Fed Proposes New Rules for Home Mortgage Lending

Source: Federal Reserve Board of Governors

The Federal Reserve Board on Monday proposed enhanced consumer protections and disclosures for home mortgage transactions.  The proposal includes significant changes to Regulation Z (Truth in Lending) and represents the second phase of the Board's comprehensive review and update of the mortgage lending rules in the regulation.  The proposed changes reflect the results of consumer testing by the Board, which will begin accepting public comment.  The latest proposal would:

• Improve the disclosures consumers receive for reverse mortgages and impose rules for reverse mortgage advertising to ensure advertisements contain accurate and balanced information;
• Prohibit certain unfair practices in the sale of financial products with reverse mortgages; 
• Improve the disclosures that explain a consumer's right to rescind certain mortgage transactions and clarify the responsibilities of the creditor if a consumer exercises the right; and
• Ensure that consumers receive new disclosures when the parties agree to modify the key terms of an existing closed-end mortgage loan.

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Help for Unemployed Homeowners

Source: Findlaw

More Mortgage Aid for Unemployed Homeowners

Homeowners who are unemployed and facing foreclosure have one small reason to be a bit less worried. On August 11, the Obama Administration announced a $3 billion package to aid struggling homeowners. This aid is meant to supplement the "Hardest Hit Fund" originally set into motion last February by the President.

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The Most Stolen Cars

Source: Insurance Institute for Highway Safety

Cadillac Escalade, Ford F-250 pickup, and Infiniti G37 top list of highest insurance claims for theft

ARLINGTON, VA — The rate at which people file insurance claims for theft is highest for versions of the 2007-09 Cadillac Escalade, a luxury SUV, followed by the Ford F-250 crew pickup, Infiniti G37 luxury car, and Dodge Charger with a HEMI engine. Theft rates for these vehicles are 3 to 5 times as high as the average for all vehicles. These are the latest theft loss results for passenger vehicles 1 to 3 years old published by the Highway Loss Data Institute (HLDI), an affiliate of the Insurance Institute for Highway Safety.

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The High Cost of Child Care

Source: NACCRRA

Parents and The High Cost of Child Care: 2010 Update

Parents and the High Cost of Child Care: 2010 Update provides average costs of child care for infants, 4-year-olds, and school-age children in centers and family child care homes in every state. The average cost that parents paid for full-time care for a 4-year-old child in a center ranged from more than $4,050 in Mississippi to more than $13,150 a year in Massachusetts.

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Updated Data on the Cost of Employer Supported Health Insurance

Source: Kaiser Family Foundation

The Kaiser Family Foundation has listed survey data on the cost of employer supported health insurance for 2009.

Link

EBRI Updates Retirement Readiness Rating

Source: EBRI

The EBRI Retirement Readiness Rating™ was developed in 2003 to provide assessment of national retirement income prospects. The 2010 update uses the most recent data and considers retirement plan changes (e.g., automatic enrollment, auto escalation of contributions, and diversified default investments resulting from the Pension Protection Act of 2006) as well as updates for financial market performance and employee behavior (based on a database of 24 million 401(k) participants).

The baseline 2010 Retirement Readiness Rating™ finds that nearly one-half (47.2 percent) of the oldest cohort (Early Baby Boomers) are simulated to be “at risk” of not having sufficient retirement resources to pay for “basic” retirement expenditures and uninsured health care costs. The percentage “at risk” drops for the Late Boomers (to 43.7 percent) but then increases slightly for Generation Xers to 44.5 percent. Households in the lowest one-third when ranked by preretirement income are simulated to be “at risk” 70.3 percent of the time, while the middle-income group has an “at-risk” level of 41.6 percent. This figure drops to 23.3 percent for the highest-income group. These numbers are generally much more optimistic than those simulated for the same groups seven years earlier. In 2003, 59.2 percent of the Early Boomers were simulated to be “at risk,” as well as 54.7 percent of the Late Boomers and 57.4 percent of the Generation Xers. When analyzed by preretirement income in 2003, households were simulated to be “at risk” 79.5 percent of the time for the lowest one-third, 57.3 percent for the middle-income group, and 39.6 percent for the highest-income group.

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FTC Issues Final Rule to Protect Consumers in Credit Card Debt

Source: Federal Trade Commission

Amendments to Telemarketing Sales Rule Prohibiting Debt Relief Companies From Collecting Advance Fees Will Take Effect in October 2010

Starting on October 27, 2010, for-profit companies that sell debt relief services over the telephone may no longer charge a fee before they settle or reduce a customer’s credit card or other unsecured debt.

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United Policyholders Offers Consumer Resources on Insurance

Source: United Policyholders

United Policyholders was founded in 1991 as non-profit tax-exempt organization dedicated to educating the public on insurance issues and consumer rights. Our first major project was working with over a thousand victims of a devastating October, 1991 firestorm in the Oakland/Berkeley, California hills to help them understand their policies and receive prompt, fair insurance claim settlements.

Link.

A Primer on Calculating Social Security Pension Benefits

Source: Social Science Research Network

Social Security Benefits Formula 101: A Practical Primer

Francine J. Lipman
Chapman University - School of Law
James E. Williamson
San Diego State University - College of Business Administration
American Bar Association - Section of Taxation News Quarterly, Vol. 29, No. 4, Summer 2010

Abstract:
Despite the broad and deep reliance on Social Security benefits, very few of the hundreds of millions of current and future beneficiaries understand how the program works. This article presents through a hypothetical couple some of the basic concepts of the Social Security benefits formula.

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Premiums Rise 20% on Non-group Health Insurance

Source: Kaiser Family Foundation

Recent Premium Increases Imposed by Insurers Averaged 20% for People Who Buy Their Own Health Insurance, Kaiser Survey Finds

People who buy their own insurance report that their insurers most recently requested premium increases averaging 20 percent, according to a new Kaiser survey examining the experiences and views of people who buy health coverage in the non-group or individual market.

Overall roughly three in four people (77 percent) with non-group coverage report facing a premium increase with a current or previous insurer. Most say they paid the increase, but 16 percent of all policyholders say they switched plans, either buying a less expensive policy from their current insurer or switching companies altogether. After these so-called “buy downs” are taken into account, people who faced a premium increase ended up paying 13 percent more than before.

Many of those facing a premium increase who switched to a cheaper policy are now getting less comprehensive coverage than they were before. The survey found that those who switched are more than four times as likely to say their new plan offers worse benefits than their previous plan (49 percent) as they are to say their new plan’s benefits are better (11 percent).

+ Survey of People Who Purchase Their Own Insurance

Survey of Non-group Health Insurance Market

Source: Kaiser Family Foundation

Survey of People Who Purchase Their Own Insurance

While most people in the U.S. get health insurance through their employer, about 14 million people under age 65 have coverage through the non-group or individual market, which has faced scrutiny recently in news reports about some insurers’ steep rate increases and in the market reforms in the new health reform law that will take effect in 2014.

This survey provides insight into the current state of the non-group market and finds policyholders report that their insurers most recently requested premium increases averaging 20 percent. Most say they paid the increase, but some say they switched plans, either buying a less expensive policy from their current insurer or switching companies altogether.

The survey also provides national data on the average premiums and deductibles reported by people who buy their own coverage in the non-group market. It examines policyholders’ views and experiences with non-group coverage and a focused look at the issues facing policyholders with pre-existing conditions.

The survey involved a nationally representative random sample of 1,038 people ages 18-64 who purchase their own health coverage, conducted between March 19 and April 2, 2010.

+ Full Report (PDF)

FTC Report on Scholarship Fraud

Source: Federal Trade Commission

Federal Agencies Release Annual Report to Congress on Scholarship Fraud

The Federal Trade Commission, the Department of Justice, and the Department of Education have issued their annual report to Congress pursuant to the College Scholarship Fraud Prevention Act, describing their continued efforts to combat scholarship and financial aid fraud.  Each year, millions of students seek help in financing their college education, and some fall prey to scholarship and financial aid scams that “guarantee” money for college in exchange for a fee.

This report provides an update of the agencies’ activities to prevent and prosecute financial aid fraud, including the FTC’s law enforcement efforts and the agency’s consumer education campaign to help students, parents, educators, and financial aid administrators identify and avoid financial aid scams.  An analysis of consumer complaints about financial aid fraud shows that:

• complaints have remained fairly constant during the past decade
• compared to all of the other types of complaints registered with the FTC, the percentage of financial aid fraud complaints has decreased over time
• the nature of financial aid fraud has shifted from scholarship search services to financial aid consulting services.

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State Cigarette Excise Taxes: 2010

Source: National Conference of State Legislatures

See map.

PEW Finds Credit Card Act Has Reduced Deceptive Practices

Source: PEW Charitable Trusts

Pew Report Finds Credit Cards More Transparent, Yet Problems Remain

Washington, DC - 07/22/2010 - Most of the practices deemed “unfair” or “deceptive” by the Federal Reserve have disappeared from new credit card offers since federal passage of the Credit CARD Act last year, according to a new report by the Pew Health Group’s Safe Credit Cards Project. Yet new trends have emerged that could cost cardholders significantly.

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Non Card Users Pay for Credit Cards

Source: Federal Reserve Bank of Boston

Who Gains and Who Loses from Credit Card Payments? Theory and Calibrations

Public Policy Discussion Paper No. 10-3
by Scott Schuh, Oz Shy, and Joanna Stavins

Merchant fees and reward programs generate an implicit monetary transfer to credit card users from non-card (or “cash”) users because merchants generally do not set differential prices for card users to recoup the costs of fees and rewards. On average, each cash-using household pays $151 to card-using households and each card-using household receives $1,482 from cash users every year. Because credit card spending and rewards are positively correlated with household income, the payment instrument transfer also induces a regressive transfer from low-income to high-income households in general. On average, and after accounting for rewards paid to households by banks, the lowest-income household ($20,000 or less annually) pays $23 and the highest-income household ($150,000 or more annually) receives $756 every year. We build and calibrate a model of consumer payment choice to compute the effects of merchant fees and card rewards on consumer welfare. Reducing merchant fees and card rewards would likely increase consumer welfare.

Full-text paper