(From the nytimes.com) The Obama administration on Friday trimmed its estimate of the federal budget deficit for this year but said the weak economy had led it to increase its deficit projection for next year. The White House’s Office of Management and Budget projected that the deficit for the fiscal year ending Sept. 30 would be $1.47 trillion, $84 billion lower than it estimated in February but still a record in dollar terms. Much of the reduction stemmed from lower than anticipated outlays for unemployment insurance. (more…)

(From smartmoney.com) The gap between the haves and have-nots seems to be hitting credit scores. The number of people with credit scores below 599 or above 800 is growing, according to a recent AP report based on FICO data. Given the depth of this recession, credit industry analysts say it’s not surprising that the number of people with scores below 599 has grown from a historical norm of 15% to 25.5%. “There’s still a phenomenon of the rich getting richer and the poor getting poorer as a result of the recession,” says Ben Woolsey, a spokesman for CreditCards.com. People who were already struggling financially may have been pushed over the edge by the loss of a job or other hardship, he says. (more…)

(From the wsj.com) Tuition continues to soar, but there might be some relief for borrowers grappling with student-loan debt: federal income-based repayment programs. Many borrowers may not be aware of them. Originally designed for those who pursue public-service jobs, the programs have expanded to benefit just about anyone struggling with student-loan debt, especially those with high debt loads and low incomes. (more…)

(From the ft.com) The US is preparing to pivot from domestic regulatory reform to a push for a tough new international capital regime after the weekend’s G20 and International Monetary Fund meetings glossed over differences between leading economies. (more…)

(From the N.Y. Times) Ending one of the fiercest lobbying fights in Washington, Congress voted Thursday to force commercial banks out of the federal student loan market, cutting off billions of dollars in profits in a sweeping restructuring of financial-aid programs and redirecting most of the money to new education initiatives. (more…)

(From SmartMoney) Changes to Medicare, prescription coverage – and student loans? The health-care legislation approved by the House on Sunday does more than just revamp the health-care system. It also shakes up federal?student?loans and Pell grants. (more…)

(From Smart Money) The financial-reform proposal announced by Senate Banking Chairman Sen. Christopher Dodd (D., Conn.) last week could mean big changes in the world of consumer credit. The new proposal, which would restrict the size and trading policies of large financial institutions and non-banks that offer consumer financial services or products, would also authorize the creation of a new consumer financial protection agency with enforcement and examination authority over big banks, credit-card?issuers, and mortgage originators and servicers. (more…)

(From the FT.com) Americans reduced their household debt for the first year on record last year as they aggressively cut back on spending to cope with the recession, Federal Reserve figures showed on Thursday. (more…)

(From the N.Y. Times) Ben S. Bernanke, the Federal Reserve chairman, told Congress on Wednesday that the central bank did not intend to start raising short-term interest rates anytime soon, saying the economic recovery would remain halting for many more months. (more…)

(From the Christian Science Monitor) New credit-card laws went into effect Monday, which will offer consumers new protections when they use their plastic. Just two of the practices targeted – retroactive rate increases and so-called “hair-trigger” penalty interest rates – cost US consumers a minimum of $10 billion per year, according to a recent study by The Pew Charitable Trusts. (more…)

(From the FT.com) The US Federal Reserve announced on Thursday that it would raise the discount rate at which commercial banks borrow from the central bank as part of moves to withdraw emergency support to the financial system. As the Fed fought the incipient financial crisis in August 2007, it cut the discount rate in one of its first moves to help liquidity in the financial system and lengthened the loan maturity to a maximum of 30 days. (more…)

(From the FT.com) The US must fix its growing debt problems or risk a new financial crisis, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, warned on Tuesday, adding a mounting deficit could spur inflation. (more…)

(From the WSJ.com) For every dollar in debt that Americans have paid off since they started cleansing their balance sheets in mid-2008, the U.S. government has borrowed more than $7. All the hard work by consumers to replenish their piggy banks may be for naught if big government budget deficits play havoc with the economy. (more…)

(From SmartMoney.com) Next time you’re out shopping and a cashier asks if you’d like to join the store’s free loyalty program, do your wallet a favor and say yes. Turning up your nose to the offer probably means one of three things: You’re worried about retailers tracking your purchase history, you aren’t sure if you’ll have a long-term relationship with a store, or you are (for lack of a better word) lazy, says Kit Yarrow, a professor of psychology and marketing at Golden Gate University in San Francisco, whose book “Gen Buy” assesses consumers’ purchase motivations. “They view [loyalty programs] as not worth their time and effort,” she says. (more…)

I am an old fashioned guy. That is why I still subscribe to two newspapers and actually read both. I know the new generation is more into the Internet and getting however little news it does get from that medium. But if all you do is read the “news” off your computer you would have missed a little gem of a letter to the editor that was in Friday’s (January 22) Daily News. (more…)

(From the FT.com) Tom Hoenig, president of the Kansas City Fed, on Thursday warned against keeping rates too low for too long. “Experience both in the US and internationally tells us that maintaining large amounts of stimulus over an extended period risks creating conditions that lead to financial excess, economic volatility and even higher unemployment at some point in the future,” he said. Mr Hoenig rejected Mr Bernanke’s argument that the Fed decision to keep rates low after the dotcom crash did not contribute meaningfully to the housing and credit bubble. “Low interest rates contributed to excesses,” he said. (more…)

(From the wsj.com) Personal bankruptcies soared last year in Western states hit hardest by the real-estate bust. In states such as California, Arizona and Nevada, where housing prices soared and then collapsed during the past decade, consumer bankruptcy filings rose roughly twice as much as the national average increase of 32%. Homeowners fell behind on mortgages and could no longer tap into their home equity to pay down other debts. (more…)

(From the N.Y. Times) Every day, millions of Americans stand at store checkout counters and make a seemingly random decision: after swiping their debit card, they choose whether to punch in a code, or to sign their name. (more…)