Click to read the report

Click to read the report

Even under normal circumstances, racial discrimination can be hard to spot. Identifying discrimination in car purchases and loans is particularly challenging, however – auto dealers don’t have to log the ethnicity of borrowers, and car loan terms are often bargained as part of a complex transaction.

Still, the Consumer Financial Protection Bureau promised to be aggressive about making sure that minorities had equal access to credit when buying a car, and back in 2013, it threw the book at Ally Financial, formerly General Motors’ lending arm. The agency said racial minorities were routinely charged higher interest rates than whites, costing 235,000 consumers an extra $300 or more during the life of their loans. Ally settled the allegations without admitting wrongdoing, and agreed to pay $80 million to consumers for damages.

Disbursing those “refunds” is a challenge, however, because neither Ally nor the CFPB knows which consumers belong to a minority group. Recall that, unlike mortgage applications, auto loan applications do not collect ethnicity.

(This story first appeared on Read it there.)

Back in 2013, to calculate the potential number of victims, the CFPB used a fairly new and controversial method: it made educated guesses based on an algorithm known as “Bayesian Improved Surname Geocoding.” By plugging criteria such as surnames and home ZIP codes into a formula, the CFPB was able to calculate the likely ethnicity of the borrower. (UPDATE: Toyota Motor Credit has settled a similar case with the CFPB.)

This technique was criticized when it was used to estimate total victims to calculate the settlement. Now that it’s time to send out money (checks were supposed to start mailing out in January), criticism has grown much louder.

On Jan. 20, the Republican-led House Financial Services Committee released a report ringing the alarm bell that some non-minorities will receive payouts from the settlement fund.

“Sending remuneration checks to white borrowers as a means of remedying alleged discrimination against African-American, Hispanic and Asian borrowers is an unorthodox approach to fair lending enforcement, to say the least,” the report says.

Committee Chairman Jeb Hensarling (R-Texas) went further, saying the CFPB-designed method for sending out checks “invites fraud on a massive scale.”

In a statement, the CFPB said it is aware of the criticism. It declined to answer follow-up questions.

“We are reviewing the report from the majority staff of the House Financial Services Committee,” agency spokesman Sam Gilford said. “The CFPB’s goal has been, and continues to be, the elimination of illegal discrimination. Discrimination in auto lending has resulted in minority borrowers being unfairly charged higher interest rates on their loans. We will continue to fairly and consistently enforce the Equal Credit Opportunity Act to ensure borrowers harmed by discrimination receive the relief they deserve.”

The disbursement controversy revolves around what to do with consumers that the algorithm is unsure about – a group of nearly 200,000 borrowers. For those consumers, Ally has been directed to send a simple “opt-out” notice – the consumer is told to respond only if she or he is not a minority. Consumers who do nothing will later receive a check. [Update: The CFPB declined to use an “opt-in” procedure for this group, which would have required consumers to affirmatively reply to the notice, confirming their minority status. The CFPB did use an “opt-in” procedure on consumers with a lower probability of minority status, but did not require them to sign an oath or supply any kind of affirmation.]

Not surprisingly, using that approach, only a tiny fraction – 0.46% – opted out of receiving disbursements. Hensarling believes that means non-minorities will receive checks, and has asked U.S. Attorney General Lorretta Lynch to suspend distribution of the money.

“It defies logic for federal agencies to distribute settlement funds without first verifying the eligibility of prospective recipients, particularly when the Bureau’s case is premised upon a flawed statistical analysis,” Hensarling wrote in a letter to Lynch.

The committee says internal CFPB documents claim that the opt-in method would have reduced the number of victims receiving checks to somewhere between 36,000 and 143,000, rather than the 235,000 expected by the CFPB.

“The Bureau employs a remuneration process designed to achieve political ends notwithstanding its acknowledgement that funds will be distributed to ineligible recipients. In this respect, the Bureau does a disservice to legitimate fair lending investigations undertaken by federal agencies,” the report concludes.

The House Financial Services Subcommittee on Oversight and Investigation promised to hold a hearing on the Ally issue in early February.


Photo caption: Tiffany Doyle, left, with sister Brittany Meda at her wedding. (Rennard Photography)

Tiffany Doyle, left, with sister Brittany Meda at her wedding. (Rennard Photography)

Call them the invisible victims of the housing collapse: The millions of homeowners who’ve spent nearly a decade dutifully making mortgage payments on homes worth less than the balance of their loans. Known as “being under water,” many in this crowd were never in danger of losing their home. But that doesn’t mean they didn’t suffer.

Tiffany Doyle, 44, was one of them. She bought her two-bedroom townhouse outside Seattle for a very reasonable $289,000, well within her means. But her timing was terrible. She pulled the trigger in 2007; very near the market’s peak. When the recession hit, her townhouse’s value plunged all the way to an estimated $220,000.

You might think as long as Doyle could keep making payments on the mortgage everything would be fine. Wrong. After the bubble burst, her company was acquired by a New York-based firm. To get ahead — or at least to feel secure in her position — she’d have to relocate to New York. But that wasn’t possible.

“I could not even consider moving,” Doyle said. If she did, she would have lost much of her life savings paying off the balance of her loan after her townhouse sold. Meanwhile, she also knew declining the move might put her future prospects with the firm at risk. “I remember feeling trapped. I thought I was making a move towards a better financial stability and then the market dropped out from under me.”

Doyle’s story was repeated across the country during the depths of the recession — it’s the kind of thing I am chronicling in The Restless Project. Homeowners who are under water often can’t sell their homes, meaning they can’t move for job opportunities — or at least they end up long-distance renting or living as split families. They also can’t obtain home equity loans or refinance, since their homes have no equity, but relief may finally have arrived.

Real estate data firm RealtyTrac says the number of “seriously” under water homes fell dramatically in 2015 as housing prices around the country continue to recover from their 2008-2009 lows. At the end of 2015, there were 6.4 million U.S. homes at least 25% under water. That’s roughly 11.5% of all homeowners with a mortgage. While that sounds like a lot,  it’s down from 7.1 million at the end of 2014 — 12.7% of all homeowners with a mortgage — and down from 18.8% at the end of 2013.

Doyle fits this profile neatly. Her townhouse is now worth an estimated $267,000 — still well below what she paid, but since she’s made several years of payments, she’s reasonably close to break-even. In other words, her mortgage is no longer a financial anchor around her neck.

“It was only a few months ago when I saw the value of my house start going up, and I did immediately feel more free and a huge sense of relief,” she said.

Even in the hardest-hit areas, relief is coming, though more slowly. In Florida, for example, 19.8% of mortgage holders are still seriously under water, but that’s compared to 24.7% last year. In Arizona, the number fell from 16.1% in 2014 to 14.3% in 2015. In Georgia, it fell from 19.2% to 14.1%, according to RealtyTrac.

But of course, there are still millions of homeowners struggling with the same situation Doyle recently escaped. For them, relief might still be many years away.

“Over the past three-and-a-half years, the number of seriously underwater properties has been cut in half, but we continue to deal with a long tail of seriously underwater properties, and it will likely be another five years at least before most of those remaining underwater properties move into positive equity territory,” said Daren Blomquist, vice president at RealtyTrac.

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Click to read my story on Grow from Acorns.

Click to read my story on Grow from Acorns.

Middle-class struggles — the kind I am covering in my Restless Project — are now front and center in this year’s presidential election . And whatever you think about his ideas, Bernie Sanders deserves credit for sharpening the spotlight on those struggles. Whether his ideas — which are unquestionably radical — can survive a presidential campaign, let alone interaction with Congress, is a very open question.

Last week, I wrote a piece for Grow / Acorns about the Republican candidates and what the impact they might have on your wallet if elected. This week, I wrote about the Democrats for Grow.  Again, it’s a brief overview. But if we spend the next several months talking about issues like student loans, health care reform, family leave and the financial industry, that can only be good for America. Feel free to posts links to stories or data sources you feel add something to the discussion.

Sanders and Clinton are on the same side of many issues — but on most, Sanders goes quite a farther than his chief rival.

On the minimum wage, for example, Clinton says she supports an increase to $12 an hour; Sanders supports $15.  Clinton’s “New College Compact” would make community colleges free. Sanders “College for All” Act would make all public colleges and universities free.   Clinton wants to improve Obamacare by allowing the federal government to negotiate with drug companies for lower prices.  Sanders wants to replace Obamacare with a “single-payer” system, similar to covering all Americans under Medicare.

Sanders has some other radical ideas, too. He has said he would like to cap credit card interest rates at 15 percent, for example.

Perhaps his most radical idea, however, is his willingness to raise taxes — even on the middle class.  Both Clinton and Sanders support family leave.  Sanders’ FAMILY Act would give family members 12 weeks of paid leave to stay home with a newborn baby or a sick relative.  Sanders would pay for it by adding a payroll tax to all Americans’ paychecks, estimated to be $1.38 per week for the average worker and employer.

“I think that’s a pretty good investment and I would hope every candidate running for president of the United States would be a strong advocate of this legislation,” Sanders has said.

Clinton supports similar benefits, but says she would make only the wealthy pay it — she rejects the notion of a payroll tax, saying middle class families don’t need a tax increase. Instead, she’d “ask the wealthiest Americans to pay their fair share.” Previously, she has said “middle-class” includes households earning up to $250,000 annually, suggesting only those earning more would pay for a fund to cover family leave costs.

To learn more about Sanders and Clinton’s ideas on health care, taxes, students loans, etc.,  please click over to my story at Acorn’s new personal finance site, Grow. 

If you’d like to try Acorns, use my referral code by clicking on this link and you’ll get a $5 bonus deposited into your account. BIG DISCLOSURE: I will get $5 also if you use my referral code.  

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Javelin Strategy & Research

Javelin Strategy & Research

U.S. consumers have finally been liberated from archaic technology that used to protect them and their credit cards from identity theft. Millions of Americans now have chip-enabled credit cards.  And now the results of this sweeping change are in.

Just as many consumers were hit by ID theft last year – an estimated 13 million.

And in fact, a more serious type of ID theft — new account fraud — actually doubled last year.  It’s too soon to know why, the switch to chip cards is the likely culprit, say the folks at Javelin Strategy and Research, which just released its annual Identity Fraud study on Tuesday.

(This story first appeared on Read it there.)

“Fraud is changing in a way that makes it more dangerous,” said Al Pascual, director of fraud and security at Javelin. “There is some troubling news, but some good news, too.”

Chip credit and debit cards, also known as EMV cards, make creation of counterfeit credit cards nearly impossible for identity criminals. Fraud rings used to take stolen account data from big retailers like Target and print the account numbers onto fake credit cards for use by criminals. But that route is growing extinct as EMV use grows. So those criminals undertake other frauds, such as using stolen Social Security numbers to open up brand new credit cards in victims’ names.

“With the much-anticipated U.S. shift to EMV well underway, fraudsters are transitioning along with consumers,” the Javelin report said. “This drove a 113% increase in incidents of new account fraud, which now accounts for 20% of all fraud losses.”

New account fraud had declined for the past three years.

The results aren’t a big surprise; plenty of experts predicted that EMV wouldn’t end fraud, but rather shift it to other forms. It also doesn’t mean the shift to EMV was a mistake; it does mean that, as criminals move to other forms of crime, bankers and retailers have to react.

Avivah Litan, a fraud analyst at Gartner, thought it was too soon in the ongoing switch to EMV for such a dramatic impact on new account fraud levels. But clearly, fraud is changing, she said.

“I definitely see a huge increase in identity hijacking for one reason or another,” Litan said.

In the meantime, there are new headaches for consumers. Detecting new account fraud and recovering from it is much more complex than disputing fraudulent charges on an existing card.

The Javelin report also found that victims of data breaches are now more likely to become victims of fraud than in the past. Last year, 1 out of 7 breach victims were hit by fraud; this year, the odds increased to 1 in 5.

Pascual said he wasn’t surprised by that finding because database thefts in 2015 often involved Social Security numbers and other personal information — think of the Anthem health care database theft — rather than merely credit card information, as in the Target and Home Depot thefts.

“We had been projecting this kind of change. But it was compounded by the fact that last year was a big year for theft of sensitive information. There were 64% more Social Security numbers exposed in 2015 than 2014,” he said.

Not surprisingly, victims of Social Security number data theft were dramatically more likely to suffer new account fraud — 4% of Social Security number theft victims versus 0.6% of the general public, Javelin said.

The news isn’t all bad. The overall amount of fraud continues to drop, from $23 billion in 2010 and $16 billion in 2014 to $15 billion last year. And the amount of existing card fraud dropped from $9 billion to $8 billion last year, the report said.

But in another shift expected by the financial industry, so-called “card-not-present fraud” — fraud where a physical card need not be presented, like online or telephone shopping — overtook point-of-sale fraud, Javelin said.

The banking industry isn’t sitting still. To combat increases in card-not-present fraud, merchants and banks are slowly turning toward digital token-based systems that would do for online transactions what chips do for in-person transactions.

But that shift is slow, so the usual advice to consumers is even more imperative this year: Check credit card statements every month for fraudulent charges, and check credit reports at least once each year for signs of new account fraud. You can get your credit reports for free at and you can get your credit scores for free every month on

In the cat-and-mouse game played by thieves and the financial industry, things might get worse for consumers before they get better.

“Criminals have to find a way to get paid,” Pascal said.

The annual Javelin study of ID theft victims is in it 13th consecutive year. The firm surveyed 5,111 U.S. consumers in 2015 and has surveyed 64,000 respondents since 2003. The study is independent, the firm said, but funded by LifeLock Inc. 

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Stu Stull

Stu Stull

When you think Ohio, you probably think Cleveland, and you might think Cincinnati. Almost certainly, you don’t think Columbus, but here’s a secret: Ohio’s capital city is larger than its more famous neighbors to the north and south. In fact, it’s the largest U.S. city to make’s top 10 most affordable cities list. By some measures, it’s larger than Denver, Seattle, and Washington, D.C. And yet, it doesn’t feel crowded, said native Stu Stull.

“Best thing about Columbus is the ease of getting around and not having to waste time waiting for everything like Chicago, Washington, LA and other cities,” said Stull, 58. “There are no hour-and-a-half waits for dinner, no looking for 10 to 15 minutes for a parking space or waiting in traffic for way too long.” Except for college football Saturdays, of course.

(This story first appeared on Read it there.)

Stull was born and raised in the central Ohio city. He left briefly for Texas, but returned years ago and never looked back. A city employee, his mortgage on a small 3-bedroom house with a garden and screened-in patio eats up only 20% of his income.

“I can get downtown in half an hour and I am 10-plus miles away. Pro football, basketball, and baseball are within a two- or three-hour drive,” he said. The NHL’s Columbus Blue Jackets are right in town. “Concerts, like the Rolling Stones last year, and other entertainment comes here often.”

The Columbus economy weathered the recession better than many Midwest towns, thanks to its status as home of The Ohio State University and state government. But Columbus has a thriving private sector, too. Plenty of financial firms are located there — inexpensive housing helps keep labor costs down — like JPMorgan Chase, PNC Financial and Nationwide Mutual Insurance. It’s also a haven for fashion, and home to firms that operate Victoria’s Secret, Abercrombie & Fitch, and other well-known brands.

The Columbus economy was recently projected to possibly overtake Cleveland by 2018, according to the Columbus Dispatch.

Stull, who is a graphic designer and a part-time musician, said Columbus is still a place with a strong middle class.

“My experience when traveling to other cities is that life is easier here,” he said. “Most people are not living like a Kardashian no matter where they are.”

Columbus also has both old-world charm and hip hangouts. The historic district, German Village, makes drivers slow down with cobblestone streets. They should slow down anyway to see the gingerbread-like homes built by German immigrants who settled the area. The neighborhood is also home to one of America’s best independent book stores, Book Loft. Meanwhile, the Short North, near the city center, is a busy strip full of high-end restaurants and local pubs; it has the feel of an outdoor festival during every football weekend.

Columbus has its critics, of course. The winters are gray, and some residents lament that it’s a bit boring compared to coastal cities like New York. But with a median home sales price of around $117,000, perhaps there’s enough money left over for frequent trips to the Big Apple.

Stull might be a bit biased, but he said the music scene is surprisingly robust.

“It is a place without the extremes of other places,” Stull says. “To quote native James Thurber, ‘Columbus is a town in which almost anything is likely to happen, and in which almost everything has.’”

Life in Columbus, Ohio, by the Numbers

  • Affordable Cities Ranking: 9th
  • Housing Poor Residents: 30.4%
  • Median Home Sales Price: $117,475
  • Median Household Income: $46,481

The cheapest cities in America, based on percent of residents who are housing poor.




Click on these links to see their stories: Pittsburgh, Oklahoma City, Buffalo and Raleigh

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What do the presidential candidates think of domestic intelligence collection — or spying on Americans, depending on your point of view?  What do they think of Ed Snowden?

We haven’t heard a lot about the NSA or Snowden during the noisy campaigns so far, and that’s a shame. That’s because all the air is being sucked out of the conversation by more trivial concerns, such as Donald Trump’s debate schedule.  But all the candidates have spoken about domestic spying and about Snowden.

As we welcome election season proper, here’s a primer on the candidates’ views.

But first, a few notes: The most remarkable item of note is that Sen. Bernie Sanders voted against the original Patriot Act back in 2001 as a member of the House. He’s part of a very select group who did so.

Second, while some candidates have expressed a bit more sympathy for Snowden’s role as whistleblower, they’ve all called for him to face prosecution for treason. Even Sanders.


Marco Rubio

On Snowden: He “sparked conspiracy theories”

From the Atlantic: “We must also distinguish these reasonable concerns from conspiracy theories sparked by Edward Snowden. This man is a traitor who has sought assistance and refuge from some of the world’s most notorious violators of liberty and human rights.”

On domestic surveillance: (The Washington Post) Those who voted for the Freedom Act, like Ted Cruz, put America at risk by making it harder to gather intelligence.

Ted Cruz

On Snowden: His opinion seems to have grown harsher over time

In 2013, he said ( “If it is the case that the federal government is seizing millions of personal records about law-abiding citizens, and if it is the case that there are minimal restrictions on accessing or reviewing those records, then I think Mr. Snowden has done a considerable public service by bringing it to light.”

More recently, he said: “Today, we know that Snowden violated federal law, that his actions materially aided terrorists and enemies of the United States, and that he subsequently fled to China and Russia,” he continued. “Under the Constitution, giving aid to our enemies is treason.”

On surveillance: (The Guardian) Cruz has defended his Senate for the USA Freedom Act, which clarified the NSA’s metadata telephone records collection pogram

Donald Trump

On Snowden: He’s hinted that he’d lead a charge to return and execute Snowden.

“I think he’s a terrible traitor, and you know what we used to do in the good old days when we were a strong country? You know what we used to do to traitors, right?” Trump said on Fox. 

On surveillanceI tend to err on the side of security, I must tell you,” he has said (  “I assume when I pick up my telephone people are listening to my conversations anyway, if you want to know the truth… It’s a pretty sad commentary.”

He also said he would be “fine” with restoring provisions of the Patriot Act ( to allow for the bulk data collection.


Hillary Clinton

On Snowden: He should ‘face the music’

(The Atlantic) “He broke the laws of the United States… He could have been a whistleblower, he could have gotten all the protections of a whistleblower. He chose not to do that. He stole very important information that has fallen into the wrong hands so I think he should not be brought home without facing the music.”

On surveillance:

Clinton voted for both the 2001 Patriot Act and the 2008 FISA Amendments that extended NSA data collection capabilities.  More on her views at The Atlantic.

Bernie Sanders

On Snowden: “I think Snowden played a very important role in educating the American public … he did break the law, and I think there should be a penalty to that,” Sanders said ( He went on to say that the role Snowden played in educating the public about violations of their civil liberties should be considered before he is sentenced. On the other hand, this mildly Snowden sympathetic story is posted on Sanders’ senate webpage.

On surveillance:

Sanders voted against Patriot Act in 2001 as a member of the House of Representatives.  Later in the Senate, he voted against the 2008 FISA Amendments.

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Click for the report (PDF)

Click for the report (PDF)

Breaking news: Big event ticket sales are a broken marketplace that hurts both consumers and entertainers.  Just kidding, everybody knows that.  It’s remarkable that both the industry and regulators remain seemingly helpless to fix the problem.

With Bruce Springsteen songs still hanging in the air above Madison Square Garden, New York Attorney General Eric Schneiderman released the results of an investigation into the seedy ticket business called “Obstructed View: What’s Blocking New Yorkers from Getting Tickets.”

“Ticketing is a fixed game,” Schneiderman said. “This investigation is just the beginning of our efforts to create a level playing field in the ticket industry.”

Here’s what the report found:

  • For the most popular concerts, many tickets are never made available to the general public in the first place. On average, more than half of all tickets — 54 percent – are reserved for insiders. Those reserved tickets are split between insider holds (16%) and pre-sales (38%).
  • Concert venues and ticket sellers like Ticketmaster regularly tacked on fees that added more than 21% to the face price of tickets, and in some extreme cases, added more than the face-value price of the ticket.
  • Third-party brokers resell tickets on sites like StubHub and TicketsNow at average margins of 49 percent above face-value — sometimes more than 1,000 percent.
  • Brokers are using illegal specialty software – called “ticket bots” — to quickly purchase as many desirable tickets as possible and resell them at a significant markup. The investigation, for instance, found that on December 8, 2014, a single broker used a bot to purchase 1,012 tickets to a June 2015 U2 show at Madison Square Garden within the very first minute of the sale.
  • Sale of “speculative tickets” is rampant and also leads to fraud.  For example — In early December 2015, tickets purporting to be for Bruce Springsteen’s 2016 “River Tour” began appearing on secondary sites like StubHub, TicketNetwork and Vivid Seats. Some tickets were even advertised for inflated prices of as much as $5,800 per ticket. The catch? No such tickets had yet been released. What brokers were selling were “speculative tickets,” that is to say, tickets that they planned, or hoped, to buy later.  But often, consumers don’t get the tickets they’ve paid for, or worse: the tickets never arrive because prices never go down, a plague that hit last year’s Super Bowl.

Most important, Schneiderman shined a light on a relatively anti-consumer, anti-free market  scheme called “price floors” that prevents ticket holders from selling tickets below a certain price. The policy prevents season ticket holders from unloading unpopular games, and artificially inflates prices.  Schneiderman specifically called out NFL price floors in the report. The league pushes fans towards its own ticket sales platform, NFL Ticket Exchange, where it enforces price floors. The Denver Post recently reported that season ticket holders who sell on outside sites, like StubHub, risk losing their season ticket rights.

Price floors have crept into many sports, however. There’s even questionable promises between bulk ticket buyers (brokers) and teams to keep prices high when games become unpopular — late-season games when a team is eliminated from postseason contention, for example.

Schneiderman said to expect some kind of multi-state action to “correct” the price floor issue within the next couple of months, according to

It’s a good start, but so much more needs to be done to clean up ticket sales. Technology and the entrance of third-party providers like StubHub help out the promise of cleaning up ticket sale markets.  Instead, the market is as murky as ever.

Chris Grimm is executive director of a fan advocacy organization called  He welcomed the report, but said much more needs to be done to restore fairness and transparency to ticket markets.

“Ticket distribution practices put fans at a huge disadvantage when trying to buy tickets and combined with bot use makes it nearly impossible for fans to score face value tickets,” he said. “Artists and venues have long argued that more transparency regarding ticket distributions just makes it easier for scalpers to make a profit. Which is ridiculous. Everyone know which shows are going to be in high demand. Simply being honest with fans that, for example, 50% of tickets are sold through the American Express presale, 30% through the fan club, 10% are held back for industry insiders and 10% are sold at the general on-sale does not sound onerous or similar to giving away trade secretes to us.

Grimm also said ticket sellers must be required to report bot use to regulators.

“If we can clean up the primary market by increasing transparency to prevent the artificial manipulation of ticket supply and really do something with some teeth to crack down on bots, the problems with the secondary market will likely also be fixed,” he said.

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Click to read my story at Grow.

Click to read my story at Grow.

Tonight is the last Republican debate before the Iowa caucuses — the last time voters can hear from candidates before votes that actually count are … counted.  And what are we talking about?  Donald Trump vs. Fox News. That’s sad, because if you haven’t noticed, there’s a lot wrong with America right now, and we sure could use an adult conversation about that.

A politically-minded friend posted recently that tonight’s debate is really pretty unnecessary, as TV viewers have been watching Trump, Cruz, Rubio and company for a looong time now, and the candidates have had plenty of time to stake out their positions.  That’s true, but it’s also true that many Americans have been too busy living their lives, getting their kids dressed for school, and trying to take care of sick parents to watch MSNBC or Fox News for the past year. Those folks are just now orienting themselves to the campaign.  Trump or no Trump, it would be nice for them to hammer away at the issues that matter — like my pet topic, is America’s middle class  about to disappear forever? — and hear what the candidates plan to do about them.

Surprise!  If you spend some time reading about each candidate and picking through their positions, there’s plenty to talk about. This week, for my friends over at Grow, I did my best to write a straight-laced piece explaining the top GOP candidates’ positions on issues that matter to money.   The topic deserves a book, of course, and I had less than 1,000 words. So consider it more of a conversation starter than the last word on the subject.  Below, I offer some links for additional reading, and I’d encourage you to study up.

If you do, I think you’ll find plenty of fodder worth discussing. Jeb Bush has a new, novel plan for dealing with college costs, for example, but you probably haven’t heard a peep about it. (He wants to give kids a line of credit they can use for school, to be repaid as a tiny percentage of income. Read more from Inside Higher Ed here.) I’m also glad Trump has actually talked about getting corporations to pay taxes for money they’ve stashed overseas (though he’s offering them a really sweet deal), and he wants hedge fund managers to pay income taxes on their income (They are “getting away with murder,” he has said.)  On overall tax reform, I find the GOP discussion less interesting, more like a game of Name that Tune. (“I can cut the tax rate to 15 percent! Well, I can cut it to 10 percent! OK Ted, Cut that tax!”)  For most people, federal income taxes aren’t even the real problem anyway — local property taxes are what’s strangling their future.  (Please tell me you’ve heard of Name That Tune, the only intelligent game show ever televised).

So here’s a start on additional reading. There will be more to say soon:

I’m happy to add to this reading list. Feel free to send me other links.

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Here it comes.

Here it comes.

Half of Americans pay for help doing their taxes, but most wish tax preparers had better credentials, a new survey has found.

Only four states currently have rules surrounding who can charge a fee to do someone else’s taxes — about 1.2 million tax preparers do so annually, according to the Pew Charitable Trusts. In Oregon, California, Maryland and New York, tax preparers must satisfy requirements such as taking classes or passing a test — but the other 46 states have no such rules, and the Internal Revenue Service isn’t allowed to set them. In 2014, the U.S. Supreme Court said so, ruling that only Congress could set such rules. And Congress hasn’t acted.

American consumers, by a wide margin, would like to see this changed, according to the survey released Wednesday by the Consumer Federation of America. Four out of five consumers want tax preparers to pass a test administered by a government agency; and 83% support licensing requirements, the CFA said.

(This story first appeared on Read it there.)

“American consumers are being reasonable…it’s Congress and state legislatures that aren’t being reasonable,” said Chi Chi Wu, an attorney at the National Consumer Law Center.

The CFA also called for better fee disclosure, and consumers agreed with that, too — 89% said they support requiring paid tax preparers to supply an upfront list of fees. Training is an issue because repeated “secret shopper” tests have shown tax preparation firms can have high error rates, as told you last year.

For example, a 2014 test authorized by Congress sent 19 “secret shoppers” to tax prep firms. Only two of the returns were completed accurately. Mistakes ranged from giving taxpayers $52 less to $3,718 more than they were entitled to. A survey of taxpayer errors from 2006 through 2009 found that tax returns done by preparers had a higher estimated percentage of errors — 60% — than self-prepared returns — 50%.

Part of the problem, say consumer groups and the IRS, is that almost anything goes in the tax prep industry.

“Anyone can hang out a shingle as a tax return preparer, with no knowledge, no skill and no experience required,” lamented Taxpayer Advocate Nina Olson in congressional testimony.

Tax Preparer Errors Can Be Costly

“With budget cuts at the Internal Revenue Service that limit customer service, more and more people will need to consult a paid tax preparer to get help with their taxes,” Linda Sherry, National Priorities Director for Consumer Action, said. “The thought that consumers pay good money for bad advice is appalling. New consumer protections must be adopted to prevent errors and fraud and ensure that taxpayers can rely on the advice they are paying for.”

After losing its Supreme Court case, the IRS set up voluntarily training programs. And some tax prep firms offer in-house training. But consumer groups say tax season is too important to leave to voluntary compliance.

“Errors on tax forms put consumers at risk of fines and lost tax refunds yet few states have taken action to ensure that paid tax preparers are licensed and trained and disclose what are often high and unpredictable fees,” said Tom Feltner, Director of Financial Services at the Consumer Federation of America.

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The average income of first-time buyers is rising fast, leaving many would-be buyers behind

The average income of first-time buyers is rising fast, leaving many would-be buyers behind

Is buying a first home becoming more a privilege than an American birthright? That’s the provocative question posed recently by Issi Romem, chief economist of And he answers it, cautiously, with data suggesting it’s true.

Romem’s most concerning assertion: Young buyers have nearly 10% higher incomes than they did less than a decade ago. The average household income for first-time buyers — as opposed to homebuyers who are trading up — is nearly $85,000, up from about $78,000 from 2004-2007. First-time homebuyers now come from higher up the income distribution than they used to, clocking in near the 60th percentile.

(I’ve talked about this problem in several ways; the “Requiem for the starter home” story I wrote last year got the most attention.)

“The ability to transition into homeownership is gradually becoming the privilege of a narrower group of first-time buyers that is more financially select,” Romem says.

(This story first appeared on Read it there.)

That leads to a second problem, one that impacts the entire economy: First-time homebuyers are conspicuously absent from home buying at the moment, which is stifling the economic recovery. In 2005, the U.S. hit an all-time high of 3.2 million first-time homebuyers, Romem says, but they buy fewer than 2 million homes annually today. That accounts for fewer than half of the nearly 4.65 million homes sold in the U.S. in 2015, according to figures from the National Association of Realtors.

First-time buyers are critical for the economy because their purchases set in motion sales for others who are trading up – usually, families looking to expand need to sell their “starter” homes first.

“A shortage of first-time buyers will cause the equivalent of famine in the housing market: a slowdown in home sales and presumably also in prices,” Romem wrote in a recent post titled “The Rising Income of First-Time Home Buyers.

Nationally, sales to first-time homebuyers are 16.5% below the historical norm, Romem says, but in some parts of the country, the dropoff is even more dramatic. In the West region, sales fall below the norm by 23.9%; in the South, by 22.6%. That compares with the Northeast, where sales to first-time buyers actually exceeded the historical norm by 3.6%.

There are two ways to look at the news. Tougher lending standards, such as larger down paymentrequirements, clearly have something to do with a dropoff in young buyers. That might help prevent a repeat of the housing bubble and collapse, said Logan Mohtashami, senior loan manager at AMC Lending Group.

“To be able to buy a home now more than ever…means you’re doing well in this economy. This cycle of homebuyers is the best I have ever seen in my 20 years,” Mohtashami said. Exotic interest-only or low-down-payment loans helped some buyers get into their first homes a decade ago, and that didn’t work out well for many of them. “I always wondered how much of the previous data was jaded because a lot of first-time homebuyers bought homes without the right income needed.”

On the other hand, the housing market is being buoyed by all-cash buyers – some investors, some foreign buyers – while young adults are renting in an expensive rental market or being forced to live with parents into their 30s. Ramem worries about the social issues that might create.

“The notion that homeownership is slipping out of reach for a growing share of the population is an uncomfortable one, especially if the trend continues,” he said. “Do we really want homeownership to become a privilege rather than a choice?”

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