You are here
Owing to an expectation that their product would never escape the ire of regulators, investors have pulled out from Tandem Money. The company appears to have closed at the end of last month.
"Tandem Money is no more," said Insight Card Services CEO Bill Smith. "We decided not to continue. We had a hard time seeing how the product would handle the scrutiny."
Tandem Money was more than just a prepaid card with a line of credit. It offered a suite of financial services on a
For the last two decades, underwriting has been driven by credit scoring. The ingredients that influence a credit score have been fairly static for some time. They depend upon the utilization of credit, your repayment history, the types of credit that you have already, the length that you have kept those accounts open, and how recently you have opened other credit accounts.
That approach may soon change.
There are some incredible things going on at the bottom of the credit pyramid.
In the last few years, many analysts have commented on how the credit scores of American households have deteriorated. For a period of time, FICO revealed that the average credit score was about 690 and that the median is a bit higher. FICO's data is better than any
Ohio check cashing firm Check$mart is offering high-cost credit on its prepaid cards.
The Insight Card calls the product the "convenience transfer" but it is simply a way to borrow money. The fee is based on the size of the withdrawal. Consumers pay $3.50 for every $25 increment. This is actually higher than the rate that
While regulators have stopped a debit card program that came with a credit option, they are yet to issue any kind of guidance about the larger issue of credit itself.
In the most recent filing with the FFIEC (June 30th, 2009) PCBC reported that it had extended $39.03 million in loans to its executives. That is roughly 8.2 percent of tier one capital ($476.3 million).
Now, it is worth mentioning that these kinds of loans are legal. I could not find a bank that didn't have such loans on its books. My point here is to say that this is probably not appropriate at this scale for PCBC, nor is it wise at a time when the bank is struggling to maintain its equity ratios.
Too friendly for their own good
Is $39 million a lot? Well, by comparison to other banks, it is absolutely stratospheric. It exceeds the rates at just about all of the banks that I
Gregory Squires and Charis Kubrin offer a fascinating essay in Shelterforce this month where she examines some of the new ways that communities are growing in and in response to the pull of poverty. Their findings show the path dependent nature of economic segregation and the linkages to race.
Their essay is worth reading. Here are a few startling facts to consider:
- In 1990, the typical black household earning above $60,000 lived in a neighborhood where the median income was $31,585. A white household with the same income characteristic lived in a much more