Measure of association – Sahara Acaps http://sahara-acaps.org/ Fri, 23 Sep 2022 13:54:24 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://sahara-acaps.org/wp-content/uploads/2021/10/icon-59-120x120.png Measure of association – Sahara Acaps http://sahara-acaps.org/ 32 32 Financial inclusion may be beyond the reach of the CBDC https://sahara-acaps.org/financial-inclusion-may-be-beyond-the-reach-of-the-cbdc/ Fri, 23 Sep 2022 13:54:24 +0000 https://sahara-acaps.org/financial-inclusion-may-be-beyond-the-reach-of-the-cbdc/ Of the many benefits heralded by central bank digital currency evangelists, one in particular, cited by enthusiasts in advanced and emerging economies, is gaining increasing prominence. It is about the CBDC’s supposed ability to promote financial inclusion – defined as the integration of all citizens within the formal national banking system – and is seen […]]]>

Of the many benefits heralded by central bank digital currency evangelists, one in particular, cited by enthusiasts in advanced and emerging economies, is gaining increasing prominence. It is about the CBDC’s supposed ability to promote financial inclusion – defined as the integration of all citizens within the formal national banking system – and is seen as increasingly vital as many economies grow. are moving towards an all-digital payment infrastructure and eventually moving away from physical cash altogether.

In a research paper, the Central Bank of the Bahamas, arguably the world’s largest issuer of a CBDC, argued that “the main objective of the Sand Dollar Project is to provide financial services to those who are not currently integrated in the Bahamian banking system”. Similarly, in the United States House of Representatives, Congressman Stephen Lynch proposed the introduction of the ECASH law under which the US Treasury would issue digital money based on peer-to-peer tokens, essentially for those without bank accounts.

In the Bahamas, according to the central bank, the proportion of unbanked people is estimated at around 18% of the population. A 2017 study by the Federal Deposit Insurance Corporation found that the “unbanked or underbanked” (defined as citizens without bank accounts and/or using instruments such as non-banking payday loans for their daily financial activities) were estimated to be 25% of the US population. This is a significant figure for an advanced economy, although the strength of the non-banking financial institutions sector may also have something to do with it.

It is worth asking why, in two advanced economies, financial exclusion accounts for between a fifth and a quarter of the adult population. There is no doubt that a portion of the unbanked do not intend to open a bank account, either because they do not trust banks or because they do not have convenient local bank branch. Others are content to operate entirely within the monetary economy and enjoy its benefits of anonymity, atomic transactions, and universal acceptance. Still others may prefer to use a combination of cash and non-bank businesses – such as credit unions and payday lenders – for their day-to-day financial activities.

The advent of various forms of decentralized financial enterprises operating via smartphones with their potential accompaniment of non-bank payment instruments – stablecoins, tokens, altcoins and others – may allow people to participate in the digital economy without resorting to any to commercial banks, and in effect increase the unbanked population.

However, none of this is of much use to those who are excluded from the banking system because banks refuse their customers due to insufficient income or savings, poor credit history, insufficient credentials or prohibitive costs to serve. Greater granularity on the number and characteristics of those who voluntarily exclude themselves from the banking system and those who are involuntarily excluded would be of enormous benefit to policy makers in general and those considering the CBDC in particular.

Most draft target operating models for CBDCs currently envision a dual-rail structure in which digital fiat currency is distributed to citizens via accounts held at commercial banks with balances and liabilities held at the central bank. This may require a major overhaul if a large and growing proportion of citizens do not want bank accounts of any kind (which of course has other major implications for financial economics) and will strengthen the hands of those who are advocating for the introduction of token-based wallet or CBDC that digitally mimics cash and can be distributed by non-banks.

For the policymaker, the inadvertent exclusion of significant numbers of citizens and voters from increasingly digital payments and financial infrastructure is both inconvenient and socially undesirable. The CBDC’s “smart money” potential to help distribute welfare payments, for example, and the monetary policy benefits of universally digital account holders and taxpayers are seen as very valuable benefits.

But CBDC may be an expensive and complicated tool with which to break the nut of financial exclusion, which is often rooted in poverty, lack of education, and other physical and social disadvantages that need to be addressed. through different political tools. Central banks are powerful and CBDCs are exciting, but deep-rooted issues of financial exclusion can escape their healing reach.

Philip Middleton is Chairman of the OMFIF Digital Currency Institute.

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Existing home sales in the United States fall for the seventh consecutive month in August and the Fed is about to inflict “a little pain” with a 75 basis point rate hike – here’s how to prepare your portfolio and your wallet https://sahara-acaps.org/existing-home-sales-in-the-united-states-fall-for-the-seventh-consecutive-month-in-august-and-the-fed-is-about-to-inflict-a-little-pain-with-a-75-basis-point-rate-hike-heres-how-to-prepare-your-p/ Wed, 21 Sep 2022 21:50:00 +0000 https://sahara-acaps.org/existing-home-sales-in-the-united-states-fall-for-the-seventh-consecutive-month-in-august-and-the-fed-is-about-to-inflict-a-little-pain-with-a-75-basis-point-rate-hike-heres-how-to-prepare-your-p/ Hi, MarketWatchers. Don’t miss these top stories. Brace yourself: the Fed is about to inflict “some pain” with a 75 basis point rate hike. Here’s how to prepare your wallet and wallet. This is the Federal Reserve’s third 75 basis point rate hike this year. Read more Existing home sales in the United States fall […]]]>

Hi, MarketWatchers. Don’t miss these top stories.

Brace yourself: the Fed is about to inflict “some pain” with a 75 basis point rate hike. Here’s how to prepare your wallet and wallet.

This is the Federal Reserve’s third 75 basis point rate hike this year. Read more

Existing home sales in the United States fall for the seventh consecutive month in August

Sales of existing homes fell 0.4% to 4.8 million in August, the National Association of Realtors said. Read more

Halfway through trial period, companies say they are happy with four-day working week, survey finds

Halfway through a six-month trial in the UK, companies that let their employees work four days a week say they are happy with the results. Read more

Mortgage applications rise for first time in six weeks, despite rates hitting 6.25%, signaling ‘volatility’ in property market

The average rate for a 30-year mortgage is 6.25%. Still, refinances and purchases have increased over the past week, the Mortgage Bankers Association said. Read more

How do cash advance apps work and are they better than payday loans?

Neither is an ideal first choice for borrowing money quickly, but knowing their differences can help you save money and avoid hurting your finances. Read more

Thinking of an EV? Here’s your guide to buying an electric car.

How to buy an EV? What about maintenance, incentives and cargo space? Here’s what to look for when buying an electric car. Read more

Three common travel disasters and what to do about them

Here are three common issues with airlines, the types of travel insurance you need to cover expenses, and how you could get free travel insurance.

“She never explained anything”: I am an elderly person and I lost $100,000 on the stock market this year. Can I sue my financial advisor?

“I informed my financial adviser that I was going to retire months before all of this happened.” Read more

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Cash Advance Apps vs Payday Loans: Which is Better? https://sahara-acaps.org/cash-advance-apps-vs-payday-loans-which-is-better/ Sun, 18 Sep 2022 16:01:54 +0000 https://sahara-acaps.org/cash-advance-apps-vs-payday-loans-which-is-better/ (NerdWallet) – If you’re asked to imagine a payday lender, you might think of a storefront in a strip mall with green dollar signs and neon slogans like “everyday payday.” You probably wouldn’t imagine a mobile app that advertises on TikTok and sports a colorful logo. But cash advance apps like Earnin and Dave provide […]]]>

(NerdWallet) – If you’re asked to imagine a payday lender, you might think of a storefront in a strip mall with green dollar signs and neon slogans like “everyday payday.” You probably wouldn’t imagine a mobile app that advertises on TikTok and sports a colorful logo.

But cash advance apps like Earnin and Dave provide advances with the same borrowing and repayment structure as payday lenders, and consumer advocates say they carry similar risks. Both are quick, no-credit-check options for closing an income gap or easing the pressure of inflation.

Neither is an ideal first choice for borrowing money quickly, but knowing their differences can help you save money and avoid hurting your finances.

Cash advance apps work like payday loans

Like most payday loans, a cash advance or paycheck app lets you borrow money without a credit check. You are also required to repay the advance, plus any fees you have agreed, on your next payday.

A single payment cycle is usually not enough for borrowers to repay payday loanso many people fall into the habit of getting another loan to pay off the previous one, says Alex Horowitz, senior director of The Pew Charitable Trusts.

App users may find themselves in a similar cycle. A 2021 study by the Financial Health Network found that more than 70% of app users get back-to-back advances. The study doesn’t say why users re-borrow, but Horowitz says the behavior is particularly similar to payday loans.

“Direct-to-consumer payday advances share DNA with payday loans,” he says. “They’re structured the same, they have repeat borrowings, and they’re scheduled based on the borrower’s payday, which gives the lender strong collectability.”

Apps can offer more flexibility

Payday lenders and payday advance apps collect repayment directly from your bank account. If your account balance is too low when funds are withdrawn, you could incur overdraft fees, says Yasmin Farahi, senior policy adviser at the Center for Responsible Lending.

An application may try to avoid overcharging your account. Mia Alexander, Vice President of Customer Success at Dave, says the app reviews users’ bank accounts before withdrawing the refund. If the refund puts the balance close to zero or negative, the app may not withdraw the funds, she says.

However, apps typically include language in their user agreements that while they try not to overcharge your account, they aren’t liable if they do.

In states where payday loans are allowed, a payday lender is unlikely to offer a free, unsolicited payment extension, as some apps claim. Some states require payday lenders to offer extended payment plans at no cost to troubled borrowers, but a 2021 report from the Consumer Financial Protection Bureau says some lenders are misrepresenting plans or not disclosing them.

Unlike payday lenders, the apps don’t make collection calls. If a user revokes access to their bank account to avoid a refund, the app will not attempt to collect the funds. The user simply cannot get another advance until they repay the previous one.

Payday loans cost more

Payday loans tend to have high mandatory fees, unlike apps. Instead, they charge a small fee that users can accept throughout the borrowing process. These fees can add up, but they are usually lower than those charged by payday lenders.

For example, an app might charge a monthly subscription fee or a fee for instant access to funds. Most cash advance apps also ask for a tip for service.

The charges on a $375 payday loan are most often about $55 over a two-week period, Horowitz says. Since the cash advance application fee is mostly optional, you can easily keep the cost below $10.

Earnin user Sharay Jefferson says she’s used payday loans in the past, but switched to a cash advance app because it’s a cheaper way to cover bills and unexpected expenses.

“If you get a $200 payday loan, you might be paying something back three times over,” she says. “With Earnin, I’m going to have to pay that $200 back, plus whatever I decide to give them. It’s much cheaper. »

Technically, apps are not lenders

Regulators like the CFPB have not classified payday advance apps as lenders, despite their similarities to payday loans.

Earnin CEO and Founder Ram Palaniappan says the app is more like a payroll service or an ATM because it makes it easier to access your own funds. Earnin asks users to upload a timesheet showing they worked enough hours to earn the cash advance amount. Other apps scan a user’s bank account for income and expenses to determine if they qualify for an advance.

Farahi says applications should be treated like creditors, meaning they would follow the Truth in Lending Act, which requires creditors to disclose an annual percentage rate. An APR allows consumers to compare costs between financing options. For example, users can compare the APR of a cash advance app to that of a credit card and choose the most affordable.

“People still need to know what the real cost of credit is and to be able to assess it and really compare that cost with other options,” she says.

Applications should also comply with applicable state lending laws. Currently, 18 states and Washington, DC, have maximum interest rate caps that could limit application fees, she says.

Cash Advance App vs Payday Loan: Which is Better?

If you need cash urgently, you can have better alternatives than payday loans and advanced apps, says Farahi.

Local charities and nonprofits can meet basic food and clothing needs. A family or friend could lend you money at no additional cost. If you have a few hours to spare, a side gig could generate as much money as a typical payday loan or cash advance application.

If you have the choice between an app and a payday loan, the app is probably the best option because:

  • It is less expensive.
  • It may not trigger overdraft charges.
  • If you don’t pay it back, the app won’t send you to collections.

A cash advance from an app is unlikely to leave you in a better financial position, Farahi says. But it may be a little less likely than a payday loan to make things worse for you.

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Can the laws protect you from excessive interest rates on loans? https://sahara-acaps.org/can-the-laws-protect-you-from-excessive-interest-rates-on-loans/ Fri, 16 Sep 2022 13:00:35 +0000 https://sahara-acaps.org/can-the-laws-protect-you-from-excessive-interest-rates-on-loans/ usury laws Usury laws protect borrowers in many states and some borrowers nationwide from excessively high fees interest rate. However, state standards for excessive interest vary widely, and federal banking laws allow credit card transmitters, among others, basically charge what the traffic will bear. Additionally, usury laws do not apply to many loans, allowing certain […]]]>

usury laws

Usury laws protect borrowers in many states and some borrowers nationwide from excessively high fees interest rate. However, state standards for excessive interest vary widely, and federal banking laws allow credit card transmitters, among others, basically charge what the traffic will bear. Additionally, usury laws do not apply to many loans, allowing certain types of lenders in some states to charge annual percentage rates in excess of 500%. Meanwhile, efforts to enact a national usury law have failed, but many states are capping certain loan rates at 36%.

Discuss your borrowing plans with a Financial Advisor can help you avoid being stuck with a high interest loan.

Basics of wear

Protecting borrowers from excessively high interest rates has been a concern of many human cultures dating far back in history. In some places and at some times, receiving even the slightest interest for lending money is considered usury. More commonly, however, usury laws set a maximum interest rate that can be charged on loans.

In the United States, the federal government has largely left usury laws to the states. All but a few states have some sort of upper limit that lenders can charge for loans. Often the highest statutory rate is a simple interest rate, but sometimes it is an annual percentage rate that includes the cost of fees as well as interest. Loan sharking can allow loans to be forgiven beyond the legal limit, and lenders who cross the line can also face fees and jail time.

State wear limits vary widely. The Responsible Lending Centeran advocacy organization, says effective usury rules on loans of $300 or less exist in 19 states: Arizona, Arkansas, Colorado, Connecticut, Georgia, Illinois, Maryland, Massachusetts, Montana, Nebraska, New Hampshire , New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Dakota, Vermont and West Virginia.

Many of these states have capped interest at 36% and offer other protections. Some of the others offer limited protections such as maintaining effective rates at or below 200% per annum. Those with little or no borrower protection include Nevada and Texas, where the Center for Responsible Lending says annual percentage rates (APR) can exceed 600%.

State laws change frequently and the general trend lately has been towards stricter usury bans. Rhode Island, for example, adopted a cap of 36% in 2022.

Limits of usury law

usury laws

usury laws

Usury laws are complex and have many loopholes. Usury laws generally affect only certain types of loans, usually small, short-term loans. payday loans, leaving the rates for other loans unchanged. In California, for example, a 36% cap only applies to loans between $2,500 and $9,999, allowing payday lenders to charge more.

Credit cards are one of the most notable exemptions. Indeed, a 1978 court ruling allowed card issuers to charge each cardholder the highest rate allowed in the state where the issuer was based. This included borrowers in states where usury laws set lower standards. After that decision, South Dakota and Delaware removed interest rate caps, prompting many large card issuers to move their headquarters to those states.

State usury laws also do not apply to federally regulated banks, credit unions, finance companies, and pawnbrokers. And the only national federal usury law only covers loans to military service members. The National Administration of Credit Unions currently prohibits its members from charging more than 18% interest on most loans, but they can still charge higher payday loan rates.

With all the exemptions, usury laws do not apply to most loans from most lenders for most borrowers. They do, however, apply to interest-bearing loans between family and friends. Unless you are a licensed lender such as a bank or pawnbroker, check your state’s usury laws before lending money to a family member or friend at a rate above 10%, which is the point where some state usury laws might come into play.

The future of usury laws

Legislative efforts in recent years to expand attrition protections for military service members have stalled in Congress. Payday lenders have argued that APR-based usury limits should not apply to the very short-term loans they issue, which often derive most of their revenue from fees rather than interest. simple.

After the failure of the federal usury initiative, many states began instituting 36% caps on payday loans. This group included former no-wear states such as South Dakota and Delaware. Today, the trend is for states to adopt caps of 36%. However, these still only concern a limited number of transactions, mainly small loans of a few hundred dollars.

The essential

usury laws

usury laws

State usury laws protect certain lenders on certain loans from excessive interest rates. However, many loans and lenders are not covered by rate caps, allowing effective payday loan rates to exceed 500% in some states. Proponents of a national usury limit failed. But many states are moving to limit payday lenders to a maximum annual percentage rate of 36%, including fees.

Banking advice

  • A financial advisor will help you with all your banking needs. Finding a qualified financial advisor doesn’t have to be difficult. Smart Assets free tool connects you with up to three financial advisors who serve your area, and you can interview your advisors at no cost to decide which one is best for you. If you’re ready to find an advisor who can help you achieve your financial goals, start now.

  • You can find out how much interest you’ll pay for a personal loan using SmartAsset’s free online service interest rate calculator.

Photo credit: ©iStock.com/AmnajKhetsamtip, ©iStock.com/Prostock-Studio, ©iStock.com/BartekSzewczyk

The post office How Usury Laws Regulate Loan Interest Rates appeared first on SmartAsset Blog.

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Michigan spent $2.5 million to be a rocket hub. Critics say it only produced hype https://sahara-acaps.org/michigan-spent-2-5-million-to-be-a-rocket-hub-critics-say-it-only-produced-hype/ Wed, 14 Sep 2022 20:45:55 +0000 https://sahara-acaps.org/michigan-spent-2-5-million-to-be-a-rocket-hub-critics-say-it-only-produced-hype/ “It’s truly remarkable that someone is considering putting a heavy industrial facility [like a launch pad] on the coastline of the largest body of fresh water in the world,” said Dennis Ferraro, who lives about 3 miles from the selected site and leads the opposition group Citizens for a Safe & Clean Lake Superior. “It’s […]]]>

“It’s truly remarkable that someone is considering putting a heavy industrial facility [like a launch pad] on the coastline of the largest body of fresh water in the world,” said Dennis Ferraro, who lives about 3 miles from the selected site and leads the opposition group Citizens for a Safe & Clean Lake Superior.

“It’s just a horrible idea. Ecologically, it is a disaster.

In Chippewa County, officials were thrilled after the Michigan Launch Initiative selected the base as its command site in January 2021. However, Brown’s group has yet to file the necessary permits with the Federal Aviation Administration to the project.

“I think everyone turned around, like we did, and said, ‘What have we won?

“There is no structure there. There is no money for that.

At Oscoda, airport officials are agitated and awaiting answers after Brown’s group suggested the former Air Force base as the site in 2020.

Airport board member Kevin Boyat said he still remains hopeful, but officials can’t get answers from Brown.

The board sent a letter months ago, he said, giving Brown 45 days to respond. He heard nothing back, Boyat said.

“It’s like ordering a new car and waiting six years [for it],” he said. “When you ordered it, you were excited.”

“It took so long and we can’t get any information from Gavin,” Boyat said.

Brown said he has complied with all state requests for information and remains confident about the state’s space outlook. He also played down environmental concerns, saying any vertical launch at Marquette would use “green energy,” some of which has yet to be developed.

But he also said no final decision has been made on when to apply for a spaceport license from the Federal Aviation Administration. This will come after a final decision as to whether it makes economic sense to proceed.

“It will start when it makes sense to start,” said Brown, who is also executive director of the Michigan Aerospace Manufacturers Association, which is an integral part of the space project.

Like all non-profit organizations, it is required to public tax declarations, on request. A Bridge search of publicly available records shows that only his 2010, 2011 and 2019 are currently available.

Bridge asked Brown and his accountant for copies of other tax returns on several occasions. Brown said he would provide them, including again in a midday email on Wednesday, September 14. At the time of publication, they were not provided by the publication.

Existing tax records show that 88% of his total revenue of $1.5 million in 2019 came from state grants.

“There was something wrong”

The turmoil comes amid what is otherwise an exciting time for space exploration.

As NASA prepares to back to the moon and the space industry approached 500 billion dollars last year, Michigan is entering the race to be a hub for launches into low Earth orbit.

It has an inherent advantage due to its location, more than halfway up the North Pole from the equator, which allows launches into “polar” orbits coveted by some commercial satellite companies.

Lawmakers funded the space effort through the belated approval of a budget that provided money for former Gov. Snyder’s pet projects in the final days of his administration.

Governor Gretchen Whitmer initially refused to honor funding for the space effort, citing a lack of details.

But after lawmakers agreed to the changes, his administration funded the project, and the quasi-government Michigan Economic Development Corp. oversaw the grant to “assess the feasibility of a low orbit launch site in Michigan”.

The Michigan Launch Initiative was scheduled to complete work in January 2021 but received two extensions. At the same time, its grant increased from $2 million to nearly $2.5 million.

The grant surprised Kirk Profit, a former lawmaker turned lobbyist.

He said the funds were raised shortly after Brown requested a $2 million investment from Kalitta Air to fly rockets into the stratosphere in its cargo planes at Willow Run and Oscoda airports.

Profit was Kalitta Air’s lobbyist at the time and said he and the company could find little on Brown’s background.

“We checked it. We finally shelved it,” Profit said recently. “There was something wrong.”

Conflicting studies

Michigan is forging ahead, though some critics say the state is lagging far behind others in the race to build infrastructure for the booming space industry.

One of the primary sources of criticism from critics is a report commissioned by Brown’s group.

The IQM Research Institute article noted that since Brown floated the idea of ​​the Michigan launches, the economics of the commercial space industry have changed dramatically.

The report, written by former air force brigadier general Michael Dudzik, who commanded all of the branch’s space forces, says the cost of putting satellites in space was dropping dramatically, from $7,000 a pound to less than $1,000. And a few big players – including Elon Musk’s SpaceX – dominated the market.

Just one more dozen spaceports in 10 states have received FAA licenses in recent years, and most have not staged a single launch.

In its 2021 report, IQM reported that there had been just 16 polar-orbiting launches — like the ones Michigan could host — at three U.S. spaceports in the previous three years.

In fact, with other locations dominating the market, IQM’s report concluded that so few new businesses would surround the launch sites that even if there was one launch per week, “annual revenue generated… would have the same revenue impact in the state equal to the annual revenue of two additional fast food chains.

“He was just selling the concept, but he was separated from the fundamental facts,” Dudzik told Bridge.

Brown criticized the finding during an interview with Bridge, saying it unfairly characterized the value of the food and beverage industry.

Dudzik’s report went “beyond the scope” of what it was asked to investigate, he added.

“No business case has been made,” he said.

Brown’s nonprofit website, however, includes a study that explores the “Business case” for launches.

The four-page study from August 2021 concludes that the sites could attract 30 aerospace companies and deliver $13.2 billion in economic impact over the next 10 years, a “potential return of 40 times the investment in terms of economic impact for the State of Michigan”.

The reasons for optimism

Even with the turmoil, many remain optimistic that Michigan could capitalize on the space industry.

The IQM report concluded that Michigan could still benefit without committing tens or hundreds of millions of dollars to launch facilities, as has happened in other states, including New Mexico, Colorado and Georgia.

Michigan has great advantages, with or without launch sites, said Greg Autry, director of the Thunderbird Initiative for Space Leadership, Policy and Business at Arizona State University.

He said Michigan’s manufacturing heritage makes it uniquely positioned to build rockets and their components. But focusing on launch sites before identifying a rocket builder is “kind of putting the chicken before the egg,” he added.

Michigan’s space efforts are “half-hearted,” Autry said, because they lack vigorous collaboration between government and the private sector.

The Colorado Space Coalition includes state government leaders as well as representatives from academia and the private sector. Although its launch site was not used, the coalition is actively working to develop the state’s aerospace industry.

If Michigan adopted Colorado’s model and got everyone around the table, “you’d move Colorado in the blink of an eye,” Autry said.

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Government of Canada consultation on reducing the criminal interest rate https://sahara-acaps.org/government-of-canada-consultation-on-reducing-the-criminal-interest-rate/ Fri, 09 Sep 2022 19:13:47 +0000 https://sahara-acaps.org/government-of-canada-consultation-on-reducing-the-criminal-interest-rate/ Authors): Joyce M. Bernasek, Dominic Duchesne September 9, 2022 Last August, the Government of Canada launched its anticipated consultation document (the consultation document) to solicit the views of stakeholders and vulnerable members of the public on the criminal interest rate and availability of high cost installment loans often offered by other lenders. Although the […]]]>


Authors): Joyce M. Bernasek, Dominic Duchesne

September 9, 2022

Last August, the Government of Canada launched its anticipated consultation document (the consultation document) to solicit the views of stakeholders and vulnerable members of the public on the criminal interest rate and availability of high cost installment loans often offered by other lenders.

Although the Government of Canada’s policy objective has not yet resulted in a new criminal interest rate, a reduction in the criminal interest rate could have market implications for lenders and borrowers.

Interest rates in Canada must not exceed 60% – section 347 of the Criminal Code

When first introduced in 1980, the criminal interest rate was established to deter loan sharking and other predatory lending practices. Section 347 of the Criminal Code (the Code) makes it an offense to: (1) enter into an agreement or arrangement to receive interest at a rate greater than 60% of the total value of the credit advanced; and (2) actually receive interest in excess of 60% of the total value of the credit advanced. It should be noted that the Code broadly defines the concept of “interest” to include costs, fines, penalties or commissions. Overdraft fees and discharge fees also fall within the scope of what would be considered “interest”. Although the consultation paper discusses high-cost installment loans, it is important to note that some payday loans are exempt from the Code.

High Cost Installment Loans

The consultation paper targets alternative lenders in their offering of what are universally considered “high cost loans” or “high interest” loans. Alternative lenders provide loans quickly with less stringent requirements and offer longer-term, higher-cost installment loans. The consultation document reveals that these installment loans have interest rates of up to 47% per year. With additional fees and charges included, and with frequent compounding interest, many of these installment loans equate to having an overall annual interest rate just below or nearly equal to the criminal interest rate of 60%.

A rate set at 60% for 40 years

The Consultation Document undertakes to better understand the impact that such a rate cut could have on the market and on the availability of financial products as we know them. As the consultation document points out, the criminal interest rate is a fixed rate not linked to market rates. When the criminal interest rate was introduced, the Bank of Canada’s overnight rate was 21%. At that time, the gap between the overnight rate and the criminal rate was 39%. Today, the gap is close to 60%. Thus, the Government of Canada wishes to know whether the interest rate pricing set by other high-cost lenders reflects the actual credit risk of the borrower, or whether the interest rates of these high-cost financial products are fixed simply respect the ceiling authorized by the penal interest rate.

Considerations for Lenders

Responses to the consultation paper are expected by October 7, 2022. Any changes to the criminal interest rate would apply to all credit products in Canada and affect a wide range of borrowing products on the market. If you or your business need help determining the potential impact of a lower criminal interest rate, please do not hesitate to contact the authors of this article.

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Prepare your finances for the holidays | On your debt https://sahara-acaps.org/prepare-your-finances-for-the-holidays-on-your-debt/ Tue, 06 Sep 2022 05:00:00 +0000 https://sahara-acaps.org/prepare-your-finances-for-the-holidays-on-your-debt/ Truth: The holiday season is expensive, and it will be here soon. With interest rates and inflation rising, this could be the most expensive year ever. With the gifts, decorations, and other seasonal purchases you expect to make, you might be surprised how easily holiday spending can spiral out of control. Start planning your vacation […]]]>

Truth: The holiday season is expensive, and it will be here soon.

With interest rates and inflation rising, this could be the most expensive year ever. With the gifts, decorations, and other seasonal purchases you expect to make, you might be surprised how easily holiday spending can spiral out of control. Start planning your vacation now.

Establish a vacation budget, well before the vacation.

Decide how much money you can afford to spend in total. Write it down and, most importantly, stick to the plan as the season progresses. It’s easy to get caught up in the holiday spirit or caught off guard with last-minute purchases. Budgeting ahead of time will help you determine how much money you can spend on each expense category, including gifts, food, entertainment, and other holiday festivities.

Be careful when spending on your credit cards.

Before you sit down to plan your vacation spending, make a list of how much debt you already have on your credit cards. Set a strict limit on the amount of credit you will use throughout the season and be firm about spending no more than you can reasonably repay. Next year’s vacation is coming quickly, so have a plan to pay off any vacation debt as soon as possible.

Save now—Spend later.

Find a way to easily set aside a few dollars from every paycheck, whether monthly, semi-monthly, or weekly, and make sure the money goes directly to a separate place or savings account. Bring your lunch to work once a week and put what you would have spent in an envelope marked “Vacation”. At $15 a week, you’ll have saved $750 to use for your vacation expenses over the course of a year.

Make your travel plans as early as possible.

If you’re one of the more than 115 million Americans who travel during the holidays, you probably already know that booking flights, renting a car, and paying for gas or other travel expenses can be a hassle. quickly add up. Airlines, train stations, hotels, and other travel industry players tend to charge higher fares during holidays, and those prices only increase as the end of the season approaches. year.

Eliminate unnecessary holiday stress

The holidays are stressful enough without the added pressure of carrying debt or taking on more debt. However, if you find yourself facing a mountain of debt that you will never be able to repay, call us so that we can help you! Give yourself the holiday gift of being debt free.

Bond & Botes helps people struggling with debt

Let us solve your financial problems. There’s no obligation, and that means there’s no downside to gathering the information you need to make good decisions about how to break the cycle of debt stress and go forward. We can answer all of your questions regarding Chapter 7 bankruptcy, Chapter 13 bankruptcy, stopping a foreclosure or wage garnishment, avoiding liens, staying a lawsuit, l medical debt, personal loans, payday loans, credit card debt, etc. We can relieve your stress! We want to help you and we can help you!


Bond, Botes, Sykstus, Tanner & McNutt, PC

The Web: www.bondnbotes.com

Facebook: facebook.com/Bond-Botes-Sykstus-Tanner-McNutt-PC-203986783117475/

102 South Court Street, Suite 314, Florence, AL 35630

Telephone: 256-760-1010 • Fax: 256-760-1023

Opening hours: Monday to Friday • 8:00 a.m. to 5:00 p.m.

No representation is made that the quality of legal services to be provided is superior to the quality of legal services to be provided by other attorneys.

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Will debt collectors call my family for a delinquent payday loan? https://sahara-acaps.org/will-debt-collectors-call-my-family-for-a-delinquent-payday-loan/ Sun, 04 Sep 2022 13:54:32 +0000 https://sahara-acaps.org/will-debt-collectors-call-my-family-for-a-delinquent-payday-loan/ Dear Penny, I’m on Supplemental Security Income (SSI) and my car broke down. I needed extra money to pay my rent, so I took out a $400 payday loan. The winning amount is $567.91. I won’t be able to pay that much and still pay my bills. The monthly payment is $170.45, which I can’t […]]]>
Dear Penny,

I’m on Supplemental Security Income (SSI) and my car broke down. I needed extra money to pay my rent, so I took out a $400 payday loan. The winning amount is $567.91. I won’t be able to pay that much and still pay my bills. The monthly payment is $170.45, which I can’t afford either. The total balance will be $2,045.40.

I spoke with a consumer credit counselor. They said don’t pay it and let it go to collections. I’m afraid they’ll call my family. I don’t want them to know. Can I do something so they don’t contact my family?

-A.

Dear A.,

I’m afraid you probably can’t stop the lender from contacting your family. If you’ve defaulted on this debt since you wrote to me, you’re no doubt bombarded with calls and text messages.

The lender may already be in contact with your family members. When you take out a payday loan, you often need to provide references that the lender can contact in the event of a default. But lenders may also start calling your family members and friends, even if you haven’t included them as a reference.

The rules for these communications likely fall into a gray area. The Fair Debt Collections Practices Act (FDCPA) is a federal law that governs debt collection practices. The law only allows debt collectors to call non-spouse family members if they’re trying to locate you, but they can’t discuss your debt. They are also prohibited from saying they work for a debt collector unless asked to do so.

However, the FDCPA only applies to third-party debt collectors, not original creditors. Most payday lenders attempt to collect overdue loans internally before sending them to a collection agency. So there is a good chance that the lender who gave you the loan is still trying to collect it.

Some states have laws that place additional limits on collection efforts. You may want to ask your credit counselor if your state laws provide additional protection.

Knowing your rights can be helpful, but let’s face it: the payday loan and debt collection industries are notorious for their sketchy tactics, so even though there’s a law that limits who a collector can contact, don’t don’t assume he’ll follow her. .

Here’s where thinking like a debt collector might come in handy. A collector has one goal, which is to get paid. The more pressure they exert, the more likely you are to pay. Even when they supposedly call family just to locate you, they know a lot of people are embarrassed by their debt and will agree to just about anything once the calls to relatives start.

Don’t play the shame game. Pick up the phone when the lender calls you so it’s clear they have your correct contact information. Be firm about your inability to pay at this time. Avoid showing emotions or divulging details about your personal situation, as this will be used against you.

As for your family, you don’t owe them an account of your finances just because a payday lender calls you. You might say something vague like, “Thank you for letting me know. They called me too. I always try to get to the bottom of things. If they contact you again, I would appreciate it if you would tell them I don’t live with you and ask them to stop calling.

None of this is technically wrong. I have no idea how curious your family is, so I can’t guarantee this will satisfy curious minds. But as long as this debt does not concern them, they are not entitled to more information.

I’m glad you consulted with a credit counselor before deciding to let this loan go to collection. If you have to choose between rent and paying off a payday loan, rent is the winner by far. But make sure you have taken into account all the consequences of a breach.

Once that account is cashed out, you probably won’t be able to take out a payday loan or any other type of credit for at least two years. Obviously, you’ve learned the hard way that payday loans are best avoided. But I guess you applied for a payday loan because you had no alternative. You will therefore need to think about what you would do if you had to face another unexpected expense.

If you can save even a small amount of money, it’s worth asking if the lender would be willing to pay. A tactic that sometimes works is to tell the lender that you are considering bankruptcy. Because creditors must cease collection efforts when you file, they may be willing to settle for less.

Either way, don’t be fooled by the threats you might encounter. You will not be arrested for this debt and your SSI benefits cannot be garnished. Most importantly, don’t let them convince you to turn that debt into a new loan. This will only trap you in an endless payday loan cycle. The damage caused by this loan may be unavoidable, but make it your goal to never go back to this predatory system.

Robin Hartill is a Certified Financial Planner and Senior Writer at The Penny Hoarder. Send your tricky money questions to [email protected].


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Here’s how the Hartford Public Library and its partners plan to help the city’s most vulnerable populations – Hartford Courant https://sahara-acaps.org/heres-how-the-hartford-public-library-and-its-partners-plan-to-help-the-citys-most-vulnerable-populations-hartford-courant/ Fri, 02 Sep 2022 18:22:32 +0000 https://sahara-acaps.org/heres-how-the-hartford-public-library-and-its-partners-plan-to-help-the-citys-most-vulnerable-populations-hartford-courant/ Hartford — Payday loans, pawnshops, check cashing services and other services that come with high costs, interest rates and fees often lead to the paradox that it is expensive to ‘to be poor. Those living in poverty or near the poverty line are often unbanked or underbanked, which can leave them vulnerable to other scams […]]]>

Hartford — Payday loans, pawnshops, check cashing services and other services that come with high costs, interest rates and fees often lead to the paradox that it is expensive to ‘to be poor.

Those living in poverty or near the poverty line are often unbanked or underbanked, which can leave them vulnerable to other scams that perpetuate the spiral of poverty.

A new program – which brings together the Hartford Public Library, Liberty Bank, the Connecticut Association for Human Services and the Cities for Financial Empowerment Fund – targets one of the most financially vulnerable populations by expanding banking opportunities for the community of immigrants and refugees from the city.

U.S. Senator Richard Blumenthal, Hartford Mayor Luke Bronin, Library President Bridget E. Quinn, and Liberty Bank Vice President of Community Development Glenn Davis were on hand at the Hartford Public Library on Friday to announce that the library has received a $487,000 federal grant to help promote and teach financial literacy to the immigrant community with the Building Social Capital: An Inclusive Approach to Immigrant Financial Immigration program.

The program will help members of the immigrant and refugee community navigate the world of financial institutions, which can be daunting for anyone.

“Immigrants may also have other specific challenges, such as fluency in English, trust issues with financial institutions or government, wondering who is trustworthy in these interactions, they may have already been subject to, perhaps, predatory lending or fees associated with other kinds of financial tools,” Quinn said. “We’re starting something new, which we hope will help communities across the country to serve this population and will strengthen our economy through the work and access this population will now have to these financial service tools.”

Blumenthal, who helped secure the grant with U.S. Senator Chris Murphy, said the grant is an investment in the community, not a cost. He also noted the important work the library does in the community.

“America has always been the land of opportunity, of equal access to uphill,” Blumenthal said. “That’s why people have come to America over the centuries. Libraries are a symbolic and practical sign of America, land of opportunity. … Libraries have been community centers, a source of learning and self-promotion.

He noted that his father immigrated to the United States in the 1930s when he was 17. Back then, Blumenthal said, the banking system was much easier to navigate.

“People today need a lot more education not only to seize opportunities… but also to avoid scams: payday loans, pawnshops, all kinds of promotions and internet promotions,” Blumenthal said. “Ultimately complicated, misleading and misleading stuff. Financial literacy has become a form of opportunity, but also a protection against some of the scams that exist. …Financial know-how is essential in today’s world to seize opportunities and avoid the pitfalls of scammers and scammers. In very difficult economic times, to ensure that consumer purchasing power keeps pace with potential price increases.

Participants in the program agree to deposit in a savings account with Liberty Bank $50 per month for five months, according to a press release. The account will be administered by the library. When the participant reaches the goal of $250, the money is transferred to an individual account in his name and he receives a match of $250, the statement said. Participants can then close the account. However, if they maintain a balance of $250 for another five months, they will receive an additional $250 from library donor funds, the statement said.

During the five months, participants meet for three hours, every two weeks, for financial education and other networking opportunities.

The program will be available to those who have been in the country for less than 10 years.

Bronin said the corresponding aspect of the program is “a powerful thing”.

“It helps solve the fact that so many residents of our community and our country in our country are unbanked,” Bronin said. “About a quarter of Americans are unbanked. You can imagine that percentage is much higher in a community where there is a concentration of poverty and in a community where there is a large immigrant community. this opportunity to connect our residents to banks, financial institutions, savings accounts and provide the educational component that goes with it is really very powerful.

American Place at the Hartford Public Library has proposed and will administer the program, which is expected to launch in the spring, Quinn said.

“This is a really essential program,” Quinn said. “We are super excited for this program.”

The YMCA of Greater Hartford also received a $500,000 grant for improvements and upgrades to its location on Albany Avenue, officials said Thursday.

Lt. Gov. Susan Bysiewicz, House Speaker Matt Ritter and State Rep. Ed Vargas touted the grant, which came from the State Bonding Commission.

“The programs and services provided by local YMCAs across our state are vital to the positive development of our young generation,” Bysiewicz said in a news release. “Children can interact with friends and have fun, learn social-emotional skills and coping mechanisms through practice and play, while being exposed to different and exciting opportunities.”

Ritter and Vargas also stressed the importance of the YMCA.

“We all recognize that the Y is a hub of enrichment programs for families and youth – the programs are essential to our community,” Ritter said.

“Summer enrichment programs are invaluable in the overall development of young people by giving them opportunities and options to learn, develop and improve the problem-solving and social interaction skills that are essential for success,” added Vargas. “I applaud the good work of the YMCA which for generations has been a cornerstone of our community and has had such a positive impact on many lives.

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Cash Converters takes on the ‘crazy’ BNPL sector that allows customers to rack up 800 purchases in 90 days https://sahara-acaps.org/cash-converters-takes-on-the-crazy-bnpl-sector-that-allows-customers-to-rack-up-800-purchases-in-90-days/ Thu, 01 Sep 2022 02:52:00 +0000 https://sahara-acaps.org/cash-converters-takes-on-the-crazy-bnpl-sector-that-allows-customers-to-rack-up-800-purchases-in-90-days/ Desperate shoppers who owe money on up to 800 purchases now and pay later ask Cash Converters to borrow high-cost money to cover their debts. The WA-based group, which has reduced its reliance on riskier, low-reputation payday loans in favor of longer-term loans, says it is responding to more inquiries from BNPL customers who are […]]]>

Desperate shoppers who owe money on up to 800 purchases now and pay later ask Cash Converters to borrow high-cost money to cover their debts.

The WA-based group, which has reduced its reliance on riskier, low-reputation payday loans in favor of longer-term loans, says it is responding to more inquiries from BNPL customers who are struggling to cover their obligations.

“There’s a large cohort of really over-burdened Australians from BNPL, from what we’re seeing,” Cash Converters chief executive Sam Budiselik said. “It’s frightening.”

At the ‘extreme’ end, he said, ‘we have (loan) applications coming in that list 800 BNPL transactions in 90 banking days, and we cannot respond responsibly to their needs’ .

It is undeniable that the BNPL has become a major competitor in the microcredit sector in recent years.

But after coming under scrutiny over their lending practices over the past decade, Cash Converters and other payday or micro-lenders, as well as consumer groups, want BNPL providers to be subject to the same responsible lending laws that govern them and the big banks.

As they do not pay interest, BNPL transactions are not classified as credit and are therefore not covered by the National Consumer Credit Protection Act.

However, Mr Budiselik said promoting the BNPL sector hid late fees on transactions, which meant that their final cost was sometimes equivalent to or more expensive than loans from Cash Converters.

“If we give money to people, we have to make sure that they repay those obligations and that they do so responsibly,” he said.

“(BNPL) needs to be regulated, it’s just totally out of control.”

Mr Budiselik was speaking as Cash Converters reported a 46% drop in annual net profit to $11.2 million after a previously disclosed writedown of its pawn shop network to cover COVID-19 closures.

Excluding the impact of impairment, operating profit improved 26% to $19 million.

Revenue rose 22% to $245.9 million as demand for the company’s loans increased and shoppers returned to its 155 Australian stores in search of second-hand goods.

Mr. Budiselik said that with record unemployment, Cash Converters’ traditional customer base was “in good shape” and still able to meet their repayment obligations.

“But the cost of living pressures are really starting to bite, so we’re seeing more transactions in the retail sector, with people selling us more goods and more demand for small loans,” a- he declared.

Cash Converters’ loan portfolio grew 20% to $213.9 million in the year to June 30, with its medium-term priority loans increasing 54% to $76.1 million for exceed short-term or payday loans for the first time.

“We see a high demand for credit, especially in the second half of the year, as people try to cope with increased expenses, or they have started to travel and see their families and are moving again,” Mr. Budiselik said. .

Customers borrow an average of $1,200 for nine months under Cash Converters Small Credit Agreements (SACCs) to cover expenses until their next payday, such as school trips or appliance repairs.

The average loan under the Medium Amount Credit Agreement (MACC) is $3,000 for 16 months.

Cash Converters declared a final dividend of 1¢ per share.

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