Monday, February 8, 2016

Archive: May, 2013

POSTED: Wednesday, May 29, 2013, 4:54 PM

Patrick Rodgers is back in the news. Two years ago, the Philly homeowner was fighting Wells Fargo over his mortgage, as I described here and in follow-ups here and here. Now he's battling eBay - I'll tell you details in tomorrow's Tech Life column in the Inquirer - here's a link. But in case you missed how Stephen Colbert later exposed Rodgers as a vampire - and lambasted the rest of the media for ignoring the obvious - here's a Comedy Central video from 2011. Turns out Dan Rather would never have made the same mistake.

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POSTED: Wednesday, May 22, 2013, 11:19 AM
U.S. Sen. Kirsten Gillibrand (Photo from

With more than $1 trillion in student loans outstanding and jobs still so hard to come by that the Federal Reserve is keeping interest rates at historic lows, Sen. Kirsten Gillibrand (D., N.Y.) has put forward a proposal to help both borrowers and, simultaneously, the broader economy: Let student-loan borrowers refinance all their loans at 4 percent annual interest.

Gillibrand calls her proposal the Federal Student Loan Refinancing Act. Like Sen. Elizabeth Warren (D., Mass.), Gillibrand has warned against the doubling of interest rates on subsidized Stafford Loans that's scheduled to take place in July if Congress fails to act, and is backing a proposal to freeze those rates at 3.4 percent.  Warren would go further. Her Bank on Students Loan Fairness Act, which I wrote about here last week, would peg the interest rate on new student loans to the ultra-low discount rate - currently 0.75 percent - that the Fed charges to the nation's largest banks. So far, more than 425,000 people have signed a petition Warren submitted to stir support for her plan.

Gillibrand's refinancing proposal addresses the broader problem faced by students and former students saddled with unaffordable debt and unable to refinance it - a problem for many in today's marketplace, according to the Consumer Financial Protection Bureau, which has been collecting consumer input and comments about  student loans for the last year.

POSTED: Tuesday, May 14, 2013, 1:20 PM
U.S. Sen. John McCain, R-Arizona. (Pablo Martinez Mosivais / Associated Press)

The Federal Communications Commission recently confirmed what many consumers regard as obvious: Cable-TV prices have been climbing relentlessly, much faster than the rate of inflation - an average of 6.1 percent a year between 1995 and 2010. Cable companies like to talk about the "per channel" price as a better benchmark, but last I checked they hadn't managed to increase the number of viewing hours available in anyone's day.

Sen. John McCain (R., Ariz.) has a plan to fix the problem by forcing cable companies to offer a-la-carte pricing. He testified this morning about the proposal, which he calls the Television Consumer Freedom Act of 2013, before the Senate Commerce Committee.  (Use promo code W72C to access Bob Fernandez's story at about McCain's appearance.) His bill would also bar blackouts of local sports events held in publicly financed facilities, and seek to ensure the future of over-the-air television.

McCain says his plan to force a-la-carte pricing is "entirely voluntary," and free of mandates and regulations. In that respect, he's being at least a bit disingenuous and playing to his conservative base. Instead, the plan builds on some basic quirks in the way we already regulate broadcast and pay television - in particular, the so-called "compulsory license" that guarantees a cable company's access to local broadcast channels - and aims to use them to the advantage of cable-TV customers.

POSTED: Wednesday, May 8, 2013, 11:16 AM

With interest rates on federally subsidized student loans set to double this summer unless Congress acts - and where have we heard that story before? - U.S. Sen. Elizabeth Warren is stepping forward with a modest proposal: Skip the debate over whether students should pay 3.4 percent or 6.8 percent, and give them the same great deal as our government gives the big banks that, as she puts it, "destroyed millions of jobs and nearly broke this economy."

Just a symbolic gesture? It's hard to see it differently - especially as congressional Republicans seem to be happily accepting the across-the-board spending cuts known as the sequester that harm Head Start kids, Meals on Wheels recipients, research-grant recipients, and a long, long list of others, particularly in states with a large military presence. But let's let the Massachusetts Democrat make her case. Here are her prepared remarks to the Senate (and you can watch the video below): 

Mr. President, on July 1st, the interest rate on new, federally subsidized student loans is set to double from 3.4 to 6.8 percent. That means unless Congress acts, for millions of young people the cost of borrowing money to go to college will double.

POSTED: Tuesday, May 7, 2013, 2:10 PM

Richard Cordray, director of the Consumer Financial Protection Bureau, says they were "wolves in sheep's clothing": purported "debt settlement" firms that sought out financially distressed consumers, often through misleading means, but made things worse for them rather than better.

The CFPB says one of the firms, Mission Settlement Agency, routinely sent letters marked with the Great Seal of the United States and claiming to be from a nonexistent "Office of Disbursement."

With help from federal prosecutors and the U.S. Postal Inspection Service, the CFPB filed suit today seeking to shut down the two operations, based in New York and New Jersey. It says the businesses targeted consumers "in multiple states" via mail and phone or via the Internet, and charged them illegal advance fees for mostly worthless services.

POSTED: Friday, May 3, 2013, 1:18 PM

If you don't pay close attention to the anti-Obamacare and anti-Medicaid arguments and Internet memes popular in right-wing think tanks and the conservative blogosphere, you may never have noticed the strange but central argument many have settled on: Medicaid is so bad that people would actually be better off uninsured.

The rap on Medicaid as substandard insurance has always been a self-fulfilling complaint, as state lawmakers have left it chronically underfunded. Now those critiques have emerged in the lingering war against Obamacare, since the Supreme Court left it to states to decide whether to join one of the law's key programs: expanding Medicaid to all Americans with incomes below 138 percent of poverty.

Manhattan Institute senior fellow Avik Roy is a prime proponent of this anti-Medicaid position, and he's been at it again after the New England Journal of Medicine published a study on an unusual natural experiment offered by the state of Oregon. Roy writes in Forbes: "The result calls into question the $450 billion a year we spend on Medicaid, and the fact that Obamacare throws 11 million more Americans into this broken program."

POSTED: Wednesday, May 1, 2013, 11:49 AM

Citizens Bank and its parent, RBS Citizens of Providence, R.I., itself a subsidiary of Royal Bank of Scotland Group, aren't saying saying why they agreed to pay about $14 million to settle overdraft complaints from federal regulators, as reported today by my colleague Harold Brubaker.

A spokeswoman told the Inquirer that Citizens has "changed the practices identified in these exam results and are working with our regulators to address any customer impacts that they have identified." But it's fair to note that the bank's overdraft practices have repeatedly drawn criticism - as have similar practices at most of the nation's leading banks.

In 2011, for instance, the Consumer Federation of America crunched the numbers to see how much it would cost a consumer to carry an overdraft for two weeks - essentially as an unlabeled loan - at each of 14 leading banks. As I wrote back then, CFA's analysis found Citizens Bank leading the list:

About this blog

Jeff Gelles, who writes the Inquirer's weekly Consumer 14.0 and Tech Life columns, takes a broad look at the marketplace of goods, services, and ideas.

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