loans to larger businesses. And our purchases of longer-term securities have provided support to private credit markets and helped to reduce longer-term interest rates, such as mortgage rates. Taken together, the Federal Reserve’s actions have contributed substantially to the significant improvement in financial conditions and to what now appear to be the beginnings of a turnaround in both the U.S. and foreign economies.  To read the rest of the tesimony click here.

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Legislation Unveiled to Reform U.S. Financial System

Posted by Hopeton on November 10, 2009

Senate Banking Committee Chairman Chris Dodd (D-CT) joined by fellow committee members Jack Reed (D-RI), Charles E. Schumer (D-NY), Robert Menendez (D-NJ), Daniel K. Akaka (D-HI), Jon Tester (D-MT), Mark Warner (D-VA), Jeff Merkley (D-OR) and Michael Bennet (D-CO) unveiled a bill today to reform the way that our financial system is regulated.  Enclosed below is a summary of the highlights of the bill provided by the press office of the Senate Banking Committee.

Dodd

Senator Christopher Dodd

Summary: Restoring American Financial Stability – Discussion Draft

HIGHLIGHTS OF THE DISCUSSION DRAFT

Consumer Financial Protection Agency: Creates an independent watchdog to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, while prohibiting hidden fees, abusive terms, and deceptive practices.

Ends Too Big to Fail: Prevents excessively large or complex financial companies from bringing down the economy by: creating a safe way to shut them down if they fail; imposing tough new capital and leverage requirements and requiring they write their own “funeral plans”; requiring industry to provide their own capital injections; updating the Fed’s lender of last resort authority to allow system-wide support but not prop up individual institutions; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.

Protects Against Systemic Risks: Creates an independent agency with a board of regulators to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the financial system. The agency could require companies that threaten the economy to divest some of their holdings.

Single Federal Bank Regulator: Eliminates the convoluted system of multiple federal bank regulators to increase accountability and end unnecessary overlap, conflicting regulation, and “charter shopping;” keeps in place the healthy dual banking system that governs community banks.

Executive Compensation and Corporate Governance: Provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation and director nominations.

Closes Loopholes in Regulation: Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated – including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders.

Protects Investors: Provides tough new rules for transparency and accountability from investment advisors, financial brokers and credit rating agencies to protect investors and businesses.

Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefit special interests at the expense of American families and businesses.

For more information on the proposed legislation click here.

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Financial Services Committee Approves Maloney-Frank bill to Speed Up Credit Card Reforms

Posted by Hopeton on October 25, 2009

The Financial Services Committee unanimously passed H.R. 3639, the Expedited CARD Reform for Consumers Act of 2009, which would move up the effective date for credit card reforms from February 22 to December 1. The bill, sponsored by Rep. Carolyn Maloney (D-NY) and Financial Services Committee Chairman Barney Frank (D-MA), changes the date by which banks and credit card issuers would have to comply with the remaining provisions of the Credit CARD Act, new consumer-friendly legislation signed by President Obama earlier this year. The bill now moves to the House floor for consideration.

Rep. Carol Maloney

Rep. Carol Maloney

Rep. Carolyn Maloney (D-NY) said: “This marks a step forward in bringing consumers badly-needed relief,” Maloney said. “Just in time for the holidays, Congress can lock in a ban on interest rate hikes on existing balances and the tricks that have kept far too many consumers trapped in a never-ending cycle of debt: tricks like double-cycle billing, due-date gamesmanship, and applying payments to lowest rates first.”

“The card companies brought this on themselves, by using the time between when the bill was signed by President Obama and when it goes into effect to ‘get in under the wire’ with a last gasp of unfair practices,” Maloney said. “Today’s action shows Congress can act with speed when necessary to provide consumers the protection they need.”

In reporting the bill out, the committee voted to keep the original effective date of February 22, 2010 for prepaid gift cards (which are now all printed and on the way to retailers for the holiday season), and for small credit card issuers with under 2 million cardholder accounts. The six largest card issuers control over 80% of the credit card market.

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