Financial Services Reform: How’d We Do?

July 23, 2010 on 12:10 pm | In financial reform | No Comments

Now that a Financial Reform Bill has been passed by Congress and signed into law, it’s worth taking a step back to see how well the bill achieves what some (such as myself) saw as the essential tasks of financial reform, to prevent a similar meltdown from blindsiding us in the future. 

Here’s some background:
In November 2009, I was getting upset at the organized, well-funded campaign of “disinformation” and obstruction taking place in the nation’s capital to put the kibosh on any truly effective consumer protection in the banking and financial services industry, (where I began my career).  I sent a letter to Christopher Dodd, Chairman of the Senate Banking Committee, whose consumer protection efforts I’ve been involved with in the past.  In the letter, I outlined 7 principles that I believed had to be included for financial reform to achieve its objectives. 

How well does the Dodd-Frank Wall Street Reform and Consumer Protection Act make the grade?  Below, I’ve assigned a letter grade for each of the 7 principles, with pertinent comments:

1. First, there needs to be a clearly-stated mandate and set of principles for the Bill that assures that those in government who are to serve as watchdogs in enforcing the provisions of the laws, understand their duty on a basis that resists the influence of politics. The job of the watchdog in government is to give pushback, to level the playing field, to publicize wrongdoing, and to deter others in the industry from following down the same wrong path.

Grade: A
Comment: While specific rules in some cases are still to be drawn up, there is clearly a new sheriff in town and the previous “anything goes” atmosphere has been brought to a screeching halt.

2. Second, there needs to be a system of checks and balances put in place to assure that accurate information is being produced and reported, and that the law is being carried out.

Grade: B+
Comment: The requirement for exchange trading of derivatives, and creation of an oversight process for systemic soundness are needed steps in the right direction.  Having consumer protection under the Treasury Department remains a concern. 

3. Transparency must be created via a process of auditing and public reporting.

Grade: B+
Comment: Congress will be auditing the Fed for greater transparency.  Jury is out on this, we’ll have to wait and see. 

4. Capital adequacy must be enforced relative to the types of risks being incurred and the type of stakeholders being exposed to these risks.

Grade: B+
Comment: With no limitations on leverage, and considerable latitude for the regulators, much will depend on the competence and diligence of those in charge, who are being paid by the taxpayers, but not always controlled by their interests.  

5. There needs to be a clear distinction between “risk capital” and “safety capital,” but neither the taxpayers nor the safety return stakeholders should be put at risk for what should be appropriately private equity risk-taking.

Grade: B
Comment: While a Glass-Steagall separation of commercial banking and investment banking activities was not restored, new capital requirements and restrictions on depository institutions are important steps in the right direction. 

6. The banks should be chartered to serve the public, while making a decent return. They should not rip off the public with exorbitant and unavoidable fees so they can make risky investments suited to investment banks, private equity and hedge funds and risk capital.

Grade: A
Comment: The new Consumer Protection Agency, together with stronger bank practices and regulatory authority, are needed fixes.  Now, they must show they can get the job done. 

7. A consumer financial services agency must have teeth.  It must be primarily a watchdog, enforcing and, when necessary, prescribing remedies, and clarifying rules when there is a clear pattern of abuses taking place against the public’s interest. 

Grade: A
Comment: (See comment #6)

Overall Grade: B+
Comment: The Bill was repeatedly weakened to gain needed votes and yet still barely passed, against unyielding partisan opposition.  Under the circumstances, I give it an overall grade of B+, with one important caveat:  Now, it will take determined vigilance to assure that the rulemaking process and its results will not be allowed to compromise these principles.

In short, while far from perfect, the Dodd-Frank Wall Street Reform and Consumer Protection Act is a very good step in the right direction.  It establishes (or re-establishes) some of the sound principles that were wantonly abandoned, leading to the financial meltdown of 2008-2009. It creates a new ethos of enforcement, accountability, and oversight, which must be maintained if we are to avoid a similar recurrence in the future. 

Great Places to Retire Abroad for U.S. Boomers: What about Southeast Asia?

July 13, 2010 on 9:16 pm | In great places to retire | No Comments
Bruce Reznik with his water buffalo, his preffered pet as a retiree in Southeast Asia.

Bruce Reznik with his pet water buffalo at his home in Southeast Asia.


I recently discussed the financial and cultural benefits of great places to retire abroad in Southeast Asia with my good friend Bruce Reznik, an international lawyer, who is now semi-retired (meaning he works only part of the year). Bruce has some valuable advice for you about traveling to and living in this area of the world.

There are five countries that Bruce recommends as great places to retire abroad in Southeast Asia: Thailand, Vietnam, Cambodia, Laos and the Philippines. Each country has its pros and cons.

Let’s take a look at a couple of examples:

Cambodia:

Pro: Low cost of living

Con: More rudimentary accommodations

For instance: In Battambang, Cambodia, the second- largest city, the price for a 4-star hotel is about $20 a night. The average price for a comfortable apartment in Phnom Penh, the capital, ranges from $200 to $800 a month.

However, Bruce also said of Battambang:

“ It has the goods and services that one would need in general. It lacks an international courier office, so it’s tough to send things quickly. It is remote from any airport so it’s about a five hour drive to Siem Reap which is the town near Angkor Watt that has an airport, and also a five, four, six hour ride to the capital.”

Vietnam:

Pro: Similar accommodations to the U.S.

Con: It’s a little more expensive

Vietnam has accommodations that are more similar to what expatriate retirees from the United States are used to.

As Bruce says in the interview:

“I just think that because their economy is greater than the other countries that they have, perhaps, accommodations that are more reminiscence to Americans of what they’re accustomed to back home.”

Bruce compared the two countries with an anecdote:

“A friend of mine told me that he went to his mother’s home town which is in Cambodia along the Vietnamese border and it was at night. Everything was dark on his side of the border but as he looked down in the valley there were lights all over in Vietnam showing that their power system is on a much better level.”

Retirement in Southeast Asia is not for everyone. There are many other options Baby Boomers can explore when considering retirement overseas as a way to lower costs.

Check out theBaby Boomers Retirement Network for the resources and expert advice you need when choosing from the many great places to retire abroad. For more information, and to read and listen to the entire interview, go to: http://www.boomersretirementnetwork.com/audios.php.

Consumer Protection in the Banking and Financial Services Industry

March 29, 2010 on 12:00 pm | In Uncategorized | No Comments

I’ve been a little upset at the organized, well-funded campaign of “disinformation” and obstruction taking place in the Nation’s capital to put the kabosh on any truly effective consumer protection in the banking and financial services industry ( I began my career in banking and after that provided consulting services to over 130 banks and savings banks).  Not long ago I sent this letter to Sen. Christopher Dodd, Chairman of the Senate Banking Committee, whose consumer protection efforts I’ve supported in the past.

Now I’m making this letter public to further press these key points.  When you read the letter, please let me know what you think and I’ll be pass them along where it will do some good. Continue reading Consumer Protection in the Banking and Financial Services Industry…

You Can Win Your Retirement Game Just Like the New Orleans Saints

February 9, 2010 on 10:28 pm | In Baby Boomers | 2 Comments

Can the New Orleans Saints SuperBowl victory teach us anything about how to have a winning game plan for our future and our retirement?

Get ready for a surprise because believe it or not I’ve given this question a lot of thought!

Continue and read more…

http://www.boomersretirementnetwork.com/blog/2010/02/09/49/

Food For Thought

January 1, 2010 on 2:26 pm | In Thoughts | No Comments

Here are some questions to think about now that we’re in the New Year…Grab an extra piece of paper and jot down your ideas and see how spiritual you want to be in 2010!!

DREAMIN’

Allow yourself to dream by completing these sentences:

  • If I had my wish, I would…
  • My life would be more fulfilling if…
  • One goal I really want is…
  • I am happiest when…
  • The one skill/talent that I would love to develop is my ability to…
  • If I had one gift to give to mankind, it would be…
  • If today were my last day on earth, I would…

NOW, GO AFTER YOUR DREAMS!!!

COURAGE

What would you do if you knew you could not fail?

If I had the courage, I would…

REGARDING 2009

  • List five actions that you took that moved your life forward.
  • List five people who assisted you in moving your life forward.
  • List five gifts that you received this year.
  • List ten abilities, talents, or gifts that you demonstrate.
  • Next, take these same four questions and use them to set the path you want to be on for 2010.
  • Vision yourself doing even more than last year!!

NOW, LOOK AT THIS LIST. KEEP IT WHERE IT CAN BE REVIEWED AND ACKNOWLEDGE YOUR FORWARD MOVEMENT AND YOUR TALENTS!!

GO FOR IT!!!

With acknowledgement and thanks to the Center for Spiritual Living, Greater Las Vegas, NV, www.cslglv.org ,which created this inspiring message

Beware of the “Change” to Overdraft Fees

November 5, 2009 on 8:22 pm | In Enough Money | No Comments

Sure, the banks have been hit hard by the recession, but they are enjoying gross profits in one area: overdraft fees. USA Today reports that banks are expected to pocket $38.5 billion in 2009 from insufficient funds and overdraft fees, more than double the amount banks earned a decade ago.

In light of the bad press they have suffered in the past year, banks are eager to re brand themselves as kinder and gentler. A few—including Chase, Bank of America, and Capital One—have capped the maximum number of overdraft fees it will charge any single customer in one day to four. At $35 a pop, this still causes customers in the red $140 a day—a hefty price tag for people who are already suffering financial strain.  This is down from 10 in one day;  Can you imagine getting charged $350 in one day due to overdraft fees?

How Can You Avoid This? Here are two ideas:

  • Call your bank and ask that it stop automatically paying transactions that overdraw your account. While they are not currently required to oblige your request (though a federal regulation might make it mandatory in months to come), banks might be eager to please unhappy customers by declining transactions that put your account in the red and saving you the overdraft fee.
  • Give yourself a $100 or $200 cushion—at least on paper. Today, make an adjustment to your bank ledger so that your records show that you have $100 or $200 less than you actually have. This will help protect you from overdrafts caused by charges that might have slipped your mind.

Bank of America Consumers Beware

Bank of America is going to start testing what their customers will do if they raise their annual fee on credit cards.

This month and next, about one in every 100 Bank of America customers will received a notice that their annual fees were increased by$70—from $29 to $99. Though the bank’s spokeswoman said the rate increases were assigned to customers based on “risk and profitability,” the truth of the matter is that customers who never carried a balance and always paid on time might have received this notice.

That’s right: customers in good standing who never incurred interest charges, late fees, or over-the-limit fees, but who had low credit scores, might be among the 1 percent of customers seeing a 340 percent increase in their annual fees.

Bank of America isn’t alone. According to the research firm Tower Group, 27 percent of credit card offers included an annual fee, compared to just 18 percent in 2008.

If you are one of the many people whose credit card annual fee has been increased, try this:

  • Remember, this is a test that B of A is running,so immediately, call and complain.  Most likely, they will report back to their management that they had to “make an exception” for you.

First Line of Defense: Housing Counselors

Second Line of Defense: Credit Improvement

By now, you know that homeowners across the country are walking away from their homes, unable to afford the payments. What you might not know is that HUD’s Housing Counseling Program provides free foreclosure prevention counseling services to troubled homeowners through 2700 nonprofit agencies.

For those having problems making their payments, housing counselors are the first line of defense. The services offered by these counselors run the gamut from negotiation for loan modifications with banks to helping homeowners establish more realistic budgets. If you are financially strapped and need immediate intervention to stop you from losing your home to foreclosure, visit the HUD website for foreclosure avoidance counselors.

Your next line of defense is to improve your credit score.With a high credit score, you can negotiate for better loan terms and lower interest rates. Regardless of your credit history—even if you have suffered a foreclosure, short sale, or bankruptcy—you can see your score jump to 720within two years of taking the appropriate steps. Here are a couple steps you should take immediately:

  • Keep your credit card balance below 30 percent of its limit. Credit-reporting bureaus reward people who keep a low balance month-round. Preferably, your balance would be close to $0, but this might be unrealistic. Aim for less than 30 percent of its limit, and you might see your score skyrocket.
  • Comb your credit report for mistakes. Though not all mistakes are detrimental to your score, some—such as an inaccurate credit card limits—could lower your score 40, 50, even 100 points.

For more information, visit the 7 Steps to a 720 Credit Score website.

By Special Guest Blogger Philip Tirone

October 2009… riding the waves, allowing ourselves to do over…

October 2, 2009 on 9:42 pm | In Balance | 1 Comment

Guest Blogger:
Frank Don
Astrologer Par Excellence

This October seems a paradoxical month, but should that surprise any of us?  We have been living, continue to live and will be living in a paradoxical world.  For many of us, we may feel as though we have entered a strange and bizarre landscape where the parameters have dramatically shifted, the terrain unstable at best, and people’s attitude a little edgy, edging towards a seething frustration, fraught with anxiety. Continue reading October 2009… riding the waves, allowing ourselves to do over……

A Wake Up Call For Baby Boomers

September 15, 2009 on 9:41 pm | In Baby Boomers, health | No Comments

The death yesterday of Patrick Swayze at age 57, from pancreatic cancer, should be a wake up call to all of us Baby Boomers.  Swayze, who was named People Magazine’s Sexiest Man of the Year in 1992, and certainly seemed as fit as a hunk, only found out he had cancer in January ‘08.  Not very long ago.

As we enter our 50’s and 60’s, in turbulent times, and as the months and years roll on, it helps to be reminded constantly that “This Is It,” it doesn’t get any better than this.  It’s all about the life you can create for yourself and your loved ones and making the best choices today.   There’s no time to waste.

That’s why I’m so committed to the mission of the Baby Boomers Retirement Club and the Baby Boomers Retirement Network. We’re here to help you make the most of what comes next, in your life, and the lives of your loved ones.  See you there!

A Day of Patriots

September 10, 2009 on 5:00 pm | In America's Future, Baby Boomer Advice, Get Motivated | No Comments

What an unusual day I had yesterday.  Starting at 7am, with three other members of our Baby Boomers Retirement Network team in tow, I headed to a large Hartford, CT venue to hear from an all-star cast of luminaries on the theme of Get Motivated!  We along with 19,000 others in the audience, heard Joe Montana, Laura Bush, Krish Dhanam, Phil Town, Zig Ziglar, Steve Forbes, Rudy Giuliani, and Colin Powell tell their personal stories, funny anecdotes, and reminiscences in the process of trying to make pertinent points.  I came away with a number of standout ideas, mostly not new but always worth being reminded of. Continue reading A Day of Patriots…

5 Things You Can Do Now To Improve Your Financial Security For Retirement (continued)

July 17, 2009 on 11:00 am | In Baby Boomers, Investment Advice for Women | 4 Comments

Here is step 5 of what every Baby Boomer woman should do now to create financial security for retirement…plus a final word.

5. Open a Roth IRA.


Hedge Your Bet Against Future Higher Taxes-By Having More than One IRA. A Roth IRA uses after-tax money to build it and gives you more options in how you take money from your retirement savings after your retirement. With both a regular IRA and a Roth IRAs, you can choose whether to withdraw either taxable or non-taxable income in a given year, or a mix of both, depending on the income and the tax rates you will face that year. Continue reading 5 Things You Can Do Now To Improve Your Financial Security For Retirement (continued)…

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