May 2015

May's Innovative Connections is all about banking! Putting your money in a bank account can be safe and secure, convenient, cost effective, and can help you save for the future. This month we have resource articles about those areas of banking that are confusing and might be stopping you from opening an account! First, an announcement from the CFPB. Next, we want to introduce you to a state-wide resource that we helped bring to life, called Bank On Oregon. We have an article about how garnishments might effect your banking, and an article about overdraft protection and how to avoid them. Finally, an article about banking as a youth!

All the best,

Innovative Changes

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The CFPB takes action against PayPal

On May 19th, the Consumer Financial Protection Bureau announced that they would take cfpb legal action against PayPal for deceptive and harmful business practices. The CFPB alleges that PayPal engaged in a number of illegal practices including enrolling consumers in services without permission, deceptive advertising, failing to honor promotions and inaccurate billing. You can read the full report here. It is always important to check your billing information thoroughly even from companies and organizations that you trust. If discrepancies arise, know your rights and report the company to the CFPB here or the Federal Trade Commission here.

Credit Tip

Did you know that consistency can help keep your credit safe? Using the same variation on your name each time you apply for credit can help ensure that your report isn't mixed up with someone with a similar name and date of birth. For example, if your name is Maria Elena Marquez Gonzales, you might choose to use Maria E. Marquez Gonzales each time, rather than Maria Elena Marquez or M. E. Marquez-Gonzales. That way, if someone else's information DOES accidentally end up on your report, you can say that you always use the same name variation, which might make it faster or easier to get your report corrected.

Find out more about building, protecting, and repairing credit in our workshop series, or in our credit builder loan program.

Bank On Oregon

Bank On Oregon helps people find safe and affordable checking and savings accounts

that will work for their needs. Bank On Oregon was modeled after Bank On programs

across the country. In Oregon the State Department of Consumer and Business Services teamed up with banks, credit unions and financial empowerment organizations like Innovative Changes. You can get started today by visiting bankonoregon.org to find a participating bank or credit union near you. These banks and credit unions offer a specialized set of services including bank accounts for people who have negative histories on Chexsystems, people who don't have social security numbers, and people who have poor credit. Whether you are looking for a second chance bank account, a bank account you can open with alternative forms of identification, or a bank account with the lowest minimum balance and fees, you can find it at Bank On Oregon.

For more information and resources about successful banking, attend our banking class, held every month at our Lloyd center office.

5 things to know about garnishments and your bank account

by Andrea Kerwin

According to the Consumer Financial Protection Bureau, there are two types of garnishment. Wage garnishment, which is when your earnings are garnished to pay a debt, and non-wage garnishment, which is when money in a bank account is garnished to pay a debt. If you are concerned about non-wage garnishment, here are five things to know.

Debt collectors who sue you in court and win may be able to freeze and take funds from your bank account or garnish wages. The court's judgment will state the amount of money you owe. A later court order may also state how much may be taken from your bank account or garnished wages.
Always show up to court. If you don't respond to a legal complaint, you will lose your chance to defend yourself and you may find that a judgment is entered against you, resulting in garnishment. If someone sues you, or if someone has obtained a judgment against you and you are unsure of what to do, talk to an attorney. Legal Aid provides free or low cost legal consultation and advice.

Continue reading here!

Youth Banking and Bank Accounts

As a young person who has been banking for several years, I believe it is very important to have a bank account with a checking and savings. I've used Bank of America since I was 16. They have been great to me over the years and I don't think I would change. I have my direct deposit set up to link to my checking and savings, which basically splits my check in half and puts money in each account.

Being banked as a youth can give you the responsibility and discipline to manage your money, and nobody can tell you how to spend it. Choosing the right bank for you can be tough. Rivermark Credit Union, Oregonians Federal Credit, Bank of West, Umpqua Bank, Albina Community Bank, and many more, are banks and credit unions that offer youth accounts with little to no fees.

Read more about youth banking here!

Overdraft Protection

Did you know that overdraft protection programs are optional? If you decline to enroll in the overdraft protection program, the bank will decline checks or ATM transactions or debit card purchases when there is not enough money in your bank account. The resulting Not Sufficient Funds (NSF) may have a fee attached to it, but it most it is a one-time fee, not something accumulating daily. Most of us are overly optimistic about our money situation so we think we'll never need overdraft protection, but the reality is, it's used often and it is very expensive. Check out these other tips from the Consumer Financial Protection Bureau to find out how you can reduce or eliminate overdraft fees.

Link your checking account to a savings account. If you overdraw your checking account, your bank will take money from your linked savings account to cover the difference. You may be charged a transfer fee when this happens, but it's usually much lower than the fee for an overdraft.

Ask your financial institution if you're eligible for a line of credit or linked credit card to cover overdrafts. You may have to pay a fee when the credit line is tapped, and you will owe interest on the amount you borrowed, but this is still a much cheaper way to cover a brief cash shortfall.

Track your balance as carefully as you can and sign up for low balance alerts to let you know when you're at risk of overdrawing your account. If you have regular electronic transfers, such as rent, mortgage payments or utility bills, make sure you know how much they will be and on what day they occur. You also need to know when the funds you have deposited become available for your use.