redesign | payments: Finally, proposed protections on prepaid banking products

In November, the U.S. Consumer Financial Protection Bureau (CFPB) published proposed regulations seeking to protect consumers in a market that has mostly been ignored: prepaid banking products.

The prepaid product market has grown from a $1 billion business in 2003 to an estimated $100 billion in 2014, with no signs of slowing. About 8 percent of all U.S. households use prepaid card and accounts, representing the growing number of people without bank accounts. Typically, prepaid accounts provide a way to pay bills electronically or purchase items online for those without credit or debit cards.

What exactly are prepaid banking products? Mostly preloaded and reloadable debit cards, but the proposed regulations extend beyond any plastic in your wallet. The CFPB also seeks to regulate electronic code or any device designed to store prepaid funds or capable of being loaded with funds. That means the regulation would cover not only physical prepaid cards such as those issued by employers to pay wages or those provided to pay government benefits (such as unemployment), but also electronic wallets such as PayPal, Google Wallet or Venmo.

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redesign | journalism: Why the Dow Jones Industrial Average is a terrible metric

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It’s the number that we hear about the most when journalists talk about the economy: the Dow. What is the Dow exactly? It’s a basket of 30 stocks. The full name, which we rarely hear, is the Dow Jones Industrial Average. It reflects 30 companies, which are supposed to be representative of the economy.

Today, these 30 stocks are hardly representative of the economy. Only recently was Apple added to the Dow. Apple is so big that its market capitalization exceeds that of the eight lowest value Dow companies combined. Service businesses have become so big that only eight of the stocks in the Dow Jones Industrial Average are actually industrial companies.

It’s great marketing for Dow Jones & Co. (now owned by News Corp., which also owns Fox News and the Wall Street Journal).

A better, broader metric of the economy is the S&P 500.

There’s another, more important, reason why journalists should focus on Standard & Poor’s 500: Its performance directly affects the well-being of many Americans. A lot of us invest (through retirement plans) in index funds that seek to replicate the performance of the S&P 500.

The Dow gets more glory, but the S&P 500 is what matters.
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redesign | legal: Corporations have the right to strip consumers of their rights. Sound fair to you?

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Nearly four years ago, in a case called AT&T Mobility LLC v. Concepcion¸ the Supreme Court ruled 5-4 that the Federal Arbitration Act of 1925 preempts any state law that prohibits a contract from barring class-wide arbitration. That dense bit of legalese essentially means that any corporation can take away your right to sue them in court, and instead force arbitration of your dispute. Not only that, but you can only arbitrate the dispute as to your claim alone — you cannot include any other people who may have been harmed by the same conduct.

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