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    Hi, I'm Phillip Crocker and I'm your "One Resource" for financial education and questions.

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    Phillip Crocker - Member Service Advocate, Resource One Credit Union
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Saturday’s Seminar Canceled

Wow, we can not get a break from this heat…

In fact, our air conditioner at our Irving Branch  just gave up.  So, since it’s approaching 90 degrees in our facility – we are canceling our Financial Education Seminar for this Saturday.  We would not want you to faint and lose a moment of information from this wonderful seminar.  

Please stay tuned for our rescheduling of this seminar…we should announce the new date for this same seminar at this same location early next week.

Thanks for your understanding and we will get back to you soon.

- Phillip

Tax Free Weekend – The Heat Is ON

Okay, so right now it’s about 10,ooo degrees or some such and parents are about to do something they do every year at this time.  Can you guess what it is?  Melt?  Nay - I guess the cat is out of the bag from the title.  It is time to send our precious babies back to school in this heat.  I only hope all the air conditioners are working full speed.

This time of year is also known for one other thing.  Shopping!!!     

Yes, it is the time of year when folks throw their budgets out the window.  At least that seems to be my case since I found my budget blueprint floating around in the backyard.  All joking aside, this is a very stressful time financially in many folks  lives – mine included.  My wife is a school teacher so we have lots of increased expenses in the month of August every year.  However, the State of Texas has come up with a little relief in the form of a TAX FREE Weekend.

It appears that each year a couple of more items are added to the list of items eligible for “tax-free” status.  So take a look at the above link and make sure you print out a copy of the items that are tax-free.  It never hurts to save money on the things you need when the occasion arises.

Happy Shopping!!!

-Phillip

Student Loans Now Top Credit Card Debt

New research reveals some startling, uncomfortable truths about student loans: The amount we as a nation owe for our education has now officially topped what we owe on our credit cards.

According to the Federal Reserve, Americans owed $826.5 billion on their credit cards in June. (The government agency calls the category “revolving credit,” but that pretty much boils down to credit card debt.) And according to the publisher of FinAid.org, Americans currently owe $829.8 billion in student loan debt. The bulk of this staggering amount — more than $600 billion — is for federal student loans, and a whopping $300 billion of that has been taken on in only the past four years.

If nothing else, this meteoric rise in our collective education debt should give pause to anyone who’s thinking about earning a college degree. Recessions are typically popular times for people to enter the academic world, and in the case of most recent recessions, this is a logical idea: You can simultaneously wait out the chilly job market and increase your marketability so that when jobs return, you’re well-prepared to jump into the employment pool.

But the difference this time around is that our current recession is one of nearly unprecedented scope by some metrics, unemployment is predicted to remain intractably strong for many years, and a battered housing market makes relocation for a job a daunting prospect for many.

For the complete text of this article, please click here.

(Source: “Student Loans now Top Credit Card Debt,” Walletpop, Martha C. White, Aug. 10, 2010)

Financial Reform Legislation – Where are we now?

The following was taken from a Credit Union Advocacy website and represents the feelings of most credit unions quite well in regards to recent legislation passed by our Congressional leaders.

On the whole, credit unions have been generally supportive of the Wall Street Reform bill. Our goals throughout have been to ensure that the reforms did not impact our members since we did not cause the financial meltdown caused by a combination of reckless lending and investing.

However, interchange fees were not involved in any way in the financial meltdown, and should not have been included in the bill. This amendment to the overall bill was included in the bill at the 11th hour, and with no hearing, no study, and no debate on an extremely complex area of the financial sector.

To some degree we believe Congress tried to address our concerns. Congress recognized that this legislation was, in effect, a shot at the big banks. It was not intended to hit small issuers like credit unions which have the most consumer friendly options in terms of credit and debit cards. As a result there was an effort to exclude us from the impact of the legislation and to ensure our cards will not be discriminated against. However there are real doubts that the exclusion will actually work in the market place.

As a result, it’s difficult to know how the legislation will impact card programs at credit unions at this time. First, it has been made clear that Congress’ intention is that the measure not have a negative impact on credit unions. But in the realities of the marketplace, our programs could be hit hard. Interchange represents retailers’ share of the cost of the system. Without retailers picking up their fair share, our members will have to pick up the costs instead.

Basically, the measure gives retailers a break from paying their fair share of costs for a guaranteed payment. Instead consumers will be paying an additional cost for shopping – whether they shop or not – through the demise of free checking, increased fees, and interest rate changes.

Think of it this way. Credit unions are a “closed system” where we operate without capital from investors. We keep the lights on and our employees working through a mixture of interest, fees, and revenue from things like interchange. Since we are not for profits owned by the people who have accounts, we return any excess revenue to our owners through better rates, more locations, or additional services like free online banking. The revenue that could disappear from interchange will have to be made up elsewhere.

The law as it applies to interchange will take effect in one year, which gives the Federal Reserve a very short time frame to get rules in place and for the card companies to try to create a system that will allow 10% of the market to be “excluded.”

The big winners in this are huge retailers. Retailers will gain exclusively. There is no provision that retailers have to pass on savings to consumers. No retailer has committed to passing on savings; in fact they fought very strongly against us to make sure they weren’t required to pass savings on to consumers. Still, we doubt that people will stop or reduce their use of debit and credit cards. Again, it’s simply too convenient. Retailers don’t want the risk of checks (where they pay for losses) and will increasingly refuse to accept checks.

In this reform the big losers are consumers – financial institutions will now have to pass retailer’s costs directly onto consumers. Those fees will be hardest on low-income people. It’s terribly unfair that those individuals, who struggle to make ends meet, will be essentially carrying the load of huge big box retailers.

- Texas Credit Union League (Advocate Blog)

Financial Services Reform Bill

It looks like the jury is still out on whether or not the Senate will be able to pass the current version of the Financial Services Reform Bill.  Our political landscape in this country is an ever-changing machine, and right when it seems certain one thing is going to happen – bam!!! – the exact opposite transpires. 

For a time now, credit unions have been lobbying our congressional leaders to be mindful of their decisions when voting on this reform bill.  Credit Unions did not cause this “financial crisis” that many of us are experiencing but are getting caught-up as collateral damage.  About a week ago, many in the credit union world thought it was a done deal…that the Reform Bill would pass.  However, due to unforeseen circumstances and a death of a prominent Senator…the landscape has shifted once again.  Seems like there may not be enough votes in the Senate to pass this Reform Bill.  It  looks like we will have to wait until weeks end for a better picture.

So why am I talking about this again on a financial education website’s blog?

If you had read my last entry you would know, but this may be your first time to the site…so welcome and let’s figure out why you should care about what is being voted upon and why it is being voted upon.

  

The bill will impose tighter regulations on financial institutions and reduce their profits.  It will boost consumer protections, force banks to reduce risky trading and investing activities and set up a new government process for liquidating troubled financial firms.  Reuters 

I came across that last week and it pretty well sums it up.  In all, those are not bad things…in fact they probably need to happen.  However, once again Credit Unions are getting grouped into the same classification and must suffer the consequences.  In many credit union advocates opinions, this Reform Bill may not accomplish all the things it was originally intended to accomplish.  After, each legislator has “added this and cut that” all that seems to be left is something that not quite addresses the main causes of our current economic distress in this country.

The main sticking point for credit unions and their members are the changes to Interchange.  Right now, merchants bear the financial burden for offering electronic payments as a solution for payment to those who pay for their goods or services with an ATM, Debit Card, or Credit Card.  A provision of this Reform Bill will transfer that cost to financial institutions…who will eventually put this cost back onto the consumer.  In the end, it could spell the end of “free” checking programs at most all financial institutions.  Merchants say without this cost of doing business they should be able to “roll-back” prices and thus help the consumer.  Let’s all hold our breath and see if things get cheaper, at the store – gas pump – and your local merchant, once this ”rolls-around”. 

- Phillip