There have been many inventions that have made our lives easier to deal with in many areas. The microwave made cooking and heating up food a quick and easy experience. Cars and planes have made travel a lot more convenient and getting to our destination has never been faster. One of the more overlooked inventions has been the automatic teller machine, or ATM. The ATM dispenses money to banking clients for use for purchases or to pay bills including payday loans and adds a level of convenience to our lives that would be sorely missed if they were taken away. Those who need money for impulse buys or to quickly pay a utility bill before the service is hut off often use ATM’s regularly and cannot get to the bank during normal business hours.

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Unlike the controversial health care mandate, most people agree that Washington would do a better job than banks at regulating student loans. The problem with lending has been varied, from banks charging higher rates, to students getting in trouble repaying loans with salaries after college that can’t support minimum payments on pricey education. Despite some major flaws in the system, and public opinion in favor of this legislation, there was a bitter debate over whether on not nationalizing the student loan program was a good thing. However, instead of scrapping a valuable program, the Federal government has decided to centralize it and manage the program itself.

Congress Votes

The vote was cast with a 56 to 43 vote in favor in the Senate. In the house, the bill passed with 220 to 207 in favor. That means that on July 1st, 2010, all federal student loans from here on out will come directly from the federal government. This blocks lenders like Sallie Mae, private banks, and even Nelnet from making loans to students, even though they’ve previously contracted them before. This ends a nice subsidy for private lenders that they used to make quite a bit of money off low-income student lending. The new changes are said to save the Federal government $61 billion dollars after 10 years. The hope is that much of that can be used to pay down the deficit and provide further funding for low-income students in the form of Pell grants.

Who Benefits Most?

Actually, it’s the student borrower that should see better days with this legislation. The Pell grant awards will shift from $5,500 dollars to a maximum of $5,900 by 2017. It may seem trivial, but with more Pell grant funding, more low-income students will, hopefully, be able to afford to go to college.

Bank of America (BOA) has been criticized and sued for its handling of homeowners with loans that are underwater. Homeowners in Washington, for instance, pointed out that while administering the Making Home Affordable Program (HAMP) loan plan to modify homeowner mortgages, it approved fewer than 13,000 applications of the total 1 million mortgages it actually services. The HAMP program has been plagued with much inefficiency, not specific to Bank of America, and some feel that Congress should step in to regulate the proper handling of these loans. Perhaps because of the lawsuit and the threat of courts intervening, BOA has stepped forward to offer a different plan.

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The economy is slowly recovering from one of the worst recessions we have seen in decades. As it starts to recover, people will also begin to make more purchases to boost it. This consumer spending puts money back into the economy and creates demand that leads to new jobs. It is a cycle that keeps our country afloat. When we started this horrible recession, the Government decided that banking was somewhat at fault for the problems we were experiencing and decided that credit card spending and bank fees for certain services were out-of-line and needed to be changed. So, starting on July 1st, banks can no longer charge overdraft fees to those who have exceeded their balances. This will severely limit the amount of money a bank can make on its customers. Many people do not realize that a bank makes a great deal of money on overdrafts fees as many people use their debit cards and go over their limits.

Bank of America has decided to implement this change right now rather than wait. Rather than allow their customers to go over limit, Bank of America will now stop purchases if they exceed the balance in their account. Many people do this unknowingly as they are not aware of certain transactions taking place on their account and with current salaries at a low, many are purchasing items dangerously close to the bottom of these accounts. With current trends, the banks stand to lose millions of dollars in revenue from fees as well as purchases.

As of July, banks will have to get the consent of their customers to charge any overdraft fees and Bank of America is well aware that it would be an uphill battle and that their customers will not sign these types of guidelines. Rather than fight it, Bank of America has decided to institute the new laws now to possibly keep customers and show that they are not predatory like the Government seems to portray than as in the media. Many of the larger banks will fall in line with Bank of America as they all scramble to find new and inventive ways to charge fees. It is likely that fees for checking account maintenance will go up as well as yearly fees on credit cards, which is already occurring across the board.

Some towns are taking note and learning how to survive a depression by using old tricks from history’s playbook. When people have no ready cash on hand, some towns are trying to stimulate commerce using some dollar alternatives that work in local areas. One of these alternatives is scrip, local currencies that can be used to trade within a select group of merchants. Another alternative that can work is a time bank. Instead of using dollars, people trade hours for different services. Each of these probably can’t uphold an economy all by themselves, however they do support additional ways to create commerce when cash is in short supply.

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