DailyFinance.comhttp://www.dailyfinance.comDailyFinance.comhttp://o.aolcdn.com/os/df/2013/img/2-dailyfinance_logo_m.pngDailyFinance.comhttp://www.dailyfinance.comen-usCopyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only.Blogsmith http://www.blogsmith.com/Facebook Friends Get a New Benefit: Now You Can Send Each Other Moneyhttp://www.dailyfinance.com/2011/11/18/facebook-friends-get-a-new-benefit-now-you-can-send-each-other/http://www.dailyfinance.com/2011/11/18/facebook-friends-get-a-new-benefit-now-you-can-send-each-other/http://www.dailyfinance.com/2011/11/18/facebook-friends-get-a-new-benefit-now-you-can-send-each-other/#commentsFiled under: , ,

Facebook Friends Get a New Benefit: Now You Can Send Each Other Money The most precious of holiday cards -- the one shaped like a $20 bill, with a peekaboo cutout for the president's face -- may be a thing of the past. Now you can just post a virtual $20 bill on a friend's Facebook wall to say Happy Holidays this year. Or send money to your kids in college -- instantly.

In a joint effort with PayPal, the social media giant launched a new app this week called Send Money that could remake the money-transfer business. While a number of so-called peer-to-peer payment systems already exist, the new app offers a seamless money transfer system between Facebook friends -- and captures Facebook's more than 800 million users.

I took the new app for a test drive. On Thursday, I sent my sister $5 to say "Thanks for being a great sibling!" While I have a PayPal login, I don't keep actual funds in a PayPal account, so I used PayPal to make a payment via my credit card.

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That's when I saw a little catch to Facebook's new app: My $5 gift had turned into $5.45 expenditure. PayPal charges a premium of 2.9% of the transfer amount, plus 30 cents, which is the same fee that PayPal also charges on its website. But for $5 gift sent from New York to Philadelphia, it's only a penny more than sending a fiver through the mail in a stamped envelope. And a whole lot cheaper than Fedexing a check or using Western Union, where an instant money transfer of $5 comes with a $5 fee -- and higher sums as the amount being sent rises.

But if you fund the transfer directly from your bank account, or with money that is kept in a PayPal account it can be sent for free. And PayPal cash can be used for currencies in 65 countries.

The turnaround time beat snail mail by a long shot: After I made the payment, my sister reported getting a link for the gift in less than two minutes. She logged into PayPal, where the prompts directed her to withdraw the money from PayPal and transfer it to her bank account. Recipients can also request a paper check.

One disconcerting part of the payment transfer: The email receipt for my payment showed $5, not the actual $5.45 that was debited from my credit card.

Catherine New can be reached at catherine.new@huffingtonpost.com.

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]]>FacebookfedexFinancemoney transferMoneyTransferpaypalpeer-to-peer paymentPeer-to-peerPaymentremittancessend moneySendMoneywestern unionWesternUnionCatherine NewFri, 18 Nov 2011 06:00:00 ESTAmericans' Financial Distress Is Getting Worse Againhttp://www.dailyfinance.com/2011/11/17/americans-financial-distress-is-getting-worse-again/http://www.dailyfinance.com/2011/11/17/americans-financial-distress-is-getting-worse-again/http://www.dailyfinance.com/2011/11/17/americans-financial-distress-is-getting-worse-again/#commentsFiled under: , , , , ,

Americans' Financial Distress Is Getting Worse AgainAmericans' economic health appears to be edging closer to code red as we head into the holiday season. A report released Thursday showed that the Consumer Distress Index fell sharply in the third quarter, indicating that more of us are falling behind financially.

The quarterly analysis from nonprofit credit counseling agency CredAbility looks at five data points: housing prices, employment rates, credit usage, spending and net worth for the average U.S. household. The index grades economic health on a 100-point scale: Any rating below 70 signals distress. But the latest report showed the national number dropped to 66.7 from 69.2, reversing gains from earlier in the year.

The deteriorating real estate market and the struggle to pay housing expenses, including mortgage payments, hurt the financial health of consumers nationwide in recent months, the index showed. Nor are homeowners alone: Renters too, are having trouble making their monthly payments. Adding pressure to household budgets is the rising cost of household goods, food and gas, which leaves Americans with little discretionary income.

In nine states, including Texas, New Jersey and Pennsylvania, consumers slipped back into financial distress after several quarters at higher levels. Twenty states remain above the distress line, and consumers in North Dakota continue to have the strongest overall fiscal health. Nevada, which had the highest rate of new foreclosures in the last quarter, ranked as the only state at the emergency level for consumer health in the index.

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Other data also reflects the economic pain Americans are feeling: The number of mortgage holders who had missed two or more payments rose in the period ending in September, according to credit monitoring agency TransUnion. It also reported that the number of credit card holders who were past due on their bill by 90 days or more was also up slightly, although credit card delinquencies remain at an all-time low overall.

The distress index describes the sobering landscape shoppers face as they try to scrape together holiday budgets. "Unless consumers are willing to borrow, they'll need to scale back their holiday spending," said Mark Cole, chief operating officer of CredAbility.

Catherine New can be reached at catherine.new@huffingtonpost.com.

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]]>christmas shoppingChristmasShoppingConsumer Distress IndexConsumerDistressIndexcredit card debtCreditCardDebtDelinquent Borrowereconomic recoveryEconomicRecoveryForeclosuresholiday shoppingHolidayShoppinghousingmortgagespast due billPastDueBillreal estate marketRealEstateMarketrecessionunemploymentCatherine NewThu, 17 Nov 2011 12:30:00 ESTBig Banks Could Lose $185 Billion Next Year, As Anger Builds: Researchhttp://www.dailyfinance.com/2011/11/14/big-banks-could-lose-185-billion-next-year-as-anger-builds-re/http://www.dailyfinance.com/2011/11/14/big-banks-could-lose-185-billion-next-year-as-anger-builds-re/http://www.dailyfinance.com/2011/11/14/big-banks-could-lose-185-billion-next-year-as-anger-builds-re/#commentsFiled under: , ,

Big banks risk losing as much as $185 billion in the next 12 months as account holders say no to being nickeled and dimed, according to a new report by boutique management consulting group cg42. Bank of America, Chase, Citibank, Wells Fargo could make up nearly three-quarters of that loss, the survey said.

For consumers looking to hit banks back, the sobering news is that $185 billion represents about 9% of total retail bank deposits. Together the top 10 largest banks hold more than $2 trillion.

The survey looked at the brand vulnerability at the top 10 retail banks in the United States, surveying 5,600 customers in June 2011. Their number one frustration: Fees. They are fed up.

Too bad fees are what the banks -- similar to the airlines -- are specializing in these days. Even as banks have dropped debit-card fees, dollar by dollar they are adding it up elsewhere to keep the much-needed revenue coming. There are fees to get a replacement card, or get cash wired to your account, or make a mobile deposit, or get an extra paper statement.

In fact, banks must recoup at least $15 to $20 monthly per depositor in order to earn what they did in the past, according to recent story in the New York Times. Meanwhile, it costs banks between $200 to $300 per customer to cover everything from staffing branches to covering insurance premiums, the story also reported.

But that is not the only gripe. In the survey, other customer frustrations included not being offered competitive rates, being hit with overdraft changes and that banks were making promises they don't keep.

"These frustrations are driving vulnerability," said Stephen Beck, the founder of cg42.

While anger about fees united how people felt about all the institutions, each bank had unique challenges, he added.

For example, Wells Fargo customers complained that the bank tried to sell them on products they didn't want or need, while nearly 50% of Bank of America customers reported that they preferred to minimize human contact and use more technology over in-person transactions. CapitalOne customers reported being frustrated with basic customer service issues. PNC and SunTrust were the least vulnerable to losing customers according to the survey.

Where that that $185 billion goes is still the big question. Already nearly $5 billion in new deposits has appeared in credit union coffers in the last six weeks.

Catherine New can be reached at catherine.new@huffingtonpost.com.

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]]>Bank of Americabank transfer daybankingbanking sectorbanking stocksBankingSectorBankingStocksBankTransferDayCitibankfee angerFeeAngerFinanceWells FargoCatherine NewMon, 14 Nov 2011 18:15:00 ESTThe Long-Term Relationship You Just Can't Quithttp://www.dailyfinance.com/2011/11/14/the-long-term-relationship-you-just-cant-quit/http://www.dailyfinance.com/2011/11/14/the-long-term-relationship-you-just-cant-quit/http://www.dailyfinance.com/2011/11/14/the-long-term-relationship-you-just-cant-quit/#commentsFiled under: ,

The Long-Term Relationship You Just Can't Quit It's an abusive relationship and you'll probably never end it. Time and again your partner takes advantage of you. You lost trust a while back. You don't even expect any satisfaction anymore, but it's been going on so long you just can't break away.

No, not your spouse. I'm talking about your bank.

For all the anti-bank anger erupting across the country lately, relatively few of us are actually parting ways with our significant financial institutions. In the past six weeks a mini bank-run sent 700,000 new customers to credit unions, according to the credit unions' trade group. But that's hardly noticeable on the scale of the universe of U.S. banking customers. Analysts predict that the percentage of people changing banks in 2011 could edge up to 10%. That's only a slight lift from 8.7% in 2010, according to a retail bank survey earlier this year from J.D. Power and Associates. Momentum is building, to be sure, but it's not yet significant.

Sometimes it seems like it's easier to walk away from a marriage than a bank account: After all, spouses don't have an entire team of MBAs working to make sure you never leave. And face it, your whole life is tied up with the conveniences of big banking: Your paycheck is deposited, your bills are paid, that quick trip to the ATM is right across the street. Maybe even your alimony and child support are on auto pay.

It's not actually easier to get divorced, of course. Far more people are leaving their banks each year than are leaving their partners. But it's not for want of trying on the part of the financial institutions.

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Banks invest hundreds of dollars per customer to make your relationship to them last and grow: new products, savings rates, rewards programs, overdraft protections, credit cards, mortgages, home equity loans, bill pay, direct deposit, weekly letters, pens and free lollipops. It works too. A typical banking customer reports having an average of 2.7 "banking products" from their primary institution, according to J.D. Power and Associates.

Worse yet, many people can't even afford to leave their bad bank marriage. That resentment-building $10 monthly checking account fee -- some of which goes to pay for the shiny new branches you see all over town -- may be the price one must pay to avoid a huge, and potentially disastrous, transfer of a whole system of electronic payments and credits.

At least 42% of all American workers lived paycheck to paycheck last year, according to a CareerBuilder.com survey. Increasingly, those funds are delivered electronically through direct deposit. Bills like credit cards, mortgages, rent, student loans, utilities, cable -- not to mention regular subscriptions like Netflix -- are increasingly tied to checking accounts via automatic bill pay.

How do you divert a paycheck next month into a new account while making sure all the bills get paid for last month? It's tricky to choreograph when you live close to the bone. And banks know that.

"The bottom line is that you can't move the account if you don't have extra cash to leave behind for two months," Hank Israel, a director with consulting firm Novantas, told The New York Times last year in an article on switching banks.

It is a lot harder to change something than it is to not change it. In behavioral finance this is called the status quo effect. Plenty of bad marriages -- and bad banking relationships -- have lasted many decades on this principle.

Of course, bad behavior from a bank is easier to ignore than that from a spouse. You can leave statements unopened, but you can only hide from your significant other for so long without severe consequences.

"Banks are just caretakers, they don't have opinions. Spouses have opinions," says Maggie Baker, a clinical psychologist and author of Crazy About Money. "You don't get into an argument with your bank account."


Catherine New can be reached at catherine.new@huffingtonpost.com.

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]]>bank feesbank transfer dayBankFeesbanksBankTransferDayCareerBuildercredit unionsCreditUnionsdivorceFinanceJ. D. Power and AssociatesNetflix IncOccupy Wall StreetOccupyWallStreetOnline bankingOnlineBankingwall streetWallStreetCatherine NewMon, 14 Nov 2011 17:15:00 ESTAs Italian Drama Persists, Fears of Credit Crunch Spread to Small Businesseshttp://www.dailyfinance.com/2011/11/10/as-italian-drama-persists-fears-of-credit-crunch-spread-to-smal/http://www.dailyfinance.com/2011/11/10/as-italian-drama-persists-fears-of-credit-crunch-spread-to-smal/http://www.dailyfinance.com/2011/11/10/as-italian-drama-persists-fears-of-credit-crunch-spread-to-smal/#commentsFiled under: ,

As Italian Drama Persists, Fears of Credit Crunch Spread to Small BusinessesThe Atlantic Ocean is wide, but maybe not wide enough. On Thursday, markets had a mixed reaction to the deepening economic crisis in Europe. With Silvio Berlusconi's exit as Italy's prime minister, the nation is expected to name a new government within days. Some sources reported that the European Central Bank would step in and buy Italian bonds, easing fears that yields of more than 7% would cause the European economy to fracture.

In the U.S., small business owners grew nervous, while the equities markets took a slight hit. The crisis impacted oil prices, which fell on Europe's political news but were buoyed by reports of weak U.S. supplies. Gold prices fell nearly 2% to just above $1,750 an ounce, as the sell-off included precious metals. The wider commodities markets took a hit as well, with holiday treats like chocolate and sugar both trading down.

"The European economic crisis is definitely concerning as we're in a global market," said Danielle Snyder, the co-founder of DANNIJO, a New York-based designer jewelry and accessories company, and a member of the HuffPost Small Business Board of Directors. "The crisis has weakened confidence in spending abroad. Fashion in particular is an international business and Italy is one of the most influential countries in the game," said Snyder, who adds that her company has grown its European presence in the past 18 months.
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"The crisis is a big threat -- don't mistake the damage this can do," says Clint Greenleaf, the founder and CEO of Greenleaf Book Group, an Austin-based independent publishing company, and another member of the HuffPost Small Business Board of Directors. "A hiccup in Europe can create havoc here, so it causes great concern. As with any crisis, there is both threat an opportunity - right now, we should all protect ourselves in case the storm is strong.

Even though they won't push the U.S. into another recession, Europe's problems will tighten U.S. lending and spending for the near term, said Alan Levenson, chief economist for T. Rowe Price. That could lead to a decline in asset values and wealth for American consumers and rise in savings rates. Translation: Slow growth through the end of the year and into early 2012. That won't help the growing U.S. deficit, already troubled by one credit downgrade this year.

Wednesday's global market sell-off was prompted after Italian 10-year bond yields broke the 7% level that had already sent Greece, Portugal and Ireland to the hand-out line. But Italy could be cushioned by its diverse labor pool and strong export sector, which give it a stronger ability to recover than its fellow European debtors. For all of Europe, however, Italy's problems accelerate a recession that is already under way, said Levenson.

The question now many are asking is: Is Italy too big too fail, making all this just another round of economic brinksmanship with Italy basically giving the economic equivalent of a crude hand gesture to the global market, said Joseph S. Fichera CEO of New York-based investment firm Saber Partners, LLC. "Italy has the ability to pay, but not the willingness," he said.

--Rod Kurtz contributed reporting to this article.

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]]>Atlantic Oceanausteritycredit crunchCreditCrunchdouble dip recessionDoubleDipRecessionEuropeEuropean Central BankEuropean debt crisisEuropeanDebtCrisisFinanceGold PricesGreeceGreek debt crisisGreekDebtCrisisitalian debt crisisItalianDebtCrisisitalyPortugalSilvio Berlusconismall businessSmallBusinessSmart growthT Rowe Price Group IncCatherine NewThu, 10 Nov 2011 15:00:00 ESTFormer Google Exec Jumps Into Payday Lending with ZestCashhttp://www.dailyfinance.com/2011/11/09/former-google-exec-jumps-into-payday-lending-with-zestcash/http://www.dailyfinance.com/2011/11/09/former-google-exec-jumps-into-payday-lending-with-zestcash/http://www.dailyfinance.com/2011/11/09/former-google-exec-jumps-into-payday-lending-with-zestcash/#commentsFiled under: , , ,

Former Google Exec Jumps Into Payday Lending with ZestCash A former Google executive has moved from the world of Internet searches to the world of high-interest, short-term lending. He says his operation, ZestCash.com, offers an innovative way to help the poorest borrowers avoid financial emergencies. But is this just a slick veneer putting a shine on the classic payday lending business?

One-time Google Chief Information Officer Douglas Merrill founded online-only lender ZestCash, which uses some fairly high-level Google-esque algorithms to assess its borrowers' creditworthiness. And the site certainly looks better than your typical payday lender. Those sketchy outfits usually operate out of rundown storefronts in lower-income neighborhoods, offering quick cash infusions at jacked-up interest rates to people with nowhere else to turn.

But friendly looking ZestCash does essentially the same thing: Its loans ring up at triple-digit interest rates. For example, a three-month $800 loan will cost nearly $550 in interest and fees at the 412% interest rate that ZestCash charges.

The site is one of a number of new businesses popping up to cater to a growing segment of Americans: The poor and credit-challenged who don't -- or can't -- use a bank. As high unemployment and falling wages continue to push more Americans into poverty, financial innovators like Merrill are on the lookout for new ways to milk profits out of this demographic.

Firmly on the 'Loan Shark' End of the Spectrum

Merrill says that his new model for assessing a borrower's creditworthiness and setting installment payments means he can offer lower rates than standard payday operators. But when one is talking in either case about interest rates of more than 400%, the degree of difference is arguably meaningless. The Center for Responsible Lending, a national policy advisory nonprofit for lending issues, defines any operation charging more than 36% interest -- a rate cap that 17 states have put in place -- as a loan shark, regardless of the secret formula it uses to underwrite its high-risk loans.

ZestCash says its rates are up to 50% lower than other payday lenders -- but some of that nuance is hard to calculate, and depends the ability of the borrower to repay the loan on its due date. If you can't make the weekly $101 payment, add a $35 ZestCast late fee to your balance. If the payment bounces, that's $35 plus a possible overdraft fee of up to $35 from your bank. And if you can't pay $101 this week, what are the chances you'll be able to afford $237 next week?

This is hardly better than online quick-cash lender, Checkngo.com, which offers a 14-day payday loan for $800 in the state of Utah, with a $200 fee, for a total of $1,000 due after two weeks. But if you can't repay the money then and have to roll over the loan, an annual interest rate of more than 650% kicks in. Multiply that by six payday periods -- or the equivalent of three months (and there is no maximum term length in Utah) -- and that $800 could cost at least $1,789.63 on the principal alone, not including interest on the $200 fee or other rollover fees. Checkngo.com did not respond to a call for comment.

Currently ZestCash is available to residents in Missouri, Utah, Idaho and South Dakota, which do not have maximum interest rates for payday loans. Four more states will be added to the roster soon, the company said.

Your Profile Includes Everything They Can Glean (and That's Plenty)

Using a formula similar to the one Google uses to rate the quality of a website, ZestCash determines a borrower's credit worthiness based on thousands of factors from cell phone behavior to an in-person interview to your Internet trail. ("Almost everyone has one," Merrill says.) They don't use a more traditional credit scoring mechanism, like a FICO score, because it is too narrow -- and if you're getting a quick loan, chances are your credit score doesn't really mean much.

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But, for example, a phone number coupled with third-party data can say more about a borrower than bankruptcy, says Merrill. Using related data points -- such as how often a borrower switched phone providers, the frequency of switching, the type of provider -- and in addition to other variables plus some fancy math, ZestCash says it can determine more accurately whether a borrower is a good loan risk.

"Many of the [people without bank accounts] have prepaid cell phones," Merrill says, explaining that continuity of month-to-month plans are a good signifier of baseline financial stability. "Not having a cell phone is a negative signal because it signals that you don't even care enough to have connectivity."

Mathematically Strong, Ethically Shaky

Care enough? Or can't afford it? It's the use of factors like that one that has some critics say saying these kind of underwriting formulas are akin to economic profiling.

"What if there was a correlation between eating at McDonald's and not paying back debt?" asks Deborah Thorne, a professor at Ohio University who specializes in debt and bankruptcy issues. One of the problems with tying cell phone patterns, for example, to credit worthiness is that it unfairly targets the poorest as a justification to charge exorbitant rates, she says. In other words, super-strength math can quickly turn into fuzzy ethics.

Merrill argues the industry charges sky-high interest rates to compensate for its average 44% default rate, and that his company's default rate is already lower than that, though he didn't specify a percentage.

Using a borrower's data trail to gauge creditworthiness breaks new ground in the evolving realm of privacy. Increasingly, transaction data is being used by third-party clients to direct targeted ads. Harvesting transactional information -- like cell phone behavior -- to predict repayment odds could be the next frontier for evaluating borrowers with otherwise spotty financial pasts.

Dartmouth economist Jonathan Zinman suggests it's often not APR or how their credit risk is evaluated that is as important for consumers, but rather the economic outcome of the loan. "Is it an investment? Are borrowers taking this loan to prevent job loss or income loss?"

Catherine New can be reached at catherine.new@huffingtonpost.com.

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]]>borrowingcredit worthinessCreditWorthinessDouglas MerrillDouglasMerrillFinancegoogleinterest ratesInterestRatesloan sharksLoanSharksonline lendingOnlineLendingPayday Lendingpayday loansPaydayLendingPaydayLoanspersonal financePersonalFinancepoor credit historyPoorCreditHistoryusuryzestcashCatherine NewWed, 09 Nov 2011 06:00:00 ESTBank of America Settles Excessive Overdraft Fee Lawsuit for $410 Millionhttp://www.dailyfinance.com/2011/11/08/bank-of-america-settles-excessive-overdraft-fee-lawsuit-for-410/http://www.dailyfinance.com/2011/11/08/bank-of-america-settles-excessive-overdraft-fee-lawsuit-for-410/http://www.dailyfinance.com/2011/11/08/bank-of-america-settles-excessive-overdraft-fee-lawsuit-for-410/#commentsFiled under: , ,

Bank of America Settles Excessive Overdraft Fee Lawsuit for $410 Million More than 13 million Bank of America (BAC) debit-card customers could see some repayment for excessive overdraft fees the bank charged between January 2001 and May 2011.

On Monday, a federal judge gave final approval to a $410 million settlement in a class-action lawsuit to compensate customers who were charged fees one or more times as a result of the bank's practice of posting debit card transactions from highest to lowest dollar amount, rather than in the order they occurred. The bank stopped doing that in May 2009.

Bank of America is far from the only one to have made that practice a policy. Suits have also been filed against J.P. Morgan Chase & Co. (JPM), Citigroup (C) and Wells Fargo (WFC), among others. The majority of banks have since changed their policies and no longer process debit-card charges that way.

The banking industry has defended the system as a way to help customers clear their largest bills first. But in reality, it was a golden goose for overdraft fees, which ranged from $25 to $35 per overdraft.

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The practice was so entrenched that one consulting company developed specialized software aimed at helping banks facilitate the high-to-low ordering and to maximize consumer fees, American Banker reported in September. One financial institution -- Union Bank of California -- signed up and agreed to pay the consulting company a 20% cut of the fees. That bank reversed its policy last year and settled for $35 million last week.

For consumers, it can be hard to figure out the details of a bank's overdraft policy and its transaction processing system. Details may be available, but they're buried in the lengthy disclosure statements attached to the accounts, which run to an average of 111 pages. That's one reason there is a new push on Capitol Hill to streamline checking account disclosures to one page. Meanwhile, if you want to know how your charges are being processed, just call your bank and ask, consumer advocates advise.

Monday's settlement with Bank of America came with a steep price tag. The $123 million attorney bill means less than $300 million will be paid out to its customers. Those who are included in the settlement will see automatic credits to their account. Former customers will have checks mailed to them.

Affected customers can check www.bofaoverdraftsettlement.com for more information.




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]]>American BankerBank of AmericaDebit CardsDebitCardsFinancelawsuitoverdraft feesOverdraftFeessettlementtransactionsWells FargoCatherine NewTue, 08 Nov 2011 17:45:00 ESTSenators Take Aim at Bank Accounts' Fine Printhttp://www.dailyfinance.com/2011/11/08/senators-take-aim-at-bank-account-fine-print/http://www.dailyfinance.com/2011/11/08/senators-take-aim-at-bank-account-fine-print/http://www.dailyfinance.com/2011/11/08/senators-take-aim-at-bank-account-fine-print/#commentsFiled under: ,

Senators Take On Bank Account Fine PrintHave you ever really read all the disclosures that came with your bank account? Nope -- we haven't either. And that should come as no surprise: The average length of banks' fee disclosures and checking account policy paperwork is 111 pages, according to a survey by Pew Charitable Trusts.

That's way too much fine print, say Sens. Dick Durbin (D-Ill.) and Jack Reed (D-R.I.). Last week, the two called on all banks to make those disclosures just one page long.

They offered as an example a one-page disclosure that Pew designed. On Monday, Durbin pressed banks in Illinois to adopt the new disclosure box.

"Consumers have demonstrated that they will no longer stay with banks and credit unions that disrespect them by failing to charge fees in an upfront and fair manner," Durbin wrote in a letter to the financial institutions, reported The Hill.

The cost of not reading and understanding those disclosures adds up to big costs for bank customers. A 2009 study of 917 consumers found that households paid a median of $43 a month in credit card and checking account fees, including credit card interest, ATM and overdraft fees.

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"People are unhappy with fees, but where are they going to go?" says Susan Weinstock, director of Pew's Safe Checking in the Electronic Age Project. "They [could] end up worse off because they won't read 111 pages of disclosure [for a checking account]."

The new proposed disclosure format outlines all the basic checking account terms and conditions -- including interest rates, ATM fees, overdraft penalties and account closing fees -- in clear terms, using a uniform reporting style across all financial institutions.

The senators also asked the new Consumer Financial Protection Bureau to lend a hand on enforcement, and require banks and credit unions to post this disclosure on their websites, the Los Angeles Times reported.

Two large credit unions are already on board -- the Pentagon Federal Credit Union and North Carolina State Employees Credit Union -- the Washington Times reported. The Consumer Bankers Association is also supporting fee disclosure simplification.

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]]>ATM feesATM usage feesAtmFeeschecking account feesCheckingAccountFeescredit cardsCreditCardsDick DurbindisclosureFinanceJack ReedLos AngelesoverdraftPentagon Federal Credit Unionpew research centerPewResearchCenterThe Pew Charitable TrustsCatherine NewTue, 08 Nov 2011 09:45:00 ESTBank Transfer Day: Small Protests, Big Changeshttp://www.dailyfinance.com/2011/11/07/bank-transfer-day-small-protests-big-changes/http://www.dailyfinance.com/2011/11/07/bank-transfer-day-small-protests-big-changes/http://www.dailyfinance.com/2011/11/07/bank-transfer-day-small-protests-big-changes/#commentsFiled under: , , ,

Bank Transfer Day: Small Protests, Big Changes Did Bank Transfer Day work? Over the weekend, many Americans came out to protest big banks, and while there's no hard data yet to gauge the day's impact, credit unions around the country are reporting a continuing upsurge in interest.

At Redwood Credit Union in Rohnert Park, Calif., on Saturday, the branch parking lot was packed and inside, extra staff were on hand to welcome new customers, according to a Patch report.

"This is definitely not normal for us," branch manager Amy Anahatou told Patch. "With the Occupy Wall Street movement and Bank Transfer Day, we have seen a lot of growth."

In other cities around the country, protesters gathered in front of big banks and in parks to express their frustration with corporate banking, bailouts and foreclosures.

In San Antonio, Texas, around 100 people connected to march downtown to Chase (JPM) and Bank of America (BAC) branches, according to the San Antonio Express. The Chicago Tribune reported that the Windy City suburb of Oak Park saw about 60 people gathered in a march organized by the local MoveOn.org chapter. Outside a Bank of America in Newtown, Penn., dozens of retirees and middle-aged residents gathered in general support of the "99%" the local news outlet reported. Patch also reported that homeowners joined dissatisfied banking customers in downtown Walnut Creek, Calif., to protest bank bailouts and foreclosures.

Big commercial banks remain unfazed. On Friday, many of the big banks said they planned to conduct business as usual. And last week, Wells Fargo (WFC) announced its attention to focus on nabbing wealthier customers, opening its first branch of Abbot Downing, a new service aimed at customers with net worths of above $50 million.

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On the original Bank Transfer Day Facebook page, some satisfied bank transferees have been calling for a new movement: Cut Up Your Credit Card Day.

Last week, the Credit Union National Association reported that at least 650,000 new people had joined credit unions across the country since Sept. 29 for a total of $4.5 billion in new deposits. Nearly 50,000 of those new customers were in Texas, the Texas Credit Union League reported, where at least $326 million had moved to Lone Star credit union accounts by November 2.

The national association said Monday it was still compiling updated national numbers in the wake of the weekend's event.

Historically, credit unions have held about 7% of the consumer banking market share in the United States. Mark Wolff, senior vice president of communications for CUNA, said that percentage is likely to rise given the surge in new members over the last six weeks.

In response to an online poll that was posted on Friday, more than 4,850 DailyFinance readers also said they are planning to move or have already moved their money to a community bank or credit union.

"The amount of attention we have had in a short, condensed period of time is unprecedented," CUNA's Wolff said.

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]]>Bank of Americabank transfer dayBankTransferDayCaliforniaChicagoChicago TribuneCredit Union National AssociationFinanceOccupy Wall StreetOccupyWallStreetRohnert Park, CaliforniaSan Antonio Express-NewsWells FargoCatherine NewMon, 07 Nov 2011 13:35:00 ESTResentment Builds Ahead of Bank Transfer Dayhttp://www.dailyfinance.com/2011/11/04/big-banks-lose-billions-as-bank-transfer-day-approaches/http://www.dailyfinance.com/2011/11/04/big-banks-lose-billions-as-bank-transfer-day-approaches/http://www.dailyfinance.com/2011/11/04/big-banks-lose-billions-as-bank-transfer-day-approaches/#commentsFiled under: , , , , , ,

Big Banks Lose Billions as Bank Transfer Day ApproachesIf money talks, how loudly does $4.5 billion speak? That's the amount added in deposits at the nation's credit unions since Sept. 29, estimates the Credit Union National Association. The organization says at least 650,000 people have opened new accounts, bringing those billions of dollars with them.

That figure doesn't even include the thousands of dollars more brought by Frank Sheldon, 63, who runs a photography studio in Seattle. He closed two accounts at Chase and moved to Boeing Employees Credit Union, now BECU -- open to everyone, not just Boeing staff -- in early September.

Sheldon's bank transfer journey actually started in 2008, when his original financial institution, Washington Mutual, was sold to J.P. Morgan Chase (JPM). After the sale, he saw his credit lines cut, which caused his credit score to dip because it gave him a higher debt-to-credit ratio. Then came the fees. His previously fee-free joint checking account and business account picked up $10 a month and $15 a month fees, respectively.

So starting in April, he began the process to transfer both accounts -- with thousands of dollars in each, he says -- to the credit union.

"Why should we reward these banks with our business?" says Sheldon.

A Response to Resentment

He is clearly not alone. On Saturday, tens of thousands of Americans are planning to march, protest or move their money as part of what is being called Bank Transfer Day, a grassroots idea born from a Facebook page that has gained steam with the help of the Occupy Wall Street demonstrations.

Claes Bell, a banking reporter with BankRate.com, says the flurry of activism is a response to ongoing resentment over bank bailouts along with new frugality as the economy -- and wages -- continue to sputter.

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At least 200 protests are scheduled for Saturday at various big bank locations around the country, says activist organization MoveOn.org. More than 160,000 people have signaled their intention to pull their money out of Bank of America (BAC), Chase or Citibank (C) on its "Move Your Money" website.

Various Occupy movements are also planning marches in support of the Bank Transfer Day movement. The Internet continues to buzz with anti-big bank sentiment under the #louderthanwords hashtag on Twitter.

"I think the thing that is clear is that people are fed up with being ripped off," says Daniel Mintz, campaign director for MoveOn.org.

A Drop in the Big Bank Bucket

A recent poll by Harris Interactive of 2,463 adults showed that only 29% of Bank of America customers said they were likely to continue using it as their primary bank in the near future; the number dropped to 21% for Chase customers and 22% for Wells Fargo and Wachovia (WFC) customers.

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But some of the biggest banks don't seem overly concerned, saying they're still committed to customer service. While $4.5 billion is a significant number for credit unions, it represents a small portion of deposits for the 10 largest banks, each of which has more than $100 billion in assets.

Chase declined to comment. A spokesperson for Citibank said its branches are open on Saturday. Wells Fargo also said it is business as usual on Saturday, with regular staffing and hours.

Bank of America, and several other banks, retreated this week from implementing new fees for debit cards, although analysts say the bank is likely to find other fees to charge that will provide it with equivalent revenue.

By coincidence, the Nov. 5 timing of the protest falls on a day with some political resonance for protest. In England, it's Guy Fawkes Day, when bonfires are burned to remember the eponymous anti-establishment figure who attempted to blow up the House of Lords four centuries ago.

In Seattle, Sheldon says his move to a credit union started long before the current zeitgeist, but he is happy to see more people following his footsteps.

"There is just a different kind of vibe [at the credit union]," he says.

Catherine New can be reached at catherine.new@huffingtonpost.com.


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]]>bailoutbank feesBank of Americabank transfer dayBankFeesBankrateBankTransferDayBoeingBoeing Employees' Credit UnionChaseCitibankCredit Union National Associationcredit unionsCreditUnionsdebit card feesDebitCardFeesFinanceGuy Fawkes NightHarris Interactive IncHouse of LordsJPMorgan ChaseMoveOn.orgOccupy Wall StreetOccupyWallStreetprotestWachoviaWashington MutualWells FargoCatherine NewFri, 04 Nov 2011 14:30:00 ESTLong-Term Unemployment Hits Older Workers the Hardesthttp://www.dailyfinance.com/2011/11/02/long-term-unemployment-hits-older-workers-the-hardest/http://www.dailyfinance.com/2011/11/02/long-term-unemployment-hits-older-workers-the-hardest/http://www.dailyfinance.com/2011/11/02/long-term-unemployment-hits-older-workers-the-hardest/#commentsFiled under: , ,

Long-Term Unemployment Hits Older Workers the HardestTo get an idea of how many Americans have been out of work for more than a year, envision the state of Louisiana. Yes, the state's population -- around 4.4 million -- is about the same as the number of people who have been jobless for 12 months and counting, according to the latest report from Pew Charitable Trusts.

Meanwhile on Capitol Hill, Congress and President Obama have been gridlocked over a proposed jobs bill, while the private sector reported a slight increase in the number of jobs created created last month.

The Pew analysis showed that 31.8% of the 14 million total unemployed workers have been jobless for more than 12 months, which is double the 2009 percentage. The economic cost of long-term unemployment continues to add up, and the government is forecast to pay $120 billion in 2011 for unemployment benefits, according to figures from Congressional Budget Office, the report said. That's an improvement from 2010, when the government paid nearly $160 billion.

Long-term unemployment continues to affect older workers more than younger ones, according to Pew. More than 43% of unemployed workers older than 55 have been out of work for at least a year compared to just 30% of workers between 24 and 35, the report said.

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Older unemployed workers face unique challenges, said Linda Barrington, the managing director of the Institute for Compensation Studies at Cornell University's ILR School. The financial impact on earnings for the long-term unemployed has lasting effect on earnings, which can hurt the ability to plan for a secure retirement. For older job seekers, lower starting salaries may also be a tough pill to swallow in finding a new job.

"When they entered the job market, there was still the paradigm of 'We underpay you when young and overpay you when you are old,'" Barrington said. "But that has changed. Now younger people are getting much higher salaries to start. If you lose your job [and you're on the older side], it may require an adjustment in earnings you are not willing to make."

For older workers, there's also less mobility than for younger workers, she said. Financial commitments such as mortgages and homeownership decrease their ability to relocate, which can limit options for a new job.

Education made little difference in the length of unemployment, the report showed, with long-term joblessness only slightly less prevalent among those with advanced degrees than those with only high school diplomas. The report showed that 34% of unemployed workers held a college degree, compared to 38% of jobless high school graduates.

Have you been unemployed for more than year? Please send me an email about how you are making ends meet.

Catherine New can be reached at catherine.new@huffingtonpost.com.

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]]>Barack ObamaCapitol HillCongressional Budget OfficeFinancejoblessnessLocallong-term unemploymentLong-termUnemploymentolder workersOlderWorkerssalaryThe Pew Charitable TrustsU.S.unemploymentCatherine NewWed, 02 Nov 2011 15:15:00 ESTBattered Bank of America Drops Debit Card Fee Planhttp://www.dailyfinance.com/2011/11/01/battered-bank-of-america-drops-debit-card-fee-plan/http://www.dailyfinance.com/2011/11/01/battered-bank-of-america-drops-debit-card-fee-plan/http://www.dailyfinance.com/2011/11/01/battered-bank-of-america-drops-debit-card-fee-plan/#commentsFiled under: , ,

Battered Bank of America Drops Debit Card Fee PlanIs Occupy Wall Street working? Bank of America (BAC) announced on Tuesday that it's dropping its plan to charge a $5 monthly fee to customers who use debit cards for purchases.

"We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," David Darnell, co-chief operating officer of the bank said in a statement on Tuesday. "Our customers' voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so."

Since the Bank of America announced the $5 monthly fee on Sept. 28, some customers fled the bank, saying it was one fee too many. The financial institution said it does not break out numbers for total accounts closed by the month, a spokesperson said.

Other banks that had instituted a debit-card fee or were testing the idea of debit-card fees have also dropped their plans as well.

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For Bank of America, the damage could already have been done.

"By claiming that it has 'listened' to customers and discontinued the fee, it only raises the question: Why didn't they ask customers about the fee before implementing it?" said Ron Shevlin, senior retail bank analyst with the Aite Group. "In addition, the bank will be seen as nickel-and-diming their customers, and not very decisive about how to run its business."

Bank of America notes that no new fees were actually charged. Everyone who might have come under the revised fee structure in January 2012 will now continue to be able to use their debit-card at no extra charge.

CEO Brian Moynihan had defended the fee as part of a strategy to make up for lost revenue after swipe fees were capped as part of financial reform legislation -- specifically, the Durbin Amendment which curbed the bank's income from card use. A spokesperson declined to say what other new revenue streams the bank might try to tap in the future, saying only that the bank will "continue to initiate actions to mitigate revenue loss."




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]]>bank accountBank of AmericaBankAccountBankOfAmericaBrian Moynihandebit card feesDebitCardFeesFinanceCatherine NewTue, 01 Nov 2011 13:05:00 ESTA Secret Trick to Boost Holiday Cash Flowhttp://www.dailyfinance.com/2011/11/01/tax-withholding-secret-boost-holiday-cash-flow/http://www.dailyfinance.com/2011/11/01/tax-withholding-secret-boost-holiday-cash-flow/http://www.dailyfinance.com/2011/11/01/tax-withholding-secret-boost-holiday-cash-flow/#commentsFiled under: , ,

how to minimize federal withholding from your paycheckThere may be a way to unlock some extra cash for the holidays right under your nose.

If you're getting a tax refund of more than $500 come springtime, it means you are giving the government an interest-free loan on your earnings. In 2011, more than 102 million people got average tax refunds of $2,805, according to the Internal Revenue Service.

While that's an excellent way to ensure you're saving some cash for big bills in 2012, you could plan to get a smaller refund and maximize your holiday-time paychecks instead. That could be the difference between staying debt-free and having a big credit card bill after the holidays.

This week, grab your your pay stub and W4 form, and find an online calculator to quickly re-examine the number of withholding allowances you're making and where you stand with your taxes. You might be able safely lower your withholding for December without creating a tax bill in the spring.

For example, if you are single and making $3,000 per month before taxes -- or $36,000 annually -- and have claimed no exemptions, then you're paying $391 in federal taxes every month, which is the maximum amount, according tax research specialist Lindsey Buchholz with H&R Block's Tax Institute.

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But if you qualify for one exemption, that could add $46 more to your wallet. Two exemptions and that's almost $100 more a month. If you're single with two kids and haven't taken the maximum allowances, that could add up to an extra $185 in take-home pay.

She cautions that not everybody is in this boat. "If your situation is similar to last year and you got a bit of refund for 2010, then you can put more into your income," she says. But if you owed taxes last year, then don't cut your withholding, or you'll have a tax bill in April.

Revisiting your W4 is also especially critical if your circumstances changed this year. For example, you might have had a new baby, adopted a child, gotten married or divorced, or made new home purchase. Personal finance magazine Kiplinger's has a calculator that gives an estimate of what an additional allowance would mean for your take-home pay.

In one case I know of, a young guy, married in 2009 but with no children, realized months after starting a new job this year that his W4 had been mistakenly submitted as single with zero allowances. Using a worksheet, he figured out he qualified for at least two. That change boosted his monthly net income by 30% and allowed him to pay down high-interest credit-card debt left over from the wedding. Now, he also has a little more cash on holiday presents without sinking into more debt.

The more allowances you claim, the less tax is withheld. But again -- proceed with caution. This only works if you've been getting a nice-sized refund each year.

Check with your company's human resource department to make sure that your resubmitted form is processed as soon as possible to get the bump in your next few paychecks. If you want to return to higher withholding level at the start of 2012, you may have to submit another W4 after the new year.

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]]>allowanceschidrenchristmas shoppingChristmasShoppingFinanceH&R Blockholiday shoppingHolidayShoppinginternal revenue serviceInternalRevenueServiceIRSpersonal financePersonalFinancetax refundTaxRefundW4withholdingCatherine NewTue, 01 Nov 2011 12:50:00 ESTBanks Back Away from New Fees, Focus on Cost Cutting Insteadhttp://www.dailyfinance.com/2011/10/29/banks-back-away-from-new-fees-focus-on-cost-cutting-instead/http://www.dailyfinance.com/2011/10/29/banks-back-away-from-new-fees-focus-on-cost-cutting-instead/http://www.dailyfinance.com/2011/10/29/banks-back-away-from-new-fees-focus-on-cost-cutting-instead/#commentsFiled under: , , , , , , ,

The financial world's fee fever may have abated -- for now.

On Friday, Bank of America (BAC) seemed likely to add more ways for customers to avoid the $5 debit-card fee after coming under severe criticism since it announced the new fee in September.

A person familiar with the bank's plans said that the altered rules would allow many customers to avoid the fee by maintaining minimum balances, using direct deposit for paychecks, or by using Bank of America credit cards, Reuters reported.

Other big and medium-sized banks including J.P. Morgan Chase (JPM), Citibank (C) and Key Bank (KEY) say they're not implementing fees for debit card use anytime soon, reported the The Wall Street Journal.

Still, the banks are looking for ways to make up for the revenue lost under new federal regulations enacted earlier this month, and to compensate for low interest rates. (Banks aren't making much money off your money these days.) That has translated into cost-cutting at some institutions. For customers, that could mean fewer real people to help you bank and more emphasis on ATM and online banking.

Last June, Wells Fargo (WFC) announced plans for cost cutting through streamlining technology and by pushing customers to use more online and mobile services, which would reduce the need for staff.

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Regional banks are on a cost cutting kick as well. Cleveland-based Key Bank has reduced processing costs associated with checking accounts, says David Bowen, its head of consumer products. The bank has also rolled out a rewards program to increase customer participation in automated banking.

The Connecticut Post reported that Webster and People's United banks could implement cost cutting moves in response to a decline in revenues caused by a squeeze on interest margins. Quite simply, banks are making less when they lend money out, thanks to today's lower interest rates.

FirstMerit Bank, which has more than 200 branches in Ohio and Pennsylvania, also said it would undergo cost-cutting measures, The Plain Dealer reported, though what those will look like are not yet clear.

BB&T, the18th-largest bank in the United States, this week asked bank managers to to come up with ways to cut costs, but has not announced specific measures, Reuters reported.




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]]>bank feesBank of AmericaBankFeesCitibankConnecticut Postcost cuttingCostCuttingdebit card feesDebitCardFeesDurbin AmendmentDurbinAmendmentFinancefinancial reformFinancialReformJPMorgan ChaselayoffsThe Plain DealerThe Wall Street JournalUnited StatesWells FargoCatherine NewSat, 29 Oct 2011 08:15:00 ESTMore Southerners Are Off the Banking Gridhttp://www.dailyfinance.com/2011/10/27/more-southerners-are-off-the-banking-grid/http://www.dailyfinance.com/2011/10/27/more-southerners-are-off-the-banking-grid/http://www.dailyfinance.com/2011/10/27/more-southerners-are-off-the-banking-grid/#commentsFiled under: ,

More Southerners Are Off the Banking Grid More people in the Southeast don't have bank accounts than in any other part of the country. Mississippi leads the country with more than 16% of households using cash-and-carry for all their transactions.

A new interactive map released by Wednesday by the Pew Charitable Trusts shows state-by-state comparisons for median bank fees and policies, as well as percentage of households that don't have a bank account, across the United States.

The national median monthly fee for a checking account is $8.95 -- or more than $107 per year. The national median minimum combined balance to avoid a monthly fee is $2,500.

But with fees rising for accounts at the biggest banks -- and with the median income falling -- more Americans could find themselves on the margins of the banking system, and unable to afford an account. Amenities that are part of having a bank account, including checking, savings, and access to credit, could slip out of reach for more millions. Today, many people without bank account rely on borrowing money from friends and family, or from payday loan operators, short-term lenders that charge interest rates of up to 400% annually.

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In eight states and the District of Columbia, at least 10% of households don't have any kind of bank account, according to the Pew Trust data. Overall, around 12% of all Americans do not have any financial institution to call their own, based on 2009 data from the Federal Deposit Insurance Corporation.

States with the fewest number of account-less households are clustered in northern New England, as well as Washington, Montana, Utah and Minnesota. Utah has the smallest percentage of unbanked households: Just 1.7% of households are unaffiliated with a financial institution.

People without a bank account also have trouble moving up the social ladder, as their lack of one puts things like mortgage loans out of reach.

"We know that those who are banked are much better able to save for long-term goals," says Susan Weinstock, director of the Safe Checking in the Electronic Age project for the Pew Trusts.

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]]>bank accountBankAccountbankscash economyCashEconomychecking accountCheckingAccountFederal Deposit Insurance CorporationFinanceInformation AgePayday Lendingpayday loansPaydayLendingPaydayLoansThe Pew Charitable TrustsunbankedUnited StatesWashington, D.C.Catherine NewThu, 27 Oct 2011 16:00:00 ESTThe Costs of Living Longer: Retiring Frugally vs. Finding Lovehttp://www.dailyfinance.com/2011/10/27/the-costs-of-living-longer-retiring-frugally-vs-finding-love/http://www.dailyfinance.com/2011/10/27/the-costs-of-living-longer-retiring-frugally-vs-finding-love/http://www.dailyfinance.com/2011/10/27/the-costs-of-living-longer-retiring-frugally-vs-finding-love/#commentsFiled under:

Planning for a comfortable retirement takes foresight, a lifetime of saving money and little familial luck. But planning for love? That might cost you.

As a widow, Goldie Linder, 92, lives in her own studio apartment, a choice that honors her desire for independence and is affordable with subsidized rent. She admits she feels lonely sometimes, but love stories from the library keep her company.

Leon Zerolnick, 93, (above, right) moved into a well-appointed senior home in Wayne, N.J., last summer. Within weeks he found a real life love story with Ellie Green, 86 (left). The two have been inseparable ever since.

Making Decisions: Live Alone or in a Home?

Whether or not you age actively and happily often comes down to where you live, and that's based on a matrix of financial, physical and emotional decisions. And while you can't control whether or not you find love, spending more -- sometimes a lot more -- to move into a socially stimulating senior-living environment could be the difference between aging gracefully alone or finding a new partner for the final years of life.

The financial issues are significant: The median national cost for assisted living is almost $40,000 a year, while home care -- a far smaller financial drain -- costs an average of $18 an hour in addition to one's regular housing costs, according to a 2011 survey by Genworth Financial (GWF). Single-occupancy rooms at a nursing home cost more than $77,000 a year. Other cost comparisons found at Caregiverslist.com price assisted living at $4,000 a month to start, with home care options ranging from $15 to $25 per hour.

But even tougher are the emotional issues that no one wants to talk about, like serious illness, dying and death. Elder-care experts agree that too often, care decisions are typically left until there is an emergency, such as debilitating fall or other medical emergency.

"The majority of American families will face [the need for long-term services], but no one wants to talk about it," says Larry Minnix, president of nonprofit advocacy group LeadingAge.

The age wave that began this year -- 8,000 people a day are turning 65 in the United States, according to Census Bureau data -- means that more seniors and their families are starting that conversation. By looking at the generation ahead of them -- the Leons and the Goldies -- they get a glimpse of the costs and benefits of different senior lifestyle decisions.

In Leon's case, he and his family had to make a snap decision after a terrible fire last July destroyed the condominium where the widower had lived independently. It was necessary to clear both the emotional and financial hurdles before Leon's move to the Emeritus senior living home, his daughter Elaine Schlossberg says. But for him, finding companionship has made the change worth it.

If the stigma of a group senior home is that care is too institutionalized and expensive, the knock on living independently is that it's too isolating. Goldie's family helped her to find a subsidized apartment that satisfied her need for independence while offering enough social outlets, like a nearby senior center, to keep her occupied. Her home caregiver, Ida, 83 herself, comes five times a week to help with chores.

Relying on Family, Managing Care Givers

Yet for many families, it is ultimately the physical condition of a senior that makes either assisted living or independent living impractical. And the alternative -- a nursing home -- often doesn't have the right feel or price tag, leaving much of the caregiving to family members and hired aides. The AARP estimates that in 2009, 42.1 million family caregivers provided elder care every day. The value of their unpaid work: $450 billion.

Ellen Loewy, 55, and her husband are taking care of her 84-year-old father in their home in Hicksville, N.Y. Her father's fading memory -- and her close relationship with him -- made home care the only option she'd consider, says Ellen, although she admits a break would be nice.

Respite comes from a local caregiver franchise. Ellen says the costs for hiring a home caregiver are around $2,500 to $3,000 a month for her father. Currently, she's trying to match her schedule with his caregivers so she and her husband can take a weeklong vacation in December.

Managing schedules and caregivers -- and paying the associated bills -- is like managing a small corporation, says Terri Corcoran, 60, who lives with her aging, bed-bound husband, in Falls Church, Va.

She says last year she spent $78,000 on home care alone, and finding the right aides has been an ordeal. No-shows, bad personal hygiene, and poor personality fits with caregivers been a challenge for Terri, and she says it has taken several years to find any consistency. But despite it all, Terry says she would never send him to a nursing home.

"We have a nursing home in our backyard and it's more expensive," she says, "He can't speak for himself at all and he wouldn't get the attention [he needs]. A lot of people I know hire [additional home care] aides to go to the nursing home."

Planning Ahead, Finding a New Life

Lee Refzam, 79, has been on both sides of the debate: Until this year, she lived independently in an apartment in Raleigh, N.C. After she took a tumble that compromised her mobility, she had to face up to the reality that she needed help. Her daughter, Jayne, lobbied for Lee to move to Seattle, where she lived, and into a senior living home.

Lee recalls being hesitant to lose her independence, move to a new a city and leave her old life behind. But five days after arriving she met Doug, 74, and within a few months, they got married. And they are not the only ones. Lee's voice lights up when she talks about all the new couples that have formed at the senior living home.

"We have become a close knit family, and some of them have gotten married," she says. "None of them will ever have a baby!"

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]]>AARPassisted livingAssistedLivingcaregiversElderly careFalls Church, VirginiaHealthhome carehome health aide jobsHomeCareHomeHealthAideJobsLocalnursing homeNursingHomeSeattleseniorsU.S.United States Census BureauVirginiaCatherine NewThu, 27 Oct 2011 07:30:00 ESTWhy 'Bank Transfer Day' Won't Workhttp://www.dailyfinance.com/2011/10/26/why-bank-transfer-day-wont-work/http://www.dailyfinance.com/2011/10/26/why-bank-transfer-day-wont-work/http://www.dailyfinance.com/2011/10/26/why-bank-transfer-day-wont-work/#commentsFiled under:

why 'bank transfer day' won't workMore than 64,000 of Americans have signed up to participate in "Bank Transfer Day" on November 5. Most will likely fail in their mission to switch to a new bank, according to a report released Tuesday.

Six out of 10 new checking account customers abandon online applications at new financial institutions, says this research from Javelin Strategy & Research, a market research group for financial services and payment companies.

"Newcomers to banks appear to be running into a lot of obstacles," says Mark Schwanhausser, senior analyst for multichannel financial services with Javelin.

Many of the obstacles to opening a new account are in place for security reasons. They include steps such as verifying an applicant's identity and that the money to open the account is rightfully theirs. But these same steps also slow down an online process that is perceived to be a faster, easier way to bank.

What can be done quickly in-person at a brick-and-mortar bank can often take more than a day the online way.
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Using secret shoppers, the Javelin research looked at 10 of the biggest consumer banks in the United States as well as a select group of five "tech-savvy" institutions. The report also found that customers abandoned applications to smaller institutions at a higher rate than they did to the big banks.

With more than one-third of Americans expressing interest in changing banks, according to a recent survey from Intuit Financial Services, the poor success rate for new accounts could present problems for smaller institutions hoping to draw in new customers.

"In terms of being a visible protest it is not a great one. It takes time to see [the change] in aggregate numbers," Schwannhausser says. Last year only 7% percent of banking customers changed financial institutions, down from 11% the previous year.

Catherine New can be reached at catherine.new@huffingtonpost.com.

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]]>bank feesBankFeesbankingbankschecking accountCheckingAccountFinancePersonal FinancePersonalFinanceswitch banksSwitchBanksCatherine NewWed, 26 Oct 2011 15:38:00 ESTMoney-Life Balance: What It Is and How to Get Ithttp://www.dailyfinance.com/2011/10/25/money-life-balance-what-it-is-and-how-to-get-it/http://www.dailyfinance.com/2011/10/25/money-life-balance-what-it-is-and-how-to-get-it/http://www.dailyfinance.com/2011/10/25/money-life-balance-what-it-is-and-how-to-get-it/#commentsFiled under: ,

Money-Life Balance: What It Is and How to Get ItWe're familiar with the idea of work-life balance -- that miraculous sweet spot where one's out-of-office world is rich and full, and doesn't collide with one's career.

But how about money-life balance? According to J.P. Morgan Chase and Co. (JPM) and the nonprofit advocacy group Consumer Action, a reasonable money-life balance considers the positive emotional benefits that go along with behaving responsibly with money. In other words, you achieve money-life balance if you're not racking up massive credit card bills during late-night online shopping binges on Zappos.com (ahem).

In a newly released survey conducted by Chase and Consumer Action, only one-third of 1,016 adults said they had money-life balance.

The Key to Good Balance
Financial planners point to budgeting as the starting point for achieving money-life balance. Besides the obvious tracking of income and expenses, having a budget means you don't have to spend precious mental energy thinking about whether a purchase is affordable or not.

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"Willpower is a strenuous way of controlling your actions .... routines can conserve energy," psychologist and Willpower author Roy Baumeister told DailyFinance in a video interview earlier this fall. "Set your life up so you don't have problems in advance."

Finding the right financial planning method for you is like buying shoes: You have to try on a lot of pairs before you find the right fit. It can be as simple as keeping a spreadsheet on your home computer or using a spreadsheet template from the Google personal finance library.

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Another popular way to put the brakes on overspending and excessive borrowing is by using a prepaid debit card. Loading a card with a fixed amount -- like $1,000 for the month -- is an easy way to manage costs and keeping funds you intend to spend separate from the money you have earmarked for saving.

There are also a number of online budgeting apps, such as Mint.com and SmartyPig.com, that can create neat visual graphics of how much you are spending on extras such as restaurants, versus necessities like student loans, as well as helping you set savings goals.

Do you have balance in your financial life? Please share your tips for how you achieved your own money-life serenity below.

Catherine New can be reached at catherine.new@huffingtonpost.com.

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]]>budgetcredit card debtCreditCardDebtFinanceGoogle Inchousehold budgetHouseholdBudgetJPMorgan ChaseMint.commoney-life balanceMoney-lifeBalanceoverspendingRoy BaumeisterSci/Techsmartypigwork-life balanceWork-lifeBalanceCatherine NewTue, 25 Oct 2011 16:40:00 ESTBeyond Card Fees: Banks Look To Sell Your Datahttp://www.dailyfinance.com/2011/10/25/beyond-card-fees-banks-look-to-sell-your-data/http://www.dailyfinance.com/2011/10/25/beyond-card-fees-banks-look-to-sell-your-data/http://www.dailyfinance.com/2011/10/25/beyond-card-fees-banks-look-to-sell-your-data/#commentsFiled under: , ,

Beyond Card Fees: Banks Look To Sell Your DataNew and higher debit card fees may not be enough to satiate the big banks. Financial institutions looking for more revenue are now eyeing another potential source of money: Selling your debit-card transaction data to marketers.

Already Visa (V) and MasterCard (MA) are marching into this new terrain by proposing to sell insights gleaned from credit-card spending data, The Wall Street Journal reported on Tuesday.

The two largest credit card networks have plans to sell marketers an analysis of anonymous data that has been sorted into various demographic segments, such as people who like to travel, the Journal reports. The data could be used to create targeted online advertising. So far, neither company has implemented these plans.

Banks are also poised to get into this business. Silicon Valley startup FreeMonee is one of the third-party marketing companies acting as broker between banks and merchants. The company will not share the names of any partners at this date, but says it is launching a merchant-reward plan with a major U.S. bank on Nov. 17.

Instead of targeted ads, banks' data will drive targeted coupons and deal incentives directly through a customer's checking account. For example, gadget buyers could get a coupon for a major electronics retailer through their bank debit card.

Too Late to Worry About Privacy?

As financial institutions seek to replace revenue cut under the Durbin Amendment -- part of the financial overhaul that limits the fees that banks can charge retailers -- they are exploring new business avenues. New technology -- and consumers' seemingly relaxing attitudes toward financial privacy -- are making these new channels increasingly plausible.

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Ron Shevlin, a senior retail bank analyst with the Aite Group, says merchant rewards through online banking make more sense than upping fees because they create revenue through positive incentives. Concerns about privacy are over-inflated he says, as consumer data remains with the banking institution at all times.

In FreeMonee's system, transaction data is stripped of any personal information and completely anonymous when the merchant sees it. This keeps consumers anonymous while still allowing retailers to see who they should target a discount.

"Banks need to replace revenue [lost under the Durbin Amendment]," says Jim Taschetta, the company's chief marketing officer. "Transaction data is accessible. With the right analytics, it can create matched incentives."

Even as better technology protects privacy, consumers are growing more comfortable with targeted advertising and offers.

A survey the company conducted with Harris Interactive showed that 57% of the 2,572 people polled were OK with their bank using purchase history to provide more tailored advertising and coupon offers. For customers under 35, that comfort level rose to 66% saying that they felt comfortable letting their bank use their spending data for customized offers.

So is brokering your transaction data to get deals a bad idea? Paul Stephens, director of policy and advocacy at the Privacy Rights Clearinghouse, says the trend is frightening. But it may be that ship has already sailed. Already millions of consumers readily give up access to their transaction data when using third-party bill pay and budgeting web programs.

"There is no such thing a true free lunch," Taschetta says. "[Consumers have to] make sure value proposition is at the right cost."

Catherine New can be reached at catherine.new@huffingtonpost.com.



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]]>bank feesBankFeesbig banksBigBanksdebit card feesDebitCardFeesDurbin AmendmentDurbinAmendmentFinancefinancial reformFinancialReformHarris Interactive IncMasterCardMastercard Incpersonal dataPersonalDataprivacyPrivacy Rights ClearinghouseSci/TechSilicon ValleyThe Wall Street JournalTransaction dataVisaCatherine NewTue, 25 Oct 2011 13:15:00 ESTAs Customers Flee, Big Banks Don't Seem to Carehttp://www.dailyfinance.com/2011/10/24/as-customers-flee-big-banks-dont-seem-to-care/http://www.dailyfinance.com/2011/10/24/as-customers-flee-big-banks-dont-seem-to-care/http://www.dailyfinance.com/2011/10/24/as-customers-flee-big-banks-dont-seem-to-care/#commentsFiled under: , , , ,

Leigh Lumley, 74, opened his checking account at Bank of America (BAC) in 1978. On Thursday, he closed it. The retired insurance salesman who lives Salem, Ore., moved his banking business to nearby SELCO Community Credit Union.

"It's an economic thing," he says about not wanting to add a $60 annual debit-card fee on top of his $12-per-month checking account cost. "I give my regrets to them."

Credit unions, mid-size banks and online institutions are eagerly stepping up to capture banking customers who are fed up with increasing fees at the biggest banks. And so far, it seems, those big banks don't mind losing their business.

Ron Shevlin, a senior retail bank analyst with the Aite Group, says that losing a small percentage customers may not even matter too much for the biggest banks. The recent rush that some of the largest credit unions are experiencing, including a boom in account openings at the Navy Federal Credit Union and BECU, represents an extremely small fraction of the biggest banks' customer base.

"[Big banks] are really trying to cull the bottom of their barrel," Shevlin says. "They are looking at their customer base and have to find ways of making it more profitable."

Even as as the biggest national banks shift increasingly into a pay-to-play model, regional banks and credit unions -- by design or coincidence -- are gearing up to absorb the fleeing customers. New promotions and products are creating competitive incentives for bank switchers, and could offer some good values to customers looking for more rewards, no fees and high-yield checking accounts.

Smaller Institutions, Bigger Incentives

EverBank, headquartered in Jacksonville, Fla., is offering $60 cash to bank switchers who open a high-yield checking account with them by the end of November. That the incentive amount is the same as what Bank of America is charging for annual debit card use is coincidental, says Frank Trotter, president of EverBank Direct.

Meanwhile, the Randolph Brooks Federal Credit Union is offering to pay customers 15 cents back on every debit card purchase. Bethpage Federal Credit Union in Long Island, N.Y., is offering free-for-life accounts to new customers who open a Bethpage Bonus checking account. Cleveland-based Key Bank rolled out its Key Rewards Program in late September, which gives rewards to customers for doing things like direct deposit or using ATMs for banking.

"The timing is very fortunate for us," says David Bowen, Key Bank's director of consumer products.

Meanwhile, it is hard to miss Capital One's (COF) campaign for it's new "5x" High-Yield Checking Account, which was launched in September.

With its catchy celebrity ads starring Jerry Stiller, the bank is making an aggressive push to grab upwardly mobile customers who can afford to carry a $5,000 monthly balance. While the campaign is part of a longer term growth strategy, the timing of it underscores a sentiment prevalent in the consumer outcry: Checking accounts should be working for you, not charging you.

Sexy marketing like "five times the national interest rate" might be ear-catching, but in reality, the national interest rate is pretty low, and five times that is not an extraordinary return. And expanding a basic checking account at a bank that offers rewards for online banking and direct deposits could leave you hooked in deeper than you'd have planned.

But for a banking customer like Lumley, no extra bells and whistles were wanted -- or needed -- to make the switch. He just wanted a plain, simple checking account that aligned with his personal finances and affordability.

"The people in Charlotte are going to lose a lot business," he says. "They don't understand the ramifications in the board room."

Catherine New can be reached at catherine.new@huffingtonpost.com.


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]]>bank feesBank of America CorpBankFeesCapital One Financial Corpcredit unionsCreditUnionsDebit CardsDebitCardsFinancefree checkingFreeCheckingJacksonville, Floridalocal banksLocalBanksNavy Federal Credit Unionsmall banksSmallBanksCatherine NewMon, 24 Oct 2011 07:10:00 EST