One of the reasons that bankers and investors and others in similar fields are lobbying against regulatory reform is that it would stifle “innovation.” Apparently, transparency in reporting practices and requirements to explain to consumers what is happening when they sign the dotted line is something that hinders innovative financial products from taking root in the market. But do we really need all these “innovations”?
Let’s review some of the fabulous financial “innovations” that have provided so many fantastic opportunities for individuals over the last couple of decades:

Option ARMs
Interest-only home loans
Payday loans
Fee harvester credit cards
Derivatives

Most of these “innovations” turned out to …read more

Personal finance reading.

Get private student loans through credit unions.

Prosper may allow you to lend to banks.

I don’t use credit cards much. And when I do, I try to pay off what I put on them immediately. But that doesn’t mean I’m not going to get a smack down from the credit card issuer. In fact, my responsible credit card use is more likely to get me a smack down, since credit card issuers aren’t making much off of me.
Anyway, I was a little surprised when one of my credit cards (issued by GE Money Bank) cut my credit line. Especially since I was nowhere near the limit and paying off my charges every month. This …read more

Stopping foreclosure after it starts.

Here are some of the reasons that banks aren’t really that interested in taking the taxpayer money that is supporting them and lending it back out (with interest, of course).

One of the bummer things about President Barack Obama’s proposed budget changes is the effect on student loan financing. In order to increase the amount of money available for grants, without increasing the federal deficit by very much, Obama is proposing changes to the way lenders are subsidized for making low interest student loans. This is one of the few items of disagreement I have with Obama’s economic policies.
The end to low interest student loans?
Right now, in order to encourage lenders to offer rock-bottom interest rates on student loans, the government hands out subsidies. Now, though, without these subsidies, lenders …read more

One company, Pertuity Direct, offers a rather interesting version of social lending. Recently, I spoke with Pertuity’s CEO Kim Muhota, as well as Charlie Schliebs, who is on the board for the National Retail Fund.

I love me some questions from readers, and I thought this one, in light of my recent adventures in banking, was a great one:
Is overdraft protection worth it?
One of the things I love about personal finances is that they’re, well, so personal. Really, it depends on your habits. First, though, a little background on overdraft protection.
What is overdraft protection?
Overdraft protection is a loan. It is a line of credit that you are allowed (usually between $1,000 and $10,000, depending on what you are approved for) to use when your account goes into the red. The idea is to help you …read more