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The Conservatives
by kim
The sum is larger than the £37bn used to prop up the banks in last October's salvage exercise and means the taxpayer is on the hook for more than £54bn in RBS alone.
George Osborne, the shadow chancellor, said the £39.2bn was the equivalent of £2,000 per family and a "new world record as the biggest bailout of any single bank in any country".
Dan Roberts on the injection of government funds Link to this audio
The government, which regards a figure closer to £29bn as a truer reflection of its new injection of funds, tried to temper its announcement by imposing curbs on bonuses at the banks. They will not be able to pay cash bonuses for the 2009 financial year to any staff earning more than £39,000 and members of the boards will have to defer all their bonuses until 2012.
The latest injection of taxpayer funds follows months of negotiations over the government's insurance scheme for toxic assets, first unveiled in January. It comes at a time when the taxpayer is already sitting on £10bn losses on the shares it bought in October, following a 20% fall in the share price of RBS in the past two days.
Lloyds is now exiting the government's Asset Protection Scheme (APS) through the biggest cash call to take place in the City, of £13.5bn, and by embarking on a complex debt swap to raise more than £21bn. It requires the government to buy £5.7bn of new shares to maintain its stake in Lloyds at 43%, although Lloyds will pay back £2.5bn for the insurance it has already received.
Documentation accompanying its fundraising showed that the City regulator, the Financial Services Authority, was investigating a previous cash call conducted by HBOS, now part of Lloyds after last year's rescue takeover.
The documentation said: "The FSA is conducting a supervisory review into the accuracy and completeness of financial disclosures made by HBOS in connection with its capital raisings in 2008, including information as to corporate impairments disclosed in the circulars and/or prospectuses issued by HBOS in connection with such capital raisings."
Neither the FSA nor Lloyds would comment further on the investigation.
RBS, though, is more troubled than Lloyds and has had no option but to put £282bn of its toxic loans into the insurance scheme, taking the taxpayers' stake to 84% from 70% through a £25.5bn injection of funds with a further £8bn kept in reserve should the economy deteriorate.
The state of RBS's finances prompted the City minister, Lord Myners, to describe the bank when run by its previous management – led by Sir Fred Goodwin – as "the worst managed bank this country has ever seen". As Goodwin's replacement, Stephen Hester, warned that the new bonus strictures would make his bankers easy prey for rivals, Myners said big pay deals were no longer justifiable.
"The chief executives of the banks have been very supportive. Some of these people in banking need to 'get it' at some point – that the levels of remuneration that helped create this situation … are just no longer justifiable," said Myners.
Hester said his bonus – now deferred for three years – was not relevant. "I have to be clear that I am doing it for the sense of accomplishment," he said.
Eric Daniels, his counterpart at Lloyds Banking Group, stressed his bank was not an investment bank paying out "telephone number-style" bonuses and that cash bonuses would be paid to staff on salaries below £39,000.
Myners urged shareholders in other banks to clamp down on pay. "I would encourage institutional investors to see this as a model to press," he said.
Amid the row about the cost and necessity of the bailout, Alistair Darling insisted that the new terms of the APS were a better deal for taxpayers. The chancellor said: "We are now able to achieve our objectives on financial stability and banking reform at a lower overall cost to the taxpayer."
Hester said the taxpayer would get its investment back at a profit and the government should not nationalise the bank entirely or it would end up like Royal Mail. "You can do the maths on how many schools and hospitals you would get" when the money is paid back, he said.
The strikes at Royal Mail could affect the mass mailing of hefty documents that Lloyds needs to send out to its more than 2 million private shareholders. Demonstrating the mixed fortunes of the banks, Lloyds shares were the biggest risers in the FTSE 100, gaining 2.7% to 87p, while RBS was the biggest faller, losing 7% to 35.9p.
A Health Savings Account (HSA) offers tax advantages1 both in the short term and over the life of the account. Your tax savings have the potential to be significant and can help maximize your healthcare buying power.
Your Wells Fargo HSA delivers the following benefits:
* Tax deductible contributions - no income cap
* Tax-free earnings
* Tax-free payment of qualified medical expenses
* No income cap for taking the deduction (unlike IRAs)
See how much tax you could potentially save over 20 years:
Graph shows 20 years, with an annual contribution of $3,000, $500 in qualified medical expenses paid from the HSA annually and a 5% annual average rate of return.
HSATax Savings on HSA Contributions: $16,800 (assuming a 28% federal tax bracket)
Tax Savings on HSA Earnings: $10,303
Total Tax Savings: $27,103
Total Earnings: $36.798
Balance in year 20: $86,798
This example and assumed annual average rate of return is for illustrative purpose only. The examples are not intended to imply or guarantee any specific investment return. The example assumes a starting balance of $0 and does not include all possible contributions and/or withdrawal combinations. Compounding interest over time was factored into the future value calculation. Fees may reduce account earnings. Tax consequences may differ depending upon individual circumstances. Please consult your tax advisor regarding your individual situation.
IRS Forms 1099-SA and 5498-SA
The Internal Revenue Service (IRS) requires Wells Fargo to issue Form 1099-SA if you took a distribution from your Wells Fargo HSA during the previous tax year. For more information regarding the 1099-SA, you can access the Understanding IRS Form 1099-SA guide.
If you had any contribution activity in your Wells Fargo HSA during the previous tax year, the Internal Revenue Service (IRS) requires Wells Fargo to issue Form 5498-SA. For more information regarding the 5498-SA, you can access the Understanding IRS Form 5498-SA guide.
Maximize your savings
Remember to contribute up to the maximum annual amount allowed by the IRS to maximize your tax savings. In 2010, the maximum allowed is $3,050 for single coverage and $6,150 for family coverage. If you are age 55 or older, you can make an additional catch-up contribution amount of up to $1,000. In 2011, the maximum annual amounts will stay the same.**
Who's eligible for an HSA?
You're eligible for an HSA if you're enrolled in an HSA compatible health plan and not covered by other health insurance (with limited exceptions). You cannot be enrolled in Medicare, or be eligible to be claimed as a dependent on someone else's tax return.
Enroll Now
Health Savings Account: Invest in your future
Health Savings Accounts (HSAs) provide a unique opportunity to build tax-free1 savings for your future allowing you to earn income and pay for qualified medical expenses. If you are enrolled in an HSA compatible health plan and meet certain other eligibility requirements, you can open an HSA.
The Wells Fargo HSA rewards you with competitive rates of interest as the balance in your FDIC-insured deposit account grows. You also have the option to invest in a selection of Wells Fargo Advantage Funds® when your HSA reaches a minimum deposit account balance. You can have an HSA in addition to an IRA or 401(k).
When you save through a Wells Fargo HSA, your benefits include:
* An FDIC-insured, interest-bearing deposit account
* Option to invest in Wells Fargo Advantage Funds – one of the largest fund companies in America
* Opportunity to transfer funds from an existing IRA into an HSA
* Growing your money tax free
* Tax deductible contributions with no income cap
* You can make contributions any time during the tax year in any amount up to the annual maximum
* You own the account, even if you change jobs or health plans
* Once you turn 65, it becomes similar to a regular IRA
o Withdrawals used for eligible medical expenses remain tax free
o Withdrawals used for non eligible medical expenses are subject to regular income tax
* No set up, transaction or investment fees, just a low administrative fee of $4.25 per month
See how your funds could grow:
Graph shows 20 years, with an annual contribution of $3,000, $500 in qualified medical expenses paid from the HSA annually and a 5% annual average rate of return.
When you open a Wells Fargo HSA your benefits include:
* Easy funds access: The Wells Fargo Visa® HSA debit card allows you to conveniently pay for qualified medical expenses
* No “use it or lose it” rule: Unlike a Flexible Spending Account, at the end of the year your balances carry over
* Account ownership: Even if you change jobs or health plans, you control the funds in your HSA, and decide when and how you want to use them
* 24x7 online access: You can manage your account online anywhere with internet access
An HSA compatible health plan and HSA may be a good option for you if:
* You want to lower your health insurance premiums and pay for out-of-pocket medical expenses with tax-free funds
* You’re self-employed
* You or your family have ongoing qualified medical expenses not covered by insurance
* You are planning on elective surgeries and other procedures not covered by standard health insurance but are considered qualified medical expenses
Learn More
* See a case study
Remember to contribute up to the maximum annual amount allowed by the IRS to maximize your tax savings. In 2010, the maximum allowed is $3,050 for single coverage and $6,150 for family coverage. If you are age 55 or older, you can make an additional catch-up contribution amount of up to $1,000. In 2011, the maximum annual amounts will stay the same.3
Enroll Now
10 Things Bank Customers Have to Be Happy About in 2011
Geoff WilliamsGeoff Williams RSS Feed
Jan 7th 2011 at 4:00PM
Text SizeAAA
Share
Filed under: Banking
Customers outside a CitibankIn a lot of ways, 2010 ended up being a pretty good year for anyone with a bank account. For instance, the Federal Reserve stepped in and offered up some regulations that somewhat tame the overdraft fee situation. The best part of the new regulations? If you want your debit card to be declined because there's not enough money in your account for the purchase you're about to make, you can direct your bank to do that. No, it's not fun to be turned away by a cashier, but a lot of people see it as much more preferable to being stuck with one or more $30-something overdraft fees.
So what do we have to look forward to in 2011?
Quite a bit actually. There's plenty not to be happy about, of course, but for now, let's think about raindrops on roses and whiskers on kittens and, you know, focus on the positive.
1. More Oversight
July 21, 2011, is going to be a big day in the personal finance world. That's when the Consumer Financial Protection Bureau (CFPB) will officially open its doors. Elizabeth Warren, special adviser to the president and someone who's been a thorn in every banker's side, is heading up the launch. Among other things, the CFPB will be establishing a consumer complaint system and overseeing financial products and services offered by banks, including credit cards, mortgages, private student loans, payday loans, credit bureaus and debt collection. If you've ever been irate at your bank for foisting a $35 fee on that $4 cup of coffee (that admittedly you shouldn't have purchased, given that you didn't realize you didn't even have $4 in your bank account, because of charges you'd made with your debit card that hadn't yet been accounted for, making you think you had more money than you actually had), you should consider Ms. Warren a national hero.
2. More Bank Loans to Small Businesses
Sure, if you don't own your own company, this doesn't affect you. Or does it? Maybe you work for a small business, which really needs a bank loan to expand and bring in more revenue. The Federal Reserve has reported that commercial and industrial loans from commercial banks are on the upswing and have been for the past two months, and the economic research and analysis firm, Moody's Analytics, as The Wall Street Journal recently reported, estimates that commercial and industrial lending from banks will rise 3% this year. And Bank of America just announced they're planning on hiring 1,000 small-business lenders. At any rate, this is good news for businesses, which is refreshing.
3. More Bank Loans to Consumers
Ah, see, regular people should also get a piece of the loan pie in 2011, too. Home loans are still probably going to be hard to come by, but analysts have been predicting that auto loans should be an area of growth. But for those who can get a home loan, especially if your credit is stellar, banks are at least continuing to lower interest rates. According to LendingTree.com, a fairly solid indicator of how the mortgage market is doing, the average rates offered by lenders just fell once again in the past week to 5.01% for 30-year fixed mortgages.
4. More Mobile Banking Opportunities
Of course, that was something we were able to look forward to in 2010 as well, not to mention 2009 and 2008 ... well, for the past few years, in fact. But 2011 looks pretty promising. Bank Systems & Technology predicted late last year that "2011 will be the year in which financial institutions will look to capitalize on the full potential of the mobile channel -- moving from basic user functionality to full mobile finance." To look at it another way, your bank will pretty much be in your pocket.
Along those lines, I'll give a plug to CashEdge, which announced that Fifth Third is launching Popmoney, CashEdge's person-to-person email and mobile payment services. It's the first time, according to CashEdge's press release, that bank customers can send money from their online bank to someone else's bank, just using that someone else's (presumably a family member or a friend or a creditor) email, mobile number or bank account information.
The bottom line: Expect 2011 to bring more innovative ways to do your banking more efficiently.
5. Fewer Bank Failures
In 2009, 140 banks kicked the bucket; 157 met their makers in 2010. There will unquestionably be bank failures in 2011, but most analysts predict fewer. We wrote a lot about bank failures during 2009 and 2010 on WalletPop, but as we noted then, many bank customers were hardly aware that their banks had shut down, since the process of transitioning a bank from failing to being owned by a more secure, reliable bank went so smoothly. If your bank does happen to fail in 2011, you probably aren't going to have too many headaches, if any. Still, fewer bank failures mean a better economy, which is good for all of us.
6. More Banking Options From Walmart
Sure, there are plenty of Walmart haters out there, but the store has a lot of fans as well, and as we've noted before on WalletPop, Walmart is increasingly looking like a bank, even if they're not allowed to be one in the technical sense of the word. Last July, Walmart began offering small business loans to its Sam's Club customers, and at Walmart, you can apply for credit cards and debit cards and perform other transaction you would do at a standard bank, such as check cashing, merchant processing, money transfer and even some things banks don't do, like tax preparation. And while the year's still young and Walmart hasn't made any banking announcements for 2011, this is more of a prediction than a fact, but look for Walmart to continue innovating how it markets to both banking customers and especially the "unbanked" (those who don't have their own bank).
7. Electronic Social Security Deposits Starting May 1
Most people already get their Social Security checks deposited into their bank accounts, but now everyone with a checking account at a bank or credit union, like it or not, will receive their benefits this way, although apparently, there are some loopholes people can get around if someone's unbanked or if they have some other reason they still have to get their benefits mailed to them. (You can also opt to go with having your money put into Direct Express, a MasterCard debit account from Comerica Bank.)
Even if you hate this idea, there's a lot to like about it, isn't there? Provided you have a bank account, it's definitely easier and more efficient to have money directly deposited into your account. It's also estimated that this will save the government $1 billion a year. For people worried about the deficit, well, this can only help.
8. Better Customer Service
In an era where some customers, or ex-customers, actually put up sites denegrating banks, like BankofAmericaSux.com, banks understand just how much anger there is out there. (By the way, Prime Performance, a company that helps businesses become well liked, recently came out with a survey showing that Regions Bank is considered the friendliest bank; Capital One and Chase came in last).
Granted, every bank manager is different, and maybe the awareness that customers are angry won't mean a hill of beans to some executives and staff out there, but it seems logical to expect in 2011 that banks will make a better effort to make their customers as happy as possible. If nothing else, bankers have got to know that if they drive every customer away, they'll have nobody left to nickel and dime to death.
9. More Ways Than Ever to Manage Your Bank Account
Not to take away anything from Mint.com, but there are plenty of other online financial management tools out there, too, from Thrive and Buxfer to, as we just mentioned in a recent post, Payoff.com, which debuted Jan. 5 of this year. Expect more services to make a splash in 2011, like GreenSherpa.com, which mixes banking and online gaming and hasn't yet launched (although you can send in your address to get an email invite when the beta version is unveiled).
10. More Alternatives to Banking
True, we've been dancing around this idea for several paragraphs now, mentioning Walmart earlier, and how angry customers have been at banks. If you're one of those who are fed up with your bank, you can definitely be happy that there are more ways than ever to leave your bank and find a way to bank without an actual bank. For instance, there's been a lot of buzz in the blogosphere about BankSimple, which is launching in 2011. It's a debit card that's meant to replace your brick-and-mortar and online personal bank. While we've no idea how effective or popular it'll be -- and I'm not recommending ditching your favorite or even unfavorite financial institution -- I'm sure some people will want to check out BankSimple.
Why? Their marketing campaign seems to be largely predicated on the idea that, "Hey, we're not a bank."
George Osborne, the shadow chancellor, said the £39.2bn was the equivalent of £2,000 per family and a "new world record as the biggest bailout of any single bank in any country".
Dan Roberts on the injection of government funds Link to this audio
The government, which regards a figure closer to £29bn as a truer reflection of its new injection of funds, tried to temper its announcement by imposing curbs on bonuses at the banks. They will not be able to pay cash bonuses for the 2009 financial year to any staff earning more than £39,000 and members of the boards will have to defer all their bonuses until 2012.
The latest injection of taxpayer funds follows months of negotiations over the government's insurance scheme for toxic assets, first unveiled in January. It comes at a time when the taxpayer is already sitting on £10bn losses on the shares it bought in October, following a 20% fall in the share price of RBS in the past two days.
Lloyds is now exiting the government's Asset Protection Scheme (APS) through the biggest cash call to take place in the City, of £13.5bn, and by embarking on a complex debt swap to raise more than £21bn. It requires the government to buy £5.7bn of new shares to maintain its stake in Lloyds at 43%, although Lloyds will pay back £2.5bn for the insurance it has already received.
Documentation accompanying its fundraising showed that the City regulator, the Financial Services Authority, was investigating a previous cash call conducted by HBOS, now part of Lloyds after last year's rescue takeover.
The documentation said: "The FSA is conducting a supervisory review into the accuracy and completeness of financial disclosures made by HBOS in connection with its capital raisings in 2008, including information as to corporate impairments disclosed in the circulars and/or prospectuses issued by HBOS in connection with such capital raisings."
Neither the FSA nor Lloyds would comment further on the investigation.
RBS, though, is more troubled than Lloyds and has had no option but to put £282bn of its toxic loans into the insurance scheme, taking the taxpayers' stake to 84% from 70% through a £25.5bn injection of funds with a further £8bn kept in reserve should the economy deteriorate.
The state of RBS's finances prompted the City minister, Lord Myners, to describe the bank when run by its previous management – led by Sir Fred Goodwin – as "the worst managed bank this country has ever seen". As Goodwin's replacement, Stephen Hester, warned that the new bonus strictures would make his bankers easy prey for rivals, Myners said big pay deals were no longer justifiable.
"The chief executives of the banks have been very supportive. Some of these people in banking need to 'get it' at some point – that the levels of remuneration that helped create this situation … are just no longer justifiable," said Myners.
Hester said his bonus – now deferred for three years – was not relevant. "I have to be clear that I am doing it for the sense of accomplishment," he said.
Eric Daniels, his counterpart at Lloyds Banking Group, stressed his bank was not an investment bank paying out "telephone number-style" bonuses and that cash bonuses would be paid to staff on salaries below £39,000.
Myners urged shareholders in other banks to clamp down on pay. "I would encourage institutional investors to see this as a model to press," he said.
Amid the row about the cost and necessity of the bailout, Alistair Darling insisted that the new terms of the APS were a better deal for taxpayers. The chancellor said: "We are now able to achieve our objectives on financial stability and banking reform at a lower overall cost to the taxpayer."
Hester said the taxpayer would get its investment back at a profit and the government should not nationalise the bank entirely or it would end up like Royal Mail. "You can do the maths on how many schools and hospitals you would get" when the money is paid back, he said.
The strikes at Royal Mail could affect the mass mailing of hefty documents that Lloyds needs to send out to its more than 2 million private shareholders. Demonstrating the mixed fortunes of the banks, Lloyds shares were the biggest risers in the FTSE 100, gaining 2.7% to 87p, while RBS was the biggest faller, losing 7% to 35.9p.
A Health Savings Account (HSA) offers tax advantages1 both in the short term and over the life of the account. Your tax savings have the potential to be significant and can help maximize your healthcare buying power.
Your Wells Fargo HSA delivers the following benefits:
* Tax deductible contributions - no income cap
* Tax-free earnings
* Tax-free payment of qualified medical expenses
* No income cap for taking the deduction (unlike IRAs)
See how much tax you could potentially save over 20 years:
Graph shows 20 years, with an annual contribution of $3,000, $500 in qualified medical expenses paid from the HSA annually and a 5% annual average rate of return.
HSATax Savings on HSA Contributions: $16,800 (assuming a 28% federal tax bracket)
Tax Savings on HSA Earnings: $10,303
Total Tax Savings: $27,103
Total Earnings: $36.798
Balance in year 20: $86,798
This example and assumed annual average rate of return is for illustrative purpose only. The examples are not intended to imply or guarantee any specific investment return. The example assumes a starting balance of $0 and does not include all possible contributions and/or withdrawal combinations. Compounding interest over time was factored into the future value calculation. Fees may reduce account earnings. Tax consequences may differ depending upon individual circumstances. Please consult your tax advisor regarding your individual situation.
IRS Forms 1099-SA and 5498-SA
The Internal Revenue Service (IRS) requires Wells Fargo to issue Form 1099-SA if you took a distribution from your Wells Fargo HSA during the previous tax year. For more information regarding the 1099-SA, you can access the Understanding IRS Form 1099-SA guide.
If you had any contribution activity in your Wells Fargo HSA during the previous tax year, the Internal Revenue Service (IRS) requires Wells Fargo to issue Form 5498-SA. For more information regarding the 5498-SA, you can access the Understanding IRS Form 5498-SA guide.
Maximize your savings
Remember to contribute up to the maximum annual amount allowed by the IRS to maximize your tax savings. In 2010, the maximum allowed is $3,050 for single coverage and $6,150 for family coverage. If you are age 55 or older, you can make an additional catch-up contribution amount of up to $1,000. In 2011, the maximum annual amounts will stay the same.**
Who's eligible for an HSA?
You're eligible for an HSA if you're enrolled in an HSA compatible health plan and not covered by other health insurance (with limited exceptions). You cannot be enrolled in Medicare, or be eligible to be claimed as a dependent on someone else's tax return.
Enroll Now
Health Savings Account: Invest in your future
Health Savings Accounts (HSAs) provide a unique opportunity to build tax-free1 savings for your future allowing you to earn income and pay for qualified medical expenses. If you are enrolled in an HSA compatible health plan and meet certain other eligibility requirements, you can open an HSA.
The Wells Fargo HSA rewards you with competitive rates of interest as the balance in your FDIC-insured deposit account grows. You also have the option to invest in a selection of Wells Fargo Advantage Funds® when your HSA reaches a minimum deposit account balance. You can have an HSA in addition to an IRA or 401(k).
When you save through a Wells Fargo HSA, your benefits include:
* An FDIC-insured, interest-bearing deposit account
* Option to invest in Wells Fargo Advantage Funds – one of the largest fund companies in America
* Opportunity to transfer funds from an existing IRA into an HSA
* Growing your money tax free
* Tax deductible contributions with no income cap
* You can make contributions any time during the tax year in any amount up to the annual maximum
* You own the account, even if you change jobs or health plans
* Once you turn 65, it becomes similar to a regular IRA
o Withdrawals used for eligible medical expenses remain tax free
o Withdrawals used for non eligible medical expenses are subject to regular income tax
* No set up, transaction or investment fees, just a low administrative fee of $4.25 per month
See how your funds could grow:
Graph shows 20 years, with an annual contribution of $3,000, $500 in qualified medical expenses paid from the HSA annually and a 5% annual average rate of return.
When you open a Wells Fargo HSA your benefits include:
* Easy funds access: The Wells Fargo Visa® HSA debit card allows you to conveniently pay for qualified medical expenses
* No “use it or lose it” rule: Unlike a Flexible Spending Account, at the end of the year your balances carry over
* Account ownership: Even if you change jobs or health plans, you control the funds in your HSA, and decide when and how you want to use them
* 24x7 online access: You can manage your account online anywhere with internet access
An HSA compatible health plan and HSA may be a good option for you if:
* You want to lower your health insurance premiums and pay for out-of-pocket medical expenses with tax-free funds
* You’re self-employed
* You or your family have ongoing qualified medical expenses not covered by insurance
* You are planning on elective surgeries and other procedures not covered by standard health insurance but are considered qualified medical expenses
Learn More
* See a case study
Remember to contribute up to the maximum annual amount allowed by the IRS to maximize your tax savings. In 2010, the maximum allowed is $3,050 for single coverage and $6,150 for family coverage. If you are age 55 or older, you can make an additional catch-up contribution amount of up to $1,000. In 2011, the maximum annual amounts will stay the same.3
Enroll Now
10 Things Bank Customers Have to Be Happy About in 2011
Geoff WilliamsGeoff Williams RSS Feed
Jan 7th 2011 at 4:00PM
Text SizeAAA
Share
Filed under: Banking
Customers outside a CitibankIn a lot of ways, 2010 ended up being a pretty good year for anyone with a bank account. For instance, the Federal Reserve stepped in and offered up some regulations that somewhat tame the overdraft fee situation. The best part of the new regulations? If you want your debit card to be declined because there's not enough money in your account for the purchase you're about to make, you can direct your bank to do that. No, it's not fun to be turned away by a cashier, but a lot of people see it as much more preferable to being stuck with one or more $30-something overdraft fees.
So what do we have to look forward to in 2011?
Quite a bit actually. There's plenty not to be happy about, of course, but for now, let's think about raindrops on roses and whiskers on kittens and, you know, focus on the positive.
1. More Oversight
July 21, 2011, is going to be a big day in the personal finance world. That's when the Consumer Financial Protection Bureau (CFPB) will officially open its doors. Elizabeth Warren, special adviser to the president and someone who's been a thorn in every banker's side, is heading up the launch. Among other things, the CFPB will be establishing a consumer complaint system and overseeing financial products and services offered by banks, including credit cards, mortgages, private student loans, payday loans, credit bureaus and debt collection. If you've ever been irate at your bank for foisting a $35 fee on that $4 cup of coffee (that admittedly you shouldn't have purchased, given that you didn't realize you didn't even have $4 in your bank account, because of charges you'd made with your debit card that hadn't yet been accounted for, making you think you had more money than you actually had), you should consider Ms. Warren a national hero.
2. More Bank Loans to Small Businesses
Sure, if you don't own your own company, this doesn't affect you. Or does it? Maybe you work for a small business, which really needs a bank loan to expand and bring in more revenue. The Federal Reserve has reported that commercial and industrial loans from commercial banks are on the upswing and have been for the past two months, and the economic research and analysis firm, Moody's Analytics, as The Wall Street Journal recently reported, estimates that commercial and industrial lending from banks will rise 3% this year. And Bank of America just announced they're planning on hiring 1,000 small-business lenders. At any rate, this is good news for businesses, which is refreshing.
3. More Bank Loans to Consumers
Ah, see, regular people should also get a piece of the loan pie in 2011, too. Home loans are still probably going to be hard to come by, but analysts have been predicting that auto loans should be an area of growth. But for those who can get a home loan, especially if your credit is stellar, banks are at least continuing to lower interest rates. According to LendingTree.com, a fairly solid indicator of how the mortgage market is doing, the average rates offered by lenders just fell once again in the past week to 5.01% for 30-year fixed mortgages.
4. More Mobile Banking Opportunities
Of course, that was something we were able to look forward to in 2010 as well, not to mention 2009 and 2008 ... well, for the past few years, in fact. But 2011 looks pretty promising. Bank Systems & Technology predicted late last year that "2011 will be the year in which financial institutions will look to capitalize on the full potential of the mobile channel -- moving from basic user functionality to full mobile finance." To look at it another way, your bank will pretty much be in your pocket.
Along those lines, I'll give a plug to CashEdge, which announced that Fifth Third is launching Popmoney, CashEdge's person-to-person email and mobile payment services. It's the first time, according to CashEdge's press release, that bank customers can send money from their online bank to someone else's bank, just using that someone else's (presumably a family member or a friend or a creditor) email, mobile number or bank account information.
The bottom line: Expect 2011 to bring more innovative ways to do your banking more efficiently.
5. Fewer Bank Failures
In 2009, 140 banks kicked the bucket; 157 met their makers in 2010. There will unquestionably be bank failures in 2011, but most analysts predict fewer. We wrote a lot about bank failures during 2009 and 2010 on WalletPop, but as we noted then, many bank customers were hardly aware that their banks had shut down, since the process of transitioning a bank from failing to being owned by a more secure, reliable bank went so smoothly. If your bank does happen to fail in 2011, you probably aren't going to have too many headaches, if any. Still, fewer bank failures mean a better economy, which is good for all of us.
6. More Banking Options From Walmart
Sure, there are plenty of Walmart haters out there, but the store has a lot of fans as well, and as we've noted before on WalletPop, Walmart is increasingly looking like a bank, even if they're not allowed to be one in the technical sense of the word. Last July, Walmart began offering small business loans to its Sam's Club customers, and at Walmart, you can apply for credit cards and debit cards and perform other transaction you would do at a standard bank, such as check cashing, merchant processing, money transfer and even some things banks don't do, like tax preparation. And while the year's still young and Walmart hasn't made any banking announcements for 2011, this is more of a prediction than a fact, but look for Walmart to continue innovating how it markets to both banking customers and especially the "unbanked" (those who don't have their own bank).
7. Electronic Social Security Deposits Starting May 1
Most people already get their Social Security checks deposited into their bank accounts, but now everyone with a checking account at a bank or credit union, like it or not, will receive their benefits this way, although apparently, there are some loopholes people can get around if someone's unbanked or if they have some other reason they still have to get their benefits mailed to them. (You can also opt to go with having your money put into Direct Express, a MasterCard debit account from Comerica Bank.)
Even if you hate this idea, there's a lot to like about it, isn't there? Provided you have a bank account, it's definitely easier and more efficient to have money directly deposited into your account. It's also estimated that this will save the government $1 billion a year. For people worried about the deficit, well, this can only help.
8. Better Customer Service
In an era where some customers, or ex-customers, actually put up sites denegrating banks, like BankofAmericaSux.com, banks understand just how much anger there is out there. (By the way, Prime Performance, a company that helps businesses become well liked, recently came out with a survey showing that Regions Bank is considered the friendliest bank; Capital One and Chase came in last).
Granted, every bank manager is different, and maybe the awareness that customers are angry won't mean a hill of beans to some executives and staff out there, but it seems logical to expect in 2011 that banks will make a better effort to make their customers as happy as possible. If nothing else, bankers have got to know that if they drive every customer away, they'll have nobody left to nickel and dime to death.
9. More Ways Than Ever to Manage Your Bank Account
Not to take away anything from Mint.com, but there are plenty of other online financial management tools out there, too, from Thrive and Buxfer to, as we just mentioned in a recent post, Payoff.com, which debuted Jan. 5 of this year. Expect more services to make a splash in 2011, like GreenSherpa.com, which mixes banking and online gaming and hasn't yet launched (although you can send in your address to get an email invite when the beta version is unveiled).
10. More Alternatives to Banking
True, we've been dancing around this idea for several paragraphs now, mentioning Walmart earlier, and how angry customers have been at banks. If you're one of those who are fed up with your bank, you can definitely be happy that there are more ways than ever to leave your bank and find a way to bank without an actual bank. For instance, there's been a lot of buzz in the blogosphere about BankSimple, which is launching in 2011. It's a debit card that's meant to replace your brick-and-mortar and online personal bank. While we've no idea how effective or popular it'll be -- and I'm not recommending ditching your favorite or even unfavorite financial institution -- I'm sure some people will want to check out BankSimple.
Why? Their marketing campaign seems to be largely predicated on the idea that, "Hey, we're not a bank."