Leadpile’s Blog

Opening a checking account with no required balance or no monthly service fees may be something that is soon going to be history. With the suffering economy, there has recently been lots of discussion and controversy surrounding overdraft transaction fees, as a new federal regulation is expected to eliminate them. To make up for these losses in revenue the banks are looking into adding additional fees to checking accounts to help fill the gap.
According to Bankrate.com effective July 1st overdraft coverage will be an opt-in service. “Banks that offer overdraft, or bounce, protection will send opt-in notices to customers explaining the service. Banks will not be allowed to charge a fee for paying an overdraft that occurs because of an ATM transaction or a one-time debit card transaction unless the customer agrees. The rule does not apply to overdrafts that occur through the use of checks or ACH transactions such as bill pay.”
Overdraft fees have affected millions of people during this hard time and often times can be looked at as making a hard situation harder. Here at LeadPile we connect consumers possibly needing help to avoid banking overdraft fees or late payments with payday loan lenders who can loan money for a period of time to get them through. We will keep an eye on any new developments with this and let you know when changes occur!

Many think of the new year as a time to start fresh and put the past behind you. This way of thinking may work in some circumstances, but in real life issues that is not always the case. Why you ask? Right when Americans think that the economy has hit rock bottom, it seems as if trends are going to dip down even further into quarter one of 2010. Homes are still expected to foreclose, banks are still going to hesitant about lending, and bailouts have still not personally touched consumers. With America still being on the downtrend, it is not a surprising that many consumers are still saving and spending less (either by choice or necessity).
It seems as if consumers are no longer embarassed, or think they are too good for using coupons, considering the redemption rate of manufacturer coupons were up 26% in the first three quarters of 2009. That is one of the many methods that consumers are utilizing to save a little money, along with not buying as many non-food items, going out for meals, and buying store brand products. Also, consumers have made changes like eating more chicken than beef because it tends to be less expensive.
With all consumer price cutting and shoppers being more aware of their purchases, are there any companies on the rise? Of course there are! As stated above, store brands are bringing in more revenue and are making sure that their shelves are stocked with their items. In some cases a store band product may be several dollars less expensive. Other types of companies that are doing well right now are the super stores (Costco, Sam’s Club, BJ’s, ect), dollar stores, and some online retailers.
Even though there are a lot of companies still in a down turn, it is nice to see that other companies and brands that may not be as popular, are now having THEIR time to shine.

Almost everyone goes to the ATM to take out cash on a regular basis. Most of the time we do not even think about the task because it has become second nature. But have you ever found yourself in a situation where you need cash and you can find every other banks ATM, but not yours? It is not a big deal going to an ATM other than your own until you see that they are going to charge you around $3.00 to complete your transaction. Then on top of that your bank sometime charges you additionally for banking elsewhere. Over time all those fees can really add up!
Is anything currently being done to lower the fees or get rid of them at all? Currently, the Federal Reserve is reviewing the matter of the rising fees. This all started to come to the service when Bankrate.com found that out of network bank fees rose 12.6% from last year. Where every dollar counts these days, it would be great if the bank fees were eliminated or at the least, decrease. It should not cost an individual $5.00 to take out $20.00.
Here are some useful tips of how to avoid these fees:
1. Only withdraw money from your OWN bank
2. Use your debit/credit card
3. Get cash back when you are at the store
Maybe we should all go back to the old school way of banking… use a piggy bank!

The FDIC has released a report showing 30+ million people have little or no access to banking services. Unfortunately, this study is also highlighting the fact that many of these consumers are poor, immigrants or minorities. According to NPR news, “In all, 25.6 percent of U.S. households either lack bank accounts or use payday loans, check-cashing services and other costly alternatives to traditional banks, according to the survey.
The report is part of an FDIC effort to bring the so-called “unbanked” into the financial mainstream.
FDIC Chairman Sheila Bair said access to a bank account gives households “an important first step toward achieving financial security.” Vulnerable families need the ability to save for emergencies and borrow on affordable terms, she said in a statement.”
The one thing that really needs to be pointed out about this report is the fact that it talks about many people who do not have banking services, yet they are using services such as payday loans. In reality, a consumer generally can not get a payday loan if they do not have a checking account. There might be some lenders that allows no bank account, however most do require it. So, I am not sure payday loans should be in this article when speaking about the “unbanked” consumers??????

FDIC has rolled out some new programs for consumers. Some selected banks feel that low to moderate income consumers don’t have enough options. Therefore, some banks that are participating in the Federal Deposit Insurance Corp programs are offering some “special” types of loans to consumers. These loans are for those that don’t necessarily have good credit (because their credit is not pulled) and are not able to get a standard type of short term loan. Wallstreet Journal Online is reporting this great news for some consumers that are not able to get quick cash and are considered “under-banked”.
Some statements that some might question are comments such as, “Fees and interest paid to payday lenders and banks for overdraft protection contribute to a larger problem for low-income individuals–those types of loans don’t help build credit scores.” Are even some banks now trying to come up with programs that compete with the payday loan, and are they really trying to find some alternative options for consumers? I guess we will never know, but the one great thing is we are seeing some alternatives being offered to our nation’s consumers that need short term cash. This is exciting for Leadpile to see, and hopes all other banks will follow.

The federal reserve has officially implemented new rules that governs the overdraft fees our nation’s banks can charge. Thursday, a ruling was imposed to make it harder for banks to add overdraft fees to customer’s accounts. Banks will now be required to have a consumer opt in for overdraft protection programs, therefore if you do not opt in for this service you will not have a transaction processed if the funds are not available. Many consumers depend on the fact that their bank will let a charge be processed on their debit card, with the assumption that they will just get charged a fee for that. Well starting in July 2010, that will not be happening. Banks will have to say bye bye to the 25 billion dollars a year in fees they collect on these sorts of transactions. No more spending money you don’t have people…. Let’s see where the banks try and make up for this cash cow loss.

Many banks are following in the footsteps of Bank of America, by offering free services that will not only help consumers save money, but learn to manage and understand their finances. When Bank of America first rolled out their “Keep The Change” program, it was a huge hit. It not only helped consumers save money effortlessly, but it also brought new customers into the bank. Banks such as Citi Bank offered incentive programs such as a referral bonus, and TD Bank now lets consumers deposit checks from home just by scanning it.
It is great that banks are offering several incentives to their customers, but is that enough? Customers do not just want incentives, they want to know their finances. Banks are well aware that many customers are much more involved in their finances now then a few years ago. With interests rates and fees skyrocketing, it makes sense the people want to micro manage their accounts to avoid penalties. Many banks are also offering better customer services and are making sure the customer knows exactly what they are signing (for example, Bank of America came out with the one pager “Clarity Commitment” form). It is great that banks are doing everything that they can to keep their customers and not hide any information from them. Banks know that their customers are much more knowledgeable about their finance today and instead of trying to make more hidden terms, they are embracing it and accommodating to their needs. This is great news for the future of the customers and the trust they have with where their money is being help. Hopefully other financial institutions begin to follow this trend!

Many conversations recently have involved payday loans and how they are just not right for consumers, yet articles like this one today make you think that maybe a payday loan is not really a “bad” option for a consumer. With this recent news that banks are under fire for the insane overdraft fees they charge consumers, payday loans are looking pretty good right now. Banks are projected to be generating up to $38.5 billion dollars in fees being charged to our nation’s bank customers. Congress is not liking this, and is looking at cracking down on all the banks that are charging these fees. What appears to be happening is consumers are using their debit cards and not having enough funds to make the purchase, yet the banks allow the transaction to take place and then charge the large overdraft fee. Maybe banks should not allow these sorts of transaction to take place, which in turn are getting the consumers more and more in debt?

With everything that has happened in the financial market in the last few years, many question if the responsibility falls on the consumer or the lenders (or both)? Is the responsibility of the lender to make sure the customer 100% know what they are signing, or it is the responsibility of the customer to ask questions if they do understand what they are signing? There are advocates on both sides, however the government now feels it needs to step in. NPR is reporting that Congress has drafted legislation that would allow the government to oversee all consumer financial products such as credit cards, mortgage loans and payday loans. This measure would prevent consumers from getting any sort of “loan” that they did not fully understand what they were signing. I am not quit sure how something like this can be regulated, but the government wants to step in and try to protect consumers in these sorts of situations. Many legislatures feel that the past behavior of our banks was that they would shop around till they found a lender that would take on their “unique” client situation. Unfortunately, what this caused was those “unique” consumers to then fall behind on their mortgages because they really can’t afford that mortgage.
No matter what, if you agree with government intervention in our financial market or not, the bottom line is our country needs something to change. The right answer is not always that easy to figure out, however one thing I do know is that to change our financial market there needs to be a combination of many people/groups that need to come together to protect customers…and sometimes protect the lenders (the good ones).

  In light of the bailouts going on with different industries, I had to point out a very funny YouTube video I found while reading over the paydaypundit. Our nation’s auto industry, banks and mortgage lenders are wanting to get money to help bail themselves out of a financial hardship they are going through. NOW Santa needs some help too!
Leadpile Lead Exchange would like to offer any help we can to Santa, but I don’t think Santa really needs any help with delivering Christmas gifts. If he is looking for some leads, we can certainly help him out with that! 

Enjoy and Happy Holidays!

Credit cards are a way of life for most Americans. According to Time.com, in the last 10 years credit card balances have gone up 75%, yet consumer’s wages have gone up only 4%. Increased balances and the number of credit cards consumers have, has allowed credit card companies to reap the rewards for years.  These credit card companies have always survived in tough economic times because they were able to generate lots of revenue from things such as late fees, however more and more consumers are now facing charge off. The charge off rate for default consumers is expected to reach 10%, which is double what the rate has been for the past 10 years. If there are more charge offs, that means credit card companies will be in the RED, because defaults/charge offs will far surpass the revenue they are bringing in from things such as late fees. So, what does that mean will happen?
In the case of American Express, they just became a bank holding company in order to receive some low cost funds and a piece of the $700 billion bailout. In the case of Citigroup, they layed off 10,000 employees and will begin imposing higher interest rates on it’s 54 billion cardholders. With other credit card issuers, there is bound to be some increased interest rates passed down to the cardholders and increased fees. The only way to really avoid the effects of these credit card issuer’s hardships, is for consumers to manage their money better where they avoid any additional late fees and also look at not incorporating any new debt. The only option I can see is looking at debt consolidation or debt settlement to avoid getting in a deeper hole. Leadpile Lead Exchange generates a lot of debt leads where consumers need help and need help now. Hopefully, they can ride the wave before any sort of credit card “bubble” bursts and they are affected in an even worse way.

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