The Congressional Budget Office in 2010 predicted that the removal of private lenders from the student loan market would save taxpayers about $58 billion in a decade, but taxpayers are expected to pay more than $3 billion in the next 10 years in what the Wall Street Journal editorial board calls "the biggest accounting fraud in history." The severe delinquency rate is at 35%, they write; and student borrowers as a whole currently only pay down their balance 1% each year, according to Bloomberg News.
President Donald Trump says he is reviewing "various tax reductions," including cutting the payroll tax and indexing the capital gains tax to inflation. He has rejected the idea that the US is headed into a recession, touting the low unemployment rate and the amount the stock market has risen since he took office.
Goldman Sachs CEO David Solomon said in a memo to employees that he expects his bank to be a "leader in our consumer business" as the company opened up its co-branded credit card with Apple to all US residents. Goldman Sachs entered the retail banking sector with Marcus, its online bank that debuted three years ago.
Lenders made $45 billion in unconventional mortgage loans to borrowers in 2018, the most in ten years, according to Inside Mortgage Finance. Many of the loans were made by nonbank lenders, but retail banks such as JPMorgan Chase and Citigroup are also offering the loans.
US households may spend up to $1,000 more a year due to the ongoing trade disputes between the US and China as a new round of tariffs will take effect on Sept. 1, according to an analysis by JPMorgan Chase. President Donald Trump said the new round of tariffs won't apply to commonly purchased goods such as shoes and electronics, but that decision will not lessen their effect, according to the analysis.
Increased use of artificial intelligence in the financial-services industry is expected to eliminate certain human jobs. However, recruitment agencies report an increase in opportunities for people with AI expertise, while LinkedIn reports a surge in banks' search for such personnel.
Floridians are being warned by the state attorney general about phishing emails linked to websites where users are told they can file a claim in the Equifax data breach. Attorney General Ashley Moody warned that the emails are designed to collect personal information, and she urged anyone wanting to file a claim to use the Equifax breach settlement site.
Economists expect Federal Reserve Chairman Jerome Powell to suggest the central bank is receptive to further interest-rate decreases when he speaks Friday at an annual gathering in Jackson Hole, Wyo. Powell is scheduled to speak on challenges confronting monetary policy.
Consumer Bankers Association President and CEO Richard Hunt said he hopes the Consumer Financial Protection Bureau's new student loan ombudsman will focus on the federal student loan program, which needs improvements. Robert Cameron was named the CFPB's private education loan ombudsman, a title that suggests the agency's only focus will be on loans made by financial institutions.
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