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Mr. Cordray, It’s Time to Step Down to Let Payday Loans Online Providers Breathe

CFPB or the Consumer Financial Protection Bureau is a controversial agency and continues to remain polarizing. The US Court of Appeals for the District of Colombia recently declared that the structure of 1 director followed by the bureau is unconstitutional. In light of the criticisms and the voters’ desire for a modification of the status quo, CFPB need to refrain from pushing regulations about payday loans online providers before the presidents enters his office.

It is common trend for federal agencies to implement some last-minute regulations when a new administration takes over the government. These regulations are usually rushed and supported by low quality assessment of the benefits and expenses. Since CFPB’s regulation can influence the financial well-being of tens and thousands of Americans, they should take time and act in good faith.

For instance, the proposed regulations on payday lending and arbitration have sparked a lot of public interest. 1.4 million comments have been received by the payday rule, which ranges from legal and economic analysis to people’s personal stories about how they quite terrified about losing access to important products and services.

The CFPB needs some time to carefully consider and reply to genuine concerns highlighted by the commenters. The staff of the bureau will really need to work 24/7 to be able to sift through, review and analyze the 1.4 million comments internally before the new administration takes over the reins of the government. Scrutinizing the comments of the arbitration rule is going to take some more time. The bureau’s proposed rule on arbitration and payday lending is going to influence significant change in the financial services market and affect so many consumers, along with their accessibility to credit. The bureau should give it the attention and time that it needs.

CFPB need to exercise control to get the rules right and to maintain legitimacy. Originally, the bureau did not have any accountability to the president and the Congress. Its structure was recently held as an independent agency by the decision of a federal appeals court. The court even said that the director of the CFPB is the single most powerful official in the entire US government, next only to the president.

The problem was addressed by the court and it gave the president the power to sack the director for various reasons other than neglect of his duty. The president has the authority to oversee the work of the CFPB and fire the director, just like for any other agency.

The CFPB also need to avoid taking aggressive actions for the interest of legitimacy until the new president decided on who he wants as director for the bureau. The future of CFPB is uncertain, and therefore, any new rules will be viewed as an invalid attempt to dictate policies. This can lead to the rules being overturned by the new administration and can cause even more uncertainties in the industry.

Instead of putting the financial industry under whipsaw policy, the bureau and its director need to step away from the pen. CFPB should spend some time to work through the information that it has received as response for its proposed rules. This way, the new administration will be able to make better, informed decisions. The major goals of the bureau is to protect the customers and promote innovation and access in financial products and that does not change. The best way for the bureau at this moment is to wait before inaugurating and announcing the final policy regarding payday loans online industry. They need to really take the time to evaluate and assess the whole situation.

Making Smart Credit Choices: Requesting a Credit Limit Increase

People often get their first credit cards when they are young and have not quite established themselves financially. As such, it is easy to understand why so many people find themselves with lines of credit that have very low limits. It is not unusual for credit card companies to give new account holders lines of credit that are only for $1,000 or a little bit more. As people begin to progress a bit with their finances, though, they often need credit cards with higher credit limits. This can often prove to be a stalling point for some consumers, as they are not sure how to go about requesting a credit limit increase from their credit card companies.

Use Credit Responsibly

With so many financial experts suggesting that people avoid using credit cards, it may be difficult to understand why some people would want to increase their credit limits. If someone is responsible with their use of credit, though, it is very easy to wind up in a situation every month where they are utilizing a large percentage of their existing credit. Some people like to charge purchases, like gasoline, groceries and other common items, and then to pay off their credit card balance entirely when the payment comes through. If someone only has a $1,000 limit, and spends $500 on the card, they are regularly going to be at 50 percent credit utilization. That is something that can lead to a lower credit score. Suffice it to say, that everyone should use their credit responsibly and should make efforts to pay off their balances in full – or as close to that as possible – every month. Only then, should you seek to get an increased credit limit.

You’re Not Asking for a Favor

People often get intimidated when calling to talk to representatives from their credit card companies. They believe that if they say the wrong thing, they will get turned down flat, or that if they don’t mind their p’s and q’s that they will wind up getting slapped with a higher interest rate or something. Nothing could be further from the truth. You are the customer, and they are making money from supplying you with a line of credit. You never have to feel nervous about approaching a credit card company, be it to ask for a different payment date, to negotiate a lower interest rate or, in this case, to ask for a higher credit limit.

It’s Easier than you think

Most of the time, you will not even have to speak with anyone to get this done. All the major credit card companies have online portals that allow you to access your account. Typically, there is a link that you can access once you are signed in that will allow you to request a higher balance. Use this link. You will be taken to a form that asks you the reason for needing a higher credit limit. For example, the company may want to know if you are doing so to transfer another balance or to make a large purchase. Be honest, and fill out the form entirely. If you qualify, you will get a notification from the credit card company.

However, if you get turned down, you may want to call their customer service department directly. Speak to the representative professionally, and explain why you need a higher balance. If they turn you down, ask to speak to their manager or supervisor, then repeat your request. It may take a couple of calls, but if you persist, and have a valid reason for needing a higher credit limit (like the fact that you are making a lot more money now than you were when you got it, and want to avoid high credit utilization) you should be successful.

The Most Effective Methods to Repay Student Loan Debt Faster

One of the most difficult thing that millennials have to deal with, when it comes to their financial future, is the very real burden of paying of student loans. Being stuck with these loans often prevents young graduates from investing money or even getting their own homes. In a nutshell, student loans often feel like financial anchors that will never go away to the people who are stuck paying them off. In fact, the Federal Reserve Bank recently released a report that tallied up the average outstanding college loan balance at a whopping $24,301 – with 10 percent of borrowers stuck with debts that exceed $58,000.

Are you looking for tips on how to pay off your student loans faster? What follows are some tips that financial advisors often pass on to their clients to help them pay off their student loans, while maintaining a semblance of a normal life.

Consider Your Student Loan to be Like a Mortgage Loan

If you have a good job and are bringing in a steady income, you can treat that student loan debt the same way you would a big mortgage. Make efforts to make larger monthly payments. This helps to reduce the loan principal at a faster rate. If a student had $25K in student debt with 6.8 percent interest fees and a 10 year loan term, the payment each month would be about $288. However, if the borrower were to pay back $700 each month, the loan would be paid off completely in just a little more than three years. Paying down the principal on loans with larger payments allows borrowers to enjoy paying less interest on the loan.

Create a Plan to Eliminate Student Debt

Too many graduates just pick away at their student loan debts and complain about them to anyone who will listen. Instead of taking this approach, create a detailed plan to get rid of that debt that is hanging over your head. Break down the total amount that you owe, and come up with 3 and 5 year plans to help eliminate the student loan debt. You should break out your budget while you do this, so you can find other expenses that can be reduced or eliminated, so you can throw that money at your educational debt instead. Map out the next few years of student loan payments in detail, and then break down the large loan amount into smaller, more manageable monthly chunks to make the debt seem less overwhelming.

Set Up a Student Loan Repayment Account

It’s always possible for people to save a bit of extra money every month. Even if you can just get an extra $100 together after all the bills are paid, you can deposit that extra cash in an account that is completely dedicated to paying off your student loan debt. Establish a separate account that is ONLY for saving funds to pay off the educational debt. If you put the extra cash in your existing checking or savings account, it may be too tempting to spend the cash on other things.

Once you get your student loan debt paid off, use that extra money each month to invest and plan for the future. You worked hard to get your education and to pay off the loans that helped you to afford that education. When you are free from the educational loan debt, you’ll be able to breathe easier, and you’ll be able to get on the fast track to saving money for a better financial future.