News articles like this speak loudly about who this kind of news is written for.
The article headline makes it sound "dangerous" and "bad" for the "lenders." Billions on the line!
It's never "billions on the line for consumers!"
Profits for corporations are always treated by news media as a given and anything interrupting them, including people's real lives, are less important.
Won't anyone think about the poor milti-billion bollar corporations
this again is why I will pipe in I like biden. So many things have come out of the agencies of this administration. He can't make congress function but he can sure as heck streamline stuff at the executive level.
But I heard people disagree with some of his stances, so it’s a coin toss between him and that other guy who quotes Hitler /s
something something pedophile
Fuck yeah this is a win for consumers, assuming there is no loophole or other way to bypass this regulation...
Assuming...
Loophole of the "payment not received on time fee" of $40.
Obligatory - Join a credit union. They're non profit financial institutions that offer the same service as a bank. As a non profit, their fees and rates are much better.
Washington State Employees Credit Union famously lost a lawsuit over overdraft fees. You can bet your ass if it's an accepted practice at major banks, your Credit Union can and will do similar things, if they want to.
When I moved states and closed my accounts with the local bank I'd been with since my first bank account (and never once paid a fee to) I looked into the credit unions in my area. The fees were absurd, I finally found one that looked decent and then found that there was a $6 fee any time you transferred or withdrew money from any savings accounts. I'm not paying to access my own money. Ended up going with another small local bank and haven't paid a fee yet. Customer service is great too, I give them a call and get a real person the next county over and the few times I've actually gone to a branch they've been almost too nice.
I probably come off as a Fidelity shill with how much I've mentioned them on Lemmy, but it's a genuinely good platform for banking. They're not a traditional bank. They're a brokerage that offers checking and savings accounts that you can directly buy/sell securities with.
I moved all my assets to them after Chase pissed me off one too many times and it was the greatest decision I've ever made. Account to account transfers are instant (I've transferred like $60k and they didn't give a fuck) and they front you the money for external incoming transfers that are still in pending. You never have time periods where you can't access your money because it's in the ether that is our antiquated banking system.
No minimums, no transfer fees, no stock/ETF purchase fees, and they pay ATM withdrawal fees automatically (including my $10 ATM fee in Vegas). The one time I had to call them to request a chargeback on my credit card the whole call, including waiting, took 5 minutes.
By far my favorite feature though is you can buy into money market funds like SPAXX in your normal accounts, so you get 5% APY on your money. However, it's still treated as normal USD so any transactions automatically pull from it.
The problem is finding them. I'm still chained to a credit union in another state years after I moved, just because I cannot find a local credit union in my city that will accept me. Plenty of ones for teachers, cops, firefighters, and veteran's, but they won't let a Joe Shmoe with an office gig store money.
You could join an online credit union such as Alliant Credit Union. It costs $5 for a membership that they'll pay for you, though there are other options that you can easily join yourself for membership.
The $20/mo ATM fee rebate is nice.
Wild! I've got nearly 20 in my metro area to choose from. I assumed that was the case in most populous areas.
Have you tried talking to them? Almost every credit union I've talked to had some loophole type thing to join, like "Donate $5 to this organization, and now you fall under X."
$8 fee but at 75% interest.
Monthly account fee of $40, waived for on time payments.
I love the bank system of charging you extra money for being broke. Have they capped overdraft fees yet or addressed how they run charges from highest to lowest to maximize fees?
I would like the nixing of closing account fee. You should not be allowed to charge folks to leave. Actually and no hiding with the contract crap.
The banks won't take a billions hit, they will simply start charging for something else.
It's not a "late fee", it's a "past due convenience charge"!
An account restoration fee.
Yeah, well, fuck lenders. I hope it's bad for them. It should be bad for them.
I got rid of my bank accounts after my direct deposit got messed up and they hit me with a "monthly maintenance fee" for being under their minimum.
Switched to a credit union super fast.
I've been with a credit union for over a decade now, never looking back.
it's not like they don't make that shit in interest in a day anyway
Peg it to the federal minimum wage.
I think it should be lower still. $5 max.
But really they need to go after interest rates. That's where the real theft occurs.
Make it like the new college debt rules. If you are making the minimum payment, then your total balance can't go up. Interest can't be higher than the minimum payment (which is also capped)
Compound interest is a ridiculous idea. When you get a loan, you should only owe a flat % on top of the loan amount. This % should be negotiated ahead of time based on the repayment schedule.
When you take a loan for {principal} over {n_periods} compounded by {frequency} at {percentage}; it turns out that there’s a mathematical formula that results in the exact cost of the loan. You can negotiate any of those parameters to achieve that flat-rate equivalent.
But watch out. Because lenders that will agree to flat-rate lending are also most likely to do so on an absolute cost-basis; meaning there is no benefit and perhaps even penalty for early payment.
Compounding isn’t all evil. Debt isn’t inherently evil, either. Like any instrument, it can be tool to improve your life and/or others’, or it can be a weapon to harm yours or others’.
I understand all of that. The way it is now, compound interest only serves to deepen the pit many people find themselves in financially. The system doesn't work, so just because it can be beneficial to a few people sometimes doesn't mean it's worth keeping around.
I don’t think we can just get rid of compound interest. It’s akin to “just get rid of F=ma”.
Compound interest is an economic law of physics. In every day, in every moment, we make choices. Big or small, those choices affect the next opportunity, which affects the next, and the next after next, and so on. A series of really good choices can lead to exponential growth, and vice versa to poor choices. Compounding interest is a mathematical model to represent that. It’s literally the opportunity cost of capital.
Sounds like a great low interest loan to me.
Should be 0. If you're late on a payment, you pay compounding interest. The idea that you can somehow charge a fee on top of that is absolutely insane.
News articles like this speak loudly about who this kind of news is written for.
The article headline makes it sound "dangerous" and "bad" for the "lenders." Billions on the line!
It's never "billions on the line for consumers!"
Profits for corporations are always treated by news media as a given and anything interrupting them, including people's real lives, are less important.
Won't anyone think about the poor milti-billion bollar corporations
this again is why I will pipe in I like biden. So many things have come out of the agencies of this administration. He can't make congress function but he can sure as heck streamline stuff at the executive level.
But I heard people disagree with some of his stances, so it’s a coin toss between him and that other guy who quotes Hitler /s
something something pedophile
Fuck yeah this is a win for consumers, assuming there is no loophole or other way to bypass this regulation... Assuming...
Loophole of the "payment not received on time fee" of $40.
Obligatory - Join a credit union. They're non profit financial institutions that offer the same service as a bank. As a non profit, their fees and rates are much better.
Not always.
https://www.cutoday.info/Fresh-Today/Washington-State-Employees-CU-Paying-2.99M-To-Settle-Overdraft-Lawsuit
Washington State Employees Credit Union famously lost a lawsuit over overdraft fees. You can bet your ass if it's an accepted practice at major banks, your Credit Union can and will do similar things, if they want to.
When I moved states and closed my accounts with the local bank I'd been with since my first bank account (and never once paid a fee to) I looked into the credit unions in my area. The fees were absurd, I finally found one that looked decent and then found that there was a $6 fee any time you transferred or withdrew money from any savings accounts. I'm not paying to access my own money. Ended up going with another small local bank and haven't paid a fee yet. Customer service is great too, I give them a call and get a real person the next county over and the few times I've actually gone to a branch they've been almost too nice.
I probably come off as a Fidelity shill with how much I've mentioned them on Lemmy, but it's a genuinely good platform for banking. They're not a traditional bank. They're a brokerage that offers checking and savings accounts that you can directly buy/sell securities with.
I moved all my assets to them after Chase pissed me off one too many times and it was the greatest decision I've ever made. Account to account transfers are instant (I've transferred like $60k and they didn't give a fuck) and they front you the money for external incoming transfers that are still in pending. You never have time periods where you can't access your money because it's in the ether that is our antiquated banking system.
No minimums, no transfer fees, no stock/ETF purchase fees, and they pay ATM withdrawal fees automatically (including my $10 ATM fee in Vegas). The one time I had to call them to request a chargeback on my credit card the whole call, including waiting, took 5 minutes.
By far my favorite feature though is you can buy into money market funds like SPAXX in your normal accounts, so you get 5% APY on your money. However, it's still treated as normal USD so any transactions automatically pull from it.
The problem is finding them. I'm still chained to a credit union in another state years after I moved, just because I cannot find a local credit union in my city that will accept me. Plenty of ones for teachers, cops, firefighters, and veteran's, but they won't let a Joe Shmoe with an office gig store money.
You could join an online credit union such as Alliant Credit Union. It costs $5 for a membership that they'll pay for you, though there are other options that you can easily join yourself for membership.
The $20/mo ATM fee rebate is nice.
Wild! I've got nearly 20 in my metro area to choose from. I assumed that was the case in most populous areas.
Have you tried talking to them? Almost every credit union I've talked to had some loophole type thing to join, like "Donate $5 to this organization, and now you fall under X."
$8 fee but at 75% interest.
Monthly account fee of $40, waived for on time payments.
I love the bank system of charging you extra money for being broke. Have they capped overdraft fees yet or addressed how they run charges from highest to lowest to maximize fees?
I would like the nixing of closing account fee. You should not be allowed to charge folks to leave. Actually and no hiding with the contract crap.
The banks won't take a billions hit, they will simply start charging for something else.
It's not a "late fee", it's a "past due convenience charge"!
An account restoration fee.
Yeah, well, fuck lenders. I hope it's bad for them. It should be bad for them.
I got rid of my bank accounts after my direct deposit got messed up and they hit me with a "monthly maintenance fee" for being under their minimum.
Switched to a credit union super fast.
I've been with a credit union for over a decade now, never looking back.
it's not like they don't make that shit in interest in a day anyway
Peg it to the federal minimum wage.
I think it should be lower still. $5 max.
But really they need to go after interest rates. That's where the real theft occurs.
Make it like the new college debt rules. If you are making the minimum payment, then your total balance can't go up. Interest can't be higher than the minimum payment (which is also capped)
Compound interest is a ridiculous idea. When you get a loan, you should only owe a flat % on top of the loan amount. This % should be negotiated ahead of time based on the repayment schedule.
When you take a loan for {principal} over {n_periods} compounded by {frequency} at {percentage}; it turns out that there’s a mathematical formula that results in the exact cost of the loan. You can negotiate any of those parameters to achieve that flat-rate equivalent.
But watch out. Because lenders that will agree to flat-rate lending are also most likely to do so on an absolute cost-basis; meaning there is no benefit and perhaps even penalty for early payment.
Compounding isn’t all evil. Debt isn’t inherently evil, either. Like any instrument, it can be tool to improve your life and/or others’, or it can be a weapon to harm yours or others’.
I understand all of that. The way it is now, compound interest only serves to deepen the pit many people find themselves in financially. The system doesn't work, so just because it can be beneficial to a few people sometimes doesn't mean it's worth keeping around.
I don’t think we can just get rid of compound interest. It’s akin to “just get rid of F=ma”.
Compound interest is an economic law of physics. In every day, in every moment, we make choices. Big or small, those choices affect the next opportunity, which affects the next, and the next after next, and so on. A series of really good choices can lead to exponential growth, and vice versa to poor choices. Compounding interest is a mathematical model to represent that. It’s literally the opportunity cost of capital.
Sounds like a great low interest loan to me.
Should be 0. If you're late on a payment, you pay compounding interest. The idea that you can somehow charge a fee on top of that is absolutely insane.
Good