You are on page 1of 8

Winter 2015

Buying and Borrowing Tips


Seven Ideas for Choosing and Managing a Mortgage
Wheels and Deals: Finding an Auto Loan That’s Good to Go
Are You Ready to Pay by Smartphone?

Buying and Borrowing Tips

ALSO INSIDE
Telemarketer Scams: Have a Complaint More Answers to How to Save:
When Calls Don’t About Bank? Common Questions Our Latest Tips
Ring True A Regulator Can Help

F E D E R A L D E P O S I T I N S U R A N C E C O R P O R A T I O N
B U YIN G AND BOR ROW ING T I PS

Buying or Refinancing a Home?


Seven do-it-yourself tips for choosing and managing a mortgage
Do you have a mortgage loan or are Finance Agency recently released the
you in the market for one? With results of a survey showing that nearly
new disclosures and other consumer half of the consumers who took out
protection rules, and fluctuations in a mortgage to buy a home in 2013
interest rates, it’s good to review some did not shop around before applying.
key strategies to keep costs down for “Failing to shop means money lost
your home loan. for consumers,” the CFPB said.
“Consumers who consider the product
“Since a mortgage may be the largest
offerings of multiple lenders or brokers
and most complex financial obligation
may save substantial sums.”
you will ever enter into, be sure to
do your homework before and after As part of the announcement, the
you commit to a loan,” said Jonathan CFPB launched an online toolkit
Miller, a Deputy Director in the FDIC’s called “Owning a Home” (www. Whether it’s a fixed or adjustable rate,
Division of Depositor and Consumer consumerfinance.gov/owning-a-home) be sure you understand all the terms of
Protection. to help consumers as they shop for a any loan you are considering before you
mortgage and make smarter decisions decide whether to take it. If you have
Here are tips on keeping borrowing questions, consider consulting with a
on home loans.
costs low and thinking ahead about HUD-approved housing counseling
issues that might arise. It’s best to compare offers from several agency (see contact information at the
different lenders before making a final end of this article) or an attorney.
For Anyone Looking for a Mortgage
decision. And keep in mind that you do
1. Remember that loan programs not have to use a lender suggested by 4. Watch for new mortgage
can change and lenders’ policies may your real estate agent or anyone else disclosures. The CFPB has developed
vary, so research new opportunities involved in your home purchase. new disclosures that, by law, lenders will
before applying for a mortgage. For be required to use beginning on August
3. Understand the pros and cons 1, 2015. For most new mortgages and
example, more lenders are beginning to
of adjustable-rate mortgages. Also refinancings, four previously required
offer borrowers the chance to obtain a
known as ARMs, these mortgage disclosures of settlement costs and key
mortgage with a smaller down payment.
loans generally start out with low loan terms (including the “Good Faith
Why is that happening?
introductory rates for a certain time Estimate” provided within three days
Fannie Mae and Freddie Mac will period. A low rate may be appealing, of applying for a mortgage and the
now buy mortgages from lenders that but be sure you know how much that “HUD-1 Settlement Statement” of
have down payments as low as rate could rise, when, and under what actual costs at closing) will be replaced
3 percent. This change could lead to circumstances. By law, the lender must by two new forms intended to provide
more lenders lowering their down disclose this information to you. When clearer and more useful information
payment requirements for borrowers. the lender considers your ability to to consumers. The CFPB has detailed
But be careful. Making a smaller down repay the loan, it must take into account information about the new disclosures
payment typically means you will pay possible rate hikes during the first five at www.consumerfinance.gov/
higher monthly mortgage payments years of the loan. knowbeforeyouowe.
and have greater borrowing costs over
“You also shouldn’t assume that you will 5. Consider how a mortgage could
the long run.
have the option to refinance an ARM affect you in retirement. Carrying
Also, in January 2015, the U.S. or sell your home to escape higher significant mortgage debt can create
Department of Housing and Urban payments later on,” said Elizabeth payment problems for retirees living on
Development (HUD) announced a cut Khalil, a Senior Policy Analyst at the a fixed income. Some consumers may
in Federal Housing Administration FDIC. “Mortgage interest rates have even delay retirement due to mortgage
insurance premiums on mortgages with been low over the past few years, but debt. “Even if you’re many years from
low down payments. This change will they may be higher in the future, retirement, consider now how long
make the FHA’s low down payment meaning that refinancing your ARM you intend to carry a mortgage, have a
loans more affordable. may not significantly lower your plan for paying it off, and be sure that
payments. This is also a reason to think timeframe lines up with your goals for
2. Don’t be shy about shopping
seriously about a fixed-rate loan, which career and retirement,” said Kathleen
around for a home loan. The
may be somewhat more expensive but Keest, also an FDIC Senior Policy
Consumer Financial Protection Bureau
has predictable payments.” Analyst.
(CFPB) and the Federal Housing

FDIC Consumer News Winter 2015


2
B U Y I N G A N D B O R R OW ING TIP S

For Current Homeowners credit limit, usually at a variable interest For further information on the issues
rate. addressed here and other topics related
6. Keep an eye on the servicing of
your loan. The entity that collects your Also, some HELOCs have low to mortgages, search for previous
payments and performs other duties introductory interest rates that can reset articles by topic in FDIC Consumer
for your mortgage lender, perhaps at a higher rate. The federal banking News at www.fdic.gov/consumernews.
including responding to inquiries and agencies have issued guidance to Also visit www.mymoney.gov and
initiating foreclosure actions against financial institutions on the importance consumerfinance.gov/mortgage.
delinquent borrowers, is referred to of early notice to borrowers about If you think you need one-on-one
as the loan servicer. It may or may not impending rate resets and making help assistance from an independent, reliable
be the same company from which you available to those facing rate increases source on topics such as buying a home,
got your loan, and it may be replaced that could be difficult to pay. See the getting a loan or avoiding foreclosure,
by another servicer over the life of the Winter 2013-2014 edition of FDIC consider contacting a HUD-approved
loan, perhaps multiple times. By law, Consumer News (www.fdic.gov/ housing counseling agency (start at
you must receive advance notice when consumers/consumer/news/cnwin1314/ 1-800-569-4287 or www.hud.gov/
the servicing of your loan is transferred heloc.html) for more on HELOCs and offices/hsg/sfh/hcc/hcs.cfm) or an
to a different company. And under new rate resets. attorney. Q
rules, you cannot be charged a late fee if
an overdue payment to the new servicer
is received within 60 days after the
transfer of duties. Wheels and Deals:
“If your loan servicer changes, carefully Finding an Auto Loan
review your account to confirm that
your payments are being accurately
That’s Good to Go
credited,” suggested Senior Policy Buying a car can be exciting, but don’t
Analyst Glenn Gimble. “Also by law, lose sight of how you will pay for it.
prior to closing on your loan you must Here are our latest tips on financing a
receive a disclosure about how often the vehicle through an auto loan.
lender transfers servicing. The answer
Review your credit reports long
may influence your decision to accept
before you go to purchase a car.
a loan from this lender or to choose
Correcting inaccuracies, such as an
a different lender, maybe one that
erroneous history of late payments,
services its own loans.”
can help you get the best loan possible.
7. Research the potential risks and Fixing mistakes may also save you
benefits of home equity products. A money on car insurance.
loan secured by a homeowner’s “equity”
To request free copies of your credit
in a home can be an economical way to
reports, go to www.annualcreditreport. dealers may be less flexible on the price
borrow money because the interest rate
com or call 1-877-322-8228. This is the of the vehicle if they don’t expect to
is typically low and, for many people,
only authorized site to obtain your free make money on the financing.
the interest paid will be tax deductible.
credit reports.
Generally, the equity is the current Don’t hesitate to seek different
appraised value of a home minus what Consider getting pre-approved for financing offers. You may be surprised
is owed on the mortgage. “As home a loan from at least one financial by how comparison shopping for an
values rise in a number of areas, home institution before you go to the auto loan can save you money. While
equity products are again becoming dealership. A financial institution, submitting multiple loan applications
more popular, but it’s important to keep such as one where you already have an generally can slightly lower your
in mind that, just like with a mortgage, account, may offer you a better interest credit score, those for car loans made
your home is at risk of loss if you fail to rate than what you get offered through within a short period (such as 14 days,
pay the loan,” cautioned Gimble. the dealership. And, don’t share with according to some credit scoring
the dealer the interest rate you’ve been models) generally are grouped together
There are two basic types of home
offered in case you want to explore loan to minimize the effect.
equity products. One is a one-time loan
options at the showroom.
for a lump sum, typically with a fixed Compare loan offers based on the
monthly payment. The other is a home Consumer advocates also suggest that Annual Percentage Rate because the
equity line of credit (HELOC), which you not even tell the dealer whether APR includes certain fees as well as
allows homeowners to borrow money you’ve already been pre-approved for the interest rate. “The size of your
one or more times up to an approved a loan until after you’ve negotiated the monthly payment is important, but
purchase price. That’s because some
continued on the next page
FDIC Consumer News Winter 2015
3
B U YIN G AND BOR ROW ING T I PS

resist attempts to focus your attention


on the monthly payment instead of the
Are You Ready to Leave Your Credit Cards at
APR,” said Luke W. Reynolds, Chief Home ... and Pay by Smartphone?
of the FDIC’s Outreach and Program
Development Section. “Remember, the Paying for purchases by smartphone sign up. A merchant must first install
APR reflects the true cost of the loan.” is becoming increasingly viable. card terminals that accept contactless
Three major companies now payments; they look different than the
The longer your loan, the more you enable consumers to buy goods at swipe terminals you are used to and
pay in interest. “Long-term loans may participating merchants with their display the symbol shown below.
lower your monthly payment but you credit or debit card by just waving
will pay more in interest over the life of a smartphone over the payment
the loan,” Reynolds added. “You may terminal. In fact, a major smartphone
even be offered a loan that is longer manufacturer recently teamed up with
than you expect to keep the car.” many banks and merchants to make
Keep good records of your loan the service available to anyone buying
quotes. Before signing on the dotted the newest version of its smartphone. As with any electronic transaction,
line, review the loan agreement (the What should you know about using pay attention to security issues.
contract) and make sure any potential your smartphone to pay in a store or a According to Jeff Kopchik, a Senior
fees, the interest rate, and other key restaurant? Policy Analyst at the FDIC, “Many
terms match what you were initially You need the right equipment. Your security experts believe that mobile
told. smartphone must contain a contactless payments are more secure than swiping
or “NFC” (near field communication) your magnetic stripe credit card
Don’t allow anyone to steer you
computer chip that allows it to “talk” because the mobile service keeps your
toward a larger purchase and a
to the payment terminal credit number in encrypted
bigger loan than you will be able to
via a wireless connection, form and does not transmit
comfortably pay. In addition to your
as well as a digital wallet it to the merchant. But
monthly loan payment, you need to
to store your payment you still should make sure
budget for the cost of auto insurance,
card information. If your phone is protected,
licensing fees and taxes.
you are buying a new such as with a password,
Leave the car at the dealership until smartphone, you can so it cannot be accessed
your loan terms are finalized. If a ask the salesperson if it by a thief. Some of the
dealer offers you a “contingent” or has an NFC chip. For a newest smartphones use
“conditional” loan agreement and lets phone you already have, fingerprint readers to
you drive the car home, the loan terms check the “settings” control access, which can
may change and be less advantageous menu and look for be secure and convenient.”
for you when you return to finalize the “NFC.” Your phone may Photo: NFC Forum Also make sure your phone
purchase. already have a digital wallet feature. “times out” and re-locks itself after it
If you have a problem with your You can also download one through an isn’t used for a short period of time. If
lender or its debt collection practices app store or other online marketplace. you lose your smartphone, notify the
that you can’t fix on your own, help You have to load your credit or bank or other issuer of any credit or
is available. Consider filing a complaint debit card information onto the debit cards that may be loaded on the
with the Consumer Financial Protection phone. The setup procedure can be phone.
Bureau at https://help.consumerfinance. as easy as taking a picture of the front “Remember that if there is a problem
gov/app/vehicleconsumerloan/ask. and back of the card with the mobile with a transaction, you will receive
For more information, see articles in wallet application. The app will then the same federal protections that
the Fall 2012 issue of FDIC Consumer send it to your bank for approval and otherwise apply to the underlying
News (www.fdic.gov/consumers/ to confirm that it’s really you. Some payment source,” noted FDIC Senior
consumer/news/cnfall12/autoloans. mobile wallets may allow consumers Policy Analyst Elizabeth Khalil. “For
html) and the Spring 2012 edition to load “loyalty” cards from favorite example, if the transaction drew on
(www.fdic.gov/consumers/consumer/ retailers. You may also receive store a credit card for payment, you will
news/cnspr12/autoloans.html). The or restaurant coupons or other offers be protected by the same laws and
Federal Trade Commission also has through your phone, based in part on regulations that cover credit cards.”
resources at www.consumer.ftc.gov/ your recent purchase history with the
articles/0209-buying-new-car. Q company. To learn more, start by contacting your
smartphone service provider or credit
Most merchants that accept mobile card issuer. Q
payments are large national chains,
but smaller stores are beginning to
FDIC Consumer News Winter 2015
4
Scams: When Telemarketer Calls Don’t Ring True Have a Complaint About
As previously reported in FDIC and don’t press any other number to a Bank? Here’s How a
Consumer News, federal rules prohibit a (supposedly) get your phone number
variety of unfair or deceptive advertising off a call list. Doing so will probably just Regulator Can Help
practices, and they enable consumers to lead to more robocalls. If you think you’re not being treated
stop most telemarketer calls by placing fairly by your bank, what should
Never give out personal identification
their personal phone and cell numbers you do? As we have previously
information over the phone unless
on the National Do Not Call Registry recommended in FDIC Consumer
you initiate the call and know the
(www.donotcall.gov). We are returning News, the quickest way to fix a problem
other party is reputable. This includes
to the telemarketing topic because the is to go directly to the institution. But
bank account and credit card numbers,
Federal Trade Commission (FTC) and what if that does not help? Consider
Social Security numbers, account
other agencies have reported increases in contacting the bank’s federal regulator.
passwords and PIN numbers.
complaints involving telemarketers that
may be perpetrating scams or otherwise Thoroughly check out any offer “The FDIC receives thousands of
violating federal and state laws. before agreeing to it. Always ask for complaints every year from customers
key details in writing. Carefully read seeking assistance,” said Kirk Daniels,
According to the FTC, the vast majority a supervisor in FDIC’s Consumer
all applications and contracts so that
of the violations of the do-not-call Response Center. “For each complaint
you understand your potential costs,
rules involve “robocalls,” which are within our jurisdiction, we contact the
risks and requirements. You also can
pre-recorded phone messages that institution to review its actions and
research an offer with help from your
companies send to thousands of phones compliance with federal consumer
state or local consumer protection
at the same time. Some companies protection laws.”
agency (start at www.usa.gov/directory/
continue to make robocalls to people
stateconsumer) or your state Attorney Information collected through
who have signed up for the Do Not Call
General’s office (www.naag.org/ complaints is shared with FDIC staff to
Registry, using fake “caller IDs” that
current-attorneys-general.php). help identify potential risks for further
make them hard to identify or trace.
These calls might be scams. Assume that any offer that “sounds review at upcoming examinations.
too good to be true” — especially However, federal regulators cannot take
Michael Benardo, manager of the
one from a stranger or an unfamiliar action against a bank if it complied with
FDIC’s Financial Crimes Section,
company — is probably a fraud. applicable laws. Likewise, regulatory
explained one scam involving a
“Common examples of scams include agencies cannot settle disputes over
pre-recorded message supposedly from
fake lottery winnings, bogus job offers, whether an institution complied with
a financial institution or a government
and promises of an investment paying the terms of a loan or deposit contract,
agency, describing some “urgent”
significantly above market rates,” said which is a private matter governed
matter. “If you return the call, you
Kathryn Weatherby, a fraud examination by state law. “We don’t have the
might be asked a series of personal
specialist for the FDIC. authority to determine whose version
questions using the touch-tone keypad
on your telephone. The information Resist pressure to make a decision of the events is more accurate,” added
you are asked to provide, such as immediately. Here are a few red flags Daniels.
account numbers, personal identification that can help you spot a scam: If you need help, you may start
numbers (PINs), birth dates, and with the FDIC by calling toll-free
• You’re told to send money or provide
passwords, can be used to access to your 1-877-275-3342, completing a
bank account information before you
bank account or commit identity theft,” customer assistance form at www2.fdic.
receive anything in return;
said Benardo. gov/StarsMail/index.asp, or writing to
• You sense a reluctance on the part of the FDIC Consumer Response Center,
He added, “Your financial institution
the caller to answer questions or provide 1100 Walnut St., Box #11, Kansas
or a government agency would never
written information; and City, MO 64106. If the FDIC is not
contact you asking for such information.
When in doubt, call your institution • You’re told you already agreed to pay the correct federal agency to handle
or the government agency that the call money but you don’t remember that. your complaint, we will forward it to
is supposedly from by using a phone that agency or provide you the contact
If you think you’re a victim, file a information.
number that you know or that you find,
complaint with the FTC (at www.
not the number in the message.” For more information about resolving
ftc.gov/complaint or toll-free at
Because it may be difficult to get your 1-877-382-4357) and with your police. complaints, start with our article in the
money back, remember the following: For more tips on topics like reducing Spring 2012 FDIC Consumer News at
robocalls, avoiding phone scams and www.fdic.gov/consumers/consumer/
If you get a robocall, hang up. Don’t
stopping unwanted mail and calls, start news/cnspr12/complaint.html. Q
at the FTC’s Web site (www.ftc.gov). Q
press “1” to speak to a live operator

FDIC Consumer News Winter 2015


5
More Answers to Common Questions cases it will put a hold on the use of
the card, but it also can cancel the card
Some things to know about the FDIC’s online deposit insurance and issue a new one,” said Heather St.
calculator, debt collectors and prepaid debit cards Germain, an FDIC Senior Consumer
Affairs Specialist. “These precautions
Consumers often seek help from the Even if you had not paid your bills can be inconvenient for the customer,
FDIC with questions relating to their as required, you have the right to be but they help limit potential fraud.”
bank accounts. That’s why FDIC treated fairly under the Fair Debt
As for federal consumer protections,
Consumer News occasionally features Collection Practices Act. For example,
your liability for an unauthorized
questions and answers that readers within five days after initial contact, the
transaction varies depending on the
may find useful. Check out the latest debt collector must provide a written
type of card. For example, debit card
collection below. notice stating who you owe money to
users are liable for no more than $50
and how much is due. And if you make
Do I have to provide personal of fraudulent charges as long as they
a written request within 30 days of the
information if I use the FDIC's notify their financial institution within
initial contact, the debt collector cannot
online deposit insurance calculator two business days of realizing that
contact you again until they mail you
to find out if my deposits are fully their card was lost or stolen. With
proof of the debt. “Consumers can use
covered? reloadable prepaid cards, federal law
this information to make sure that they
treats “payroll” cards (for employer
“No. ‘EDIE,’ the FDIC's Electronic are actually responsible for paying the
deposits of salary or government benefit
Deposit Insurance Estimator, does money and that it is not someone else’s
payments) the same as debit cards, but
not need personal identification responsibility. They also can make sure
currently there are no federal consumer
information such as your actual name, the amount owed on a legitimate debt
protections limiting losses with
Social Security number or account is accurate,” explained Edward Hof, an
general-purpose prepaid cards. That
number,” said Martin Becker, Chief of FDIC Consumer Affairs Specialist.
could be changing, though, because
the FDIC's Deposit Insurance Section.
Also under the law, consumers have the Consumer Financial Protection
“EDIE is a site that can help you
protections against violence, obscene Bureau (CFPB) has proposed a new rule
confidentially calculate your deposit
language, repeated calls and other that would increase federal consumer
insurance coverage.”
abuse. Without the consumer’s protections for prepaid financial
For an accurate analysis of your permission or a court order, debt products. Also, industry practices may
insurance coverage, though, you collectors cannot contact consumers already limit your losses to some extent,
will need to list account owners or before 8 a.m. or after 9 p.m. And, if so check with your card issuer.
beneficiaries, but you can type in aliases you tell a debt collector in writing that
To help protect yourself, don’t divulge
like Jane Doe or Child #1. Also enter you refuse to pay, the collector can only
your prepaid card number to anyone
information such as the type of account contact you one more time – either to
who calls, e-mails or otherwise
and the dollar amount to reflect your tell you that all communications have
contacts you unexpectedly. Regularly
bank accounts correctly. You can use ended or that it will take a specific
review your account for unauthorized
hypothetical amounts if you want action, such as suing you to collect the
transactions (if you are unsure of how
to explore opening new accounts or debt.
to do so, review the documentation
adding to existing account balances.
To learn more, start with the Consumer that came with your card) and notify
And when you’re done, EDIE doesn't
Financial Protection Bureau (www. the financial institution that issued your
store any of the details you key in, nor
consumerfinance.gov or call toll free prepaid card immediately if you see any
can it track users.
1-855-411-2372) and/or the Federal discrepancies. Also, if your prepaid card
To use EDIE, go to www.fdic.gov/ Trade Commission (www.consumer. doesn’t work, contact the card provider,
edie. You can speak with an expert to ftc.gov/topics/dealing-debt or call explain your situation, find out what
discuss your FDIC deposit insurance toll-free 1-877-FTC-HELP). Another happened and ask what you need to do
coverage by calling 1-877-ASK-FDIC valuable resource is your state Attorney to access your funds.
(1-877-275-3342). General’s office (www.naag.org/
To learn more about reloadable
current-attorneys-general.php).
What should I do if I have a problem prepaid cards, start at the CFPB Web
with a bill collector, and what are my Due to security concerns, my site at www.consumerfinance.gov.
rights as a consumer? bank put a temporary “hold” on If new consumer protections are
my reloadable prepaid debit card. adopted, we’ll report on them in FDIC
Complaints about debt collectors are
Can the bank do that? And what Consumer News. And for additional
common, with allegations ranging from
consumer protections do I have if a information on prepaid cards, see our
harassment to fraud (such as when
thief used my card? Summer 2012 issue at www.fdic.gov/
criminals use fake documentation to
consumers/consumer/news/cnsum12/
paymentcards.html. Q
trick victims into paying bills that don’t “Yes, if the bank that issues a prepaid
exist). card suspects a security risk, in most

FDIC Consumer News Winter 2015


6
How and Where to Save: Our Latest Tips FDIC
Everyone knows they should save Consumer News
money to help pay for their future Published by the Federal Deposit
needs or wants, but not everyone Insurance Corporation
knows the best or easiest ways to
Martin J. Gruenberg, Chairman
save. That’s why FDIC Consumer
News regularly features tips on where Barbara Hagenbaugh, Deputy
and how to save efficiently. Our to the Chairman for Communications
most recent suggestions appeared Elizabeth Ford, Assistant Director,
in the Spring 2014 (www.fdic.gov/ Office of Communications (OCOM)
consumers/consumer/news/cnspr14/
Jay Rosenstein, Senior Writer-Editor,
savingandinvesting.html) and Fall 2014
OCOM
(www.fdic.gov/consumers/consumer/
news/cnfall14/financialcheckup.html) Mitchell W. Crawley, Graphic Designer
issues. Here are a few more ideas. FDIC Consumer News is produced
Review how and where you are quarterly by the FDIC Office of
saving for retirement. Options include Communications in cooperation with
workplace retirement plans, Individual other Divisions and Offices. It is
Retirement Accounts (IRAs) offered by intended to present information in a
Certificates of deposit (CDs), which nontechnical way and is not intended to
many banks and investment companies,
provide a predetermined fixed- or be a legal interpretation of FDIC or other
and the U.S. Treasury Department’s
variable-rate interest payment for a set government regulations and policies.
new “myRA” (myRetirement Account),
time period (usually three months to Due to periodic changes in statutes and
which is a simple, safe, and affordable
five years), also may be an option. agency rules, always check the FDIC Web
savings program to help individuals
site — www.fdic.gov — for up-to-date
start saving for retirement. The myRA Find more money to save by cutting
information. Mention of a product,
program offers a new type of Roth IRA, expenses. A great resource for ideas
service or company does not constitute
guaranteed by a new U.S. Savings Bond on how to use your money wisely is an endorsement. This publication may
that costs nothing to open and carries MyMoney.gov, the U.S. government’s be reprinted in whole or in part. Please
no risk of losing value. main Web site about personal finances credit FDIC Consumer News.
with information from more than 20
Because myRA accounts do not have Send your story ideas, comments,
federal agencies, including the FDIC.
minimum contribution requirements, and other suggestions or questions to:
Start at the “Spend” page at www.
savers can contribute the amount Jay Rosenstein, Editor, FDIC Consumer
mymoney.gov/spend/Pages/spend.aspx.
that best fits their budget. During News, 550 17th Street, NW, Washington,
the first phase of the program, myRA If you get a large, one-time DC 20429, e-mail jrosenstein@fdic.gov.
accounts can be funded through “windfall,” consider using some or
Find current and past issues at
automatic payroll deduction. To open all of it to help build your emergency
www.fdic.gov/consumernews or request
an account or learn more about the savings. Start by checking whether
paper copies by contacting the FDIC
myRA program, including eligibility you have enough in a federally insured
Public Information Center. Call toll-free
requirements, go to www.myra.treasury. deposit account to cover three to six 1-877-ASK-FDIC (1-877-275-3342) or
gov or call toll-free 1-855-406-6972. months of essential living expenses. If e-mail publicinfo@fdic.gov.
you don’t have that much in your “rainy
Set savings goals for specific reasons. Subscriptions: To receive an e-mail
day fund,” consider adding funds from
“Designating accounts that you will notice about each new issue with links
a tax refund, an inheritance, or other
regularly contribute to for a particular to stories, go to www.fdic.gov/about/
new-found money. This account may
purpose, such as for a vacation or the subscriptions/index.html. To receive
help pay for major unexpected expenses
next holiday season, will help motivate FDIC Consumer News in the mail, free
or tide you over during a disruption in
you to meet your goals by a certain of charge, call or write the FDIC Public
your income.
deadline,” said Luke W. Reynolds, Information Center as listed above.
Chief of the FDIC’s Outreach and For more ways to save, including ideas
Program Development Section. “Some for keeping banking costs down, search
banks offer ‘club’ accounts that promote for articles in FDIC Consumer News at
For More
regular, small savings for a certain www.fdic.gov/consumernews and check Help or Information
reason, but you can use regular deposits out the FDIC’s Money Smart financial Go to www.fdic.gov or call the FDIC
into any savings account to reach your education program at www.fdic.gov/ toll-free at 1-877-ASK-FDIC
target.” moneysmart. Q (1-877-275-3342)

FDIC Consumer News Winter 2015


7
News Briefs
See our money and banking tips for are combining financial education consumers to access a variety of
the tax season. Consider reviewing our with safe, low-cost savings accounts databases from different government
most recent article on ways to make tax for school children. FDIC-insured and self-regulatory organizations to
time less taxing. The Winter 2013/2014 banks in the program are working with learn more about the background of a
FDIC Consumer News (www.fdic.gov/ schools and/or nonprofit organizations financial professional.
consumers/consumer/news/cnwin1314/ to help children open savings accounts
FDIC Consumer News has previously
taxtips.html) provides guidance on how in conjunction with financial education
cautioned readers to be careful when
to guard against tax-related identity programs. The FDIC ultimately hopes
buying bank CDs from deposit brokers
theft, such as when a criminal calls to highlight promising approaches for
because the accounts they sell may
and impersonates an IRS employee encouraging the development of good
involve more risks than working directly
to ask for immediate payment or money management and savings habits
with an insured bank. Reminder: The
for confidential information. (Note: at a formative age.
FDIC does not have the authority to
The most common form of identity
To learn more, start at www.fdic.gov/ examine, approve or insure deposit
theft reported to the Federal Trade
youthsavingspilot. brokers, who can be anyone from an
Commission in 2014 was tax-related.)
individual transacting business alone
A new federal Web site can make
You’ll also find information on free tax from a home office to a major financial
it easier for consumers to conduct
preparation services offered through services firm. For more information,
a thorough background check of
the IRS or IRS-coordinated programs see our article in the Spring 2013 issue
financial professionals, including
for many taxpayers, plus ideas to put (www.fdic.gov/consumers/consumer/
news/cnspr13/cdsfrombrokers.html). Q
brokers who offer FDIC-insured
some of a tax refund into savings or
certificates of deposit. The site
toward paying down debt.
from the Commodity Futures
The FDIC has launched a pilot Trading Commission (CFTC) —
program to identify ways banks www.smartcheck.gov — enables