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The Year in Review: The Best and Worst Consumer Money Stories of 2015
2015 was marked by a number of money milestones that will protect and even bolster consumers’ wallets. Among the good news: You can feel more confident about such weighty financial decisions as choosing the best mortgage or saving for retirement. You’ll also have more security to protect you from identity theft when using your credit cards. And same-sex couples can now enjoy financial perks no matter where they live or were married.
Unfortunately, not everything was rosy. Consumers took some unexpected hits, too. That just proves that there’s always a need for vigilance and action.
As we look back over the past 12 months, here are the money milestones that made our list.
Milestones to Smile About
Easier roll-overs to Roth IRAs. The year kicked off with the implementation of a new IRS rule permitting after-tax contributions to 401(k)s to be rolled over to Roth IRAs, where they would continue to grow tax-deferred. The result could mean greater tax savings for you, especially if you make too much money to be eligible to contribute to a Roth IRA in the standard way.
The beginning of the end of robocalls. In June, the Federal Communications Commission adopted a proposal to protect consumers against unwanted robocalls and spam texts. By ruling that telephone companies face no legal barriers in allowing consumers to use robocall-blocking technology, the commission gave the green light for service providers to offer “do not disturb” technologies to stop unwanted robocalls on consumers’ landlines or wireless phones. In addition, more than 550,000 people have signed on to Consumers Union’s End Robocalls petition asking AT&T, Verizon, and CenturyLink to give customers the ability to block these calls.
Parity for same-sex couples. Same-sex couples realized considerable financial benefits after the Supreme Court’s June decision to legalize same-sex marriage nationwide. No matter where they live or were married, same-sex couples can file their state taxes jointly, file for spousal and survivor benefits through Social Security, and enjoy other financial perks that previously belonged only to heterosexual couples or same-sex couples living in states that recognized their marriages.
Greater disclosures for mortgage-shoppers. Since October, thanks to the efforts by the Consumer Financial Protection Bureau, lenders are now required to provide new, standardized documents to those looking for a mortgage. The goal: To make it simpler for consumers to compare loans before they borrow. The new rules also require that disclosures clearly show what consumers will owe and how the loan could change over time.
Greater security for credit cards. Credit-card fraud has been skyrocketing in the U.S. Nearly 32 million U.S. consumers had their credit-card information stolen in in 2014—more than three times the number in 2013. In October, however, banks and credit companies began sending new and existing customers cards embedded with a high-tech chip that makes it more difficult for criminals to steal personal information.
The “myRA” for retirement savings. In November, the Treasury Department rolled out the “myRA,” a new type of IRA for those who don’t have access to a 401(k) retirement savings plan at their job or other employer-sponsored savings plans. The myRA (rhymes with IRA) is a no-fee, no-minimum-balance, nondeductible Roth IRA is meant to be a “starter account.” While the current interest rate barely tops 2 percent, the point of the myRA isn’t so much to bulk up an existing nest egg as to get nonsavers into the habit of building one in the first place.
Help for student loan debtors. It’s no secret that Americans are struggling under a mountain of student debt. In December, the Education Department launched the Repaye Student Loan Plan to make it easier to retire that debt. The plan caps the monthly payment amount at 10 percent of your discretionary income. It’s open to anyone with federal student loans, regardless of income or the loan’s date of origin.
Milestones to Frown On
Debt collectors allowed to use robocall technology. The budget bill that Congress passed in November includes a provision to allow debt collectors to use robocall technology to contact delinquent borrowers of federal loans on their phones. The big target: The millions of student loan borrowers who have fallen behind on their loans. At least four senators are already planning to sponsor new legislation that would roll back the student loan robocall provision. If you want to tell lawmakers how you feel about this issue, our colleagues at Consumers Union have put together this form that identifies your relevant members of Congress and allows you to easily send them a message expressing your concerns.
Higher interest rates on your mortgage and credit cards. After a great deal of anticipation, the Federal Reserve finally hiked interest rates by a quarter point in December. Behind the move: Unemployment is approaching 5 percent—very close to the point when inflationary pressure typically starts to kick in. The small increase in interest rates could help to ward off inflation. But the rate hike, along with possible future increases, will whack your wallet—from the rate you pay on an adjustable-rate mortgage to the interest rate on your credit-card bill.
Mandatory arbitration takes a giant leap forward. The U.S. Supreme Court handed a victory to business interests in December, ruling in favor of mandatory arbitration, rather than class-action lawsuits, as a preferred method for resolving issues between companies and their customers. Think it won’t affect you? It may. Forced arbitration clauses are tucked into hundreds of millions of consumer contracts, from Amazon, Groupon, Netflix, and Verizon, to car loans, credit cards, checking accounts, insurance, student loans, and even certain nursing-home agreements. Read the fine print—and weep.
Consumer Reports has no relationship with any advertisers on this website. Copyright © 2006-2015 Consumers Union of U.S.
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