Tuesday, July 27, 2010

What Financial Reform Means to You

The Dodd-Frank Wall Street Reform and Consumer Protection Act, otherwise known as Financial Regulatory Reform, will soon be signed into law by President Obama. The bill is 2,319 pages long -- there's no single article that can fully explain every way in which this sweeping legislation will ultimately impact your life, but it's important to understand at least the basics.

Let's take a look at exactly how this reform bill will impact your life in the coming months and years.

Mortgage Lending
The changes made to mortgages will help assure that consumers are less likely to get nailed with high fees and bad loan terms. The days of the "liar loan" are now officially over. Lenders will now be required to fully document a borrower's income before agreeing to provide a mortgage loan. They will also be required to determine that the borrower can otherwise repay the loan.

The bill also prohibits lenders from offering incentives (called yield spread premiums) to mortgage brokers in exchange for originating loans with terms unfavorable to borrowers, such as higher interest rates.
• Prepayment penalties for most mortgage loans will no longer be allowed.

The downside of these consumer protections? By making mortgages less profitable for lenders, they could become tougher to get for borrowers. For example, we're already seeing stricter lending standards with higher required down payments.

Free Credit Scores

Consumers can already get a free look at their credit histories once every year from the big three credit bureaus -- Experian, TransUnion and Equifax (NYSE: EFX - News) -- by going to AnnualCreditReport.com. In its earlier form, the new law had extended that ability to credit scores as well, offering one free look at our credit scores annually.

In the final version, however, the bill only allows consumers who are denied a loan or suffer some other sort of "adverse action" to get a free look at their credit score.

In addition to being turned down for a loan, other "adverse actions" that could result in a free look at your credit score include an increase in your cost of insurance, being charged more for, or being denied, a car lease, or if the interest rate you're offered on a credit card or loan is higher than one being offered for those with excellent credit.

Debit Card Interchange Fees

While final changes are still months away, the new bill will very likely save merchants money. Whether it will save any for you, on the other hand, is less certain.

• Interchange fees, also known as "swipe fees," are charges merchants have to pay Visa and Mastercard for processing debit and credit card transactions. The fee for debit cards currently averages 1.6% -- credit cards' swipe fees average more than 2%. Under the new law, the Federal Reserve can cap the fees on debit cards (but not credit cards) limiting them to what they decide is "reasonable and proportional to the actual cost incurred."
• It will take months for the Federal Reserve to decide what's reasonable, but in Europe, Visa and MasterCard interchange fees are as low as 0.2% -- in Australia they're capped at 0.5%. Odds are that caps here will be higher than those charged on other continents, but lower than they are today. In lobbying for this change, retailers virtually assured Congress that they would pass along their savings to consumers. Many consumer advocates, however -- including this one -- are skeptical.
• Merchants will be allowed to offer a discount to customers who pay with cards that carry lower transaction fees -- that's something that hasn't been allowed in the past. They'll also be allowed to set both minimums and maximums for card transactions.

An All-Powerful Consumer Watchdog

One of the primary changes brought about the new law is the establishment of a Consumer Financial Protection Bureau within the Federal Reserve. This new agency will have sweeping powers to regulate virtually every kind of lending activity and lender, from the largest banks to the smallest pawn shops.

But there is one large group of lenders that escapes oversight by the new agency: car dealers.

According to Edmunds.com, of the 11 million cars expected to be sold this year, about 70% will be financed or leased through a car dealership. But despite opposition from both consumer advocates and the White House, Senate republicans successfully excluded car dealers from regulatory overview by the newly formed Consumer Financial Protection Agency.

The argument from car dealers and their lobbyists? They're already regulated by plenty of state and federal consumer protection rules that are designed to prevent practices such as "bait and switch" lending and loans packed with undisclosed extras such as extended warranties.

In addition, dealers argued, if another layer of regulations are imposed on them, lending and leasing may become so unprofitable that many dealers would simply stop offering it, ultimately hurting consumers.

Bank Bailouts

While the bill didn't go as far as many wanted -- for example, it doesn't give the government carte blanche to preemptively break up banks it considers "too big to fail" -- it did establish some new rules that could head problems off before they become systemic. It also should reduce the amount of money taxpayers would be required to shell out should good banks go bad.
• In the case of a failing financial institution, the Federal Deposit Insurance Corp. (FDIC) will borrow from the Treasury to pay for the cost of liquidation, then get its money back by selling off the institution's assets. If asset sales aren't enough to repay the Treasury, the FDIC could charge a fee to other banks.
• Payments to creditors of a failing institution designed to prevent a crisis from spreading will be limited to payments a creditor would receive in bankruptcy. In other words, money owed by failing financial firms to other companies might not be entirely repaid. This would prevent a repeat of the $160 billion taxpayer bailout of AIG.
• If a bank fails, the FDIC will have the ability to take back compensation paid to its current or former senior executives for the two years preceding its failure. In addition, the government can ban senior executives found responsible for a bank's failure from future work in the financial services industry.

Additional Protection for Investors and Consumers
• Financial literacy: The legislation requires the SEC to conduct a financial literacy study. It also creates an Office of Financial Literacy that will be tasked to develop programs to teach Americans about savings, loans, liens and fees. The agency would establish standards for financial advice programs and help keep Americans, particularly seniors, from becoming victims of scams.
• Investor Advocate: The legislation creates an Investor Advocate within the SEC that will represent the interests of retail investors.
• Greater disclosure to retail investors: The legislation requires that adequate disclosures be made to retail investors before they are allowed to invest in financial products.
• More protection for underserved investors: Another goal is to allow the un-banked and under-banked greater access to mainstream financial institutions.

By: Stacy Johnson

CREDITS: Money Talks News

You Don’t Have to Pay for Cable TV

You might not know it, but you can watch HDTV with an antenna.

Over 99% of U.S. TV households can receive at least one local station over the air, while 89% can watch five or more. The picture is perfectly clear thanks to the switch to digital TV completed on June 12, 2009. You’ll either see a crisp, beautiful image or no image at all (static is a thing of the past). And the best part? All your favorite programming will still be in HD.

HDTV is more expensive for local stations to produce, so it’s common to see a station broadcast in regular standard definition during the day, but switch their signal to high definition for prime time. So while the local news may not be in HD, your favorite shows like Glee, America’s Got Talent, and The Bachelorette will be.

Of course, you will need an antenna to make this work, but your HDTV will also have to have an “HDTV tuner” built in. This is sometimes referred to as “integrated HDTV”. If not, you’ll need to buy a separate HDTV tuner that connects your existing HDTV to an antenna. To check, you may have to consult your HDTV’s manual, do a search online, or contact the manufacturer.

AntennaWeb, a site provided by the Consumer Electronics Association (CEA) and the National Association of Broadcasters (NAB), will show you exactly where to point your antenna for the best reception at your address. It will also let you see which stations are broadcasting over the air in your area. There may be more than you think.

What about shows that aren’t on broadcast channels?

Two of my favorite shows, The Daily Show and The Colbert Report, air on Comedy Central, which isn’t a channel you can receive with an antenna. Fortunately, Internet to the rescue! If you’ve got a computer and internet access (there’s no way I’d be able to live without paying for Internet), both shows can be watched in their entirety on their respective websites for free. (Full episodes of The Daily Show and full episodes of The Colbert Report). Like most online shows, you’ll have to sit through a few commercials, but less than you would see watching the same show on television and without having to pay for the privilege.

The popular website Hulu has hundreds of shows available to watch online, all free, commercial-supported, but it’s not the only option. Netflix is a great way to watch past seasons of favorite shows, which can be streamed instantly to almost 100 devices like your computer, Xbox, PlayStation, Wii, iPhone (soon), etc. You can watch as much as you want for only $9 a month; compared to the cost of a cable or satellite subscription with premium movie channels, a pittance. Plus, they’ve got almost every movie you’ve ever heard of, offer a 2 week free trial, and let you cancel whenever you want.

Where do you watch live sports online?

If you’re getting your Internet from one of these providers, you can access ESPN3, a “broadband network for live sports programming”. The site is currently in beta and not every game on TV is available online, but you can watch thousands of games and events (even World Cup soccer) live with chat, stats, scoreboards, and picture-in-picture. According to them:

Each year ESPN3 delivers thousands of live games and events like College Football and Basketball, NBA, MLB, UEFA Champions League Soccer, The Masters and US Open Golf, all 4 Grand Slam tennis tournaments, and more. Plus you get a fully interactive experience with real time in-game stats and scoreboards and live chat.

Other sites to watch sports? MLB.tv has an $80/year membership that will let you stream every regular season baseball game (with a few exceptions) right to your computer/PS3/etc, live or on-demand, and in HD when available. Given the success of these ventures, look for even more games and events to be broadcast online through sites like ESPN3 and MLB.tv. The interactive nature of the web allows for an engaging, social experience and ultimately, more enjoyable spectating.

But what about “premium” shows, like the ones on HBO, Cinemax and Starz?

Some shows can be purchased individually from sites like Amazon.com or Apple’s iTunes Store a day or two after they air. If you do the math, you’ll find that purchasing your favorite show is likely to be cheaper than paying for the channel it airs on month after month.

For everything else, you’ll have to be a little patient and wait for the inevitable DVD release of last season. The typical DVD set for one season of a television series costs between $25 and $35, so you could buy several sets each month and still save over the cost of cable or satellite. However, if it comes out on DVD, chances are it’ll show up on Netflix where that $9 a month subscription is now looking really good.

How does all this internet video get on my TV?

While streaming video to your computer sounds great, most people want to watch television on their television. Fortunately, there are tons of options to get your favorite shows on your big screen. First, check your computer for an output designed to work with either an external monitor or TV. If you’ve got one, you may be able to buy a cable and adapter that will plug your computer directly into your television. Doing so is a bit like putting together a puzzle; you want to find pieces that connect to each other. This can be a little tricky, especially with all the different possible connections on the market. So if you’re not tech savvy, you may want to get a little help from someone who is or check out this video from Howcast called ”How To Connect Your Laptop To Your Television”.

You might also want to look at “media streaming” boxes. Like the cable box you’ll be ditching, these connect to your TV and allow you to watch programming you wouldn’t otherwise be able to see. The big difference? You can watch free and paid internet content. Depending on the box, you’ll be able to stream video from Netflix, Amazon, MLB.tv, Hulu, and YouTube, audio from internet radio stations, Pandora, and Last.fm, and watch movies or look at photos that have been stored your home PC. Think of media streaming boxes as mini-computers for your TV.

The Roku Digital Video Player is $80 ($100 for the HD version), but you can get $20 off if you’re a new Netflix subscriber. It’ll stream dozens of “channels” from the web right to your TV for less than the price of one month of cable or satellite. Plus, it’s an open platform so developers are adding new channels all the time.

The Boxee Box by D-Link wont be available for purchase until later this year, but you can install their free software on your home computer right now. It’ll turn your Mac or PC into a full fledged media player, with an interface specifically designed to look great on TV. It’s much easier to navigate with a remote and provides easy access to your personal collection of movies and music, as well as every video website under the Sun.

Google will soon enter the market to pair TV and the Internet with Google TV, a software package they developed to be built in to TVs, Blu-Ray players and set-top boxes. It’s sort of a super-TiVo that will let you watch and record broadcast programming while seamlessly switching to internet streaming when what you want to watch isn’t on a channel you receive. In essence, Google created the perfect companion for anyone who wants to ditch cable or satellite without sacrificing their favorite shows. Upcoming devices with Google TV built in have been announced by Sony, Logitech and Intel, but wont be available until later this year.

Apple TV is like an iPod for your TV. It’ll let you stream videos and audio from your iTunes collection, but only if they’re in the right format, and nothing from Hulu, Netflix, etc. Of course, anything you purchase from iTunes will play perfectly, so this may be a great option for some. However, at $230 with seemingly limited capabilities, your best bet might be to wait for the Apple TV 2 (if such a thing is coming).

So there are plenty of inexpensive options. You don’t need a new computer for every TV in your house, though with the money saved by cutting out cable or satellite, you could afford several.

How much does all of this cost?

While the average cable bill is $75 a month or $900 a year, I was paying closer to $150 a month or $1800 a year to see everything I wanted. Now I pay $9 a month for my Netflix subscription and watch everything else for free online or over-the-air broadcast. I don’t need a TiVo (since you can just hit pause on a website), and I use an old, cheap computer running Boxee hooked up to my TV as my “media center”. My $1800 a year expense is now only $108 and I can watch just about everything I want, whenever I want.

Update: Hulu Plus

Just one day after writing this story (yesterday), Hulu announced their new premium membership called Hulu Plus. For $9.99 a month, it promises full and current seasons of shows like The Office, Friday Night Lights, Dancing with the Stars and Lie to Me. Shows can be watched on your computer, through an iPhone/iPad app, or on a compatible television, blu-ray player or gaming system. While you are paying money for a premium service, Hulu has said that programming will still be advertising supported, so be aware. Currently, the full Hulu Plus catalog is only open to those who request an invitation, but look for wider availability soon. Personally, I can’t wait to try it out.

Credits to: MoneyTalks News

TPS Extension for Salvadorans

WASHINGTON—U.S. Citizenship and Immigration Services (USCIS) announced today that the Department of Homeland Security (DHS) will extend Temporary Protected Status (TPS) for eligible nationals of El Salvador from the current expiration of Sept. 9, 2010, through the new expiration date of March 9, 2012. During the past year, DHS and the Department of State have reviewed the conditions in El Salvador. Based on this review, Secretary of Homeland Security Janet Napolitano has determined that an 18-month extension is warranted because the conditions that prompted the 2001 TPS designation of El Salvador following a series of severe earthquakes persist and temporarily prevent El Salvador from adequately handling the return of its nationals.

Under the extension, individuals who have been granted TPS are eligible to re-register and maintain their status for an additional 18 months. There are approximately 217,000 nationals of El Salvador (and people having no nationality who last habitually resided in El Salvador) who may be eligible for re-registration. TPS does not apply to Salvadoran nationals who first entered the United States after Feb. 13, 2001.

To maintain TPS status, Salvadoran TPS beneficiaries must re-register during the re-registration period from July 9 until Sept. 7, 2010. It is important to re-register as soon as the re-registration period opens to allow sufficient time for USCIS to complete all the routine background checks and further application processing. Applications from Salvadoran TPS beneficiaries will not be accepted before July 9.

USCIS will issue a new Employment Authorization Document (EAD) to eligible TPS beneficiaries who timely re-register and apply for EADs. However, USCIS will automatically extend the validity of existing EADs held by Salvadoran TPS beneficiaries for six months, through March 9, 2011. This automatic extension will allow sufficient time for eligible TPS beneficiaries to re-register and receive an EAD without any lapse in employment authorization. The Federal Register Notice explains how TPS beneficiaries and their employers may determine which EADs are automatically extended.

TPS beneficiaries must submit Form I-821, Application for Temporary Protected Status, to re-register. Applicants seeking an extension of employment authorization must file Form I-765, Application for Employment Authorization, with the required fee. If an individual is only seeking to re-register for TPS, the applicant must still file Form I-765 for data-gathering purposes; the filing fee is not required. Re-registrants age 14 and older must submit the biometric fee. Applicants who are able to demonstrate an inability to pay may request a fee waiver for the application, biometric service fees or both. Failure to submit the required application and biometric fees or a properly documented fee waiver request will result in the rejection of the re-registration application. For information on fee waivers, visit the Fee Waiver Guidance Web page at www.uscis.gov.

Further details on the extension of TPS for El Salvador, including the application requirements and procedures, are available at www.uscis.gov and in the Federal Register Notice. TPS forms are available online or by calling the toll-free USCIS Forms line, 1-800-870-3676 1-800-870-3676. For additional information, applicants may also contact the USCIS National Customer Service Center toll-free number, 1-800-375-5283 1-800-375-5283.

Last updated:07/09/2010 Credits to US Citizenship Web page.

JFK; Bush; LBJ; Nixon