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Greece taps public sector cash to help cover March needs

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Greece taps public sector cash to help cover March needs
Greece is tapping into the cash reserves of pension funds and public sector entities through repo transactions as it scrambles to cover its funding needs this month, debt officials told Reuters on Tuesday.Shut out of debt markets and with aid from lenders frozen, Athens is in danger of running out of cash in the coming weeks as it faces a 1.5 billion euro loan repayment to the International Monetary Fund this month.The government has sought to calm fears and says it will be able to make the IMF payment and others, but not said how.At least part of the states cash needs for the month will be met by repo transactions in which pension funds and other state entities sitting on cash lend the money to the countrys debt agency through a short-term repurchase agreement for up to 15 days, debt agency officials told Reuters.However, one government official said they could not be used to repay the IMF unless Athens was able to repay the state entities the cash it borrowed from them.Debt officials sought to play the repos as advantageous for both sides, arguing that the funds get a better return on their cash than what is available in the interbank market.”It is not something new, its a tactic that started more than a year ago and is a win-win solution. Its a proposal, we are not twisting anyones arm,” one official said.In such repo transactions, a pension fund or government entity parks cash it does not immediately need at an account at the Bank of Greece, which becomes the counterparty in the deal with the debt agency.The money is lent to the debt agency for one to 15 days against collateral – mostly Greek treasury paper held in its portfolio – and is paid back with interest at expiry.The lender can always opt to roll over the repurchase agreement and continue to earn a higher return than what is available in the interbank market.One source familiar with the matter has previously said Athens could raise up to 3 billion euros through such repos, but that it was not clear how much of that had already been used up by the government.”There is a sum that has already been raised this way,” the debt official said without disclosing specific numbers.Athens – which has monthly needs of about 4.5 billion euros including a wage and pension bill of 1.5 billion euros – is running out of options to fund itself despite striking a deal with the euro zone to extend its bailout by four months.Faced with a steep fall in revenues, it is expected to run out of cash by the end of March, possibly sooner, though the government is trying to assure creditors it will not default.”We are confident that the repayments will be made in full, particularly to the IMF, and there will be liquidity to get us through the end of the four-month period,” Finance Minister Yanis Varoufakis said during a late-night talk show on Greek TV on Monday. “March is sorted.” [Reuters]
[…]

The Payday Loan Rule Changes That Only Payday Lenders Want …

Image 1425592858-shutterstock_220081786.jpg

Follow the money: payday lenders gave significant campaign money to legislators who are now trying to undo Washington State’s landmark payday lending reforms.dcwcreations / Shutterstock.com

Washington State passed some of the strongest payday lending reforms in the nation in 2009. But now a group of lawmakers want to scrap those reforms in favor of a proposal backed by Moneytree, a local payday lender.

The rule changes they’re going after limit the size and frequency of payday loans and provide a free installment plan option to help borrowers who can’t pay back their loan when it’s due.

According to data from the Department of Financial Institutions, these reforms hit payday lenders hard. In fact, before the reforms took effect, payday loans were available at 603 locations across Washington and lenders were making more than $1.3 billion in loans per year. Last year, there were only 173 locations and it was a $331 million industry.

Now, a proposal, sponsored by Rep. Larry Springer, D-Kirkland, and Sen. Marko Liias, D-Lynnwood, would replace the payday loan system in Washington with a “small consumer installment loan” system that would clear the way for lenders like Moneytree to start offering 6-month to 12-month loans with effective interest rates up to 213 percent.

The proposed law would also increase the maximum size of a loan from $700 to $1,000 and remove the current eight-loan cap, effectively removing the circuit breaker keeping borrowers from getting trapped in a debt cycle.

What’s more, instead of the easy-to-understand fee payday loans we have now, the new loans would have a much more complex fee structure consisting of an amortized 15 percent origination fee, a 7.5 percent monthly maintenance fee, and a 36 percent annual interest rate.

It is incomprehensible, after years of working on payday reforms that finally worked in Washington, that lawmakers would throw out that law and replace it with one created by Moneytree.” says Bruce Neas, an attorney with Columbia Legal Services, a group that provides legal assistance to low-income clients.

Proponents say the new system could save borrowers money. And they’re right, technically, since interest and fees accrue over the life of the loan. However, a loan would need to be paid off in around five weeks or less for that to pencil out—and that seems highly unlikely. In Colorado, which has a similar installment loan product, the average loan is carried for 99 days. What’s more, according the National Consumer Law Center, “loan flipping” in Colorado has led to borrowers averaging 333 days in debt per year, or about 10.9 months.

While numerous consumer advocates have spoken out against the proposal—along with payday loan reform hawks like Sen. Sharon Nelson, D-Maury Island, and even the state’s Attorney General—few have voiced support for it. In fact, in recent committee hearings on the proposal, only four people testified in favor of it:

Dennis Bassford, CEO of Moneytree;

Dennis Schaul, CEO of the payday lending trade organization known as the Consumer Financial Services Association of America;

Rep. Larry Springer, prime House sponsor of the proposal and recipient of $2,850 in campaign contributions from Moneytree executives;

Sen. Marko Liias, prime Senate sponsor of the proposal and recipient of $3,800 in campaign contributions from Moneytree executives.

Springer and Liias aren’t the only state legislators Moneytree executives backed with campaign contributions, though. In the past two years, executives with Moneytree have contributed $95,100 to Washington State Legislature races.

At least 65 percent of the money went to Republicans and the Majority Coalition Caucus. Which is expected, since Republicans have been loyal supporters of Moneytree in the past. When a similar proposal was brought to the Senate floor two years ago, only one Republican voted against it.

More telling is where the remaining money went. Of the $33,150 Moneytree gave to Democrats, $20,500 went to 11 of the 16 Democratic House sponsors of the proposal and $5,700 went to two of the four Democratic Senate sponsors.

Both the Senate and House versions of the proposal have cleared their first major hurdles by moving out of the policy committees. The bills are now up for consideration in their respective chamber’s Rules Committee. The Senate version appears to be the one most likely to move to a floor vote first, since the Republican Majority Coalition Caucus controls the Senate.

Regardless of which bill moves first, payday lenders undoubtedly want to see it happen soon.

The Consumer Financial Protection Bureau, established by Congress in response to the Great Recession, is poised to release their initial draft of regulations for payday lenders. Although the agency’s deliberations are private, it is widely believed the rules will crack down on the number and size of loans payday lenders can make.

Those rules may well affect Moneytree and other payday lenders Washington.

In the likely chance they do, payday lenders could see their profits shrink. Unless, that is, Washington scraps its current system in favor of one carefully crafted by payday lenders looking to avoid federal regulators.

[…]

8 On Your Side: Bill could remove payday loan protections

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LAS VEGAS – Taking out a payday loan is rarely a good idea. Many companies charge high interest rates, and customers can easily get in a trap where they spend years paying off the loans.

If you get a payday loan, be warned. These companies may soon have more leverage over customers. Nevada law offers consumers some protections from payday loan companies, but that could change.

If Senate Bill 123 passes, it would allow payday loan companies that offer long-term loans to sue customers who default on their loans.

“Somebody can get sued after paying for twelve to fourteen months on this loan, and then get sued at the end for more interest,” said consumer advocate Venicia Considine.

Considine says this can hurt payday loan customers who are already strapped for cash.

“The average income nationally of people who go to payday loan lenders is about $22,400 a year,” she said.

Considine says she feels the current laws obligate lenders to ensure anyone they give money to can pay it back. Senate Bill 123 would change that, and it could keep people trapped in a cycle of debt for a long time.

“It’s a lose-lose for the consumer,” she said.

You can voice your opposition to the bill by contacting your state lawmaker.

If you are in trouble with payday loans, the Legal Aid Center of Southern Nevada can help. Their services are free.

If you have a problem you want investigated, contact 8 On Your Side at 702-650-1907.

[…]

Lenders play it safe amid China property woes

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Lenders are expected to stay cautious towards China’s cash-strapped property sector as Shenzhen-based developer Kaisa’s debt woes continue to rattle the market. But they will continue to lend to larger mainland companies.

“Companies from China will remain a major source of business for loan markets this year,” said Sonia Li, head of syndicated loans for Asia at JP Morgan. “But you will see a flight to quality for Chinese borrowers, particularly in light of what is happening in the real estate sector. Lenders will be very cautious to the real estate sector,” she added.

China has become a bigger part of Asia’s loan markets. According to Thomson Reuters data, China was the largest driver for loan growth in the Asia-Pacific region last year, accounting for $141.3 billion in loan volume or about 27% of the total in the region. Infrastructure, project and real estate deals accounted for slightly more than two-thirds of that volume.

Given the increasing exposure banks have to Chinese property, a protracted downturn could have a knock-on effect on the banks. “A lot of mid-sized and big Chinese banks as well as foreign banks have exposure to the China property sector. A big downturn in China real estate market would affect everyone but the mainland banks have the most exposure to the property market,” said Christine Kuo, senior credit officer at Moody’s.

For now, however, the rating agency views Kaisa’s problems as being unique to the company and, at a briefing in Hong Kong on Tuesday, Simon Wong, Moody’s senior credit officer, told reporters that he didn’t think the Shenzhen’s developer’s problems would pose a systemic risk to the sector.

“If the Kaisa case is resolved satisfactorily, such as another developer coming in and potentially buying Kaisa’s assets at fair market value, I think that would also help to ease investors’ concerns,” Wong told reporters.

related

Kaisa given respite but is still in the doghouse Kaisa default triggers broader loan worries Agile woe compounds China’s property problems Cofco Land plans up to $500m placement Loan Week, February 13-18

For now though, investors and lenders are giving the sector a wide berth.

Kaisa had been subject to unexplained bans imposed by the Shenzhen government on the sale of its property projects in Shenzhen. Reports had been circulating that other developers including Fantasia and China Overseas Land & Investment have faced similar bans but the companies have since clarified that the blocked sales are due to administrative procedures by the authorities, and not violations by the companies.

Lenders could also turn wary towards small-cap companies. “China is an important market but we expect more large-cap and higher grade companies this year compared to last year given the concerns over the mid-cap sector,” said Amit Khattar, head of syndicated loans for Asia at Deutsche Bank.

Subordination risk

Kaisa’s problems expose the risks that offshore lenders face. It had initially defaulted on a $51 million loan with HSBC. While it subsequently got a waiver from the British lender, other creditors have frozen some of its onshore bank accounts, and if it came down to a default, onshore lenders would get first dibs on the assets.

Offshore lenders are often subordinated to mainland lenders as the loans are typically issued through offshore holding companies, using the so-called red chip structure.

China’s State Administration of Foreign Exchange (Safe) has made moves to take away some of that subordination risk and, in July last year, relaxed the rules to allow mainland companies to use onshore assets as collateral when raising funds offshore. However, there are restrictions, and Safe has made it clear that the proceeds have to be kept offshore.

“The change in Safe rules means that offshore lenders can get senior secured access to Chinese companies rather than just a red chip structure,” said Khattar. “It is a meaningful development but the number of companies using this has been limited by restrictions over the use of proceeds,” he added.

Lenders have been comfortable lending to offshore holding companies, provided they are perceived to be a strong credit. For example, smartphone company Xiaomi last year tested the market with a debut $1 billion loan, which attracted 29 lenders. Xiaomi is cash rich, with no onshore borrowings.

However, weaker companies are expected to come under more scrutiny now. “Lenders have become more comfortable with loans using offshore holding company structures,” said Deutsche Bank’s Khattar. “But they will be more wary about certain credits,” he added.

This year could be a more challenging one for mainland companies as Taiwanese lenders are keen to keep their exposure to mainland companies down, and could look to diversify to Indian or Southeast Asian companies. “Taiwanese banks were big investors for China loans in the past but they have pretty tight China limits at the moment,” said JP Morgan’s Li.

But amid ongoing market volatility, more companies could start tapping the loan markets as bond yields have risen. “Bond market volatility specially in the high yield market could see more high yield issuers trying to access the loan markets in 2015,” said Khattar.

¬ Haymarket Media Limited. All rights reserved.

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Payday Loans Entrap the Most Vulnerable – Roll Call


Payday Loans Entrap the Most Vulnerable | Commentary

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By Galen Carey

As our economy continues to improve, there is a crushing weight holding many back: payday loans. While state and local leaders have taken up the cause in certain jurisdictions, this is a national problem that requires Congress to act. Unscrupulous lenders lure those who are already facing financial hardship into a debt trap from which it is very difficult to escape.

Drawn by slick marketing, desperate borrowers are induced to accept unfavorable terms they may not fully understand. The cost of a typical payday loan exceeds 300 percent annual percentage rate. By requiring full repayment from the next paycheck, payday lenders virtually guarantee that the borrower will be forced to ask for a new loan, with additional fees and interest, to pay back the old one.

This violates the underwriting standards applied to virtually every other type of loan. Payday loans perpetuate a cycle of debt, poverty and misery.

Three quarters of the fees payday lenders bring in come from borrowers, mostly low income, who have taken out 10 or more loans in a single year. More than half of all payday loans are renewed or rolled over so many times that consumers wind up repaying at least twice the amount they originally borrowed.

We have just come through the busiest season for payday lenders. Their ads promise an easy solution to the pressure of unbudgeted holiday expenses.

Parents understandably want to buy their children Christmas presents, and the lure of readily accessible extra cash masks a real threat to their financial health.

The reality is that a short-term loan almost always creates a debt that the borrower cannot repay in two weeks. Interest and fee payments balloon while the principal remains unpaid. The debt burden often continues long after the Christmas toys have been broken and discarded.

Last October, the National Association of Evangelicals addressed the devastating impact of payday loans with a resolution calling for an end to predatory lending. We are asking churches, charities, employers and government agencies to work together to help our members, neighbors and co-workers in ways that do not exploit them and lead to further misery. Other religious groups, including the Southern Baptist Convention, have made similar appeals.

The Bible prohibits usury, exploitation and oppression of those in need, and there is growing evidence that payday loans, as they are currently structured, often violate biblical justice. Predatory lenders who oppress the poor incur the wrath of God (Exodus 22:21-27). They should apply their expertise and resources to developing stronger communities rather than tearing them down.

Every family needs a rainy day fund to cover unexpected expenses from time to time. Churches should teach the spiritual disciplines of tithing and saving that position members to provide for themselves and generously care for others when special needs arise. It is our responsibility as neighbors and as churches to save and give generously, to provide the neediest among us with every possible opportunity to achieve and succeed. Churches, charities and employers should support households in their communities in times of crisis so as to prevent neighbors from being drawn into long-term debt.

In 2006, Congress passed bipartisan legislation capping the rates on loans issued to service-members at 36 percent annual interest. We need similar leadership from Congress today so that all Americans are protected from financial predators. The Consumer Financial Protection Bureau, an agency established to monitor the increasingly complex array of financial products offered to the American public, plans to unveil a new rule in coming months. We hope the bureau thoroughly investigates the payday industry and establishes just regulations and that Congress supports this process. State agencies should do the same. We need common sense guidelines such as requiring that loans be made at reasonable interest rates, and based on the borrower’s ability to actually repay.

Credit can change lives. It can be a source of opportunity or cause of devastation. How we use and safeguard this powerful tool is our choice. Caring for and lifting up our neighbors is our responsibility.

Galen Carey is vice president of Government Relations for the National Association of Evangelicals.

The 114th: CQ Roll Call’s Guide to the New Congress

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© ReprintsGuest Observer […]

Flight to safety for lenders amid China property woes

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Lenders are expected to stay cautious towards China’s cash-strapped property sector as Shenzhen-based developer Kaisa’s debt woes continue to rattle the market. But they will continue to lend to larger mainland companies.

“Companies from China will remain a major source of business for loan markets this year,” said Sonia Li, head of syndicated loans for Asia at JP Morgan. “But you will see a flight to quality for Chinese borrowers, particularly in light of what is happening in the real estate sector. Lenders will be very cautious to the real estate sector,” she added.

China has become a bigger part of Asia’s loan markets. According to Thomson Reuters data, China was the largest driver for loan growth in the Asia-Pacific region last year, accounting for $141.3 billion in loan volume or about 27% of the total in the region. Infrastructure, project and real estate deals accounted for slightly more than two-thirds of that volume.

Given the increasing exposure banks have to Chinese property, a protracted downturn could have a knock-on effect on the banks. “A lot of mid-sized and big Chinese banks as well as foreign banks have exposure to the China property sector. A big downturn in China real estate market would affect everyone but the mainland banks have the most exposure to the property market,” said Christine Kuo, senior credit officer at Moody’s.

For now, however, the rating agency views Kaisa’s problems as being unique to the company and, at a briefing in Hong Kong on Tuesday, Simon Wong, Moody’s senior credit officer, told reporters that he didn’t think the Shenzhen’s developer’s problems would pose a systemic risk to the sector.

“If the Kaisa case is resolved satisfactorily, such as another developer coming in and potentially buying Kaisa’s assets at fair market value, I think that would also help to ease investors’ concerns,” Wong told reporters.

related

Kaisa given respite but is still in the doghouse Kaisa default triggers broader loan worries Agile woe compounds China’s property problems Cofco Land plans up to $500m placement Loan Week, February 6-12

For now though, investors and lenders are giving the sector a wide berth.

Kaisa had been subject to unexplained bans imposed by the Shenzhen government on the sale of its property projects in Shenzhen. Reports had been circulating that other developers including Fantasia and China Overseas Land & Investment have faced similar bans but the companies have since clarified that the blocked sales are due to administrative procedures by the authorities, and not violations by the companies.

Lenders could also turn wary towards small-cap companies. “China is an important market but we expect more large-cap and higher grade companies this year compared to last year given the concerns over the mid-cap sector,” said Amit Khattar, head of syndicated loans for Asia at Deutsche Bank.

Subordination risk

Kaisa’s problems expose the risks that offshore lenders face. It had initially defaulted on a $51 million loan with HSBC. While it subsequently got a waiver from the British lender, other creditors have frozen some of its onshore bank accounts, and if it came down to a default, onshore lenders would get first dibs on the assets.

Offshore lenders are often subordinated to mainland lenders as the loans are typically issued through offshore holding companies, using the so-called red chip structure.

China’s State Administration of Foreign Exchange (Safe) has made moves to take away some of that subordination risk and, in July last year, relaxed the rules to allow mainland companies to use onshore assets as collateral when raising funds offshore. However, there are restrictions, and Safe has made it clear that the proceeds have to be kept offshore.

“The change in Safe rules means that offshore lenders can get senior secured access to Chinese companies rather than just a red chip structure,” said Khattar. “It is a meaningful development but the number of companies using this has been limited by restrictions over the use of proceeds,” he added.

Lenders have been comfortable lending to offshore holding companies, provided they are perceived to be a strong credit. For example, smartphone company Xiaomi last year tested the market with a debut $1 billion loan, which attracted 29 lenders. Xiaomi is cash rich, with no onshore borrowings.

However, weaker companies are expected to come under more scrutiny now. “Lenders have become more comfortable with loans using offshore holding company structures,” said Deutsche Bank’s Khattar. “But they will be more wary about certain credits,” he added.

This year could be a more challenging one for mainland companies as Taiwanese lenders are keen to keep their exposure to mainland companies down, and could look to diversify to Indian or Southeast Asian companies. “Taiwanese banks were big investors for China loans in the past but they have pretty tight China limits at the moment,” said JP Morgan’s Li.

But amid ongoing market volatility, more companies could start tapping the loan markets as bond yields have risen. “Bond market volatility specially in the high yield market could see more high yield issuers trying to access the loan markets in 2015,” said Khattar.

¬ Haymarket Media Limited. All rights reserved.

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Bipartisan bill puts payday loan industry before people | The Stand

Image moneytree-payday-loans.jpg

By JOHN BURBANK


(Feb. 12, 2015) — If your friend told you that she could get a payday loan of $700, and that the interest would be 36%, plus a small loan origination fee of 15%, plus a monthly maintenance fee of 7.5%, you might advise her to get out her calculator. Here’s why: That $700 loan could cost her $1,687, even if she makes all her payments on time. Right now, under state law, she can get the same loan and it will cost her $795 in all.

Which loan would you choose? That seems like an easy question to answer. But a lot of legislators have failed this test in Olympia. They are sponsoring a bill, HB 1922, to enable MoneyTree to sell “small consumer installment loans,” with high interest, maintenance fees, and origination fees.

Why would these legislators — 36 in the House and 12 in the Senate, both Democrats and Republicans — want to enhance the revenue of the payday loan industry? State Rep. Larry Springer (D-Kirkland) is the prime sponsor of this legislation. He says that “(o)ur current payday lending system is broken. Too often it leaves consumers in a never-ending cycle of debt.”

Unfortunately, HB 1922 makes matters worse, not better, for borrowers.

Rep. Springer may not know how well the law that he helped pass in 2009 reformed payday loan practices. That law leashed in the payday loan industry, with new standards that helped to make sure that people with loans did not get pushed deeper and deeper into debt. The industry didn’t like it, as the total amount of loans fell by more than $1 billion, from $1.3 billion in 2009 to $300 million in 2013. The amount of fees that the industry collected dropped by $136 million annually. The number of payday loan storefronts has fallen from over 600 in 2009 to less than 200 now. The total number of loans has fallen from 3.2 million in 2009 to 870,000 in 2013. That’s a lot of money for people to keep in their communities, rather than giving it to MoneyTree.

But very quietly last year, the owners and executive staff of MoneyTree, principally the Bassford family, dropped $81,700 in campaign contributions to both Democrats and Republicans. Many of the beneficiaries of this largesse are sponsoring the MoneyTree bill, HB 1922. In fact, the chief sponsor in the Senate, Sen. Marko Liias (D-Edmonds) received $3,800 from the Bassfords.

What would be the result of the bill that Rep. Springer and Sen. Liias are pushing? For a $700 loan, what now costs a total of $795 could cost $1,687. The poor person (literally) who gets this loan would end up paying $252 in interest, $105 in origination fees, and $630 in monthly maintenance fees, as well as, of course, the original one-year loan of $700. From 2017 on, the fees on these loans will be automatically raised through the consumer price index.

MoneyTree’s investment of $81,700 in campaigns could result in literally hundreds of millions of dollars in revenue. That’s quite a cost-benefit equation for the Bassfords. How about the working people who take out these loans? Their average monthly income is $2,934, or about $35,000 a year. With this bill, legislators punish the already poor for being poor, while enhancing the wealth of the payday loan perpetrators.

The legislation pretends to be helpful to borrowers by requiring this notice to be included in loan documents: “A SMALL CONSUMER INSTALLMENT LOAN SHOULD BE USED ONLY TO MEET SHORT-TERM CASH NEEDS.” Now isn’t that helpful! What is not helpful is that this bill was scheduled to be voted out of committee Thursday, even before the committee heard the bill on Wednesday, and even before any bill analysis was developed by legislative staff.

Our current payday loan system may be broken from MoneyTree’s perspective. But, while it is not perfect for low-income borrowers, it works, and it is a lot better than the previous system. Perhaps some responsible legislators will slow down the fast-track on the MoneyTree bill, and put people ahead of MoneyTree profits.


John Burbank is the executive director and founder of the Economic Opportunity Institute in Seattle. John can be reached at john@eoionline.org.

[…]

Greece says has no cash problem, to present plan next week

By Renee Maltezou

ATHENS (Reuters) – Greece said on Saturday it had no short-term cash problem and that it will hand its European Union partners a comprehensive plan next week for managing the transition to a new debt deal.

The EU has warned time is running out to avoid a financing crisis in Greece.

The new left-wing government in Athens has rejected the austerity that was forced upon the country by an EU/International Monetary Fund bailout and instead says it wants a “bridge agreement” until it has negotiated a new deal.

“We will present a comprehensive proposal on Wednesday,” Finance Minister Yanis Varoufakis said, referring to a meeting of euro zone finance ministers in Brussels on that day.

Varoufakis was attending a cabinet meeting called to prepare the government’s overall policy programme, which Prime Minister Alexis Tsipras will present to parliament on Sunday.

On Friday, Jeroen Dijsselbloem, who chairs the Eurogroup of euro zone finance ministers, told Reuters that Greece had to apply for an extension of its reform-for-loans plan by Feb. 16 to ensure the euro zone keeps backing it financially.

This is essentially an extension of the current bailout, something Greece has said it does not want and will not accept. It is due a 7.2 billion euro trance from the EU/IMF bailout, which it says it does not want because of the austerity strings attached.

Instead, Athens wants authority from the euro zone to issue more short-term debt to tide it over until a new deal is agreed, and to receive already-agreed profits that the European Central Bank and other central banks have gained from holding Greek bonds.

Greece faces interest rate payments of around 2 billion euros over February and should repay a 1.5 billion euro loan to the IMF in March.

That has raised concerns the country may suffer a cash crunch, but this was dismissed on Saturday by the Greek official in charge of the government’s accounts.

“During the time span of the negotiations there is no problem (of liquidity). This does not mean that there will be a problem afterwards,” Deputy Finance Minister Dimitris Mardas said on Mega TV.

Asked whether the state may suffer a cash crunch if talks drag on until May, the minister said he did not expect the negotiations over a new deal to last that long.

“Even if they did, we can find money,” he said.

(Writing by Jeremy Gaunt; editing by John Stonestreet)

Politics & GovernmentBudget, Tax & EconomyEuropean Union […]

TitleMax Opens 13th Car Title Loan Store in New Mexico

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Getting a title loan with TitleMax means you can get the cash you need while maintaining the use of your vehicle.

Albuquerque, NM (PRWEB) January 20, 2015

TitleMax, one of the nation’s largest and fastest growing car title loan companies, continues to expand westward. It recently opened its 12th location in the Greater Albuquerque – Santa Fe Area and its 13th location in the state of New Mexico. The new store, which opened Friday, January 16, 2015, is located at 1205 N. Riverside Drive, Espanola, NM and can be contacted at (505) 395-2495.

Hours of operation are Monday – Friday from 9:00 a.m. to 7:00 p.m., and Saturday from 10:00 a.m. to 4:00 p.m. Residents in this area can now visit this new store for all of their short-term cash needs.

“The team at our new TitleMax location is excited and ready to help the residents of Espanola obtain the short-term cash loans they need,” said Otto Bielss, Senior Vice President of Operations for TMX Finance. “Getting a title loan with TitleMax means you can get the cash you need while maintaining the use of your vehicle.”

About New Mexico Car Title Loans

A title loan is a fast way for credit-challenged individuals to secure the short-term cash they need. To get a TitleMax car title loan in the state of New Mexico, an individual must have a clear, or lien-free, car title, and a government-issued ID. With these items an individual can obtain a title loan up to $10,000 while still maintaining the use of their vehicle. No insurance is required, there are no credit checks and most loans can be completed in as little as 30 minutes.

There are more than 1,450 convenient TitleMax locations throughout the Southeast, Southwest, Midwest, and West Coast. For more information, or to find a TitleMax near you, visit TitleMax Locations.

About TitleMax

TitleMax, a subsidiary of TMX Finance, provides financial products to people without access to traditional credit alternatives. TitleMax has been a trusted consumer lender for over 17 years, helping hundreds of thousands of people in getting cash when they need it. Since its inception in 1998, TitleMax has grown to over 1,450 stores, spanning 18 states and provides car title loans to over 3,000 people each day.

Please visit http://www.titlemax.com/ for more information on car title loans and how TitleMax can be of service.


[…]

How Paying Student Loan Interest in College Pays Off

School is back in session, and if you’re like most college students, student loans are a fact of life. For many — focused on grades and weekends of relaxation — repaying those loans is something to think about “later,” after graduation and once they’ve entered the work force. But beginning to whittle away the interest on your student loan debt now could make a significant difference to your finances in the future.

“I had no idea what my loans were when I came to college,” Kansas State University junior Hope Abarr says. “My mom signed me up for loans, and it wasn’t until about halfway through freshman year when I started getting emails about them that I started asking questions and trying to figure out the best way to handle them.”

Seven in 10 college graduates in 2012 turned their tassels on the big day saddled with student loan debt, an average of nearly $30,000 per borrower, according to the Institute for College Access & Success. On top of that, many of these graduates struggle to find work.

The Benefits of Paying Interest

Unless your student loan is subsidized, it starts accruing interest right away. And this isn’t just any interest — if you don’t pay it as it accumulates, it’s capitalized, meaning your interest is added to the principal (amount you borrowed), and it now earns interest, too.

“You’re getting a snowball effect because this debt is growing as you kick it down the road,” says certified financial planner Tim Higgins, author of “Pay for College Without Sacrificing Your Retirement.”

Students have the option to pay or defer their interest payments while they are in school. When these payments are deferred and the interest capitalized, the loan balance grows.

“When you delay your payments, you are paying interest on top of interest,” says Higgins, who recommends that students find a way to make interest payments while in school. Though the interest that accumulates if you defer may not seem like a considerable sum, when you’re faced with thousands of dollars in debt upon graduation, every bit helps.

Abarr is a family studies and human services major who plans to go on to nursing school. When she arrived at KSU, she began in the pre-veterinary medicine program but changed majors in part due to the cost of that program. As the first member of her family to attend a four-year college, she says cost has been a consideration at every stage — from choosing a college where she would qualify for in-state tuition, to choosing a major that was more budget-friendly.

She was fortunate to be connected with a service that pairs finance majors with other students to provide personal finance counseling. That’s where she learned about paying on her loans while in school. “I think the interest payments on my unsubsidized loans are around $50 each month, but I try to pay as much as I can on them,” she says.

While interest-only payments don’t affect the largest portion of your student loan debt — your principal — they do hold the snowball at bay. Higgins explains these payments can provide good financial lessons and encourage academic focus by making the college investment clear to students who may otherwise not pay much attention to the cost of school until after graduation.

The U.S. Department of Education reported in September that of all student borrowers who entered repayment in fiscal year 2011, 13.7 percent defaulted or failed to make their payments as scheduled. While this number is down slightly from past years, it illustrates that a good portion of college graduates are struggling to get their student loan debt under control. Making those payments a habit early on could save you from trouble when it’s time to enter the workforce.

Drawbacks to Paying Student Loans While in School

Perhaps the only drawback to paying your interest while in school is the fact the cost may require you to reprioritize. Students don’t typically have much cash. Fortunately, interest-only payments are relatively small. Depending on the amount you’ve borrowed and the interest rate on your loan, your monthly interest-only payment could cost less than a new pair of shoes.

Higgins says college students should consider a job on campus or in the service industry where they can make money to pay interest, increase cash flow for other expenses and build their résumé.

“Get a job on campus or down the street at a coffee shop,” he suggets. “This does two things. One, it allows you to earn some kind of revenue for living expenses but also that can be applied to your student loan interest. Two, it builds your résumé so you can increase your earning potential when you enter the workforce after graduation.”

Abarr has both subsidized and unsubsidized student loans. Though she typically takes 15 credit hours each semester, she also works full time during the summers and part time at the library during the school year.

“Watching my family make bad financial decisions, I’m trying to make choices now that will give me the best chance when I get out of school,” she says.

Depending on your schedule, working may not be possible. For students who have no choice but to wait to pay interest, Higgins suggests they focus on quality internships.

“If you can’t pay at least your interest, you need to focus on how you’ll pay your debt down when you graduate,” he says. “And more than your expensive school, your internships will help you land the kind of job and income you want.”

Most college students take out loans. And with each loan comes the promise of repayment. If you’re a student, positioning yourself to tackle your student loan debt now — whether through making interest payments or boosting your chances of a high-paying career upon graduation — may reduce your risk of default and ensure a more profitable future.

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