Big Banks, Flooded in Profits, Fear Flurry of New Safeguards

The nation’s six largest banks reported $23 billion in profits in the second quarter, but they could end up victims of their own success.

In recent weeks, the Treasury Department, senior regulators and members of Congress have stepped up efforts intended to make the largest banks safer. The banks have warned that more regulation could undermine their ability to compete and curtail the amount of money they have to lend, but the strong earnings that came out over the last week could undercut their argument.

The most pressing concern for banks is a relatively tough new rule that regulators proposed last week that could force banks to build up more capital, the financial buffer they maintain to absorb losses. But the banks did not demonstrate any difficulty in meeting the proposed rules, and the banks now appear to have fewer allies in Washington than at any time since the financial crisis.

This was highlighted on Wednesday when the Treasury secretary, Jacob J. Lew, effectively issued an ultimatum to Wall Street, calling for the swift adoption of rules introduced through the Dodd-Frank financial overhaul law, which Congress passed in 2010. Mr. Lew also said that he might be open to stricter measures if enough had not been done to remove the threat that big banks can pose to the wider economy.

“If we get to the end of this year, and cannot, with an honest, straight face, say that we’ve ended ‘too big to fail,’ we’re going to have to look at other options because the policy of Dodd-Frank and the policy of the administration is to end ‘too big to fail,’ ” Mr. Lew said.

“This is maybe the strongest admission I’ve heard from the administration that we must act further to end ‘too big to fail,’ ” Senator David Vitter, Republican of Louisiana, said in a statement. Along with Senator Sherrod Brown, Democrat of Ohio, Senator Vitter introduced a bill earlier this year that would sharply increase capital levels at the biggest banks. In Congress on Thursday, Ben S. Bernanke, the Federal Reserve chairman, echoed Mr. Lew’s remarks. He said that if the measures already planned did not remove the risks posed by large banks, “additional steps would be appropriate.”

 

READ MORE: http://finance.yahoo.com/news/big-banks-flooded-profits-fear-012113498.html

CUs Overwhelmingly Preferred By Financially Savvy Consumers, Poll Shows

Financially savvy consumers overwhelmingly choose credit unions as their preferred institutions, says a new GoBankingRates.com poll, and that is no surprise, says Paul Gentile, Credit Union National Association executive vice president of strategic communications and engagement.

"For users of financial services, it's all about trust--and the credit union model, as a cooperative operating on a not-for-profit basis with no shareholders--engenders the trust among consumers and small business customers," he told GoBankingRates.com (July 17).

Among those polled on the GoBankingRates site and its partner sites--US News, Boston.com, AL.com and The City Wire-- more than 73.76% of poll respondents choose credit unions as their preferred institutions. Local community banks distantly followed, being preferred by 14.18%, national banks by 9.93%, and other institutions by 2.13%.

The publication also featured an explanation by Andrew Schrage, personal finance journalist and co-owner of blog Money Crashers Personal Finance, who noted he used to have an account at a national financial institution but pulled it when he ran into bad customer service.  Like 2.2 million other banking customers since 2011, he moved his money to a credit union.

 

http://www.cuna.org/Stay-Informed/News-Now/CU-System/CUs-Overwhelmingly-Preferred-By-Financially-Savvy-Consumers,-Poll-Shows/

Old-Fashioned Saving Tricks That Still Work

The old adage "a penny saved is a penny earned" calls to mind a time when cash truly was king, when pennies had purchasing power and savings were stored in boxes under beds.

But in today's more sophisticated world of apps, points and credit, maintaining a connection to pennies earned -- and other old-school approaches to spending and saving -- might not be such a bad idea.

Here are some ways to reintroduce some of those old-fashioned money management techniques into your financial repertoire. While no one would recommend stashing savings under a mattress or issuing I.O.U.s for groceries, adopting some tried-and-true tactics for financial management might be just the ticket to thriving in the modern world.

http://www.dailyfinance.com/2013/04/16/old-fashioned-money-saving-tricks/

Questions to Ask Before Taking Out a Home Equity Loan

Borrowing money against a home isn’t as simple as applying for a new credit card. Not only do homeowners have to understand the differences between a home equity loan and line of credit, they must also calculate the costs that come with taking equity out of what’s probably their biggest asset.

“It’s incredibly important before you take on any form of credit--including a home equity line of credit—that you assess your overall assets and credit picture,” says Adam Nash, COO of software-based financial advisement company Wealthfront. “Before approaching a home equity line of credit or loan, you have to ask yourself: is now the right time to take on more debt?”
During the heady days of the most recent real estate boom, people were using their homes as a piggy bank--drawing against the equity to fund vacations, make big-ticket purchases, take out other loans, or for debt consolidation. This strategy seemed to be working until home prices tanked, leaving many people with home equity loans or lines of credit they couldn’t afford to pay back.

Read more: http://www.foxbusiness.com/personal-finance/2013/07/17/questions-to-ask-before-taking-out-home-equity-loan/#ixzz2ZQIxFCrW

4 Apps to Help Build Up Your Savings Account


Spending less and saving more is easier said than done. But consumers can get a little help bulking up their savings accounts with these apps that make debt reduction, wealth building and even filing expense reports a lot easier.

http://www.foxbusiness.com/personal-finance/2013/06/20/4-apps-to-help-build-up-your-savings-account/