Citizen Cartwright

Banks making money from fraud of older customers

Across the country, banks of all sizes are facilitating billions of dollars of fraud every year — and collecting big fees for doing so, reports The New York Times.

The Justice Department is considering civil and criminal actions against a number of banks for allowing tainted money to flow through branches, for failing to safeguard against suspicious merchants, and for originating transactions on behalf of businesses that they know make unauthorized withdrawals from customer accounts, the Times says.

Can money buy happiness?

Recent research by Nobel laureate psychologist/economist Daniel Kahneman and Princeton economist Angus Deaton finds that “emotional well-being” (or happiness) maxes out around $75,000 of income in the United States.

But they find that life satisfaction (the answer people give to questions like “All things considered, how satisfied are you with your life as a whole these days?”) keeps rising.

“We conclude,” Kahneman and Deaton write, “that high income buys life satisfaction but not happiness.”

I don't really get this distinction, but since I've paid attention to happiness research in this blog, here's the link.

Banks jumping into the prepaid debit card market

Four years after the financial crisis, more than a dozen of the nation's biggest banks have gotten into the once-niche market of prepaid debit cards, courting the millions of Americans on the margins of the banking system, The Washington Post reports.

The 2010 Dodd-Frank financial overhaul and other new regulations restricted the amount banks could earn from debit and credit card fees — but left a loophole enabling banks to continue to impose high fees on merchants when customers pay for goods with a prepaid card, the Post says.

Some regulators see the market as a way to address the problem of people who have no access to the banking system.

But many consumer advocates worry that the nation’s largest banks are segregating lower-income people into a second-tier system that costs less to manage, has fewer consumer protections and is still largely outside the traditional banking system, says the Post.

The Consumer Financial Protection Bureau is working on the first federal guidelines for the industry.

The latest on keeping up with the Joneses

As the rich have gotten richer, an economic arms race has developed, with the middle class spending beyond its means to keep up, say economists Marianne Bertrand and Adair Morse of the University of Chicago.

Amid this "trickle-down consumption," they say, Americans are saving less and more frequently going bankrupt — and politicians are pushing policies to make it easier to take on debt.

New series on Social Security, Medicare

The Wall Street Journal is starting an occasional series to help you better understand your benefits.

The paper says it will answer your specific questions on topics including Medicaid, estate taxes, retirement disbursement accounts, pensions and ways government "intervention, inaction or overreaction" will affect the rest of your life.

How much money do you need for retirement?

So Tuesday's item on Americans' lack of confidence about attaining a financially secure retirement raises the question of how much each of us needs to save.

Here is Ballpark E$timate, a retirement planning calculator created by the Employee Benefit Research Institute and its American Savings Education Council.

Calculators like these can be fairly complex. I used to like the book "Get a Life: You Don't Need a Million to Retire Well," but it may be out of date. Let me know if you've got a good resource, and I'll share it with other readers.

New data on Americans saving too little for retirement

Fifty-seven percent of American workers say they have less than $25,000 in total household savings and investments excluding their homes, in a report being released Tuesday by the Employee Benefit Research Institute.

Americans are back to borrowing

Household debt — which includes mortgages, credit cards and car and student loans — was up 0.3 percent, to $11.3 trillion, in the fourth quarter of last year, according to the Federal Reserve Bank of New York.

It's the first fundamental increase since the third quarter of 2008, the report says.

The data suggest that after years of shrinking, the country's mortgage debt is stabilizing and possibly about to increase, says The Wall Street Journal.

Investors beware

A wave of fraud is bringing big losses to people who sought better returns on their retirement savings than they could get from bank deposits and government bonds offering minuscule interest rates, The New York Times reports.

Tens of thousands of investors have put money into speculative bets — such as private loans to new companies like television production firms and shares in bundles of commercial real estate properties — that were promoted by aggressive financial advisers, the paper says.

Broken: The law school escalator to upward mobility

Applications to law schools are headed for a 30-year low as job prospects aren't making up for high tuition and student loan burdens, says The New York Times.

Many of the reasons law jobs are disappearing can be traced to the Internet, as in other knowledge-based professions, the Times says. Research is faster and easier, needing fewer lawyers, and is being outsourced to less expensive places, such as West Virginia and overseas.

And online legal forms don't need legal training to fill out.

New York state is considering whether to allow students to take the bar exam after just two years of law school, as a way to cut student debt, the Times says.