Personal Finance Why the Fed setting the Reserve Rate to 0% doesn't matter for you. |
- Why the Fed setting the Reserve Rate to 0% doesn't matter for you.
- Remember that unemployment income is taxable
- PayPal has the worst customer services and disputes process imaginable! Stay away!
- FHA Mortgages For Credit Scores Under ~640 Are No Longer Being Issued
- Somehow negotiated rent down $1K less/month for an apartment in a complex...should I take the offer, or will other buildings follow during this time, and I should wait?
- Hospital sent me a bill for $9k even though I have insurance. What do I do?
- Student loan interest rate is suspended, should i dump my normal monthly payments to the highest interest rate loan?
- I *can* stop paying my student loans, but *should* I?
- Chase waived my next minimum payment and reversed the last interest charges on my card.
- I need to replace my SSN card and obtain an ID, but both offices are closed
- New to taxes. I started a job on Jan 6th 2020 which I filled out a W4 for. Do I need to include that for this years tax return?
- Just got my hours cut in the middle of buying on a house
- Husband took a 10k loan from his 401k for us to move out of a bad neighborhood. Now he’s been furloughed but I’m still working in office everyday (My company is considered essential) Do we keep said money for just incase or put it back?
- TaskRabbit breaks TV, says Renter’s Insurance will Pay
- Self-employed partner hasn’t filed taxes in many years
- A friend may be screwing himself over for life. Never Filed Taxes.
- 24 Hour Fitness is hiding and preventing account freezes. Should I do a charge back for the monthly fee I was charged last week?
- Are my student loans suppose to be labeled as “closed” on credit reports?
- Student here and ineligible for benefits because of school... help?
- Don't use TaxACT this year.
- Paid my federal taxes on Turbotax, yet it still says I still owe the money even after it came out of my bank account.
- My dad desperately needs advice...Struggling now that he's unable to work....Should he risk it anyway?
- For those who have had their accounts closed by Chase
- I (1099) have not had a refund in 2019 or 2018. Can I make a small over-payment for Q4 Est now so that I can include my direct deposit info on my return?
| Why the Fed setting the Reserve Rate to 0% doesn't matter for you. Posted: 27 Mar 2020 06:22 AM PDT Good morning /r/personalfinance, After screaming into the wind over in /r/news, I thought I'd come explain to you why the Reserve Requirement Ratio being set to 0% doesn't matter for you. There seem to be some significant misunderstandings about what it means, what the Reserve Requirement does, and how it affects consumers. First, the Reserve Requirement is the amount of cash (or cash equivalents) banks must maintain on deposit at the Fed. This money is used to settle interbank transactions and to encourage banks to maintain a certain level of liquidity. Second, if a bank's reserve account is below the limit set by the Fed, they simply borrow from other banks, overnight, at the Fed Funds rate. Banks with excess reserves will lend money to other banks with insufficient reserves at the Fed Funds Rate. On balance sheets, these are recorded as Fed Funds Purchased and Fed Funds Sold. When the Fed Funds Rate is 0% (like it is now), banks can effectively borrow from each other for free (realistically, almost free, since they'll still pay a few basis points). If the banks can't borrow from other banks (due to credit concerns, for instance), the bank can borrow directly from the Federal Reserve at the Discount Window (which currently has a rate of 0.25% for primary credit and 0.75% for secondary credit) to maintain adequate reserves. Setting the reserve requirement to zero, simply means bank's won't need to borrow from the fed or from each other at a very nominal rate. It essentially eliminates a small expense for banks while greatly reducing accounting transactions and interbank liabilities. So, what does this mean for the average depositor? Nothing. Just because banks don't need to keep liquidity at the Fed, doesn't mean they won't. They just don't need to incur an expense if their liquidity levels dip below the prior rate of 10%. Banks are also required to maintain Contingency Funding Plans (Funding and Liquidity Risk Management -Interagency Guidance) that creates a framework to ensure they maintain sufficient liquidity levels in times of stress and have sufficient contingent liquidity sources to meet their needs in those specific times of stress. Additionally, large banks are subject to the Liquidity Coverage Ratio, which is a requirement of Basel 3 (which are basically international banking accords). This requires Large Banks to maintain sufficient liquid assets to cover 1 month of out going cash flows.
Unlikely at this point. Compared to the 2008 crisis, banks are better capitalized, have better liquidity risk management processes (including the above mentioned contingency funding plans), and hold higher levels of liquidity. Banks are in a better position to defer borrowers, allowing them to recover before they become past due.
No, No, No, A thousand times no. This is the biggest misconception I've see (and honestly, the entire reason for my post). A reserve ratio of 0% does not mean banks can lend an unlimited amount of money. It means they can lend 10% more money (at most). Think of the reserve requirement as the minimum you need to maintain in your checking account before you start incurring maintenance fees. The Fed has simply waived that balance requirement and is waiving all the fees for everyone.
No. Per accounting rules, banks can't lend out money they don't have. For every dollar of assets (loans, investments, cash, etc), they need to have $1 in liabilities (deposits or loans)) or capital equity (surplus, retained earnings, etc). IF a bank has $100 in liabilities/capital, the bank must have $100 in assets. If a bank has $200 in liabilities/capital, they must have $200 in assets. There's a reason we call the balance sheet a balance sheet. Because it needs to balance. Further, banks are constrained by their Capital ratio (Assets divided by capital). This is part of Basel II, Basel III, 12 CFR 3, 12 CFR 6, and various parts of interagency guidance. Leverage ratios are around 9% for Large bank holding companies, and 10% for other bank holding companies (https://www.federalreserve.gov/publications/2018-november-financial-stability-report-leverage.htm). This means banks are leveraged about 10 to 1. This is much different than the financial crisis when it was closer to 20-1. (5%). And certainly much higher than Lehman Brothers, which had a leverge ratio of 31-1 (or 3.2%). I hope this effectively explains why the reserve requirement going to zero doesn't matter for you. Recommended Reading https://www.thebalance.com/reserve-requirement-3305883 https://www.frbdiscountwindow.org/ https://www.fdic.gov/news/news/financial/2010/fil10013.html https://www.investopedia.com/terms/l/liquidity-coverage-ratio.asp https://www.federalreserve.gov/publications/2018-november-financial-stability-report-leverage.htm TLDR: Removing the Reserve Requirement does not allow unlimited lending, eliminates the need for short-term borrowing despite the current nominal cost. Banks have other liquidity and capital constraints. [link] [comments]  |
| Remember that unemployment income is taxable Posted: 27 Mar 2020 12:53 PM PDT The US house and senate have passed the stimulus package, and once it gets signed into law, if you are about to collect unemployment, you will now be receiving $600 more per week for four months than your approved state unemployment. So for example, if you are getting $300 per week, you will now be getting $900 per week. Again, this will last four months. Please remember that unemployment is taxable income. You will need to report it on your 2021 taxes. The money you are receiving is untaxed. Make sure to plan for next year and try to put a little bit of money aside to compensate for the amount you will have to pay on it in 2021. [link] [comments]  |
| PayPal has the worst customer services and disputes process imaginable! Stay away! Posted: 27 Mar 2020 09:12 AM PDT TL;DR I have bought 10 different items from a seller using PayPal's goods and services. Only received 6 damaged items that are in terrible condition. Even though I returned those 6 items, my case is closed in favor of the seller after almost 2 months because of the incompetent people at PayPal. More than three months ago, I have bought 10 different items by using PayPal's goods and services. Initially, seller provided me with the pictures of eight items, and couple days later I asked him to provide pictures of the other 2 items. Well, as you might expect he told me someone stole most of his inventory from his garage, and he does not have those 2 items anymore. Here is the fist Red Flag. He said he will send a partial refund to me for those two items. I said okay. Eventually after 2 weeks, he still did not even ship the other 8 items. I got sad, and told him I don't like what is going on anymore, and I would like to cancel this transaction. He started telling me he is on his way to UPS and about the drop the packages off. He was telling me how much time he and his family spent packing these items. I said okay, just send it and make sure all the items are in perfect condition. Couple days later, I have received three different packages. And, somehow there were only 6 items in those. Obviously, he did not send two of the most expensive items. The items were in such a terrible condition, and I honestly lost my mind. Funnily, he told me that his friends packaged these items and all of these are because of him. As you can expect, everything that he is telling me is contradictory. Got mad and told the seller to provide me with return shipping labels which he did. He sent me three different shipping labels. Using those labels, I put the items back in the packages he sent with and dropped it off at UPS the very next day. I told him to refund me all my money, but he was telling me he needs to sell some items first. After a week of waiting, I asked him again for the refund. He said whether I would accept if he can send me different items. I lost my mind again and told him just refund my money, but he stopped responding, and I escalated the case to PayPal. And what I saw was seriously terrible. He was selling some of the items I have returned on eBay already before providing my refund. Anyway, I have provided PayPal with pictures of the items I received and tracking numbers from return shipping labels. Here comes another incompetent company, UPS. Somehow, they managed to lost one of the packages I sent. And, the seller received two of the packages. Since the seller bought the return shipping labels, UPS told me that they send a paperwork to him for the claim of the lost package which he still did not fill. After all, even though I have provided every single information PayPal asked for, they closed my case in favor of the seller, and I got denied because of that lost package which is not even my responsibility at that point anymore. After all the talk that I had with different dispute agents all telling me that I will got my refund, and this case will be closed in favor of me, they still managed to be the same incompetent company that people are continuously pointing out. Imagine being this incompetent that you can write " This decision was made because we did not receive valid proof or tracking that you returned the merchandise. ". Seriously???? What was the proof of shipping that I send you??? This is a straight up robbery from PayPal. And, I am asking everyone here to point me to the right direction about what I should do so that PayPal won't get away with this. By the way, I just opened a dispute with Amex. At least, they have a really good customer service that can help me for getting my refund back. [link] [comments]  |
| FHA Mortgages For Credit Scores Under ~640 Are No Longer Being Issued Posted: 27 Mar 2020 10:08 AM PDT I am a real estate broker and just wanted to share this. Between yesterday and today I have had all my lenders call me to tell me the same thing: They can't do FHA loans under a certain credit score any more.....the most common I am hearing is 640. The tl;dr reason I am getting from them: Unemployment is skyrocketing, so a lot of people are going to miss mortgage payments. The stimulus bill mandates servicers to advance up to a year of borrower payments on government-guaranteed/insured and conforming mortgages to every borrower that requests forbearance and attests to financial hardship caused by coronavirus. The mortgage services don't want to be left holding the bag and don't have the liquidity to cover the advances. So any FHA loan that looks marginally risky is getting the hook. I had a couple of FHA transactions that were supposed to close next week. Those would-be home buyers literally got a call from their lender saying they could no longer fund the loan. They are now scrambling to try and figure out where they are going to live, while I am calling every lender I know to see if somehow someone can get their loan closed. This shit is about to get crazy. [link] [comments]  |
| Posted: 27 Mar 2020 05:30 PM PDT So obviously, COVID-19 is going to continue to be a big thing over the next month or so (let's be real, probably like 2-3 months), and my lease is up in June...and I'm trying to move to a new apartment in the same city but to a nicer location with cool amenities. I was able to get $1k off of my rent per month with one building that I called, but no other buildings are doing the same. Is it reasonable to just take the offer, or should I wait for another building in a better location? [link] [comments]  |
| Hospital sent me a bill for $9k even though I have insurance. What do I do? Posted: 27 Mar 2020 04:50 PM PDT 2 months ago, I lost hearing in my ear and thought it was ear wax. I asked Reddit for advice and was told to go to the ER. I went and they told me I have ear wax. Now I have a bill for $9k. I literally cannot pay this. What are my options? Edit: One thing I'm wondering is if this could permanently affect me if I can't pay it? Does it just accrue large amounts of interest that I owe if I don't pay it? [link] [comments]  |
| Posted: 27 Mar 2020 05:29 PM PDT i have loans with navient and i pay about 250/month to my loans spread across 7 loans. one loan has an interest rate of 6.8% with a balance of 1,000. should i disregard my other 6 loans and put my $250 to that 6.8% loan? until the government increasing the interest rate again [link] [comments]  |
| I *can* stop paying my student loans, but *should* I? Posted: 27 Mar 2020 02:38 PM PDT So student loan payments are currently suspended. I can stop paying, but I don't know if I should. I pay $79/mo for student loans. I am in PSLF. I owe about $17600. My employment is secure and I am saving over $1000/mo now. I have no other debt. I know I can stop paying, but is there any reason for me to actually stop? It's a fairly small amount of money, I'm contributing towards my savings, and I want to keep getting the qualifying months. Is this reasonable? [link] [comments]  |
| Chase waived my next minimum payment and reversed the last interest charges on my card. Posted: 27 Mar 2020 08:35 AM PDT
I know most people may not benefit from this because you keep your credit cards at $0 balance, but for me this was pretty huge. BIG shout out to Chase. [link] [comments]  |
| I need to replace my SSN card and obtain an ID, but both offices are closed Posted: 27 Mar 2020 02:29 PM PDT Am I screwed? Due to the coronavirus pandemic, both the Florida DMV and Social Security offices are closed until April 19th. I've never had an ID, so I can't order one online. I lost my SSN card, but they require an ID to order a replacement SSN card. I need these documents to complete an I-9 for a work-from-home employer. Is there an alternative here? [link] [comments]  |
| Posted: 27 Mar 2020 07:38 PM PDT Title. I'm assuming I don't put it on my tax return because we are currently filing for the 2019 tax year, which was from Jan 1 2019 - Dec 31 2019. Since I started the job in January of this year, the income I've made through it will be involved in next year's tax return. Do I understand this correct? [link] [comments]  |
| Just got my hours cut in the middle of buying on a house Posted: 27 Mar 2020 02:12 PM PDT Should I tell the bank, pick up a temp job somewhere to make up the difference? For the first time in 2 and a half years at my employer my hours have been cut from 40 back to 32. As soon as this damn lockdown in Michigan ends Ill be back up to 40, regardless, I can easily afford the house either way, but Im worried if the bank asks for more paystubs before closing on the 5/08, the loan will get denied. My income for all of April may very well be 20 percent less than the previous months. This is my first home after looking for about a year, winning the bid, the home inspection went great and Im waiting on the appraisal at the moment. [link] [comments]  |
| Posted: 27 Mar 2020 07:12 AM PDT We were suppose to move at the end of the month, but obviously it can't happen now. While I didn't want him to take this loan out, we were both making enough that we would be able to pay the loan back in about 4 months. Our current landlord won't budge and we either sign a 12 month lease or pay almost $350 more a month to do Month to Month. His company said he should file unemployment until his industry gets better, but our healthcare insurance is only Guaranteed for the next 30 days. We obviously haven't touched the 401k cash so we could put it all back right now, but considering how things are going, he thinks we should hold onto the cash. Any advice is appreciated. Hope everyone continues to stay healthy!!! [link] [comments]  |
| TaskRabbit breaks TV, says Renter’s Insurance will Pay Posted: 27 Mar 2020 05:38 PM PDT I hired TaskRabbit to dismount my TV from my old apartment and mount it into my new apartment; however, they cracked the screen of the TV while transporting it to the new apartment. After corresponding back and forth with customer service, they told me that I should have my own renter's insurance to cover it. Shouldn't TaskRabbit be paying for it instead of my renter's insurance? [link] [comments]  |
| Self-employed partner hasn’t filed taxes in many years Posted: 27 Mar 2020 07:19 PM PDT Advice? He hasn't kept track of income, expenses, etc. I only have the last few years of a bank account to account for income. [link] [comments]  |
| A friend may be screwing himself over for life. Never Filed Taxes. Posted: 27 Mar 2020 12:03 PM PDT Hi all, I recently found out my friend has never filed taxes in his life. He's had a rough go at things and was briefly homeless in his 20's but now in his 30's he stepped up and got a great paying job and truly made something of himself. However, I recently found out during this years tax season that he has never done taxes in his life and is too afraid to start fearing what he owe's may ruin him. Apparently he may be considering to continue to never touch them but did not want to talk about the matter. I'm truly worried about him. Of course now that the stimulus bill is coming to all who filed in 2018 and 2019 my question is this. No matter what, yes he should file his taxes this year and get on track. As a person who was homeless, worked in a factory, and then managed to get into a high paying industry in the last few years, Does he have a lot to fear with what he owes. How should he even begin the process, and if he were to file now, would he qualify for the stimulus? The last part is less important but may help encourage him to file if he gets some assistance financially in case he owes a lot. I want to break down the barrier of fear to get started so that he can get on the right track. [link] [comments]  |
| Posted: 26 Mar 2020 10:58 PM PDT The gym closed right around the time due to coronavirus when I was charged. I tried to call but they are not taking any calls. I sent an email to freeze my account but it was ignored. Should I dispute the charge through my CC and do a chargeback for last week's charge as well as block them from charging me next month? I don't think the gym will be opening here for some time as this city lockdown will continue [link] [comments]  |
| Are my student loans suppose to be labeled as “closed” on credit reports? Posted: 27 Mar 2020 05:04 PM PDT I am a college student that recently got interested in checking up on my credit health. I noticed that on my Experian report, the four student loans that were disbursed over this school year were categorized as "closed" accounts. I went on Credit Karma to double reference and both Equifax and TransUnion have it as "open." Should I dispute this status irregularity with Experian? I'm just concerned that the closed accounts are being negatively factored into my credit score. On the Experian app, my credit score is in the mid 600s. My credit history is basically non existent aside from the student loans that were reported. [link] [comments]  |
| Student here and ineligible for benefits because of school... help? Posted: 27 Mar 2020 01:13 PM PDT Hello r/personalfinance - new guy to this sub reddit here. I recently got denied unemployment benefits due to my "availability for work is limited to hours which will not conflict with your attendance at school". I'm from CT and was discharged and haven't been working since early March. Any one know the proper steps I should take to receive any unemployment compensation? Appreciate any help in advance [link] [comments]  |
| Posted: 27 Mar 2020 05:01 AM PDT I used them in 2019 with no problems. This year, the experience has been a mess -- the site is glitchy, and filed multiple, incorrect returns. After abysmal experience with customer support, I looked around and it looks like I wasn't the only one to have issues this year; see: https://www.consumeraffairs.com/finance/taxactonline.html. I wish I'd come across those reviews earlier. If you used TaxACT before, and were planning to use them again this year -- exercise care, and consider looking elsewhere. [link] [comments]  |
| Posted: 27 Mar 2020 07:13 PM PDT I did my taxes last month and after filing and paying in full my federal taxes through turbotax, it still says I owe the money on the their app. The money came out of my bank account and I can see it on my statement, but it looks like turbotax is telling me otherwise. I tried to create an account on the IRS website to see if it still says I owe, but I can't create an account because I have no way to verify my identity through the options they give me. Is this something where it says i owe until the deadline? Or is something else going on? I'm 20 and don't know the first thing to even start doing in regards to this. Any advice or insight would be very helpful. Thank you [link] [comments]  |
| Posted: 27 Mar 2020 07:10 PM PDT (Texas) My dad is 69 yrs old and the only income my family has. He works at a junkyard that has ~500 customers a day who come and pick parts off of wrecked cars. His boss says that they are an "essential business" because they provide self-service auto parts. (even know you can also buy the same parts online) My dad is at high-risk for severe illness from COVID-19 for two reasons....He is "65 years and older" (69), and he is also immunocompromised. He lives with my elderly mother who also meets the same criteria. So, he made the decision to stay home in order to protect himself and his family. My question is....Can he file for unemployment? Thank you so much for reading this and I would be sooooo greatful for any input or ideas y'all might have. [link] [comments]  |
| For those who have had their accounts closed by Chase Posted: 27 Mar 2020 05:31 PM PDT For the past few days i have been unable to use my funds or withdraw them from an ATM. Then today I woke up to a $0 balance and all of my funds were removed from the account, the charge was listed as "DEBIT DDA CHECK CHARGE". Does this mean they have closed my account and are mailing me a check? Has anyone had this charge on their account before from chase? I tried calling but was on hold for 2 hours and 30 mins and my phone died while waiting. They are low on support due to coronavirus, but im hoping maybe some of you can let me know what the charge means? [link] [comments]  |
| Posted: 27 Mar 2020 02:57 PM PDT As stated, I havent included my direct deposit info on last years return and will not again this year. Can I make a small over payment (late) now for Q4'19 and then include that payment on my tax return so that it is returned to me by direct deposit. It seems this is the only way to share my direct deposit information with the IRS. Any thoughts? [link] [comments]  |
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