Filed under: Banks, Credit, In the News

More than one-tenth of U.S. banks continue to be at risk of failure even as some sectors, such as credit quality, are showing some signs of recovery.

Around 829 of the country's 7,800 banks were on the Federal Deposit Insurance Corp.'s "problem list" at the end of June, up from 775 at the end of the first three months of the year, the Wall Street Journal reported. Already this year 118 banks have failed, well ahead of last year when 140 went under.

It's still difficult to get a loan; total loan and lease balances fell 1.3 percent from April through the end of June. Total banking assets fell 1% to $13.2 trillion during the quarter.

FDIC Chairman Sheila Bair says banks are starting to ease lending standards in some cases but warned that "lending will not pick up until businesses and consumers gain the confidence they need to hire and spend."

The FDIC also says there were 104 fewer banks in the second quarter compared with the first quarter, and for the first time in the last 38 years, no new banks were added.

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Filed under: Banks, Credit, Technology, Fraud

Despite the best efforts of banks and security experts, Internet fraud continues to cost consumers millions of dollars every year. But a new credit card sized piece of plastic has the potential to stop one of the most popular forms of online fraud; fooling consumers or their banks into handing over information that can be used to empty accounts.

This credit card sized piece of plastic that inventor Matt Walker hopes to stop Internet fraud cold in its tracks is the PassWindow, which is a finalist in the Asian Innovation Awards.

Instead of the expensive-to-distribute security tokens that some banks use to verify the identity of a consumer, the PassWindow can be built into your existing bank debit or credit card and operates in a simple manner.

Continue reading Can a piece of plastic make online banking more secure?

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Filed under: Credit, Recession, Investing, In the News

The historic finance reform bill hammered out by a House and Senate panel is 2,000 pages long, but WalletPop had its yellow highlighter out to spare you one brutal summer read. (Actually, we had a lot of help from Reuters and The New York Times.)

Here are some of the tidbits on how the bill will play out for consumers if it passes, as expected, next week:

No help for the fallen: Our federal dollars would supposedly no longer be used to bail out massive misbehaving outfits like AIG and Lehman Brothers, which went bankrupt. The next time a conglomerate of suits goes belly up, the government vows to sell their pieces off like scraps to the bidding dogs. That hopefully means our tax dollars will be better used.

Credit transparency: If you're denied a loan, a mortgage or a credit card because of something fishy on your credit report, the denying party will have to show you what's fishy -- for free. We like anything free, even if it's a FICO revelation.

Continue reading How finance reform affects us directly

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Filed under: Banks, Borrowing, Credit

New rules that kick in this August require banks to substantially change one of their most-loathed policies: automatic enrollment in an overdraft "protection" plan that lets a transaction you don't have money to cover go through, then zings you with a $35 fee. The rules mandate that people will have to opt into these programs; banks can't enroll you automatically and without telling you. As we already warned you, banks are hitting back by sending customers letters making it sounds like they have to opt in for this "protection" or that something terrible will happen if they don't.

Well, our earlier advice still stands: You don't have to and shouldn't sign up for overdraft protection. But don't just take our word for it. Susan Weinstock, director of the financial reform campaign at the Consumer Federation of America, tells Walletpop there are other, less expensive ways to get short-term credit without having to incur a $35 fee each time. This article outlines several of those methods. Here's the bottom line:

The first and best way is to keep track of your spending. You can use an old-fashioned check register, check your balance online daily or sign up for alerts. Many of the major banks now offer you the option to get a message on your cell phone when payments are posted to your account or when the balance in your account drops below a predetermined limit.

If you're thinking about signing up for overdraft protection so your card doesn't get denied and leave you stranded, carrying a backup credit card isn't a bad idea, as long as you're disciplined enough to pay off that charge by the due date so you don't get hit with finance charges. For hotel or rental-car reservations, which can lead to a hold being placed on your card for a sometimes significant amount, a credit card is also a better pick so that hold doesn't lead to your account falling into the red.

Finally, we've told you before about alternatives to overdraft protection that link your checking account to a savings account or line of credit. While banks do charge for this service, it's generally a lot less than an overdraft fee, which makes it a viable alternative if all else fails. "The Consumer Federation of America is urging consumers to say no to overdraft fees" by opting out of your bank's offer of "protection," Weinstock says. After all, you work too hard for your money to hand it over to the bank $35 at a time.

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Filed under: Credit, Debt, Personal Loans, 101 banking

With credit card interest rates soaring as high as 30%, people continue to look for alternatives to credit cards, especially when an emergency comes up. Personal loans can be a good option, but only if you have a good credit score; otherwise, the rates can be even higher than credit cards.

Just what can you use a personal loan for? Essentially any cash needed, including credit card payoff, debt consolidation, education, training, home improvement, car financing, business needs, vacation expenses, major purchases, wedding expenses, moving costs and medical expenses.

But be careful out there: If you're not absolutely sure about what you're getting yourself into, personal loans can cost you big time. Interest rates, especially from places like the ones that offer payday loans, can be as high as 300%, so be certain you understand the terms before you sign on the dotted line.

Continue reading Personal loans 101: How to get the money you need

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