Securities backed by student loans for sale

There is a big sale of student loans prepared – and the loans are all federally backed. These “securities” made of student loans are going to be sold soon. Is it a good idea to sell government-backed loan credit? Or are businesses relying on taxpayers to bail them out should something go wrong?

Source for this article: Student loan backed securities up for sale by Personal Money Store

How these banks got the loans

Student loans are privately administered, but not for much longer. Private companies administer the loans, but the government backs them up should the students default on the loans. In theory, students get the best personal loans through this private lending system. A new student loan bill changed this practice, and also the federal government will now administer loans.

The student-loan backed securities

Like the subprime mortgage securities created by Wall Street, student loan securities are "bundled.” These loans are reorganized into products bought and sold by investors. Since the government backs the loans, they are considered a lot more "safe". $ 855 million worth of student loan securities can be sold by Citigroup. $ 1.23 billion of student loan backed bonds and securities can be sold by Bank of America. Sallie Mae will even sell $ 1.7 billion in bonds.

A intelligent financial investment?

The student-loan backed securities being sold as federally guaranteed loan securities will benefit the companies and investors. These student loan bonds will not end up benefiting the taxpayers that take on the risk of the student loan securities. This situation has been partially resolved, but not entirely. The middleman position is being typically removed by probably the most recently-passed student loan bill. You will find some questions if the federal government is going to continue selling these bundled financial products? At least if it does, the taxpayers will see the benefit this time.

Notifying credit card holders of interest rates in front of Supreme Court

The Supreme Court will be hearing a new case that questions the responsibilities and rights of credit card holders and lenders. Verbal arguments in McCoy v. Chase Manhattan Bank will be heard during the next court session. The case is a class-action suit that alleges credit card companies cannot retroactively increase the interest rate on a card without notification. The card issuer is claiming that there was notification – in the initial card holder agreement that was signed.

Source for this article: U.S. Supreme Court to consider credit card notification by Personal Money Store

How the card holder sees the case

In McCoy v. Chase Manhattan Bank, James A. McCoy is claiming that Chase Manhattan violated the law when it raised his credit card interest rate. After McCoy missed a credit card payment, Chase bank retroactively upped the interest rate on that month's transactions. McCoy had agreed to this increase by signing the cardholder agreement, but he did not receive separate notification of the increase. This modification, McCoy alleges, was illegal under new federal regulations.

The case of the credit card issuer

Chase-Manhattan Bank appealed a lower court decision on this case to the Supreme Court, saying the Truth in Lending Act was complied with in this case. TILA requires that written notification of changes to interest rates be provided by these short term lenders. The TILA has one provision that says if an item has been agreed to in the past, they do not have to re-notify the card holder. Essentially, the debate comes down to interpretation versus ambiguously written laws.

Credit card payments at issue

The initial event that led to the McCoy v. Chase Manhattan Bank case was, in the end, in response to a late payment on a credit card. The Truth in Lending Act requires credit cards and unsecured loan companies to be transparent with their charges. What's your opinion: are cardholders responsible for reading and remembering the whole agreement, or should card companies be required to notify them of everything?

Congress agrees upon auto dealer exemption

The National Automobile Dealers Association has political muscle, and it wasn’t afraid to use it to get the highly sought-after auto dealer exemption from Consumer Financial Protection Bureau oversight. NADA spokesman Bailey Woods told Automotive News that House and Senate committees made the right decision, as the CFPB would make dealer financing for auto loan application more involved and ultimately a lot more costly. As it stands, it is Christmas in June for auto dealers; they lobbied and Congress delivered.

Source of article: Congressional committee agrees on auto dealer exemption by Car Deal Expert

A victory for auto dealer exemption

The Congressional committee’s decision on the auto dealer exemption puts car loans in a different sphere than credit cards, mortgages and other varieties of consumer credit. Arranging auto loans for people with bad credit in-house will be unhindered for those dealerships with the capability, but the CFPB will still keep watch on banks and credit unions that work with auto dealers. The FTC will continue to have jurisdiction over auto dealers, but their governance has proven ineffective in the estimation of some members of Congress (legislative action can take eight years). The rule system governing the FTC is much a lot more involved the rule set to which other government agencies must adhere, which may explain the inefficiency of the former.

Rep. Barney Frank bemoaned the lack of votes

Barney Frank and other House Democrats wanted auto dealers to be put on a leash, as did President Obama, the Pentagon, military families, consumer rights and civil rights grounds, indicates Automotive News. Where the finance bill began and where it ended up after NADA’s lobbying was a tale of the power of campaign contributions. When the larger goal fell out of reach, Frank and crew did obtain the concession that the FTC would be allowed a shorter turnaround time in their investigation efforts. Yet in spite of this, some consumers may nevertheless be subject to those practices of dealer finance that are labeled less than reputable by some. Auto dealers claim this is merely than making ends meet in a tough economy.

Find a lot more data here:

http://www.autonews.com/apps/pbcs.dll/article?AID=/20100625/RETAIL07/100629912/1128

Increasing incomes doesn’t people spend a lot more

United States financial numbers for May 2010 are in, and as outlined by Bloomberg Business, individual incomes outpaced consumer spending quite a bit. This reportedly made it possible for households to boost their savings and support the economic recovery, although how slower spending boosts the nation’s economic recovery is in question. It might just be viewed as another instance of reporting sleight of hand, similar to the way U.S. unemployment numbers were being reported the past few months.

Source of article: Consumer spending fails to keep pace with increasing incomes by Personal Money Store

Where the money needs to go – consumer spending

Reports show the table is ready for consumer spending. Americans are working longer, salaries are trending upward, and payroll numbers are up. Then again, Bloomberg explains to us in an additional story that the large number of jobless in America really lowers salaries as there are so numerous applicants (supply and demand), so perhaps one hand doesn’t know what the other is doing in Michael Bloomberg’s domain. Whichever the case, the Federal Reserve has kept interest rates extremely steady, so fewer folks will have to dive to the nearest cheap personel loans bunker to eat.

Recovery not propelled by consumer spending

Nevertheless, as RBS Securities economist Omar Sharif told Bloomberg, the level of consumer spending should be enough for sustained growth, but not enough to drive recovery efforts. Yet despite underwhelming growth in consumer spending, numbers still beat the median estimate of 61 economists surveyed by Bloomberg (.1 percent gain). Wages were up .5 percent about 1.3 percent given that March, which was the largest increase over 3 months since December 2007 when the current recession started, and individuals looked to the easy cash loans more often than before. Savings increased substantially: 4 percent from April into May ($ 454.3 billion). That’s the highest such increase in a single month since September 2009, as outlined by Bloomberg.

It appears good news for the most part

According to Sal Guatieri of BMO Capital Markets, American consumers have effectively rolled with the punches. ”As long as jobs are coming back, people will continue to spend,” he said to Bloomberg. Paying down debt such as from a fast personal loans and rebuilding savings are admirable financial goals that will continue to see improvement as positive economic factors continue to emerge.

More data about this topic at these websites:

Bloomberg Business

businessweek.com/news/2010-06-28/u-s-economy-income-gains-boost-spending-savings.html

Bloomberg (lower salaries)

bloomberg.com/news/2010-06-27/jobless-produce-u-s-investor-profits-on-productivity-with-less-inflation.html

Consumer spending from the Fox Business point of view:

youtube.com/watch?v=xmK9gC2nW0Y

Belt Basics-- The belts that run your engine

The major parts of your engine are typically run by belts. Though they’re easier to ignore, but belts are incredibly essential. What is the best way to care for engine belts?

Article source: Belt Basics– The belts that run your engine by Car Deal Expert

Belting out the basics

Rubber is typically the primary component in the belts in an engine. Instead of just snapping, belts will generally crack, decay, or wear. Because belts are run in hot-and-cold conditions, they’re more prone to wearing out. Belts generally run the cooling system, alternator, and accessories in a car. In some cars, there are three or four separate belts that run each part. A single "serpentine" belt generally runs every little thing in a newer engine.

Changing out your own belts

A belt that squeaks or squeals means that it is stretching out. Every time you check your oil or take your car to the mechanic, you need to have your belts checked. If you see a belt that is cracking or splitting, it is time to replace them all. With some experience, replacing a belt is relatively easy. First, find the diagram of the belt and copy it down. Remove the tension from the belt before you remove it. Put the new belt in the engine and re-tighten the tension.

Should you dress the belt?

Helping a belt last can be a tough job – and some suggest that you "dress" it. This is only partially true. Dressing a belt can make it stop squeaking or squealing for a short amount of time. A belt making all kinds of noise is a warning – so before you dress it, you need to check things out. You should only dress a belt for temporary silence while you get your car to the mechanic.

Texting at work not protected by law, says Supreme Court

Many people have tried texting while at work. The technology is ubiquitous in developed nations, and because many people spend the majority of their waking lives in the workplace, it stands to reason that there will be quite a few occasions when workers resort to texting at work, regardless of employer policy. The question of whether these communications are automatically private has been addressed by the Supreme Court in the California City of Ontario vs. Quon decision, reports the Los Angeles Times.

Article Source: Texting at work not protected by law, says Supreme Court by Personal Money Store

Texting at work – Understand your employer’s policy

Police Sgt. Jeff Quon sent sensitive personal messages via a work pager, and later attempted to invoke his Fourth Amendment right to protection against an illegal search and seizure when his superiors accessed the texting at work evidence. The Supreme Court ruled with a 9-0 in favor of the Ontario Police chief, claiming that since there was reason to believe a work policy was being violated, his search of Jeff Quon’s texts did not violate Quon’s constitutional rights. Hence, the court ruled that the search was reasonable.

Sgt. Jeff Quon could lose a lot

According to the U.S. Bureau of Labor Statistics, a police sergeant earns an average of $50,000 per year, although the figure can be higher depending upon experience, locality and other factors. If Sgt. Jeff Quon happened to be placed on some manner of unpaid leave for his texting at work escapades, he’d probably end up seeking sources of fast cash. As it stands, he had already won an appeal against the Ontario Police Department via the 9th Circuit Court of Appeals, writes the Times. But the Supreme Court overturned the decision.

Justice Anthony Kennedy said the search had ‘a legitimate work-related purpose’

Arch Wireless, the contractor that handled the Ontario Police Department’s text paging system, was subpoenaed to release Sgt. Quon’s racy personal messages to his wife and a girlfriend, according to the L.A. Times. Justice Kennedy of the Supreme Court ruled that the search was justified on work-related grounds and was not unreasonable. Interestingly, Quon’s immediate supervisor had told him that he could use the pager for personal messages as long as he was willing to pay all of the extra fees. Yet the nature of said personal messages by Jeff Quon warranted there to be some kind of investigation, in the Supreme Court’s view.

City of Ontario vs. Quon is reportedly the first case on record to involve privacy issues regarding texting at work with any kind of employee-issued device.

More information on this topic

Los Angeles Times

latimes.com/news/nationworld/nation/la-na-court-worker-texting-20100618,0,7772406.story

Bureau of Labor Statistics

bls.gov/oco/ocos160.htm

Other examples of inappropriate texting at work: (WARNING: Some inappropriate language can be heard)

History of the Predictive Text Swearing

youtube.com/watch?v=6hcoT6yxFoU

Online credit card scam stole millions with just pennies at a time

An online credit card scam that stole millions of dollars, pennies at a time, was halted by the U.S. Federal Trade Commission. The online credit card scam used identity theft to steal small amounts of money that went undetected by consumers or fraud detectors. Over four years, a lot more than a million individuals were charged anywhere from 25 cents to $ 9 on their credit cards in a scam that added up to be more than $ 10 million.

Source of article: Online credit card scam stole millions, pennies at a time by Personal Money Store

Victims didn't even notice

The elaborate online credit card scam went undetected because scammers made very small charges and set up more than 100 bogus companies to process the transactions. It was reported by PC World that U.S. credit card holders financed most of the scam because about 94 percent of all charges went uncontested by the victims of identity theft. As reported by the FTC, the scammers charged 1.35 million credit cards a total of $ 9.5 million, but only 78,724 of these fake charges were ever noticed. Typically they made just one charge per card number to fake business names such as Adele Services or Bartelca LLC. Avivah Litan, an analyst with the Gartner research firm who tries very hard to follow bank fraud, told PC World:

“They know that many of the fraud detection systems won’t detect anything under $ 10 and they know that consumers won’t complain about a 20 cent fee. What’s different here is the scale, and that they got away with it for so many years.”

A trend in credit card fraud

The online scam is certainly going to be a textbook case about how online services used to facilitate business within the 21st century could be exploited for credit card fraud. As credit cards are increasingly getting used for inexpensive purchases–they’re now accepted by soda machines and parking meters–credit card fraud criminals have cashed in on the trend. IDG News Service reports the scammers found loopholes in the credit card processing system that allowed them to set up fake U.S. companies that then ran more than 1 million fake credit card transactions through legitimate credit card processing companies. First Data was one of the favored scammers. 110 of the 116 fake merchant accounts the FTC uncovered were with First Data. They set up bogus accounts with BBVA Compass as well.

Source of identity theft uncertain

The FTC believes the defendants may have run credit checks on the identity theft victims to be certain they were creditworthy. The FTC doesn’t know where the scammers obtained all of the credit card numbers that they charged, however they could are purchased from online carder forums, black market Web sites where criminals buy and sell stolen data.

A textbook credit card scam online

To create the virtual infrastructure for the online credit card scam, Webpronews reports the scammers set up fake physical addresses and fake web online websites pretending to sell products, along with a real company’s tax number found online. Scammers then sent out quite a few spam e-mail pretending to recruit American finance managers for offshore financial service companies. Those selected by the scammers were told that they needed to set up dummy corporations to receive the credit card payments and send the money to bank accounts in Lithuania, Estonia, Latvia, Bulgaria, Cyprus and Kyrgyzstan.

A lot more information accessible at these sites:

PC World

pcworld.com/businesscenter/article/199952/ftc_says_scammers_stole_millions_using_virtual_companies.html

IDG News service

computerworld.com/s/article/9178560/FTC_says_scammers_stole_millions_using_virtual_companies?taxonomyId=17

Webpronews

webpronews.com/topnews/2010/06/28/ftc-cracks-down-on-online-payment-scam