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How Secure Will Cyber Security Be Under Trump?

I have to admit that when President-elect Trump uttered “the cyber” during the first presidential debate, I was right there with the tech community in the collective eye-rolling that followed. “The Cyber” memes were born, along with real concern about the candidate’s grasp on cyber security, and with the recent announcement of former New York City Mayor Rudy Giuliani as the cyber czar, those concerns multiplied.

The seeming “miunderestimation,” or possibly anti-comprehension, regarding something so crucial to national security may not on the surface seem like a consumer issue, but it is.

Our nation’s approach to cyber security at this juncture — beset by hostile state-sponsored attacks on our electoral process, expertise and secret information grabs from major industries and the federal government, and ransomware attacks —is a matter of the utmost urgency, and the President-Elect has said as much to his credit.

But Mr. Trump’s response can’t be just a marketing move or a branding opportunity — things he gets. There must not be merely the appearance of change — commissions talking and debating endlessly with little to show for it. There must be actual boots-on-the-ground solutions — now. Unfortunately, I don’t think that’s what will happen.

The Consumer Financial Protection Bureau specifically comes to mind—our nation’s most successful boots-on-the-ground agency — if Mr. Trump does as many are predicting he will do, and makes it yet another piece of President Obama’s dismantled legacy.

The CFPB was an important accomplishment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The agency is charged with protecting consumers from the predatory financial practices that brought about the economic meltdown of 2007 to 2008, and to watch out for signs of future trouble. The CFPB has the power to ban financial products deemed “deceptive, unfair or abusive” and to impose penalties on companies that take advantage of consumers.

Barring a judicial miracle, the current CFPB director Richard Cordray is almost certainly going to receive one of Mr. Trump’s signature “You’re Fired” communiqués. (Interesting side note, our President-elect doesn’t own that trademark.) Worse, an anti-CFPB former Texas Congressman, Randy Neugebauer, appears to be the leading candidate to get the job.

Among other things, the Distinguished Gentleman from Texas thinks payday lenders are too roughly treated by the CFPB and that all business contracts should contain mandatory arbitration clauses (barring class action suits). He also thinks that the CFPB should be headed not by a single director, but by a commission of people from both sides of the aisle. Those of us who support the CFPB believe that this would diminish the agency’s ability to go after dangerous practices that harm consumers in a timely and effective way.

The Trump transition team did not respond to a request for comment regarding it plans for the CFPB and/or Cordray.

This Is About Appointing the Right People

It was reported last week that the cyber security czar role in the Trump administration will fall to the President-elect’s close associate and campaign stalwart, former New York City Mayor Rudy Giuliani.

There is a connection here between what appears to be afoot at the CFPB and the next administration’s approach to cyber security — both represent bad decisions based on a basic incomprehension of what is at stake and what needs to happen next. The CFPB works, specifically the single-director approach. Instead of hiring an opponent of the agency to presumably dismantle it, we should be using it as a model to create a single-director federal agency that emulates the CFPB to oversee cyber security.

As it stands, Mr. Giuliani will be bringing together experts working on cyber security solutions and business leaders who are targeted by hackers from the energy, financial and transportation sectors. The next step that is missing here is a government agency that can fine entities that do not meet the threshold for cyber security best practices— mandated employee education, maintaining technology and tools, hiring experts — practices that the agency would determine and set as a standard. (You can learn more about how to protect yourself from cyber threats like identity theft here and monitor two of your free credit scores for signs of foul play every 14 days on Credit.com.)

In a recent interview, Mr. Giuliani said of the President-elect, “He’s going to elevate this to a very large priority for the government — and I think by doing this, he’s trying to elevate this as a priority for the private sector.”

As the Christian Science Monitor’s Passcode noted, quoting the former NYC mayor, the idea here is pretty simple: Trump will go straight to the public to “educate people on how important [cybersecurity] is, even to the point of their own personal protection.”

That is a fantastic idea that everyone should applaud. Whether the user is in the Pentagon or logging onto a free Wi-Fi network, our cyber security too often comes down to an individual clicking or not clicking on a malware-laden link or falling prey to some other security pratfall.

That said, any agency dedicated to cyber security would need to work closely with the military and intelligence communities, and would also have to focus its resources on real solutions to the dangers we face, many of them extinction-level threats. The person running it would have to be at the cutting edge of cyber security best practices.

When the news came down of Mr. Giuliani’s cyber czar role, experts almost immediately hit Twitter with reasons this was a bad idea. (Mr. Trump’s transition team also didn’t respond to request for comment regarding this choice. Guiliani was not readily available for comment either.) As happens, the cyber security community took a look at the website of Giuiliani’s cyber security company, giulianisecurity.com. They found serious problems, including expired SSL, no https and an exposed CMS login, to name a few. You don’t need to know what these things are, but the cyber czar sure does. There can be no “oops” in his or her record.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

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This article originally appeared on Credit.com.

Feds Sue Student Loan Giant Navient: What Borrowers Need to Know

The U.S. Consumer Financial Protection Bureau is suing Navient Corp., the nation’s largest student loan servicer, accusing it of “systematically and illegally failing borrowers at every stage of repayment,” according to a press release Wednesday. The CFPB is asking Navient to compensate the borrowers the agency says were harmed.

Among other things, the CFPB alleges that since at least January 2010, Navient misallocated payments, steered struggling borrowers toward multiple forbearances instead of income-driven repayment plans, and provided unclear information about how to re-enroll in income-driven repayment plans and how to qualify for a co-signer release.

Navient denied the CFPB’s allegations in a statement Wednesday, saying they are false and politically motivated. The student loan giant, which broke off from Sallie Mae Bank, one of the largest lenders of private student loans, in 2014, currently services more than $300 billion in federal and private student loans for more than 12 million borrowers.

The Illinois and Washington attorneys general also filed suits against Navient on Wednesday. Navient said in subsequent statements Wednesday that allegations by the Illinois and Washington attorneys general were also politically driven and “unfounded.”

“Time will tell” what impact these lawsuits have on borrowers, says Betsy Mayotte, director of consumer outreach and compliance at American Student Assistance, a nonprofit that helps students pay for college. But regardless of outcomes, borrowers should regularly check their student loan accounts to make sure their loans are being serviced correctly, she says.

How to check if Navient is your loan servicer

Your student loan servicer is the company you make payments to each month. It’s not always the same company that lent you money in the first place.

The Department of Education is the lender for all federal student loans, but it contracts with private, third-party companies, including Navient, to handle loan servicing. Log on to the Federal Student Aid website to find your federal loan servicer. In addition to Navient, other major federal loan servicers include FedLoan Servicing, Great Lakes Higher Education Corporation & Affiliates and Nelnet.

What to do if you’re frustrated with your student loan servicer

When it comes to student loan servicing, “consumers cannot easily take their business elsewhere,” Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement Wednesday.

It is possible to switch student loan servicers through federal consolidation or student loan refinancing. But you shouldn’t consolidate or refinance solely to switch servicers because there are potential risks associated with each, says Adam Minsky, a Boston-based lawyer specializing in student loans. Also, there’s no guarantee you’ll be better off with a different servicer.

“The other servicers aren’t exactly rainbows and sunshine,” Minsky says.

If you’re stuck with your servicer, there are a number of things you can do to voice your concerns and protect yourself as a borrower: File complaints, check your credit report for errors, school yourself on your repayment options and watch out for companies that charge fees for student loan help.

File complaints

You can file complaints to one or multiple of the following entities:

The CFPB alleges that Navient ignores borrowers’ complaints. But getting your concerns in writing is still worth doing, if only to improve the system for others, Seth Frotman, student loan ombudsman and assistant director of the office for students at the CFPB, said in a press call Wednesday.

“We receive thousands of complaints,” Frotman said. “That has dramatically informed our work around improving the student loan servicing market.”

Check your credit report for errors

One of the CFPB’s allegations is that Navient incorrectly reported disabled borrowers’ accounts as “in default” when the borrowers had actually gotten loan relief through the government’s Total and Permanent Disability discharge program. To guard against a mistake like that, which could severely hurt your credit score, check your credit report for errors. You can get one free credit report every year from each of the three major credit bureaus.

Get up to speed on your repayment options

Student loan servicers are supposed to help you understand the various student loan repayment options. By learning about the options yourself, you can be empowered to hold your loan servicer to that standard. Keep in mind, though, that each of the following options has risks.

  • Income-driven repayment plans can lower your monthly federal student loan payments by capping your payment at a percentage of your income. They also offer loan forgiveness after you make on-time payments for 20 or 25 years, depending on the plan.
  • Student loan forgiveness programs, such as Public Service Loan Forgiveness, can relieve your federal student loan debt if you work for a certain type of employer and make on-time payments for a certain period of time.
  • Federal consolidation doesn’t lower your monthly payments or save you money, but it’s sometimes necessary to do in order to qualify for income-driven repayment or a forgiveness program. Consolidating is frequently confused with student loan refinancing, which is a way to save money on interest by getting a lower rate.
Watch out for companies that charge fees for help

You can sign up for the above options on your own for free. But some companies that aren’t affiliated with the Department of Education capitalize on subpar student loan servicing practices by charging fees to enroll borrowers in free federal student loan programs. So-called student debt relief companies often advertise messages such as “Obama Student Loan Forgiveness” on Facebook and Google. If you’re tempted by such an offer, know that you don’t have to pay for student loan help.

If your servicer isn’t answering your student loan questions, reach out to the Department of Education or your state’s attorney general’s office for help.

Teddy Nykiel is a staff writer at NerdWallet, a personal finance website. Email: teddy@nerdwallet.com. Twitter: @teddynykiel.

Restaurant owner criticized for offering stereotypical special on MLK Jr. Day

A Texas restaurant owner said she didn't think she did anything wrong when she promoted a holiday special on Facebook.

>> Read more trending stories 

Sabrina Pyle, owner of Azle Café in Azle, Texas, was hoping to draw in more customers on Martin Luther King Jr. Day when she offered a unique meal.

"I came up with this incredible, ingenious idea for what I thought would bring people in for lunch," Pyle told WFAA.

The special consisted of chicken and waffles with a side of watermelon. 

Social media users quickly pointed out that the offering was problematic. The stereotype that black people have an affinity for fried chicken and watermelon emerged during times of slavery in America and after the Civil War to portray people who belong to the racial group as lazy and dirty.

"It's a way to express racial (contempt) without getting into serious trouble," a University of Missouri professor said in a 2013 NPR interview. "How it's possible to be both a taboo and a corporate mainstream thing just shows how complicated race in America is."

"To use something like chicken and waffles and a side of watermelon as a Martin Luther Ling Special is disgusting," Brad Pelt told WFAA. "It's not okay."

Pyle said the action was "distasteful" on her part. 

"I just didn't think it through," she said. "I wasn't thinking about the historical (context). I was thinking, 'We have margaritas and tacos on Cinco de Mayo, so, let's have some fun with Martin Luther King Day.'"

Pyle, who was called a racist by social media users, deleted the post on Monday. 

"I am, by far, not racist," she told WFAA.

5 Financial Goals to Set in 2017

By Kurt Smith, Psy. D.

Learn more about Kurt on NerdWallet’s Ask An Advisor

The beginning of the new year is the perfect time to reflect on the past and look forward to the future. It’s also a good time to set goals in your personal, physical, emotional and financial life. What better time to look ahead and think of how you want your finances to change in the coming year?

Still, for many people money isn’t a pleasant topic, and so they often avoid it. Some people will put off thinking about money until taxes are due in April. If that’s you, force yourself to push past the discomfort and keep reading.

You may not be able to change your income, but you can choose how you spend and save your money, which will greatly affect your financial future. Making a few simple decisions now can set you up for success and put you where you want to be financially down the road.

Here are five financial goals to consider setting in 2017. Pick a few or pick them all. Either way, you’ll be on the path to a better financial picture this time next year.

Set a budget

Knowing where and how you’re spending your money is the first step to getting your finances in order. Start a simple spreadsheet that lists all your expenses along with your net income, or use a budgeting app like Mint. Once you know your income and expenses, you can set up a financial plan for your spending. Look for ways to pare down your variable expenses — costs that aren’t fixed — so you fit in funds for savings and retirement.

>> MORE: How to build a budget

Invest in your 401(k) or an IRA

If your employer offers a 401(k), you should certainly take advantage of it. 401(k)s and individual retirement accounts are great, because the amount you contribute can be excluded from your taxable income. Many employers will match your 401(k) contribution, up to a certain percentage, which doubles your contribution each time. Your account will grow over time not just from your contributions but also by the compounding growth of the investments you choose. Most 401(k) plans will allow you to start with even a small amount, such as 3% of your income.

Increase your 401(k) or IRA contribution

If you’re already contributing to your company’s 401(k), bravo! Now, increase the amount you contribute by a percentage point or two. Use the same approach for an IRA. You probably won’t miss the small percentage when you get your paycheck each time, and saving that extra little bit will add up in the long run. If your employer offers a match, try to increase your contribution to at least meet that match so you reap the full benefits the company is offering. This means if the company offers up to a 6% match, be sure to make your contribution 6%.

Pay off your debt

Getting out of debt will mean you’ll have more money to contribute to saving for your future and, ultimately, more financial freedom. No matter how much debt you have, you have to start somewhere to begin to pay it off. One strategy is to focus first on the smaller debts you may have, such as credit card balances, which also may have relatively high interest rates. Pay those off first, and then you’ll be more energized and ready to tackle any larger debts, such as car or student loans. The less money you have tied up in debt, the more money you’ll have to save and spend as you wish.

Start an emergency fund

Having an emergency fund can offer financial relief and peace of mind in tough situations. If you need to replace a home appliance suddenly, get your car fixed or handle some other financial circumstance that life throws your way, you’ll be prepared. Start by setting a goal of saving $1,000 in your emergency fund. Even if you put just $84 a month into an account, you’ll reach your goal within the year. If you need to dip into the account for an emergency, just make sure to replenish that amount.

The topic of finances makes some people anxious, while others get mad. If setting financial goals requires you to talk with a partner, be on guard for finger-pointing, blaming and anger to arise in your relationship.

No matter what stage of life you’re in, you can start making financial goals. Whether you are graduating from college soon or getting ready to retire, planning will help set you up for financial success. Planning also helps lessen the mental and emotional burden that ignored finances bring. It’s never too late to get started, so pick one or all of the goals listed above and start setting yourself up for your best money year yet.

Kurt Smith, Psy. D., is a financial and relationship counselor at Guy Stuff Counseling and Coaching.

5 Ways to Upgrade Your Old Car With New-Car Tech

No word yet on when cars will be able to take the wheel while dressing you in a suit, à la “The Incredibles,” but today’s carmakers are still coming up with some pretty fancy new technology.

As the industry barrels toward autonomous vehicles, new cars include increasingly advanced ways to protect drivers, such as automatic braking and blind spot monitoring. Plus, new car technology often means posh comfort features. Think Wi-Fi access and massaging seats.

But it’s not always affordable to buy a new car or expensive technology packages, and buying a used car — or holding on to a car longer — is much more practical for many shoppers.

The good news is, you don’t need a new car to get some of the latest upgrades. Several aftermarket devices can be added to your current ride to give it capabilities found in new models, often for less than $100 each.

Karl Brauer, executive publisher of Autotrader and Kelley Blue Book, is a “big believer” in upgrading older cars with new technology.

“Especially if it’s a car you otherwise really like. I have an old 2005 Ford GT, which is a unique car they only made for two years. It’s a car I can’t just go get a newer version of,” Brauer says. “If I want a more modern feature in my car, I have to add it myself. So I put an upgraded head unit that in one fell swoop of installation went from a single CD player and AM/FM radio to something that could play everything but Blu-ray.”

Below are a few of the ways to give your trusty ride a technology facelift — from heated seats to rearview camera capabilities — without spending a fortune.

1. Heads-up displays

In a world of Oculus Rift and virtual reality video games, the auto industry is ripe for a video projection upgrade.

Heads-up displays, or HUDs, show navigation for drivers as a transparent image projected on the windshield and have been included in newer car models by brands such as Audi, General Motors, Mercedes-Benz, Hyundai and Land Rover.

HUDs not only display arrows for upcoming turns, but also information like your speed, mileage, engine warnings and more — all without ever requiring your eyes to leave the road. It’s typically offered as a factory-installed add-on but is becoming standard equipment on higher-end cars and even some midlevel models.

You can find standalone aftermarket HUDs for $100 to $300; they typically project onto a transparent screen that sits on the dashboard in front of your windshield and displays directions and engine warnings. Other companies have designed stands and smartphone apps that provide HUD capabilities for even less, like the Hudway Glass for $49.95.

2. Seat heaters and massagers

Want to give your car the comfort level of a spa? Start with the seats.

Built-in heating pads in car seats debuted on the 1966 Cadillac DeVille, but the cozy upgrade has soared in popularity in recent years, with heated seats offered on almost every new model today. In fact the 2016 Ford F-150, a pickup truck, not only offers a seat warmer, but also front-seat cooling and massaging capabilities as well.

If your car didn’t come with upgraded seats, you don’t have to miss out. You can buy seat covers with various heating settings for less than $50, such as Bed Bath & Beyond’s heated car seat cushion for $39.99. More advanced cushions can provide cooling and massages, while still costing less than $100. Two examples with high customer ratings, the Five Star FS8812 10-Motor Vibration Massage Seat Cushion ($59.99) and the Gideon Luxury Cooling and Heating Ventilated Seat Cushion ($49.95), are available through Amazon.

3. Parking sensors

Twisting in and out of small parking spots is incredibly stressful, and often leads to scratched doors or fender benders. The latest automobiles can sometimes take the wheel for you with automatic parking, but there’s an affordable way to add parking help to your current car.

Parking sensors typically activate when you shift into reverse. Using sound waves, the sensors detect surrounding objects and use increasing beeping or lights to warn drivers when they’re coming close to hitting something.

Aftermarket sensors can be purchased for less than $35, like Zone Tech’s Car Reverse Backup Radar System for $15.75. Of course, the more you spend, the more features the tool typically offers. Original manufacturer parts with multiple sensors may cost up to $300, such as the JustforJeeps.com Park Distance Sensors for $306.90.

And while experienced professional installation is always a plus, several sensors don’t require drilling or wiring, and can be installed at home. Just make sure they’re compatible with your car before buying.

4. Rearview camera

We can’t sing the praises of rearview cameras enough — they’ve become essential safety equipment for nearly all vehicles. The National Highway Traffic Safety Administration will require them in all new vehicles after May 1, 2018, as rearview blind spots account for over 15,000 injuries each year, and backup cameras reduce this blind zone by about 90%.

You can buy a quality rearview camera that you can install yourself for less than $150. Auto retail chain Pep Boys offers a wireless backup camera for $127.49 online.

5. Bluetooth stereos

Nobody wants a ticket for holding a cell phone, or worse, an accident caused by distracted driving. And in today’s constantly connected world, that makes Bluetooth capabilities a fan favorite upgrade.

Bluetooth installation wirelessly syncs your phone to your sound system, so drivers can speak to callers over their car speakers, display incoming alerts on their dashboard, and operate their phone’s music through the car stereo — meaning no more manually scrolling through your tiny device to find Beyonce’s “Lemonade” on your morning commute.

And you don’t have to buy a whole new vehicle to get one. Simply replace your current stereo with a Bluetooth-equipped one. A reliable model can be found for under $150. Best Buy’s Kenwood radio, at $79.99, has over 100 positive customer reviews, and the company’s Geek Squad auto techs will install it for $64.99. Also, many independent shops sell stereos and provide installation for varying fees.

Nicole Arata is a staff writer at NerdWallet, a personal finance website. Email: narata@nerdwallet.com.

Photo of a heads-up windshield display courtesy of Hudway Glass.

Mortgage Rates Jan. 18: Up Slightly; Big Banks Accused of Mortgage Discrimination

Mortgage rates made small moves this morning, with 30-year fixed and 5/1 ARM rates ticking up a hair, and 15-year fixed rates holding steady for the third day in a row, according to a NerdWallet survey of mortgage rates published by national lenders on Wednesday.

Mortgage Rates Today, Wednesday, Jan. 18 (Change from 1/17) 30-year fixed: 4.31% APR (+0.01) 15-year fixed: 3.70% APR (NC) 5/1 ARM: 3.84% APR (+0.02) JPMorgan Chase and Bank of America face mortgage discrimination charges

Two of the nation’s largest mortgage originators stand accused of discriminatory lending practices by the U.S. government. Today, U.S. Attorney Preet Bharara of the Southern District of New York filed a lawsuit against JPMorgan Chase claiming the bank charged at least 53,000 black and Hispanic borrowers higher interest rates and loan fees between 2006 and 2009.

JPMorgan has agreed to a settlement, reported to be $55 million, and issued the following statement: “We’ve agreed to settle these legacy allegations that relate to pricing set by independent brokers. We deny any wrongdoing and remain committed to providing equal access to credit.”

» MORE: Calculate how much house you can afford

Today’s action follows a similar charge against Bank of America made less than two weeks ago by the U.S. Department of Housing and Urban Development, alleging discriminatory lending practices against Hispanic borrowers in South Carolina.

The lawsuit against JPMorgan Chase claims the lender charged minority borrowers, on average, about $1,000 more in fees than white borrowers with similar risk profiles. The U.S. government also says the bank paid mortgage brokers bonuses for selling customers loans with higher interest rates.

Damages to borrowers could amount to “tens of millions of dollars,” according to the lawsuit. Attorneys for JPMorgan Chase filed a response with the court denying the allegations.

The HUD lawsuit against Bank of America alleges that two employees offered less favorable mortgage loan terms to female Hispanic prospective borrowers compared with non-Hispanic females. The claims are based on loan estimates offered to potential borrowers in tests conducted by the National Fair Housing Alliance.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

Michael Burge is a staff writer at NerdWallet, a personal finance website. Email: mburge@nerdwallet.com. NerdWallet writer Hal Bundrick contributed to this report.

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When You Can’t Repay a Payday Loan

+ What to do if you can't repay a payday loan 1. Prioritize food and shelter needs. 2. Offer to settle before debt goes to collections. 3. Consider bankruptcy if debts are overwhelming. 4. Know your rights in dealing with debt collectors. 5. Insist collectors show proof the debt is yours. 6. If sued, show up in court no matter what.

If you don’t repay your payday loan, here’s what can happen: a barrage of bank overdraft fees, constant collections calls, hit after hit to your credit, a day in court and garnishment of your paycheck.

Don’t think it can’t happen because you borrowed only $300 in the first place.

“If you have a valid, binding, legal agreement to pay that debt, and you’re in a state where they can sue you and attach your wages, you’re playing a game of chicken that you’re going to lose,” says Bruce McClary of the National Foundation for Credit Counseling.

This is what you can expect:

First up: Lots of bank withdrawals and calls

When the money you borrowed is due, payday lenders don’t waste time.

Immediately, they’ll initiate automatic withdrawals from your bank account, which you typically give them access to when you take out the loan. If the debits don’t go through, they may break the charge into smaller chunks in an attempt to extract whatever money is in your account. Each failed attempt can trigger a bank fee against you.

At the same time, lenders will start calling, sending letters from lawyers and contacting the relatives or friends you used as references when you took out the loan. While federal law prohibits debt collectors from revealing their identity or your debt situation to anyone else — they can ask only for help locating you — violations of this provision are widespread, advocates say.

In a 2014 report on lender practices, the Consumer Financial Protection Bureau found that payday collectors visited borrowers’ homes and places of work and told friends, neighbors and colleagues the details of the person’s outstanding loan.

“They’re fairly aggressive because you’re already on a fairly short leash,” credit expert John Ulzheimer says. “Payday lenders understand that if someone goes delinquent, it’s much more likely they’re going to default. They’re not going to give their borrower a bunch of time, and they’re certainly not going to listen to a bunch of sob stories before they start trying to collect on the debt.”

Jail time? No — but threats are common

In a 2014 Pew Charitable Trusts survey, 30 percent of online payday borrowers reported having been threatened by a payday lender, “including the threat of arrest,” says Nick Bourke, director of the nonprofit’s small-dollar-loans project.

Failure to repay a loan is not a criminal offense. In fact, it is illegal for a lender to threaten a borrower with arrest or jail. Nonetheless, some payday lenders have succeeded in using bad-check laws to file criminal complaints against borrowers, with judges erroneously rubber-stamping the complaints.

The CFPB advises anyone threatened with arrest for nonpayment to contact his or her state attorney general’s office. You should never ignore a court order to appear in court, however, even if the criminal complaint was filed mistakenly.

Try to negotiate a settlement

A lender would rather collect money directly from you than proceed to the next step, which is to sell your debt to an outside collections agency.

“It’s not inconceivable that [third-party debt collectors] are paying 3, 4, 5 cents on the dollar,” Ulzheimer says. That makes lenders’ first priority to collect the debt themselves, he says. The second option is to see if they can settle with you directly for some amount of money. The third is outsourcing to a debt collector.

“And that’s when the fun begins, because these guys are professional debt collectors,” Ulzheimer says.

Transfer of your debt to the pros can happen “very, very quickly,” he says, perhaps within 30 days. Think of the previous collections efforts multiplied: collections agents showing up at your workplace, calling you 10 times in a day, threatening to sue. A collections agency will often use the threat of a report to the credit bureaus to encourage delinquent borrowers to make a payment, since payday lenders don’t themselves use the credit agencies.

“The collector has complete latitude regarding whether they want to report it at all, whether they want to report it immediately, or in six months, or ever,” Ulzheimer says.

Next stop: The courthouse

If you think a collections agency wouldn’t bother to sue for a small amount, think again.

Michael Bovee, founder of the Consumer Recovery Network, says nearly all lawsuits against consumers today are for relatively small amounts. “I’ve seen lawsuits for under $500,” he says. “Even Capital One sues for less than $500 these days. I see those regularly.”

The lenders typically win because consumers don’t show up to court. “Consumers don’t know what to do,” he says. When the defendant is a no-show, the judge typically enters a summary judgment and the court can begin to collect the money you owe on behalf of the collections agency.

“Depending on your state law, you are exposed to property liens, bank account levies and wage garnishment,” Bovee says.

Options if you default on a payday loan

Don’t let panic drive your decision-making.

“You should not prioritize paying the payday lender over putting food on the table” or paying the rent, says Lauren Saunders, associate director of the National Consumer Law Center. Cover basic needs first; you may be eligible for community assistance plans for help with rent, utilities or food. Then, seek free advice from a nonprofit credit counselor or legal aid center to set a repayment plan, she says.

Call the lender and make an offer to pay a portion of the bill in exchange for erasing the rest of the debt. “They’re usually at least open and willing to listen,” Ulzheimer says. A good figure to start the bartering is 50% of the debt amount.

“Tell the lender: ‘Look, I simply can’t pay you and I’m considering bankruptcy,’” Ulzheimer says. “The minute you start using the BK word they get real serious, because BK means they get nothing.”

Get any agreement in writing, and make sure the document states that your balance will be reduced to zero. In official terms, you want the debt “exhausted.”

Don’t ignore a lawsuit

If you can’t settle, make sure you know how to deal with debt collectors. If you’re sued for the debt, show up in court.

“You should never ignore a lawsuit,” says Saunders, a lawyer. “Show up in court and ask them for proof that you owe them the money, because often they show up without proof.” A CFPB review of one lender’s lawsuits found that 70% of them were dismissed for lack of proof.

If you can’t get the suit dismissed, do whatever you can to avoid having a judgment on your record: ask the plaintiff to accept a settlement plan, plead with the judge. A judgment is different, and worse, than simply having an unpaid loan reported to the credit agencies.

“You pay late on loans and it may show up as 30 days, 60 days, 120 days late, there’s really nothing more that’s going to happen to your credit. The damage is there,” Bovee says. A judgment, though, “has a whole new shelf life. That’s another seven years on your credit report.”

While the judgment may eventually drop off of your credit report, the amount you owe never magically dissolves.

“Time never makes debt go away,” Ulzheimer says. “Bankruptcy does.”

Karen Aho is a contributing writer.

Will a Trump Presidency Lead to More Predatory Lending?

Free markets mean corporations and consumers are engaged in a constant arm-wrestling match over prices and rules governing marketplaces. When President-elect Donald Trump takes office, will the rules of this engagement change substantially?

Already, Republicans are fighting hard to dismantle, or at least disempower, the nation’s newest federal consumer protection agency, the Consumer Financial Protection Bureau (CFPB). But that’s just one of several steps being weighed that could dramatically impact the balance of power between consumers and corporations during the next several years. Trump and his appointees will soon be dealing with everything from Net Neutrality to robocalls to late fees. Like so much with Trump, it’s hard to know if he stands with traditional Republican positions on these issues, or if he has his own ideas. But clearly, the future of issues ranging from payday-loan regulation and binding arbitration rules to debit card swipe fees are at stake.

Consumer Protections On the Line

The power of federal consumer protection agencies like the Federal Trade Commission (FTC), which fields things like consumer identity theft complaints, tends to ebb and flow based on which political party holds power in Washington, and on the state of the American economy. The economic collapse last decade, combined with the rise of Democratic power in Washington, led to a host of steps taken to reign in what supporters say were abusive practices that hurt consumers, particularly by the financial industry. Financial reform saw passage of the CARD Act, which banned several credit card issuer practices that consumers found frustrating, such as double-cycle billing or seemingly random late fees and interest-rate hikes.

More importantly, the Obama years also saw creation of the first new federal consumer protection office in decades. As Trump takes office on Friday, a battle royale has already developed between consumer groups and conservatives who want to gut America’s youngest consumer-oriented agency. The war of words escalated last week, with opponents of the bureau calling for Trump to immediately remove bureau chief Richard Cordray, calling him “King Richard,” while supporters have promised they have “gone to Defcon One” to protect it.

The CFPB is the brainchild of Elizabeth Warren — then a bankruptcy expert, now a Democratic Senator from Massachusetts. The bureau was designed to pick up where other banking regulatory agencies, like the Office of the Comptroller of the Currency (OCC), left off. Bank regulators like the OCC have the difficult job of serving two masters — both the safety and soundness of the banking industry and the fairness with which consumers are treated. Critics said the abuses apparent during the housing bubble, such as unclear mortgage documents, demonstrated that regulators sided too often with banks and neglected consumer protection. So the CFPB was designed as a consumer-first agency. It was also designed to enjoy independence from industry pressure — it is not subject to Congressional purse string requirements, and its director not subject to removal for political reasons. At least, that was the intention of Warren and Democrats who wrote the legislation creating the CFPB.

A lawsuit that went in the favor of CFPB opponents last fall has, at least for now, paved the way for removal of CFPB director Cordray. The bureau and its supporters plan to appeal the ruling, but Republicans aren’t waiting around for that. They are urging Trump to remove Cordray as soon as he takes office.

“It’s time to fire King Richard,” Senate Banking Committee member Ben Sasse, R-Nebraska, wrote in a January 9 letter to Trump. “Underneath the CFPB’s Orwellian acronym is an attack on the American idea that the people who write our laws are accountable to the American people. President-elect Trump has the authority to remove Mr. Cordray and that’s exactly what the American people deserve.”

Bureau opponents say the CFPB should operate more like the FTC, with a slate of politically-appointed commissioners running things.

Last week, the Trump administration signaled it was leaning toward removing Cordray and reigning in CFPB power by revealing it had interviewed retired Texas Republican Congressman Randy Neugebauer as a potential CFPB chief. In Congress, Neugebauer was a leading CFPB critic, calling its efforts to regulate payday loans “paternalistic erosion of consumer product choices.”

Meanwhile, Rep. Jeb Hensarling, R-Texas, indicated he will move immediately to pass legislation he proposed last term named the Financial Choice Act, which is largely designed to roll back provisions of the Dodd-Frank Financial reform bill. It would eliminate the Volcker Rule, designed to prevent banks from taking some kinds of risks with their own money; it would also remove the Durbin Amendment that limited fees on debit card transactions.

“We were told [Dodd Frank] would lift our economy, but instead we are stuck in the slowest, weakest, most tepid recovery in the history of the Republic,” Hensarling said while supporting the bill last fall.

Bureau supporters are fighting back. Warren held a conference call on January 13 with 3,000 consumer advocates where she rang the alarm about the future of the CFPB and financial reform.

“It’s time to send a message to big banks, payday loan lobbyists and their Republican friends in Congress: The American people are watching,” Warren said, according to a press release from Americans for Financial Reform, an advocacy group. ”We’re going to fight back against any efforts to gut financial reform and to allow big banks and shady financial institutions to once again cheat consumers and put our economy at risk.”

Consumer advocacy groups universally support the CFPB, which says it has returned $12 billion to 27 million wronged consumers since its inception. One group held a “One of 17 Million” event in Washington, D.C. earlier this month.

“We’ve gone to DefCon One on protecting the CFPB because the predatory lending industry and the big Wall Street banks are all demanding the President-elect illegally fire the extraordinary CFPB director Richard Cordray and replace him with one of several industry henchmen who will help Congress eviscerate the successful bureau,” Ed Mierzwinski, program director at the Public Interest Research Group, an advocacy organization, said. “But how do you fire an effective official who has protected consumers and families from financial predators exactly as Congress asked him to do? You ignore the law and you ignore the voters’ demand for an unrigged financial system. We hope Mr. Trump has better judgment than that.”

Some Consumer-Friendly Officials Departing D.C.

Already, some noted consumer-friendly officials have started to leave Washington.

At the FTC, Chairwoman Edith Ramirez announced she would resign on Friday. Ramirez focused on emerging internet of things technologies during her six years at the FTC.

“Ramirez cast a spotlight on emerging privacy issues, involving ‘smart TV’s,’ cross-device tracking and other technologies,” the Center for Democracy and Technology said, praising Ramirez’s time at the agency. “Through a series of cutting-edge cases — Snapchat, D-Link, inMobi and Turn, for example — the commission made it clear that tech companies that deceived consumers or failed to protect their security would be punished and publicly shamed.”

In addition to consumer issues like privacy, the FTC’s main charge is to enforce antitrust law. During his candidacy, Trump signaled a break with traditional Republicans over anti-trust law, suggesting, for example, that he would have blocked the Time Warner-AT&T merger. But Trump picked former FTC commissioner Joshua D. Wright to run his FTC transition team. Wright, a traditional conservative who, in an op-ed penned days after Trump’s election victory, criticized “anti-merger mania.” He said evidence shows big mergers often help consumers, and cautioned against a return to the days of trust-busting.

Wright is widely believed to be the leading candidate to head the commission after Trump takes office.

The Trump transition team did not immediately respond to Credit.com’s request for comment.

So Long Net Neutrality?

Even bigger changes might be coming to the Federal Communications Commission (FCC), however Multichannel.com reported this weekend that Trump’s picks to head that agency — several veterans of the conservative American Enterprise Institute — have plans to eliminate the FCC’s consumer protection tasks altogether. Currently, the FCC helps consumers in dispute with telecommunications providers and sets policies, like net neutrality.

FCC Chairman Tom Wheeler, who led the charge for net neutrality and new privacy rules for broadband consumers, will vacate his spot on Inauguration Day. While Trump picked FCC transition team members with anti-net neutrality track records — one a Verizon economist, the other a former Sprint lobbyist — Wheeler said in a speech last week that overturning the commission’s rule is not a foregone conclusion. Changes would require a new rule making process, he said — and that would be a mistake.

“Tampering with the rules means taking away protections that consumers in the online world enjoy today,” Wheeler said in his speech.

While Trump transition team members Ajit Pai and Michael O’Rielly advocated for a streamlined FCC before, backtracking on issues like net neutrality seems less a sure thing after Trump added Republic Wireless co-founder David Morken to that transition team. As head of a small telecom company, Morken has said he is against changes that help entrenched competitors, and has a populist bent to his rhetoric.

“Traditional Republican telecom policy has favored incumbents who are heavily engaged in regulatory capture over innovators like us,” Morken told The Wall Street Journal in December.

His lack of opposition to Net Neutrality, in addition to that open challenge of established Republican thinking, has led some to think he might provide balance on a Trump FCC. But as with the many critical consumer issues the Trump administration will take on in the coming months, only time will tell whether populist positions or conservative leadership will win that arm-wrestling match — and how consumers will fare in their own wrestling match with corporations.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

 

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This article originally appeared on Credit.com.

Women in New Mexico See Smaller Wage Gap but May Fall Short on Retirement

There’s some good news for women living in New Mexico: On average, women there face one of the smallest differences in wages between the genders of any state in the country. But they still need to put away $1.18 for every $1 a man saves to accumulate an equivalent nest egg in retirement.

Women working in New Mexico earned about 85 cents for every $1 men made in 2015 — the seventh smallest wage gap in the U.S. New Mexico was also among the 10 states charting the most improvement in the wage gap from 2007 to 2015, the latest data available, according to a new study by NerdWallet.

Gap narrows in some states

Nationwide, women, on average, earned 80 cents for every $1 men made in 2015, based on median income — that’s up from 77.5 cents in 2007, the analysis of U.S. Census Bureau data shows.

Each year, U.S. women must put aside savings at an average rate of $1.25 to every $1 a man invests in a 401(k), traditional individual retirement account, Roth IRA or other investment plan to save an equivalent amount, the study found.

While pay parity remains elusive, the gap is closing more in some states than in others, which translates into a smaller shortfall in retirement savings. For example, in New York, the state with the narrowest wage gap, women must invest an average of $1.13 for every $1 to catch up to men. In Oklahoma — the worst state for wage gap improvement during the same period — women would need to put away $1.37 for every $1 a man saves there.

More than equal pay for equal work

Both men and women struggle to save for retirement. The National Retirement Risk Index suggests roughly half of American families aren’t saving enough to maintain their standard of living in retirement. But the wage gap can make the challenge more pronounced for women, who live, on average, five years longer than men.

What’s behind the wage gap? Research suggests the issue isn’t so much that a woman working any particular job makes less than her male colleague; rather, it’s that the odds are greater that he will rise to upper management and earn more.

As well, a 2014 Harvard study suggests women are far more likely to take career breaks for child and elder care, which ends up limiting the number of women working in more time-consuming jobs with little flexibility for family needs.

A checklist for saving for retirement

To help keep the wage gap from expanding into an even larger retirement shortfall, experts suggest these tips to maximize savings:

  • Get the full match on your workplace retirement account. Employers often will match — up to a limited amount — the cash you contribute to a workplace retirement account, such as a 401(k) or 403(b). Your contributions are made pretax, directly from your paycheck.
  • Set up a Roth or traditional IRA. IRAs also offer tax benefits to savers who qualify. If you are married and file taxes jointly, a non-working spouse can open and contribute to an IRA based on the working spouse’s income. Try a Roth IRA calculator to see how much you can contribute.
  • Use a taxable account. After maxing out tax-advantaged retirement savings accounts, you can invest further in the stock market’s long-term earning power. While there is always some degree of uncertainty when it comes to stocks, taking an appropriate risk can help the dollars you save work harder.
Find the gap in your state

Here are the states where women’s incomes average the most — or fewest — cents on the dollar compared with men, and where the pay gap saw the most — or least — improvement. If your state isn’t on one of these lists, you can find it here.

10 states with the smallest wage gaps in 2015

  1.    New York (Women made 88.7 cents for each $1 men earned)
  2.    Delaware (88.5 cents)
  3.    Florida (86.6 cents)
  4.    North Carolina (85.9 cents)
  5.    Rhode Island (85.8 cents)
  6.    California (85.7 cents)
  7.    New Mexico (84.6 cents)
  8.    Hawaii (84.1 cents)
  9.   Vermont (83.8 cents)
  10.   Nevada (83.7 cents)

10 states with the largest wage gaps in 2015

  1.    Wyoming (Women made 64.4 cents for each $1 men earned)
  2.    Louisiana (68 cents)
  3.    West Virginia (70.6 cents)
  4.    Utah (71.1 cents)
  5.    North Dakota (71.1 cents)
  6.    Montana (72.5 cents)
  7.    Oklahoma (73.2 cents)
  8.    Idaho (73.5 cents)
  9.    Michigan (74.3 cents)
  10.    Ohio  (74.7 cents)

10 states where the wage gap improved the most, 2007-2015

  1.    Rhode Island: (Wage gap shrunk 10.96%)
  2.    Delaware: (10.19%)
  3.    New Hampshire: (9.87%)
  4.    Kentucky: (9.28%)
  5.    Connecticut: (9.00%)
  6.    Florida: (8.41%)
  7.    Illinois: (7.96%)
  8.    South Carolina: (7.83%)
  9.    New York: (7.76%)
  10.    New Mexico: (7.55%)

10 states where the wage gap improved the least, 2007-2015

  1.    Oklahoma (Wage gap grew 5.57%)
  2.    Utah (grew 1.35%)
  3.    Vermont (grew 0.40%)
  4.    Texas (no change)
  5.    Idaho (Wage gap shrunk 0.45%)
  6.    Ohio (shrunk 0.99%)
  7.    Nebraska (shrunk 1.21%)
  8.    Georgia (shrunk 1.28%)
  9.    Virginia (shrunk 1.37%)
  10.    Colorado (shrunk 1.37%)

Kevin Voigt is a staff writer at NerdWallet, a personal finance website. Email: kevin@nerdwallet.com. Twitter: @kevinvoigt. Jonathan Todd is a data analyst at NerdWallet. Email: jonathan.todd@nerdwallet.com.

NY Women’s Wage Gap Smallest but Retirement Shortfall May Loom

Good news, women of New York: On average, you face the smallest difference in wages between the genders of any state in the country. The bad news: You still need to sock away $1.13 for every $1 a man in your state saves to enjoy the same size retirement nest egg.

Women working in New York in 2015 made about 89 cents for every $1 a man earned — the nation’s smallest wage gap. New York also was among the 10 states charting the most improvement in the wage gap from 2007 to 2015, the latest data available, according to a new study by NerdWallet.

Gap narrows in some states

Nationwide, women, on average, earned 80 cents for every $1 men made in 2015, based on median income — up from 77.5 cents in 2007, the analysis of U.S. Census Bureau data shows.

As well, four of the five states that saw the wage gap shrink the most from 2007 to 2015 were near New York — Rhode Island, Delaware, New Hampshire and Connecticut — the data show.

Each year, U.S. women, on average, must put aside savings at a rate of $1.25 for every $1 a man invests in a 401(k), traditional individual retirement account, Roth IRA or other investment plan to save an equivalent amount, the study found.

New York women must invest $1.13 for every $1 to catch up. In Oklahoma — the worst state for wage gap improvement during the same time period — women would need to save $1.37 for every $1 men save there.

More than equal pay for equal work

Both men and women struggle to save for retirement. The National Retirement Risk Index suggests roughly half of U.S. families aren’t saving enough to maintain their standard of living once they’ve retired. But the wage gap can make the challenge more pronounced for women, who live, on average, five years longer than men.

So what’s behind the wage gap? Research indicates the issue isn’t so much that a woman working any particular job makes less than her male colleague; rather, it’s that the odds are greater that he will rise to upper management and earn more.

2014 Harvard study suggests women are far more likely to take career breaks for child and elder care, which ends up limiting the number of women working in more time-consuming jobs with little flexibility for family needs.

A checklist for saving for retirement

To help keep the wage gap from expanding into an even larger retirement shortfall, try these suggestions to maximize savings:

  • Get the full match on your workplace retirement account. Employers often will match — up to a limited amount — the cash you contribute to a workplace retirement account, such as a 401(k) or 403(b). Your contributions are made pretax, directly from your paycheck.
  • Set up a Roth or traditional IRA. IRAs also offer tax benefits to savers who qualify. If you are married and file taxes jointly, a non-working spouse can open and contribute to an IRA based on the working spouse’s income. Try a Roth IRA calculator to see how much you can contribute.
  • Use a taxable account. After maxing out tax-advantaged retirement savings accounts, you can invest further in the stock market’s long-term earning power. While there is always some degree of uncertainty when it comes to stocks, taking an appropriate risk can help the dollars you save work harder.
Find the gap in your state

Here are the states where women’s incomes average the most — or fewest — cents on the dollar compared with men, and where the pay gap saw the most — or least — improvement. If your state isn’t on one of these lists, you can find it here.

10 states with the smallest wage gaps in 2015

  1.     New York (Women made 88.7 cents for each $1 men earned)
  2.     Delaware (88.5 cents)
  3.     Florida (86.6 cents)
  4.     North Carolina (85.9 cents)
  5.     Rhode Island (85.8 cents)
  6.     California (85.7 cents)
  7.     New Mexico (84.6 cents)
  8.     Hawaii (84.1 cents)
  9.     Vermont (83.8 cents)
  10.     Nevada (83.7 cents)

10 states with the largest wage gaps in 2015

  1.     Wyoming (Women made 64.4 cents for each $1 men earned)
  2.     Louisiana (68 cents)
  3.     West Virginia (70.6 cents)
  4.     Utah (71.1 cents)
  5.     North Dakota (71.1 cents)
  6.     Montana (72.5 cents)
  7.     Oklahoma (73.2 cents)
  8.     Idaho (73.5 cents)
  9.     Michigan (74.3 cents)
  10.     Ohio  (74.7 cents)

10 states where the wage gap improved the most, 2007-2015

  1.     Rhode Island: (Wage gap shrunk 10.96%)
  2.     Delaware: (10.19%)
  3.     New Hampshire: (9.87%)
  4.     Kentucky: (9.28%)
  5.     Connecticut: (9.00%)
  6.     Florida: (8.41%)
  7.     Illinois: (7.96%)
  8.     South Carolina: (7.83%)
  9.     New York: (7.76%)
  10.     New Mexico: (7.55%)

10 states where the wage gap improved the least, 2007-2015

  1.     Oklahoma (Wage gap grew 5.57%)
  2.     Utah (grew 1.35%)
  3.     Vermont (grew 0.40%)
  4.     Texas (no change)
  5.     Idaho (Wage gap shrunk 0.45%)
  6.     Ohio (shrunk 0.99%)
  7.     Nebraska (shrunk 1.21%)
  8.     Georgia (shrunk 1.28%)
  9.     Virginia (shrunk 1.37%)
  10.    Colorado (shrunk 1.37%)

Kevin Voigt is a staff writer at NerdWallet, a personal finance website. Email: kevin@nerdwallet.com. Twitter: @kevinvoigt. Jonathan Todd is a data analyst at NerdWallet. Email: jonathan.todd@nerdwallet.com.

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