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Apache is functioning normally

July 24, 2023 by Brett Tams

Today we’re embarking on a unique journey – diving into the intriguing world of superstitions. One superstition, in particular, has caught our eye: the belief that an itchy left palm indicates a lottery of jackpot win on the horizon. Now, that’s quite a claim! So, get ready as we unravel this cultural phenomenon’s truth, fact by fact, itch by itch.

A World Rich with Superstitions

Superstitions, by definition, are beliefs or practices resulting from ignorance, fear of the unknown, trust in magic, or chance. Throughout history, they’ve guided people’s actions, especially when it comes to attracting wealth or good fortune. Superstitions and signs of good luck are as varied and colorful as human cultures themselves. Here are a few widely recognized ones from around the world:

1. Ringing in the New Year: In many cultures, the New Year is seen as a fresh start, and various superstitions and traditions are associated with ensuring good luck for the coming year. In Spain, for instance, people eat 12 grapes at midnight, each grape representing good luck for one month of the coming year. In the southern United States, eating black-eyed peas on New Year’s Day is considered to bring prosperity.

2. Knocking on Wood: This is a common superstition in Western cultures used to ward off bad luck after making a favorable prediction or boast, or when one mentions good fortune that one has had so far. The idea is that by knocking on wood, you’re seeking protection from the “evil spirits” that might hear and ruin your good luck. It’s believed that this superstition may have come from ancient pagan traditions where certain trees or groves were thought to be the homes of benign spirits or gods.

3. Carrying a Rabbit’s Foot: This is another common symbol of good luck in many Western cultures, especially in North America. It’s thought to originate from African-American folk magic known as “Hoodoo”. It’s typically the left hind foot of a rabbit that is considered lucky, and even more so if the rabbit was killed in a cemetery under a full moon.

4. Four-Leaf Clovers: These are considered to be a sign of good luck in Irish tradition. Each leaf in the clover symbolizes something: the first for faith, the second for hope, the third for love, and the fourth for luck. Finding a four-leaf clover is considered particularly lucky because they are rare.

5. Lucky Number Seven: In many cultures, the number seven is considered lucky. It’s a significant number in various religions and cultures. There are seven days in a week, seven continents, seven colors in a rainbow, and seven notes on a musical scale, which all contribute to the positive connotations of the number.

6. Horseshoes: In many cultures, horseshoes are considered symbols of good luck due to their association with horses, which were often seen as symbols of speed, power, and protection. The luck of the horseshoe is thought to work best when it’s hung in a U shape so it can “collect” good luck.

7. Money Plant: In the Hindu religion, the Money Plant (Epipremnum aureum, also known as Golden Pothos, Devil’s Ivy, or Silver Vine) holds a special place. This vining plant, common as an indoor houseplant worldwide, is considered a symbol of good luck and prosperity.

The association of the Money Plant with wealth comes from a popular belief rooted in Vastu Shastra – the traditional system of architecture in India, akin to Chinese Feng Shui. According to Vastu, certain plants promote positive energy in the environment, and the Money Plant is one of them.

The superstition around the Money Plant is connected to Goddess Lakshmi, the Hindu deity of wealth, fortune, and prosperity. It’s believed that nurturing a Money Plant at home can attract the blessings of Goddess Lakshmi and pave the way for a prosperous life. To this end, some people even practice a ritual of wrapping the plant’s creeper around a coin and placing it in the pot, symbolizing the growth of wealth.

However, like all superstitions, it’s important to remember that these beliefs aren’t scientifically validated. The positive impact of keeping houseplants, including the Money Plant, can be more accurately attributed to their air-purifying properties and the psychological benefits of being around greenery. The superstition involving the Money Plant and Goddess Lakshmi provides an interesting insight into the cultural practices tied to prosperity in the Hindu tradition.

Origins of the Itchy Left Palm Superstition

The old wives’ tale regarding an itchy left palm is steeped in history and varies from culture to culture. The belief in this particular itch’s predictive power seems to have originated in Europe, especially in the British Isles.

There, it was believed that if a person rubbed their itchy left palm on wood, it would assure the arrival of money. The superstition was later carried across the Atlantic and became fairly well-known in the United States, too.

Why the left hand specifically? In many cultures, the left side is considered to be less lucky or even negative. In Christianity, for instance, the left hand is often associated with betrayal – consider the seating arrangement at the Last Supper, where Judas Iscariot is often depicted sitting to Christ’s left.

The left-hand itching belief is also tied to the distinction between giving (associated with the right hand) and receiving (associated with the left hand). This can be found in many cultures globally, where the right hand is traditionally used for giving or paying out money, while the left hand receives it. So, an itching left palm would signify money coming in, while right hand itching could suggest money going out.

Cultural Differences

So, what does it mean when your left hand itches? In many cultures, an itchy left palm implies unexpected money coming your way. How did this superstition begin? Some believe it traces back to Saxo Grammaticus, a Danish historian who mentioned ‘itching palms’ in relation to greed. For others, it’s an old wives’ tale passed down generations. But does the superstition differ for men and women? Not typically. The interpretation of the left palm itching is usually consistent across genders.

Now, I bet you’re thinking, “What about the right hand itching?” Interestingly, in some cultures, an itchy right palm signifies that money is going out, hinting at potential bad luck. Don’t worry, though – it’s just a superstition!

Differences Between Men and Women

The superstition about an itching left hand indicating incoming wealth or financial windfall doesn’t specify any gender differences. The belief is generally applied to all individuals, regardless of their gender.

However, the way this superstition is interpreted or applied may vary depending on cultural norms or societal roles. For example, in some societies where women are traditionally homemakers and males are seen as the primary earners, an itchy left hand in a man might be more likely to be associated with an increase in salary or a profitable business deal. Meanwhile, for a female, it could be linked to her husband’s earnings or seen as an indicator of good luck around the home.

On a medical level, certain conditions causing itchy palms like hand eczema or psoriasis do not discriminate between men and women. However, it is noteworthy to mention that autoimmune diseases (including psoriasis) are generally more common in women than men, which might indirectly affect the prevalence of symptoms like itchy palms.

Medical Reasons for Itchy Palms

There can be a multitude of reasons why your palms may itch, and while we’d love it to be a sign of an impending windfall, it’s more often related to skin conditions or underlying health issues. Here are a few possible causes:

Dry skin: Dry skin, or xerosis, can make your palms itchy. This condition can result from environmental factors like cold, dry weather, or overwashing your hands.

Eczema: Eczema, or atopic dermatitis, is a condition that causes your skin to become itchy, red, and dry. Dyshidrotic eczema specifically affects hands and feet and could lead to an itchy palm.

Psoriasis: This is a chronic autoimmune condition that can cause a buildup of skin cells and form scaly patches on your skin. Palm psoriasis can make your palms itchy and want to scratch them.

Allergic reaction: Contact dermatitis is a skin reaction that happens when you touch a substance that irritates your skin or causes an allergic reaction, such as certain types of metals, soap, or plants.

Diabetes: In some cases, diabetes can lead to itchy skin, including the palms, due to poor blood circulation or yeast infections that are common in people with diabetes.

Liver disease: Itchy skin can be a symptom of liver disease. The itchiness is likely due to your liver’s inability to filter toxins from your body efficiently.

If your itchy palms persist or cause concern, it’s always best to seek medical advice.

Other Non-Medical Reasons for Itchy Palms

Outside of medical causes, people often attribute itchy palms to various superstitions and beliefs. Here are a few:

Astrology: Some people believe that itchy palms can be related to the movement of the planets or a particular person’s horoscope.

Energy and Chakras: In certain spiritual practices, itchy palms might suggest that you’re coming into contact with certain energies, or experiencing a blockage or overactivity in your hand chakras.

Psychic Phenomena: Some people believe that itchy palms could be a sign of a psychic phenomenon. They might think that their left palm itches when someone is thinking of them or when something significant is about to happen in their lives.

Spiritual Communication: In certain belief systems, physical symptoms like itching are interpreted as messages from the spiritual realm. An itchy palm could be taken as a sign or message from a spirit guide.

It’s important to note that while these beliefs are held by some, they’re not supported by scientific evidence. They offer a window into the fascinating ways that different cultures interpret and ascribe meaning to everyday physical experiences.

Itchy Palm Lottery Win Stories

When it comes to left hand itching and lottery winners, the tales are as intriguing as they are varied. Let’s delve into a few of these stories.

Mary Shammas

A popular tale when it comes to the itchy left palm superstition and lottery wins involves Mary Shammas, a Brooklyn grandmother who credited her left hand’s itch for her good fortune.

In 2010, Mary Shammas was riding on a Brooklyn bus when her left palm began to itch. Remembering the old superstition her mother had told her about – that the left hand itching meaning, it that money is on its way – she decided to act upon it. She immediately asked her daughter to purchase a lottery ticket using family members’ birthdays as the numbers.

The result? A whopping $64 million New York Lottery jackpot – one of the biggest in the state’s history at the time.

This tale has undoubtedly added fuel to the fire of the left hand itching superstition. However, while the story is truly remarkable and memorable, it’s important to take it in context. Mary’s win was more about chance and the decision to purchase a lottery ticket than the itch itself. It’s a classic example of “post hoc, ergo propter hoc” reasoning – Latin for “after this, therefore because of this.” This logical fallacy assumes that because one event happened after another, then the first must be the cause of the second. The itching of Mary’s left palm occurred before the lottery win, but it did not cause the win.

So, while Mary’s story is indeed an entertaining tale of an itchy left palm leading to lottery luck, it doesn’t offer empirical evidence to support the superstition. Just like other similar anecdotes, it serves to highlight how we, as humans, love to find patterns and establish cause-effect relationships, even when they’re a product of random chance.

Donald Pittman

from North Carolina, claimed his left palm itch was the reason behind his purchase of a $5 lottery ticket that won him a staggering $200,000 in 2016. Pittman stated that whenever his left hand itches, money’s coming. And this time, it did.

But can we establish a direct connection between his itchy palm and the win? The fact is, it was Pittman’s decision to buy a lottery ticket that led to his win, not the itching per se. There’s no scientific proof linking physical symptoms to a future event. So, while it’s an exciting narrative, it seems more about chance and coincidence than causation.

Melissa Ede

Melissa Ede, a taxi driver from Hull, England, scooped a £4m lottery win in 2017. She shared that she often experienced itchy hands before something ‘big’ happened, making a link between the itch and her major win.

It’s possible that Ede’s claim might be based on the Baader-Meinhof phenomenon, where one stumbles upon some obscure piece of information—often an unfamiliar word or name—and soon afterwards encounters the same subject again, often repeatedly. Any small itch before a ‘big’ event may stand out more in her memory due to this phenomenon, leading her to make a connection where none exists.

In all these cases, the common thread is that these individuals chose to attribute their good fortune to an itchy hand, but this is a matter of personal belief rather than empirical fact. There’s no denying these are fun, entertaining stories, but they shouldn’t be taken as evidence of a left hand itch being a legitimate sign of lottery luck. Instead, they serve as fascinating examples of how humans seek patterns and causality, even in the face of pure chance.

Coincidence or Causation?

It’s easy to see a correlation where one might not exist. In the cases of Pittman and our Reddit friend, it seems more like a coincidence than causation. As humans, we’re prone to remember instances that confirm our beliefs (like getting lottery winnings when our hand itched) and forget the ones that don’t (all the times our hand itched, and we didn’t win). This is a cognitive bias known as the “confirmation bias.”

Also see: Money traps people often fall for

The Mathematical Reality of Lotteries

Playing the lottery can be a fun pastime, but it’s critical to understand the mathematics behind it. Here are some key points to consider:

Odds of Winning: The odds of winning a major lottery such as the Powerball or Mega Millions are incredibly slim. For instance, the chances of winning the Powerball grand prize are approximately 1 in 292.2 million. That means you’re about 20 times more likely to be struck by lightning in your lifetime than to win the Powerball.

Expected Value: The expected value of a lottery ticket, which is the average amount of money you would win if you played the lottery an infinite number of times, is usually negative. This means that in the long run, you’re expected to lose money.

Probability Theory: The lottery is a game of independent events. This means that each draw is independent of the previous one. So the idea of a “due number” that has to come up soon because it hasn’t been drawn recently is a misconception.

Law of Large Numbers: While in the short run, outcomes might deviate from the expected result; in the long run, the outcomes will converge to the expected result. In the case of a lottery, the more you play, the more likely you are to lose.

The lottery, despite the dreams it evokes, is a game of chance with highly unlikely odds. If you play, play responsibly, and never view it as a means to fix financial troubles or secure a stable future. Remember, an itching palm – left or right – doesn’t change the statistical reality of your lottery number being drawn.

Superstition and Reality: Finding the Balance

Superstitions like the itchy left palm can add some fun to our routines, but it’s vital not to let these beliefs guide our financial decisions. The thrill of buying a lottery ticket with the hope of winning big can be a rush, but it shouldn’t overshadow the need to save money and live frugally.

The world of superstitions is a fascinating one, offering a glimpse into human psychology and the patterns we try to find in life’s unpredictability. The belief that an itchy left palm means money is coming is just one such example. But remember, whether it’s the itchy right hand indicating potential loss or an itchy left palm suggesting impending wealth, these are just superstitions, not fact.

Financial responsibility remains key, regardless of whether your palm itches or not. So, the next time your left hand itches, before rushing to buy a lottery ticket, remember this article and maybe just reach for some good ol’ moisturizer for that dry skin instead.

What’s your experience with this superstition? Do you have a money superstition of your own? Let’s continue the conversation about the enthralling world of superstitions and financial responsibility in the comments.

Source: pennypinchinmom.com

Apache is functioning normally

July 24, 2023 by Brett Tams

A 401(k) loan allows you to borrow money from your retirement savings and pay it back to yourself over time, with interest. While this type of loan can provide quick access to cash at a relatively low cost, it comes with some downsides. Read on to learn how 401(k) loans work, when it may be appropriate to borrow from your 401(k), and when you might want to consider an alternative source of funding.

What Is a 401(k) Loan & How Does It Work?

A 401(k) loan is a provision that allows participants in a 401(k) plan to borrow money from their own retirement savings. Here are some key points to understand about 401(k) loans.

Limits on How Much You Can Borrow

The Internal Revenue Service (IRS) sets limits on the maximum amount that can be borrowed from a 401(k) plan. Typically, you can borrow up to 50% of your account balance or $50,000, whichever is less, within a 12-month period.

Spousal Permission

Some plans require borrowers to get the signed consent of their spouse before a 401(k) loan can be approved.

You Repay the Loan With Interest

Unlike a withdrawal, a 401(k) loan requires repayment. Typically, you repay the loan (plus interest) via regular payroll deductions, over a specified period, usually five years. These payments go into your own 401(k) account.

Should You Borrow from Your 401(k)?

It depends. In some cases, getting a 401(k) can make sense, while in others, it may not. Here’s a closer look.

When to Consider a 401(k) Loan

• In an emergency If you’re facing a genuine financial emergency, such as medical expenses or imminent foreclosure, a 401(k) loan may provide a timely solution. It can help you address immediate needs without relying on more expensive forms of borrowing.

• You have expensive debt If you have high-interest credit card debt, borrowing from your 401(k) at a lower interest rate can potentially save you money and help you pay off your debt more efficiently.

When to Avoid a 401(k) Loan

• You want to preserve your long-term financial health Depending on the plan, you may not be able to contribute to your 401(k) for the duration of your loan. This can take away from your future financial security (you may also miss out on employee matches). In addition, money removed from your 401(k) will not be able to grow and will not benefit from the effects of compound interest.

• You may change jobs in the next several years If you anticipate leaving your current employer in the near future, taking a 401(k) loan can have adverse consequences. Unpaid loan balances may become due upon separation, leading to potential tax implications and penalties.

How Is a 401(k) Loan Different From an Early Withdrawal?

When you withdraw money from your 401(k), these distributions typically count as taxable income. And, if you’re under the age of 59½, you typically also have to pay a 10% penalty on the amount withdrawn.

You may be able to avoid a withdrawal penalty, if you have a heavy and immediate financial need, such as:

• Medical care expenses for you, your spouse, or children

• Costs directly related to the purchase of your principal residence (excluding mortgage payments).

• College tuition and related educational fees for the next 12 months for you, your spouse, or children.

• Payments necessary to prevent eviction from your home or foreclosure

• Funeral expenses

• Certain expenses to repair damage to your principal residence

While the above scenarios can help you avoid a penalty, income taxes will still be due on the withdrawal. Also keep in mind that an early withdrawal involves permanently taking funds out of your retirement account, depleting your nest egg.

With a 401(k) loan, on the other hand, you borrow money from your retirement account and are obligated to repay it over a specified period. The loan, plus interest, is returned to your 401(k) account. During the term of the loan, however, the money you borrow won’t enjoy any growth.

Recommended: Can I Use My 401(k) to Buy a House?

Pros and Cons of Borrowing From Your 401(k)

Given the potential long-term cost of borrowing money from a bank — or taking out a high-interest payday loan or credit card advance — borrowing from your 401(k) can offer some real advantages. Just be sure to weigh the pros against the cons.

Pros

• Efficiency You can often obtain the funds you need more quickly when you borrow from your 401(k) versus other types of loans.

• No credit check There is no credit check or other underwriting process to qualify you as a borrower because you’re withdrawing your own money. Also, the loan is not listed on your credit report, so your credit won’t take a hit if you default.

• Low fees Typically, the cost to borrow money from your 401(k) is limited to a small loan origination fee. There are no early repayment penalties if you pay off the loan early.

• You pay interest to yourself With a 401(k) loan, you repay yourself, so interest is not lost to a lender.

Cons

• Borrowing limits Typically, you are only able to borrow up to 50% of your vested account balance or $50,000 — whichever is less.

• Loss of growth When you borrow from your 401(k), you specify the investment account(s) from which you want to borrow money, and those investments are liquidated for the duration of the loan. Therefore, you lose any positive earnings that would have been produced by those investments for the duration of the loan.

• Default penalties If you don’t or can’t repay the money you borrowed on time, the remaining balance would be treated as a 401(k) disbursement under IRS rules. This means you’ll owe taxes on the balance and, if you’re younger than 59 1 ⁄ 2, you will likely also have to pay a 10% penalty.

• Leaving your job If you leave your current job, you may have to repay your loan in full in a very short time frame. If you’re unable to do that, you will face the default penalties outlined above.

Alternatives to Borrowing From Your 401(k)

Because withdrawing or borrowing from your 401(k) comes with some drawbacks, here’s a look at some other ways to access cash for a large or emergency expense.

Emergency fund Establishing and maintaining an emergency fund (ideally, with at least three to six months’ worth of living expenses) can provide a financial safety net for unexpected expenses. Having a dedicated fund can reduce the need to tap into your retirement savings.

Home equity loans or lines of credit If you own a home, leveraging the equity through a home equity loan or line of credit can provide a cost-effective method of accessing extra cash. Just keep in mind that these loans are secured by your home — should you run into trouble repaying the loan, you could potentially lose your home.

Negotiating with creditors In cases of financial hardship, it can be worth reaching out to your creditors and explaining your situation. They might be willing to reduce your interest rates, offer a payment plan, or find another way to make your debt more manageable.

Personal Loans Personal loans are available from online lenders, local banks and credit unions and can be used for virtually any purpose. These loans are typically unsecured (meaning no collateral is required) and come with fixed interest rates and set terms. Depending on your lender, you may be able to get funding within a day or so.

The Takeaway

Borrowing from your 401(k) can provide short-term financial relief but there are some downsides to consider, such as borrowing limits, loss of growth, and penalties for defaulting. It’s a good idea to carefully weigh the pros and cons before you take out a 401(k) loan. You may also want to consider alternatives, such as using non-retirement savings, taking out a home equity loan or line of credit, or getting a personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2023 winner for Best Online Personal Loan overall.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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Source: sofi.com

Apache is functioning normally

July 24, 2023 by Brett Tams

There’s more to banking than low monthly fees, high yield savings, and a large ATM network. More Americans today seek banks and credit unions that align with their values when it comes to sustainability and social responsibility.

The U.S. banking system tends to disregard lower income and rural communities, with traditional banks establishing multiple branches in the country’s largest and wealthiest cities. The most socially responsible banks, on the other hand, provide online banking, low monthly fees, and no minimum deposit requirements, making them accessible to lower income individuals and families. They may also support efforts to help lower income individuals qualify for personal loans, auto loans or mortgages at fair interest rates.

But that’s not all that comes with socially responsible banking. Socially responsible banks emphasize financial literacy for those in their local community. They might also consider their organization a green bank, committed to fighting climate change and avoiding projects that support fossil fuels.

10 Best Socially Responsible Banks and Credit Unions

The best socially responsible banking institutions combine sustainability, accessibility, transparency and ethics to help make the world a better place. Yet, you won’t sacrifice top-notch personal checking and savings or even high-quality business banking when you choose one of the financial institutions on our list. You can have the best of all worlds – and do what’s best for the world – by choosing a socially responsible bank or credit union.

1. Aspiration: Best for Online and Mobile Banking Services

Aspiration is not a bank. But it’s one of the best cash management accounts offered anywhere online, with no monthly fee and a host of money management features. The Aspiration Plus Spend Save account that offers 3% interest on savings.

Aspiration is a certified B-Corp that shows its commitment to socially responsible banking with a variety of programs. Aspiration will plant a tree each time you round up a debit card purchase to deposit the difference in your Save account. It pays 3% to 5% cash back on debit card purchases with companies that are members of the Conscience Coalition, a group of small businesses devoted to social responsibility and sustainability.

Aspiration offers two accounts: One asks members to “Pay-What-Is-Fair,” which means you can use the account for free if you choose. Aspiration Plus costs $7.99 monthly or $71.88 annually (save $24 when you pay upfront.) Save accounts in the Pay What Is Fair model earn 1% APY, while Aspiration Plus savings accounts earn 3% APY.

2. Amalgamated Bank: Best for Investment Planning

Amalgamated Bank has branch locations in the nation’s largest cities: Boston, New York, San Francisco and Washington D.C. The bank offers personal checking and savings accounts with no monthly fees.

Amalgamated Bank offers four checking account tiers, including three interest bearing accounts. Two of the accounts have no minimum opening deposit. If you choose the interest earning Give-Back Checking account, you’ll earn a high APY of 0.90% – 0.95%, with an additional contribution of one-half of your interest earnings going to the charitable organization of your choice.

In addition to its choices in checking and savings accounts, Amalgamated Bank stands out when it comes to helping new retail investors choose ESG companies to invest in and plan for their future.

3. Spring Bank: Best for New Yorkers

Hailed as New York’s first B Corp bank, Spring Bank offers personal and business banking online and at branches in Harlem and the Bronx. The Green Checking account offers no monthly fee with direct deposit, paperless statements and no overdraft fees. If you need an account to write checks, you’ll want to choose the Basic Checking account.

Spring Bank deposits are insured by the Federal Deposit Insurance Corporation, up to $250,000 per depositor, per account. But the bank works with the IntraFi Network to also insure multi-million dollar deposits across multiple reputable U.S. banks.

Spring Bank offers CDs with terms from 90 days up to five years with a minimum deposit of just $250 and interest rates ranging from1.50% APY up to 3.25% APY. The bank also has a high-yield Vacation/Club savings account for short-term savings.

Spring Bank ranks in the top 5% of all 3,000 B Corps across the world and earned awards for its Governance and Customer Service in 2022. The company strives to provide affordable financial products, enabling its customers to avoid what it calls “fringe” financial products like check-cashing services and payday loans.

The bank also supports small businesses in New York and beyond with business checking accounts, money market accounts, and business loans.

4. Beneficial State Bank: Best for West Coast Residents

With seven locations across California, Oregon, and Washington, Beneficial State Bank is the B Corp bank of choice for those on the West Coast. The bank’s majority owner is Beneficial State Foundation, a nonprofit organization serving the public interest.

Beneficial State Bank offers three checking accounts, all with a $50 minimum opening balance and a low monthly service charge. eChecking waives the monthly fee if you sign up for eStatements. Checking and Interest Checking products have low monthly service charges that are easy to waive if you meet certain criteria. The bank also has savings, money market, CD, and IRA accounts to help you meet your long-term and short-term savings goals.

With an emphasis on ethical, equitable banking, Beneficial State Bank is a green bank that does not support or lend fossil fuel companies. The bank shows where every percentage of your deposit goes and says that 75% of its lending occurs within its mission categories. The other 25% supports other categories, but never to projects or organizations that cause harm to the planet or the people on it.

Some of the bank’s top lending categories for businesses and consumers include environmental sustainability, affordable housing, auto loans with fair interest rates, and health and well-being. The bank is also a preferred lender for clean vehicle programs in the state of California.

5. City First Bank, A Subsidiary of Broadway Federal Bank: Best for Commercial and Nonprofit Banking

City First Bank is part of a family of companies devoted to socially responsible lending and personal and business banking in low to moderate income communities. City First Bank, based in Washington, D.C., is a black-led, minority depository institute (MDI), as well as a B Corp and a member of Global Alliance for Banking on Values.

City First Bank offers a variety of personal and business banking products, as well as accounts for nonprofit organizations. The personal checking account has no monthly fee if you meet any of four criteria:

One monthly direct deposit
10 debit card transactions
eStatement enrollment
Minimum monthly balance of $100

The bank also offers a personal savings account, CDs, money market accounts and savings accounts for minors.

6. Sunrise Banks: Best for Mortgages

Sunrise Banks offers a full range of personal banking products, including personal checking, savings accounts, credit cards, and a pre-paid Mastercard. But it is best known for its Pathway2Home affordable mortgage product, as well as other mortgages with down payments as low as 3%. The bank also writes VA loans with no down payment required.

By supporting affordable housing and helping Minnesota residents get into homes of their own and begin building generational wealth, Sunrise Banks shows its commitment to socially responsible banking. Like many of the socially responsible banks on this list, Sunrise Banks is a member of GBAV, a Community Development Financial Institution, and a B corporation.

7. Clean Energy Credit Union: Best for Clean Energy Loans

Most of the banks on our list support efforts to reduce climate change, do not help fund or support fossil fuel companies, and run their organization sustainably. Clean Energy Credit Union works to fund renewable energy through personal loans for electric bicycles, solar electric systems, geothermal heat pump systems, and green home improvements. Clean Energy Credit Union also offers auto loans for electric vehicles.

While the credit union specializes in funding renewable energy and other loans, it also offers options for personal checking and savings accounts. Checking accounts offer dividends from .01% APY to 3.56% APY with a minimum opening balance of just $25 and no monthly fees if you meet certain requirements, including having a Clean Energy loan.

Savings accounts include a bank account with a 0.15% APY and a minimum opening deposit of $100, certificates, and a money market account with dividends ranging from 0.95% up to 1.61% APY, with a minimum deposit of $2,500.

As part of its commitment to green living, the credit union offers bio-based, compostable debit cards that are eco-friendly. It is also one of the few banks or credit unions on our list that offers a Carbon Zero Teen Account online, which shows your teen the carbon offsets their deposits can fund.

8. National Cooperative Bank

National Cooperative Bank offers high yield CDs, and money market accounts, as well as checking and savings accounts and business products. The bank offers an interest earning checking account with a 0.90% APY and no minimum opening deposit. There is a $15 monthly fee if the balance falls below $500.

The money market account has a high 2.28% APY, with a minimum balance of $5,000 to avoid the $25 monthly fee. You will need just $100 to open the account. You can earn a 4.34% APY on with a 12-month CD with a $2,500 minimum opening deposit.

While the bank is committed to helping its customers earn money through high interest rates, it is equally committed to its duties as a socially responsible bank. The bank has donated $8 billion to support underserved communities nationwide, and provided loans and investments of $475 million to low and moderate income families, including mortgage loans.

9. Clearwater Credit Union: Best for Previously Unbanked Consumers

Clearwater Credit Union is a certified Community Development Financial Institution and a member GBAV. While most credit unions are devoted to serving their local communities, Clearwater takes it a step further by donating $1.6 million to 290 non-profit organizations in 2022. Employees donated more than 1,340 volunteer hours within their local communities, and the credit union awarded $20,000 in scholarships to students in the credit union’s home state of Montana.

Clearwater CU offers multiple choices in bank accounts, including a basic checking with no monthly fee, a premium checking that pays dividends, and a SmartSpend checking account with a low, $5 monthly fee for previously unbanked consumers.

The SmartSpend account can help lower income individuals and families avoid the fees that come with check cashing services or prepaid debit cards. It also gives them the opportunity to avoid overdraft fees while gaining the convenience of a deposit account, debit card, and access to mobile banking.

10. Carver Federal Savings Bank: Best for Small Business Banking

Many of the banks on our list devote time and money to sustainability, equality, and other social causes. But they don’t necessarily offer the highest interest rates available in online banking today. Carver Federal Savings Bank, however, is a Black-operated, socially responsible bank that also delivers high-yield savings of 4.00% APY.

But there is a catch. You’ll need a $5,000 minimum opening deposit. This might make the Carver savings account inaccessible to many in underserved communities seeking personal checking and savings accounts. However, for those on firm financial footing who want to support a socially responsible bank, Carver’s high yield savings is a solid choice.

Beyond the high yield savings, Carver is known for an array of checking and savings products for small business owners, including a money market account with 2.00% APY and a business interest checking account.

Start-up businesses or those with low-to-moderate balances might prefer the Carver Community Business Free Checking with no minimum balance, no monthly fee, and 200 free transactions per month. The bank focuses on Black- and Minority-owned businesses as well as women-owned businesses across New York City.

Carver is a designated CDFI and has reinvested 80% of every dollar deposited into NYC communities. It also donated $149 million in New Market Tax credit and more than $259 million in leveraged loans across the New York metro area.

How to Choose Socially Responsible or Sustainable Banks and Credit Unions

When you’re shopping around for a socially responsible bank, first consider what aspects of ethical banking are most important to you. Are you looking for a bank committed to serving low income communities, or one that puts a focus on renewable energy? Maybe sustainability is the most significant aspect to finding a socially responsible bank that aligns with your values.

Of course, you also want to think about all the other elements that you would consider for your personal banking needs. These include low fees, online banking capabilities and an intuitive mobile app, early availability of your direct deposits, and a high yield savings account.

Our list of the best socially responsible banks takes all these factors into consideration and showcases banks that back up their values with investments – in their communities and in the environment.

The best socially responsible banks often showcase their commitment to ethical banking through certifications or membership in organizations that support and reflect their values. If a bank is a member of the Global Alliance for Banking on Values, recognized as a community development financial institution (CDFI) or a Certified B corp, you know the bank has demonstrated its commitment to ethical banking.

Global Alliance for Banking on Values (GABV)

The Global Alliance for Banking on Values (GABV) is a worldwide network of socially responsible banks committed to ESG values. GABV banks focus on three pillars:

Finance change
Do no harm
Sustainable products and services

To join the Global Alliance for Banking on Values (GABV), banks must show their commitment to sustainability, and have a balance sheet of at least $50 million. They must be a full service bank and show financial stability and stable governance. Many of the best socially responsible banks are members of the Global Alliance for Banking on Values (GABV).

Community Development Financial Institutions (CDFIs)

A Community Development Financial Institution is a bank, cash management account, or credit union that is certified by the U.S. government. It’s a bank that has shown a commitment to providing banking services in low income communities and underserved communities across the U.S.

Unlike many other financial institutions, Community Development Financial Institutions focus on areas such as economic development, affordable housing and supporting small businesses in their local community.

Certified B Corp

A Certified B Corp is any organization or socially responsible financial institution that successfully balances purpose and profit. Organizations can apply for B Corp certification if they demonstrate transparency, social responsibility, and show high social and environmental sustainability standards. Banks and credit unions must pass rigorous certification standards to become recognized as a B Corp.

FAQs

Still have questions about the best socially responsible banks? Check out some commonly asked questions below.

Which banks are eco-friendly?

Many U.S. banks meet eco-friendly requirements in a variety of ways. Some, like Clean Energy Credit Union, refuse to support fossil fuel companies. Aspiration plants a tree whenever customers round up their debit card purchases to deposit into a savings account.

To find eco-friendly banks, you can look up their ESG (Environmental, Social & Governance) ratings on their websites, in their financial statements, or on a website like Sustainalytics.

Remember, ESG ratings are derived from many factors, including a company’s diversity & inclusion practices, sustainability, charitable donations, and more. You may have to dig deeper to see which banks employ sustainable practices to reduce their carbon footprint.

How Can You Determine Which Banks Are Committed to Ethical Banking?

A search on a company website should help you find the best socially responsible banks committed to ethical banking. Check online to see if the bank helps underserved communities or the unbanked or underbanked population. Ethical banks may be recognized as a community development financial institution.

What is responsible banking?

Responsible banking or ethical banking typically focuses on three key areas:

Banking access and community development
Environmental impact and climate change
Holistic social responsibility

What is an ESG bank?

An ESG bank focuses on environmental sustainability, social responsibility and ethical governance.

Source: crediful.com

Apache is functioning normally

July 23, 2023 by Brett Tams

If you’re a parent hoping to send your child to college someday, you’re probably well aware that higher education costs have skyrocketed over the past 10-plus years.

Tuition and fees for the 2022-2023 academic year averaged $10,940 at public colleges (for in-state residents), $28,240 at public colleges (for out-of-state residents), and a whopping $39,400 at private colleges. And the price tag for an undergraduate degree typically goes up every year. Any way you look at it, college is a huge expense for families.

The good news, however, is there are a number of ways to make college more affordable for parents, everything from tax-advantaged college savings accounts to merit- and need-based scholarships to federal student loans.

Smart Ways to Pay for College

What follows are four key strategies that can help you cover the cost of a child’s college education — without going broke.

1. Starting Early With a Savings Plan

There are a variety of accounts to help parents save for college. While you can simply put money aside each month (or year) in a regular savings account, there are advantages to using a savings vehicle that is specifically designed for college savings. Here are two to consider.

529 Savings Plans

A 529 savings plan is a tax-advantaged investment account designed to help save for future education expenses. Your contributions to the account are made with post-tax dollars but, as long as the money stays in the account, no income taxes will be due on earnings. When you take money out to pay for qualified education expenses, those withdrawals may be federal income tax-free — and, in many cases, free of state tax too.

While 529 plans used to be limited to higher education, the funds can now be used for kindergarten through grade 12, as well as certified apprenticeship programs and qualified student loan repayments.

💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

Coverdell Education Savings Account

Like a 529, a Coverdell Education Savings Account (ESA) is a tax-advantaged account designed to help save for a child’s future education expenses. Contributions are made on an after-tax basis, but earnings aren’t taxed. When you withdraw the money and use it for qualified education expenses, the investment profits are tax-free.

However, Coverdell accounts come with income and contribution caps. Contributions are capped at $2,000 per year, and you can only make them until your child turns 18. To open and contribute to a Coverdell ESA, your income must be below a certain limit ($110,000 for single filers; $220,000 for married couples).

Coverdell ESA funds must be withdrawn when the beneficiary turns 30, or rolled over to another eligible beneficiary in the family.

2. Looking for Ways to Get Free Money

When figuring out how to pay for your kid’s college, there are numerous resources available, including scholarships, grants, and other forms of financial aid. These sources of “free money” can provide significant assistance to students based on academic merit, extracurricular achievements, or financial need.

Your Free Application for Federal Student Aid (FAFSA) will automatically match you with any federal scholarships and grants you’re eligible for, but there are other types available. You can look for additional funding options on your own using a search engine like FinAid or SoFi’s Scholarship Search Tool.

You can also research various scholarships offered by corporations, foundations, and non-profit organizations related to your child’s interests and intended field of study.

In addition, your child also can check out the high school guidance department for any information, and you may want to make an appointment with a school counselor to get any tips that might help your search.

If your child has a college selected, funding information is usually available on that school’s website as well.

Recommended: How Do You Find Non-Academic Scholarships for College?

3. Considering an After-School Job

Encouraging your child to work part-time during high school or college can contribute to funding their education and teach valuable life skills. A part-time job provides them with their own income, reducing their dependence on student loans and parental contributions.

Many colleges offer work-study programs where students can work on campus or in community service roles while earning money for their education expenses. In addition, summer jobs or internships can be an excellent way for students to save for college during their break.

However, it’s important to strike a balance between work and academics to ensure that your child’s studies remain a top priority. You may need to help your child manage their time efficiently to avoid overworking themselves and compromising their academic performance.

A job won’t pay for everything, but it will pay for some things, and that could mean fewer costs to cover with savings or financing.

4. Researching Student Loan Options

With the high cost of getting a degree these days, you may not be able to avoid taking on at least some student loan debt. You and your child may want to take some time to research and understand all the student loan options out there — both federal and private — and how they work well-ahead of senior year.

The amount a student can borrow in federal loans will depend on their year in college, status as dependent or independent, and the type of loan or loans they take out.

Parents of dependent undergraduate students also can apply for Direct PLUS Loans to help pay for education expenses that aren’t covered by other federal financial aid.

Federal student loans usually have more benefits than loans from banks or other private lenders, so be sure to compare the benefits of each private student loan program, as well as the interest rates and terms.

For example, federal loans offer deferment and forbearance along with programs like Public Service Loan Forgiveness (PSLF) and income-driven repayment plans. Private lenders don’t usually offer such perks and protections. It’s generally recommended that students exhaust all federal loan options prior to borrowing private student loans.

While researching different options for private student loans, you may encounter different ways for you and your child to apply, such as taking on a private student loan yourself or acting as a cosigner for a private student loan.

There are, of course, pros and cons to both of those options, so it’s important to do your due diligence on the private lenders you may be considering. What benefits do they offer? What are their rates and terms? Is there any fine print?

If your child doesn’t qualify for enough federal student aid to cover the cost of attending college, private student loans may be a viable option to look into to close the gap.

💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

The Takeaway

There’s no one-size-fits-all way to pay for college. Students and their families may end up using a blend of savings, scholarships, grants, work-study, and different types of student loans to finance their education. When looking at aid options, you may want to prioritize federal sources of aid before borrowing private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

Apache is functioning normally

July 22, 2023 by Brett Tams

Whether you’re new to tech or an experienced professional, upskilling with a bootcamp can help you advance in your career and potentially increase your earnings.

The average salary after a coding bootcamp is around $70,000 per year, according to a 2017 analysis by Course Report, a website that researches the coding education industry and reviews bootcamps. This average salary could include graduates with an associate degree or higher.

Your earnings can depend on the following factors:

Specialization.
Years of experience.
College education.

Here’s what you need to know about salaries after coding bootcamps and how to maximize your earnings.

What impacts salary after coding bootcamp?

Location

Where you live affects how much you make after completing a coding bootcamp. Tennessee has one of the highest average annual salaries for bootcamp graduates — $72,650 — according to ZipRecruiter, an online job board. Georgia has the lowest average post-bootcamp salary: $46,571 per year.

Here are the top 10 states with the highest salaries after coding bootcamp in the U.S., according to ZipRecruiter.

	Average Annual Bootcamp Salary



Massachusetts

Connecticut
Rhode Island


Washington
Source: ZipRecruiter

Specialization

There are several areas to choose from when deciding what to study in a coding bootcamp. Each area requires a different level of tech knowledge and different responsibilities — like managing a team, strategic thinking and interacting with clients.

All of these factors can impact your salary. Generally, the more responsibilities you have — and the more you interact with direct reports, clients and other stakeholders — the more you’ll make.

For example, a development operations engineer — responsible for leading teams in addition to writing code and maintaining software — earns on average $125,636 per year, according to Indeed, an online job search platform. Keep in mind that these jobs could also require college degrees.

A technical support specialist — who is more likely to be behind the scenes developing, monitoring and troubleshooting digital products — earns on average $44,239 per year, according to Indeed.

Experience level

Coding bootcamp graduates can progress in their careers and earn more money post-bootcamp as they gain additional experience.

The median starting salary for bootcampers is $65,000 per year, according to a 2017 study by Course Report. By their second job, graduates make $80,943, on average. The average salary jumps to $99,229 by a bootcamp graduate’s third job.

College education

Most bootcamps do not require a college degree to enroll. That’s one reason it can be attractive to beginners wanting to learn technical skills. But having a four-year degree — in addition to completing a bootcamp — could help you earn more.

Bachelor’s degree holders who completed a coding bootcamp received an average salary of $71,267, according to a 2020 survey by Course report. That’s more than the average post-bootcamp salary of $61,836 for those with no college degree.

Salary could increase with more advanced degrees. If you have a doctorate and complete a bootcamp, you could earn around $83,250 per year, based on the 2020 average post-bootcamp salary reported by Course Report.

But a four-year degree may be significantly more expensive than a coding bootcamp. Think about your learning and career objectives — in addition to your earning potential — to determine if a degree program is worth it.

How to increase your chances of a higher salary after coding bootcamp

The salary an employer offers you should be based on your expected value — something your previous experience will help them measure. Fortunately, a major selling point of coding bootcamps is the experience you’ll gain from practical, hands-on training.

Here’s how to leverage your bootcamp skills to land a higher salary.

Build a portfolio. Your bootcamp work is valuable. Don’t hesitate to show it off. You can even go a step further and develop personal projects to show just how dedicated you are to your career field — and demonstrate a skill set that justifies a higher salary.

Don’t be afraid to negotiate. Even when you put your work in front of employers, you may not get an offer that reflects your value. But you don’t have to take the first offer you get. You can ask for more. Some bootcamp schools offer career services to help you negotiate your salary and get closer to the pay you deserve.

Frequently asked questions

What are coding bootcamps?

Coding bootcamps are short-term training programs designed to teach practical, in-demand tech skills, like coding and web development.

How do coding bootcamps differ from a degree?

Coding bootcamps typically focus on specialized skills, while a bachelor’s degree in computer science, for example, will cover more general knowledge. Many coding bootcamps are also much shorter than four-year degree programs — but bootcamps are not accredited. That means you won’t graduate from a bootcamp with a degree.

Do coding bootcamps pay you?

Students do not earn money for attending a coding bootcamp. Instead, you’ll pay to attend a bootcamp, like other career-training programs.

How much do coding bootcamps cost?

Tuition for a coding bootcamp can run between $7,800 and $21,000 — with an average tuition price of $13,584, according to Course Report. Some can be free, however. Costs vary by the program’s length, whether it’s in person or online and any additional student services the school offers.

How much can you make after a coding bootcamp?

Bootcamp graduates make $70,000 per year on average, according to a 2017 study by Course Report. Your salary will depend on your location, experience level, specialization and level of education.

Is it hard getting a job after a coding bootcamp?

Your job search after completing a bootcamp will look a lot like any other job search — including networking, highlighting your experience and showing what you’ll bring to the company. Some bootcamp schools offer career services to help students post-graduation.

Source: nerdwallet.com

Apache is functioning normally

July 22, 2023 by Brett Tams

While Rithm Capital’s purchase of $1.4 billion of consumer loans from Goldman Sachs will assist with its diversification efforts, it can also help its mortgage lending business, a BTIG report said.

The price paid was not disclosed. The portfolio consists of loans originated by Goldman Sachs’ Marcus unit, and held on the parent company’s balance sheet.

“To a degree we think the acquisition of Marcus loans could pair nicely with its origination efforts on the mortgage financing side of the business, especially if there’s some first-time homebuyers in the mix,” the BTIG report, authored by Eric Hagen and Jake Katsikas said. “However, we think the deeper objective is to flex its capabilities as a diversified investor and lender, including the ability to toggle between putting assets on its own balance sheet and generating fees from managing and servicing on behalf of third parties.”

These are fixed-rate closed-end installment loans, with about 95% of the pool originated between the fourth quarter of 2021 and the same period in 2022. BTIG provides “cursory details” on the portfolio, namely an average credit score of 735 and a projected loss range of between 8% and 10%.

Goldman Sachs is in the process of reorganizing Marcus. Furthermore, in the second quarter, Goldman Sachs recorded a $1.15 billion hit to its earnings because of commercial real estate issues.

At the end of the first quarter, Goldman Sachs had $2.9 billion of Marcus loans on its books, net of a $470 million write-off. During the period it sold a $1 billion portfolio to Varde Partners and provided $830 million of seller financing, BTIG and Bloomberg said.

“This purchase is extremely attractive to us building off our past and current expertise in consumer finance,” said Michael Nierenberg, chairman, CEO and president of Rithm, in a press release. “Consistent with our investment approach, we continue to look for opportunities to grow shareholder value and believe this transaction will be an excellent addition.”

Rithm could move into direct consumer lending given the changing landscape in the banking business, a Keefe, Bruyette & Woods flash note on the deal said, citing Nierenberg’s comments in a Bloomberg article.

“We view the transaction positively, as Rithm has a history of making opportunistic investments that generate attractive returns,” Bose George, an analyst at KBW said in a flash note.

This deal compliments a prior Rithm investment in what BTIG termed the SpringCastle portfolio, a small, but high-yielding package of lower credit score unsecured consumer loans originated and serviced by OneMain.

“The acquisition also aligns with Rithm’s objective of widening its stance to incorporate a comprehensive list of target credit investments, along with developing third party asset management capabilities,” BTIG said.

Rithm wants to flex its capabilities as a diversified investor and lender, with the ability to toggle between putting assets on its balance sheet and generating fees from managing and servicing them on the behalf of third parties, the report continued.

BTIG’s bottom line on this transaction is it continues to see Rithm’s diversification of capital as a source of value for investors, “especially if the objective is to eventually spin off the [mortgage] origination and servicing segments of the business, as it could help certain tangential strategies with strong returns become more visible earnings drivers.”

Source: nationalmortgagenews.com

Apache is functioning normally

July 22, 2023 by Brett Tams

It’s 2021. A group of Redditors has inflated GameStop’s share price by 2,100% and investors have poured $280 million into BUZZ, an ETF based on social media hype.

Backed by the founder of Barstool Sports, BUZZ is currently outperforming the S&P 500.

What a time to be alive.

The market madness of early 2021 has given everyone from retail investors to the Chairman of the Fed plenty to think about. For investment firm VanEck, it highlighted a golden opportunity to resurrect a wacky idea from the mid-2010s: an ETF based not on rising price, but on hype.

The VanEck Vectors Social Sentiment ETF (BUZZ) is made up of 75 stocks chosen by their “social media sentiment,” i.e. their levels of buzz online. It’s a bit of a wild concept since investors don’t traditionally associate hashtags with a rise in share price. But if the GameStop explosion is any indication, hashtags matter now.

So how does BUZZ work? Why is it controversial? And why are ETFs in general considered a better long-term investment than individual stocks?

Let’s investigate BUZZ.

What’s Ahead:

What makes BUZZ such a unique ETF?

On paper, BUZZ looks like a pretty normal ETF. It consists of a healthy number of stocks (75) including many blue chips like Ford, Tesla, and Twitter. Plus, it has a high bar for entry: all stocks in BUZZ must have a market cap of at least $5 billion, so no volatile newcomers are welcome here.

If BUZZ’s appearance seems normal, it’s the way these stocks were chosen that’s so fascinating.

How ETFs are (typically) built

ETFs have themes that link the underlying securities together. The first ETF, built in 1993, was SPY, and was launched to reflect the overall performance of the S&P 500. An investment in SPY, therefore, is like an investment in the S&P 500 index itself.

Today, there are over 7,600 ETFs bundling commodities like gold or oil, sectors like IT and healthcare, and emerging markets like Africa and India.

While ETF themes can range from the obvious to the creative, all ETF managers follow one basic principle: to build a fund that will increase in value over time. Case in point, you can’t just make up an ETF and get it listed – you have to get it approved by the SEC and sell your underlying logic to investors.

That’s what makes BUZZ so unique and controversial: some investors think it’s based on nothing at all.

How BUZZ was built, and why it’s getting mixed reactions

The Van Eck Vectors Social Sentiment ETF (BUZZ) gets its 75 stocks from an algorithm called the Buzz NextGen AI U.S. Sentiment Leaders Index, which identifies companies getting “bullish social media sentiment.”

In short, it picks stocks based on rising popularity, not price.

Many investors aren’t too keen on BUZZ because they struggle to link social media mentions with share price. Earnings, growth potential, demand… these are factors that should indicate a rise in share price.

But Reddit mentions? Really?

Case in point, BUZZ isn’t the first hype-based ETF. The Sprott Buzz Social Media Insights ETF (BUZ) launched alongside the aforementioned AI index in 2015. But most agree that BUZ was just too ahead of its time. Due to a lack of investor interest, it closed.

Does that mean the naysayers are right? That social media mentions are a terrible predictor of a rise in share price?

Well, if BUZ had stayed open, it would’ve outperformed the S&P 500 in four of the last five calendar years.

BUZZ is not a “meme stock” ETF

Some in the media are quick to label BUZZ a “meme stock ETF” full of stocks that saw skyrocketing share prices thanks to the subreddit r/WallStreetBets. However, the two most notorious meme stocks, GameStop and AMC, are nowhere to be seen on BUZZ.

“This is not a Reddit meme stock ETF” says BUZZ originator Jamie Wise, as quoted in CNBC.

While GameStop and AMC support the logic behind BUZZ, that hype can drive share price, both stocks were way too extreme to be included. Among other reasons, they weren’t mentioned in enough places for a long enough period of time.

BUZZ isn’t trying to predict memes, but rather, find companies that might see a tick in share price due to positive social media sentiment. Hedge funds have been monitoring social media for years, but BUZZ represents the first time this intel is being shared with the people.

If learning about BUZZ has piqued your interest in ETF investing, here’s a quick refresher of the basics, and why, according to the experts, ETFs are often considered a better long-term investment than individual securities.

What is an ETF?

An ETF, or Exchange Traded Fund, is like a bundle of investments that you can buy and sell on an exchange. To illustrate, you can buy shares of BUZZ right now on Webull – for example – just like you’d buy shares of TSLA or GOOGL.

An ETF can include a mix of individual stocks, commodities, bonds, and other securities. And unlike mutual funds, ETFs can be traded all day, so their share prices constantly fluctuate.

ETFs offer a convenient way to invest in a broader concept, commodity, or even an entire sector

Let’s say you want to invest in the clean energy sector. You could go buy, say, 88 individual company stocks. It’ll just take hundreds of hours of research, 88 trades, and fees, and leave you with 88 tickers to track in your portfolio.

Or, you could just invest in a single clean energy ETF. That way, the research is already done for you, you make one trade, and you only have a single ticker to track in your brokerage app of choice.

ETFs have lower expense ratios

Expense ratios are a funds management costs, which are typically taken out of the fund’s assets.

Generally speaking, ETFs are passively managed and have significantly fewer operating expenses than something actively managed like a mutual fund. This means that ETF managers can afford to charge shareholders like you fewer fees (if any).

ETFs are more diverse and stable than individual securities

Because they represent bundles of securities, ETFs are naturally more diverse and stable than individual stocks. If the market is like a big, wide ocean, ETFs are like cargo ships. Sure, they can be a little slow, but they’re resilient to crashing waves and the occasional hurricane.

If you invest in a single stock and it tanks, you’re out of luck. But if you invest in a sector ETF and just one out of 108 stocks tanks, your investment will barely be affected. In fact, you might not even notice as the share price continues to rise with sector performance.

ETFs don’t always go up, of course, but their inherent diversity makes them a superior long-term investment than most individual securities.

Summary

BUZZ’s hype-based indexing logic is certainly avant-garde, but it still follows a traditional ETF philosophy: to provide a diverse, convenient, and stable pathway to long-term growth for investors.

Whether or not this ETF will continue to perform remains to be seen, and only time will tell!

Source: moneyunder30.com

Apache is functioning normally

July 21, 2023 by Brett Tams

Disability insurance is the most underrated type of insurance, and one that I routinely would see clients skip. Who ever thinks they will become disabled?

Hard truth – According to some statistics from the Council for Disability Awareness, 1 in 4 workers who are 20 years old will be disabled before they retire. That’s a shocking number for most people to consider. If you can’t perform your job, you can’t earn money, and that’s where a disability insurance plan can save the day.

The best disability insurance companies make it easy to get a quote online. Below you can quickly get a quote from top rated disability insurance companies we recommend, or keep reading to learn more about disability insurance and its uses.

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Quotes from the top disability carriers to ensure you find the best rates
Helps thousands of consumers apply for disability insurance each year
Rated Excellent on TrustPilot
Benefit terms range from 3 months to age 67
Choose your waiting period
Multiple riders add flexibility to your policy

Benefit periods from as little as 2 years or all the way to retirement age
Family care benefit provides coverage for up to a year if policyholder has to take off work to care for a child, spouse, or parent
10% discount to business owners and an additional 10% to preferred occupational classes.
Offers the option of Full Coverage for Mental/Nervous disabilities or a 10% discount for a 2 year limitation.
Rated A (Excellent) by A.M. Best for financial strength

What is Disability Insurance?

The idea behind disability insurance is simple.

It operates similar to a traditional life insurance plan, but instead of paying out upon your death, it pays out if you become disabled.

Coverage for these plans can vary in the size. Just like with other kinds of insurance plans, every disability policy is different.

If you already know what you want and just want to browse different rates from several carriers, click here.

Some plans are going to replace 45 %of your income, while others are going to give more replacement at 65%.

The more replacement coverage you want, the more you’re going to pay for your plan.

The Differences with Workman’s Compensation

When an employee suffers an injury on the job, oftentimes their employer will compensate them through worker’s compensation.

It is important to understand the difference between disability insurance and worker’s compensation – because the two are not the same thing.

The key difference between workers’ compensation and disability insurance is that workers’ compensation (or workers’ comp) pays for injuries that are work-related. Employers will obtain workers’ comp insurance in order to pay for incidents that occur on the job.

If workers sustain injuries on the job, it is oftentimes up to the employer to pay for the person’s medical bills, as well as for the individual’s lost wages if the employee must take time off work because of the injury.

An employee who collects payment via workers’ comp will typically, however, not have a long-term disability, but rather a temporary injury from which he or she will soon return.

On the other hand, disability insurance pays for a percentage of a person’s earnings if the insured is not able to work due to an injury or illness – regardless of whether that injury or accident happened at work or elsewhere.

In addition, if the disability insurance policy is an individual policy (versus an employer-sponsored group plan), the insured will be covered under the policy regardless of who he or she is employed through.

According to the Council for Disability Awareness, less than 5 percent of disabling accidents and illnesses are work related.

This means that the other 95 percent are not – and that these other 95 percent are also not covered by workers’ compensation insurance.

It can be extremely difficult to qualify for Social Security’s disability benefits. For example, Social Security will only pay benefits if a person is considered to be totally disabled. This means that the individual cannot do work that they did previously, nor can they do other jobs either.

In addition, the person’s disability must have lasted, or be expected to last, for at least one year or result in death.

An individual must also have collected enough work credits in order to qualify for Social Security disability benefits.

You can take a look at the 2019 Social Security Administration limits and rates for OASDI and social security here.

The number of credits will be dependent on the age that the individual is when he or she becomes disabled.

With that in mind, the importance of disability insurance becomes even more clear.

This type of insurance can provide you with the additional funds that you need to help pay living expenses – without the need to dip into savings, retirement assets, or worse yet – use credit – for the purpose of paying day to day bills until you are back on the job.

If Social Security deems that a person’s situation qualifies, there is still a five month waiting period before benefits are paid.

This, too, can create a financial hardship for many people in terms of paying living expenses – especially if there are added medical costs due to the illness or injury that has been suffered.

So, we know Social Security won’t give the money you need and workman’s comp probably won’t cover it, so now what?

This is why you should explore a private disability insurance policy.

Types of Disability Insurance

The two main types of coverage are long-term disability and short-term disability.

You can probably guess from the name, but short-term policies are designed to cover employees for a much shorter time, anything shorter than two years.

Long-term disability, on the other hand, is built for anything past two years. A long-term disability insurance policy could continue to pay out for the rest of your life if it’s needed but typically runs from 5-10 years.

Some of the common causes for short-term disability insurance include:

having a baby
a severe illness
a major injury.

Long-term disability could include a lot of things, but some common causes are:

cancer
muscular disorders
cardiovascular complications
or serious injuries

Long-Term Disability vs. Short-Term Disability

Aside from the obvious, there are a few key differences between long-term disability and short-term disability.

One of those is the waiting period for a payout.

With short-term, policyholders can start receiving weekly checks as quickly as a 1 to 7 days after you file a claim for the policy.

With a long-term disability insurance policy, on the other hand, it can be anywhere from 90 days to 180 days.

If you’re looking at the cost difference between the two plans, short-term policies are going to be significantly more affordable than its long-term counterpart. Long-term plans can give you years more coverage which could translate to thousands and thousands of additional coverage from the insurance company.

Another key difference between the two kinds of plans is how you can get the coverage.

A lot of companies offer their employees short-term disability insurance, but almost no companies have a long-term disability insurance program.

If you want to get the long-term coverage, you’ll have to purchase a plan through a private insurance company. If your company offers any type of short-term disability insurance, you should always enroll in the program.

Group, Individual, Multi-life

Inside of the two main types of disability insurance are several “sub-types” of coverage.

One of those is group coverage.

These are policies which are offered through an employer and are offered to all the employees. Group coverage could be either short-term disability or long-term disability.

Employer-sponsored short-term plans are designed to pay for any disabilities which occur outside of the workplace. Short-term disabilities are much more common than long-term disabilities which could impact you for the rest of your life.

Individual Disability Insurance

If your company doesn’t have any sponsored plans, you can purchase a private policy through an insurance company.

You’ll be required to answer some medical questions and depending on the plan, take a medical exam.

Multi-Life Disability Insurance

When you’re shopping around for a disability insurance policy, you’ll probably come across plans being sold as “multi-life plans.”

The idea of these plans is to get several key people in a business (think of several doctors in a practice) to all apply at the same time with their plan.

The insurance company markets these policies as multi-life so they can offer simpler underwriting processes and pass some of the savings onto the policyholders.

Is Group Disability Enough?

For the employees who are lucky enough to get disability insurance through their employer, you still might be lacking. Just because you have a plan through your job, it might not be enough.

Let’s say you’re not able to go to work because of an accident. You can’t get to your job and pull in your paycheck, are you going to be able to pay for all of your monthly bills without having to make any extreme sacrifices.

To determine if your group disability insurance is enough, you’ll need to do some basic math.

Look at your plan and see how much coverage it provides.

For this example, let’s say it pays 50% of your salary. Now, take a look at your bills and expenses.

If the total of those numbers is more than 50% of your income, then your group disability isn’t enough.

If you’ve crunched the numbers and came to the jarring realization your group plan isn’t enough, the best choice is to purchase an additional individual plan.

Both of the policies can work together, and your individual plan can pick up the slack left behind.

What’s the Difference Between Owner-Occupation and Any-Occupation?

One of the most important things to understand about disability insurance plans are the differences between an owner-occupation plan and an any-occupation plan.

They may sound the same, but they completely change how your plan operates and the coverage it will give you.

First, let’s look at owner-occupation (sometimes called own-occupation protection). Policies with this protection will only pay out if you can no longer to the duties and tasks required to you by your job.

If you’re an electrician, but you can not do the simple tasks required on a day-to-day basis, then an own-occupation plan will pay you the benefits.

Any-occupation policies will only pay the benefits of the plan if you can no longer perform any occupation based on your education and work experience.

As you can tell, any-occupation policies have much stricter rules on the circumstances in which they will pay the policyholder.

Type of Disability Insurance	Description of Disability Insurance
Short-term disability insurance	Provides coverage for a limited period of time, usually up to 6 months, and replaces a portion of your income if you are unable to work due to illness or injury.
Long-term disability insurance	Provides coverage for a longer period of time, typically until retirement age, and replaces a portion of your income if you are unable to work due to illness or injury.
Group disability insurance	Provided by an employer as part of a benefits package, group disability insurance offers coverage to all employees and may be offered as short-term or long-term disability insurance.
Individual disability insurance	Purchased by an individual, this type of disability insurance offers customized coverage and can be either short-term or long-term disability insurance.
Own-occupation disability insurance	Offers coverage if you are unable to work in your specific occupation due to illness or injury, even if you are able to work in a different occupation.
Any-occupation disability insurance	Offers coverage only if you are unable to work in any occupation due to illness or injury.
Residual disability insurance	Offers coverage if you are able to work but have a reduction in income due to illness or injury.

How Much Does Disability Insurance Cost?

Now for the part everyone wants to know, how much is a disability insurance plan going to cost you?

Well, there are a lot of different factors which are going to affect how much the premiums are. It’s difficult for me to give an exact number without knowing your exact situation.

For example, the age of the applicant is going to play a major role in the premium rates. If a 25-year old applies for a policy, it’s going to be significantly cheaper than a plan for a 45-year old.

The general rule of thumb for disability insurance is the premiums are going to be anywhere from 1% to 3% of your gross income.

If you are making $100,000, you can budget for $1,000 – $3,000 every year.

As I mentioned, there are dozens of different factors which will completely change how much you pay.

If you’re a smoker, then you’re going to pay much more for your plan.

If you have a riskier job, you’re going to pay more.

The rule of thumb is exactly that.

How Much Disability Insurance Do You Need?

I alluded to the amount of disability insurance earlier in this article, but now let’s take a hard look at how much coverage you should have.

Not having enough disability insurance protection could cause some serious financial strain if something were to happen.

First, let’s look at your living expenses. If you don’t already have a budget, take some time to look at all of your monthly bills (power bill, water bill, mortgage payment, etc.) and your spending (groceries, gas, etc.).

On top of those monthly expenses, add in a few “unexpected” bills as well. You never know when something is going to break or an extra bill is going to pop up.

You want to have some cushion in your budgeting. Otherwise, you end up living paycheck-to-paycheck.

After you have the monthly expenses number, you can do some subtracting.

If you aren’t working, your expenses are going to look very different than they do now. For example, if you aren’t driving to work every day, you probably won’t be spending as much on gas.

You won’t be spending money on work clothes, and you will probably cut out some additional “entertainment expenses” as well.

Now you have a new number, your monthly expenses minus some tweaks.

The next number you want to add to the equation is any income you’ll make from other sources besides your disability insurance plan.

This category can include any money from your investments, money from your spouse or partner’s job (or a second job if they decide to add another job) and any additional disability income you may qualify for.

If you’re the main income earner in your home, then having disability insurance is one of the most important purchases you can make.

Key Man

For most people, they purchase disability insurance for their family and loved ones. for others, they buy a plan to protect their business.

If you’re one of the foundational workers in your business (ex. an owner, CEO, etc.), then you should consider buying a disability insurance policy for your company.

Key man plans operate a little differently than a traditional disability policy. With these policies, the business pays the premiums for the plan, and if something were to happen to you and you couldn’t perform your job, then the business is going to get the money from the payout.

These policies are a way for the companies to protect themselves against financial struggles if a key person in the business were unable to work because of illness or injury.

The company can use this money to outsource those duties or to hire someone to replace the key person while they are out with the disability.

Disability Insurance for High Income Occupations

There is a certain group of people which disability insurance could have some serious problems.

If you are a high-income earner, the standard disability insurance policy simply may not be enough. Just about every insurance company which sells one of these plans is going to have an income limit.

Regardless of the percentage they replace, they are not going to offer more than that limit.

Typically, these are doctors or lawyers who own their own firms, for example.

Some policyholders may find the insurance company’s limit is below the 60% they offer in income insurance.

If you’re one of these people, there are some things you can do to get the protection you need, regardless of how much money you make every year.

One option is to choose a company who offers higher limits. Each company has different coverage limits on their policy. We can help you shop around until you find one with a high enough limit for your needs.

Another route is to buy two separate plans from different companies. Sure, you’ll pay more in premiums every month, but you’ll have the protection in place if you ever need it.

Where to Get a Disability Insurance Quote

You now know the basics of disability insurance coverage, it’s time to go out and find a policy of your own.

There are more than 40 insurance companies which sell these plans. As I mentioned, they are all different. Some are going to have higher limits, offer a larger percentage, or have cheaper rates.

You need to find a company which suits your needs.

Before you pick a company, compare the rates and plans from several companies. You don’t buy the first house you see, why would you buy the first policy you find?

Sure, you can use your own time to contact those 40+ companies individually, or you can use a tool which will do the dirty work for you.

If you’ve decided you want to get disability insurance or supplement the coverage you already have from work, check out PolicyGenius. They are one of the few companies out there which can gather quotes from dozens of companies for disability insurance, all in one place.

PolicyGenius allows you to tailor your quotes to exactly the kind of policy you’re looking for; the perfect amount of coverage with the proper waiting period.

They know shopping for insurance isn’t easy, but they make it as quick as possible.

FAQs – Best Disability Insurance Quotes

How can I get the best disability insurance quotes?

To get the best disability insurance quotes, it’s important to shop around and compare policies from different insurance companies. You can request quotes online or by speaking with a licensed insurance agent. Be sure to provide accurate information about your occupation, income, and health to receive an accurate quote.

What factors can affect the cost of disability insurance?

The cost of disability insurance can be affected by several factors, including your age, occupation, health status, and the type and amount of coverage you select. Policies with longer benefit periods or more comprehensive coverage may be more expensive.

How much disability insurance coverage do I need?

The amount of disability insurance coverage you need depends on factors such as your income, monthly expenses, and savings. A general guideline is to have enough coverage to replace 60% to 80% of your income, but this may vary depending on your individual circumstances.

Source: goodfinancialcents.com

Apache is functioning normally

July 20, 2023 by Brett Tams

Doma sold additional pieces of its retail title production business as part of the company’s reorganization as it struggles to become profitable.

Near North Title, a Chicago-area title agency, is the new owner of Doma’s Midwest retail offices. The Texas offices were sold to Capital Title of Texas, a part of the Shaddock Title Cos.

This is Near North’s second significant transaction this year, following the purchase of another Chicago-based agency, O’Connor Title Guaranty. In this deal it picked up locations in Illinois, Indiana, Minnesota and Wisconsin.

Terms of both transactions were not disclosed.

In May, Doma sold 22 Northern and Central California offices to Williston Financial Group in a transaction valued at $24.5 million. That followed a disclosure in its first quarter earnings call that the company was evaluating its organizational structure. Doma has yet to turn a GAAP net profit since it went public in 2021 with big ambitions in title and adjacent businesses.

“These strategic transactions are aligned with our mission-driven go-forward strategy and refined focus on our core underwriting and technology business,” said Max Simkoff, Doma CEO, in a press release. “We believe we have found optimal homes for our Local team members in the branches we have sold.”

Houlihan Lokey was Doma’s financial advisor and Mayer Brown was legal counsel for these transactions.

At the end of June, Doma conducted a one-for-25 reverse stock split that brought its price back up from pre-split levels well below the $1 per share minimum listing price to a close of $7.81 per share on July 19. As it started trading after its special purpose acquisition company merger, Doma closed at $6.84 per share.

The reverse split, however, did not stop the New York Stock Exchange from starting delisting proceedings for Doma’s warrants. In anticipation, the NYSE has halted trading in the warrants, which would have allowed holders to exchange 25 of them for one share of Doma stock at a price of $287.50 per share, according to a Securities and Exchange Commission filing.

Doma will announce its second quarter results on Aug. 8.

In the first quarter, Doma reported a net loss of $42.1 million, an improvement over the fourth quarter loss of $109.4 million and the year ago loss of $50 million.

Source: nationalmortgagenews.com

Apache is functioning normally

July 20, 2023 by Brett Tams

Rumors this week that regulators would increase residential mortgage capital requirements for larger depositary banks, far exceeding international standards under the Basel III rules, have raised alarms for industry executives, analysts and trade groups.

The consensus is that the change would primarily affect the shrinking jumbo market (loans greater than $726,200) and hurt regional banks, sources said. The first impact would be through higher rates, but a shift of origination volume from depository banks to independent mortgage banks is not to be dismissed, experts added.

Overall, banks help inject money into the mortgage system by providing warehouse lines of credit to independent mortgage banks (IMBs) and trading mortgage-backed securities (MBS) and mortgage servicing rights (MSR). Facing higher capital requirements, these institutions would reduce their interest in accumulating these assets – or even sell them, pressuring prices, observers told HousingWire.

To understand the context, U.S. agencies decided to review banks’ capital framework in response to the financial crisis, consistent with the standards issued by the Basel Committee on Banking Supervision in 2010 (Basel III). U.S. regulators increased the overall quality and quantity of banks’ capital and improved leverage ratios for the largest banks.

In 2017, the Basel Committee issued a second set of revisions to Basel III, called the Basel Endgame, to address the calculation of risk-weighted assets and limit banks’ internal models to estimate risk. U.S. regulators have been working on these rules for years but have prioritized them since the recent bank failures of Silicon Valley Bank and Signature Bank.

Initially, regulators signaled that big Wall Street banks might face a 15% to 20% average increase in overall capital requirements. The current rule for mortgages was expected to remain unchanged: first-lien whole loans prudently underwritten and performing to their original terms receive a 50% risk weight, while other loans receive a 100% risk weight.

However, this week, Bloomberg reported that under the latest draft proposal, 40% to 90% risk weights would be assigned for large banks issuing residential mortgages, depending on the loan-to-value ratio. That’s 20 basis points higher than the international standard. Residential mortgage-backed securities guaranteed by government-sponsored enterprises (GSEs) wouldn’t be affected.

More pain for the jumbo market

“Our initial thought is that the impact would not be huge, just because the GSEs are the main source of mortgages and banks are not holding loans that have high loan-to-value that are conforming – they probably get they done through the FHA or the GSEs to be securitized,” Bose George, managing director at Keefe, Bruyette & Woods (KBW), said.

According to George, the rule would impact only the jumbo market, a very high credit quality market. So, even there, George’s team assumes only a few loans would fall into this category of high LTV, ultimately having higher capital requirements.

“We are assuming that the impact in the jumbo space is probably going to be slightly higher mortgage rates, as opposed to volume significantly shifting to the nonbanks,” George said in an interview with HousingWire. “Right now, there’s a gap between where banks offer rates on jumbo and where the securitization market needs to be. So, if we have rates go up by 5 or 10 basis points, it’s not going to move that away from the banks on the jumbo side.”

However, the regulatory proposal comes amid a shrinking jumbo market. The product has been a bank offering since the financial crisis due to these institutions’ need for deposits, but it suffered from recent bank failures. At HousingWire’s Mortgage Rates Center, data from Optimal Blue shows 30-year fixed rates for jumbos at 6.99% on Wednesday, compared to 6.74% for conforming loans.

Inside Mortgage Finance (IMF) estimates lenders originated $37 billion in jumbo loans from January to March 2023, down from $58 billion in the previous quarter and $133 billion in the same period last year. First Republic Bank, rescued by JPMorgan Chase in May, Wells Fargo and JPMorgan were the top three jumbo producers in the period.

Same market, different players

Following the financial crisis of 2008, depositary lenders retreated from the residential mortgage markets due to higher capital costs and reduced profitability. Consequently, independent mortgage banks, which have less stringent regulatory requirements, now have nearly two-thirds of the mortgage pie.

“We would expect banks affected by these proposals to lobby for a more even playing field vs. nonbank lenders,” Mario Ichaso, senior residential mortgage backed-securities strategist at Wells Fargo, said in a trading desk commentary on Tuesday night. “We would not be surprised to see changes to these proposals down the road, but participants should continue to monitor these developments for any spillover effects to the MBS market.”

Big bank executives have started to publicly criticize the proposal to increase capital requirements on their mortgage loans.

“I think there’s been a desire to finish up Basel III,” Brian Moynihan, chair and CEO of Bank of America, said in an earnings call with analysts on Tuesday. “They’ve [regulators] got to think through the downside of some of these rules, and that they could push stuff outside the industry to nonbanks (…) and the resilience of those institutions, is interesting to watch through cycles.”

Moynihan estimates that a 10% increase in BofA’s capital levels would prevent the bank from making about $150 billion of loans at the margin.

JPMorgan Chase Chief Financial Officer Jeremy Barnum said, “All else [being] equal, higher capital requirements definitely are going to increase the cost of credit, which is bad for the economy.” And, in the mortgage space, JPMorgan might pull back even further if new rules are applied.

“When you increase the capital requirements, it makes it even harder. So, that just becomes one of the areas where you’re in that tension between remixing versus pricing power that we talked about a second ago. And it might, in fact, mean that we do less credit available for homeowners and more regulatory risk as the activity moves outside the perimeter,” Barnum told analysts last week.

On July 10, Federal Reserve Vice Chair for Supervision Michael Barr said the proposal’s more accurate risk measures would be equivalent to requiring the largest banks to hold “an additional $2 of capital for every $100 of risk-weighted assets.”

“For the banks that would need to build capital to meet the requirements, assuming that they continue to earn money at the same rate as in recent years, we estimate that banks would be able to build the requisite capital through retained earnings in less than two years, even while maintaining their dividends,” Barr said.

Barr also signaled that capital requirements would affect banks with assets over $100 billion. It was undoubtedly influenced by the recent experience with institutions with assets between $100 billion and $200 billion collapsing. Several sources said it’s unusual for regulators to adopt risk weightings by bank sizes when the risk weighting traditionally applies to the asset.

“I think that’s where the regional banks will likely be the hardest hit. And theoretically, it will drive some consolidation, which I think is odd given that they [regulators] have made bank mergers more difficult,” Pete Mills, senior vice president of residential policy at the Mortgage Bankers Association (MBA), said.

Mills added: “There are a lot of conflicting regulatory pressures in the market. Regulators are worried about the growth of the IMBs market share, but they’re doing things that would appear to exacerbate it. IMBs are a very robust business model if there’s warehouse credit available. And we’ve got several public companies now. One of the strengths of our housing finance system is the diversity of business models – banks, nonbanks, REITs as holders of mortgage assets, credit unions, and community banks. Maintaining that balance is important.”

Taylor Stork, Community Home Lenders of America (CHLA) president and Chief Operating Officer at Developer’s Mortgage Company, said that the new capital requirements proposed for the large banks, combined with the heightened interest rate risk of portfolio lending as rates have skyrocketed, would only likely to heighten the trend towards IMB mortgage dominance.

“Mortgage lending by Wall Street banks has plummeted since the 2008 housing crisis, as independent mortgage banks now originate two-thirds of all loans and decisively outperform banks in loans to minorities and other underserved borrowers,” Stork said in a statement.

The secondary market is not immune

If the new rule changes the mortgage origination dynamics due to higher capital requirements for these assets, it will be reflected in the secondary market.

“The impact may be more profound at the regional bank level, which tends to have higher exposures to the whole loan residential market relative to those institutions with more than $700 billion in assets. This could result in more securitization activity from regional banks into the private label market as they look to shed some of their residential exposures,” Ichaso said.

Mills particularly worries about the impacts on the MSR market and warehouse lending.

“Banks could stop accumulating MSRs and sell servicing. And, if they sell servicing to improve their capital ratios, who will buy the servicing if other banks are facing the same punitive capital standards?” Mills said. “Banks are a critical source of liquidity for the market by providing warehouse lines to IMBs. We’re again concerned that a large increase in capital of 15% to 20% would discourage banks from participating in the warehouse lending business.”

A recent BTIG report from analysts Eric Hagen and Jake Katsikas also stated that the Basel III Endgame would incentivize banks to shred their MSR portfolios.

“Broadly speaking, we expect banks could continue shedding MSRs if new capital requirements end up more restrictive than the 250% risk weight already in place through Basel.

According to the BTIG report, the top three banks in agency servicing – Wells Fargo, JPMorgan and U.S. Bank – control upwards of $1.5 trillion in unpaid principal balance.

“Beneath them, but still in the top 50, are dozens of community banks and thrifts with less than $10 billion of servicing, which we see as a potentially ripe source of supply for nonbank lenders and servicers to encroach on over time. It goes in-hand with long-duration MSRs also looking more challenging from an asset-liability management standpoint for franchises with shorter-term or more sensitive deposits, which could induce incremental selling activity.”

Is the Basel Endgame coming soon?

The Federal Reserve, Federal Depository Insurance Corporation and the Office of the Comptroller of the Currency, which together regulate banks, are expected to unveil the Basel Endgame proposed changes on July 27, Bloomberg reported.

Mills speculated that bank failures and rescues amplified the regulators’ desire to implement the Basel Endgame “more quickly than they would have otherwise.”

“It appears they’re going directly to a notice of proposed rulemaking. So, they’re skipping the advance notice process. Our other concern is, typically, when you have a significant change in capital regulations, they will do what’s called a quantitative impact study, a QIS. At least we haven’t heard anything to suggest that they are going to do that this time around,” he said.

Overall, industry experts said higher capital requirements for mortgages wouldn’t be the remedy for problems like the recent bank failures.

“The problems that the industry had with mortgages, in fact, a few months ago, had nothing to do with credit risk. It had to do with the interest-rate risk or that the assets on banks’ balance sheets had long-duration mortgages,” George said. “The new changes would address a problem or issue that came up much earlier when Basel III was being sort of implemented. From that standpoint, it seems like it’s solving a problem that isn’t currently a problem.”

Michael Bright, CEO of Structured Finance Association, said, “I would like to know what problem would be solved because the market is pretty regulated right now. LTVs are still quite low. Home prices are quite high. The delinquencies are very low. The underwriting process has gone through a sea change over the last 10 years.”

Bright added: “Silicon Valley did fail, but it was very unique in a lot of ways, and to recapitalize the entire system focusing on non-agency mortgages just because of that, to me, seems like an overreaction.”

Source: housingwire.com

A World Rich with Superstitions

Origins of the Itchy Left Palm Superstition

Cultural Differences

Differences Between Men and Women

Medical Reasons for Itchy Palms

Other Non-Medical Reasons for Itchy Palms

Itchy Palm Lottery Win Stories

Mary Shammas

Donald Pittman

Melissa Ede

Coincidence or Causation?

The Mathematical Reality of Lotteries

Superstition and Reality: Finding the Balance

What Is a 401(k) Loan & How Does It Work?

Limits on How Much You Can Borrow

Spousal Permission

You Repay the Loan With Interest

Should You Borrow from Your 401(k)?

When to Consider a 401(k) Loan

When to Avoid a 401(k) Loan

How Is a 401(k) Loan Different From an Early Withdrawal?

Pros and Cons of Borrowing From Your 401(k)

Pros

Cons

Alternatives to Borrowing From Your 401(k)

The Takeaway

10 Best Socially Responsible Banks and Credit Unions

1. Aspiration: Best for Online and Mobile Banking Services

2. Amalgamated Bank: Best for Investment Planning

3. Spring Bank: Best for New Yorkers

4. Beneficial State Bank: Best for West Coast Residents

5. City First Bank, A Subsidiary of Broadway Federal Bank: Best for Commercial and Nonprofit Banking

6. Sunrise Banks: Best for Mortgages

7. Clean Energy Credit Union: Best for Clean Energy Loans

8. National Cooperative Bank

9. Clearwater Credit Union: Best for Previously Unbanked Consumers

10. Carver Federal Savings Bank: Best for Small Business Banking

How to Choose Socially Responsible or Sustainable Banks and Credit Unions

Organizations That Support Sustainability and Social Responsibility

Global Alliance for Banking on Values (GABV)

Community Development Financial Institutions (CDFIs)

Certified B Corp

FAQs

Which banks are eco-friendly?

How Can You Determine Which Banks Are Committed to Ethical Banking?

What is responsible banking?

What is an ESG bank?

Smart Ways to Pay for College

1. Starting Early With a Savings Plan

529 Savings Plans

Coverdell Education Savings Account

2. Looking for Ways to Get Free Money

3. Considering an After-School Job

4. Researching Student Loan Options

The Takeaway

What impacts salary after coding bootcamp?

Location

Specialization

Experience level

College education

How to increase your chances of a higher salary after coding bootcamp

What makes BUZZ such a unique ETF?

How ETFs are (typically) built

How BUZZ was built, and why it’s getting mixed reactions

BUZZ is not a “meme stock” ETF

What is an ETF?

ETFs offer a convenient way to invest in a broader concept, commodity, or even an entire sector

ETFs have lower expense ratios

ETFs are more diverse and stable than individual securities

Summary

Read more:

Table of Contents

Quotes From Top Rated Disability Insurance Companies We Recommend

What is Disability Insurance?

The Differences with Workman’s Compensation

What About Social Security Disability Benefits?

Types of Disability Insurance

Long-Term Disability vs. Short-Term Disability

Group, Individual, Multi-life

Individual Disability Insurance