News 

When Unpaid Student Loan Bills Mean You Can No Longer Work

“Unable to work, she defaulted on her student loans” writes Natalie Kitroeff for nytimes.com. Many student loans are backed by guarantees by the state or federal government, which foot the bills if borrowers default.With student debt levels soaring — the loans are now the largest source of household debt outside of mortgages — so are defaults.To entice banks to make student loans, the government offered them insurance: If a borrower defaulted, it would step in and pick up the tab.The government’s interest in compelling student borrowers to pay back their…

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Markets News 

One of China’s hottest companies rebuffs criticism about transparency

“In this case, Ant Financial lends money to Alipay users and then packages those debts into asset-backed securities for sale to investors” writes Anthony Kwan for cnbc.com. Asset-backed securities are financial instruments that are backed by underlying loans and other receivables. According to news reports, Moody’s Investors Service previously said that companies like Ant Financial needed to be more transparent about how such asset-backed securities are created — including their criteria for lending to underlying borrowers.”The demand for these securities is very healthy and continuing to expand,” Douglas Feagin, senior…

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News Regulators 

Auto lending is vigorous even as high-risk delinquencies build

“In all, there were $1.2 trillion in auto loans outstanding in the U.S., up $23 million from the previous quarter” writes Rachel Koning Beals for marketwatch.com. Only about one-third of all outstanding subprime auto debt, that carried by the lowest-rated borrowers, was originated by banks and credit unions.That’s more than double the 4.4% delinquency rate for subprime loans made by traditional banks, a number that’s largely improved since the end of the financial crisis.Auto loans have grown for 26 straight quarters, drawing more scrutiny of the expansion of the riskiest…

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News 

Lawsuit seeks new recourse on for-profit college fraud

“Tina Carr and Yvette Colon had attended Sanford-Brown Institute, a for-profit college in New York, and are seeking to have their student loans erased” reports foxbusiness.com. Their lawsuit cites federal and state law that prohibits fraud as well as the contract they signed with their school.Navient, the loan servicer named in the suit, said it doesn’t have the authority to decide the fate of student loans.The Associated Press reported last month that DeVos is considering abandoning the Obama administration practice of fully erasing student loans and granting defrauded students only…

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News 

New Opportunity Fund promotes biz loans in a week with Fresno expansion

“Instead, it uses grants and loans from private organizations to fund small business loans” reports thebusinessjournal.com. The Fresno Area Hispanic Foundation recently expanded its portfolio of small business lenders to include Opportunity Fund, a San Jose-based community development financial institution (CDFI). Source: thebusinessjournal.com Share This:

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Don’t fret over the student loan deduction – millennials will be much better off under tax reform

“Most people who find themselves paying back student loans at present will be much better off if tax reform passes” writes Jimmy Sengenberger for washingtonexaminer.com. Tuition tax credits offer tax savings only if a student goes to college, which increases demand and boosts college prices.Tax deductions and tax credits themselves are inherently costly – that’s why the IRS calls them “tax expenditures” – and are of little to no economic benefit, and they muddy the waters of the tax code. Source: washingtonexaminer.com Share This:

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Longer-term auto loans growing amid overall lending slowdown

“Six-year auto loans have become the most common terms used in auto financing, while loans of seven years or longer have also increased in popularity” writes Sven Gustafson for autoblog.com. CFPB says auto loans are the third largest category of household debt for Americans, behind mortgages and student loans.”The move to longer-term auto loans is opening up more risk for consumers,” CFPB Director Richard Cordray said in a release.The share of loans with terms of six years or more increased from 26 percent of all auto loans originated in 2009…

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News 

Close adviser helped move huge sums offshore

“From the beginning, the arrangement between the two families over the repayment of the Bronfman loans was unusual” writes Ed Pilkington for theguardian.com. The entities, Charles Bronfman Trust and Charles R Bronfman Trust, were US-based and thus liable to pay US taxes on any interest accruing, which would be treated as income.The Kolber trust would then mark on its books the sums as receivable fees instead of describing them as they really were – reimbursement of the interest payments. Source: theguardian.com Share This:

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Payday-loan borrowers need protection from the poorly-named Consumer Financial Protection Bureau

“Many borrowers prefer payday loans, as revealed by both academic studies and surveys of payday loan customers” writes Daniel Press for washingtonexaminer.com. But now lawmakers must intervene once again against another consumer-busting rule: the rule put forward by the Consumer Financial Protection Bureau against payday loans.We know this from experience, “thanks” to states such as Georgia and North Carolina that have heavily regulated payday loans for more than a decade.And the overwhelming majority of such borrowers (95 percent) say they value having the option to take out a payday loan,…

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News 

Report: Lending disparities cost Fresno small businesses millions of dollars

“Those are just two findings in a study examining disparities in small business lending conducted by the Woodstock Institute, a nonprofit research organization that focuses on fair lending and financial systems reform” reports thebusinessjournal.com. Access Plus Capital is a community development financial institution (CDFI), which was created to provide financing options to disadvantaged populations.Baldev Birk, a technical assistance analyst with Access Plus Capital, said that refinancing onerous non-bank lending is a common part of their portfolio.The $79 million represents just fewer than 5,700 additional loans that businesses would have received…

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