Cases are handled. Reverend billy graham is back in the hospital. Family members insist that graham is in good health and they expect him home in just a few days. President obama pays tribute to president john f. Kennedy. He laid a wreath at his grave side after honoring more than a dozen of americans with the medal of freedom. Friday marks 50 years that kennedy was assassinated. Real money with ali velshi is next on al jazeera america. Call it the credit generation gap. Young adults struggling with low Credit Scores and late payments while boomers have their act together. Ill give you the reason. Also small banks making a big role in a community. Well tell but one Community Bank in harlem. Im ali velshi, this is real money. This is real money, and you are the most important part of the show. Join us live reason twitter aj real money. The National Average Consumer Credit score hovers at 691, like the fico score, the credit score that youre used to, that banks judge your credit worthiness, experian uses a similar credit system. Not all generations are created equal. Millennials, young adults, age 19 to 29, they have got an annual credit score of 628. Thats the lowest of all groups by far before their average debt includes credit cards, car loans, student loans, whats more, millennials have the fewest number of credit cards but they overutilize them buying pizza and beer on a friday night instead of keeping them around for a rainy day. And these folks are developing bad credit habits early by paying their bills late. Now people age 30 to 46, im going to lump myself in that crowd. Theyre only marginally better off with the average credit score of 653. They carry the highest debt of any age group. They average even more late payments than the millennials and any other age group for that matter. Baby boomers, 47 to 65 are faring much better. The debt they carry is marginally lower, but they use credit cards less than any other age group, and theyre pretty good about paying their bills on time. Two generations very different credit standings. The difference is baby boomers thrived in an economy that was growing at a faster rate today while enjoying a pretty good Access Capital to loans. Since then jen xers and millennials lived through tighter access to loans. Michelle renary is bt of analytics at experian, she joins us from irvine, california. You were involved in putting these numbers together. What in here is worrisome. I think you hit a lot of good points, ali. The difference between the generations, and the millennial, the score differences are 107 points which is a widespread. With the millennials having 628 credit score that will keep them from getting some of the best offers and best Interest Rates because they are below prime. How fixable are these things because one could worry if they have low Credit Scores it could cost them in higher Interest Rates and that could stick with them through life. How quickly can one fix a credit score and fix it from 630 to 700. That depends on a lot of circumstances. But in terms of being fixable for the millennial generation, is that it should be pretty quick because they have what is called the thin file. They dont have a lot of credit yet, and so they can turn it around easily by starting to pay the new credit on time, and not overutilizing or maxing out their credit. They could make a change fast. One positive change came across because of a card act by congress is that there is not as much credit available to those under 21. How does that affect these numbers . Its a doubleedge sword because it kept lenders from sending new proposals or new credit cards to people under 21. But the doubleedge sword is that they dont have that experience and the ability to learn from it until theyre older. Its important nor them to learn how to pay bills well early so when they want to get a mortgage later they have that experience and they have the good credit score to rely on. It forced lenders to take a harder look at the ability to pay bills, which has kept some people from getting credit for people of all ages. Has that resulted from fewer people with bad credit from being on the books. It may have. There so many different sources, so it makes it difficult to define what difficulty to pay. The people with bad credit, and people with excellent credit. How do you explain the fact that that is smoothed to where you have a bigger middle now . I think that its something in terms of getting more credit for people who are in the middle, so a lot of near prime len desert bulenlenders are come and shed light on that. Thanks, michelle. Today on twitter and facebook ive been asking you what is the biggest obstacle you face when it comes to managing your credit card debt. Eric said recurring charges for subscriptions, charlie tweets, my own lack of discipline. Charlie, you get the honesty award of the night. Jp morgans settlement with the government include 4 billion for what feds call consumer relief. Half of that money will go to reducing the size of mortgages held by folks wit who are risk f foreclosure. In the last six years it hasnt been taxed, thats benefited people including one california woman who told her story to our stacey tisdale. But as stacey explains unless Congress Takes action, some homeowners who get mortgage relief in the jp morgan deal may end up paying more in taxes. In 2010 wells fargo reduced the size of elizabeths mortgage so she could afford her mortgage payment. Under ordinary circumstances elizabeths 200,000 principles reduction would be taxed as income. For elizabeth that would have meant a huge tax bill. 60,000 on taxes. If a creditors forgives your debt, meaning they say, okay, you dont owe this amount to us any more, normally thats considered taxable income. Reporter but elizabeth and all of the struggling borrowers who have received Financial Relief by having the size of their mortgage were spared. For seeing the financial disaster that the tax laws could create, president george w. Bush signed the mortgage relief bill. This with allow homeowners pay no mortgage on Debt Forgiveness they may receive. This is a good bees of legislation. Reporter a good piece of legislation, the act expires admitted night december 31st creating what experts say a financial nightmare for struggling homeowners. It could not have addressed this problem. There is a big catch in this while they may be able to afford their new mortgage payment theyll be stuck with a tax bill they wont be able to afford, and attempting to pay those taxes may wind them in default or foreclosure. Reporter how big a tax bill . Say you earn 40,000 and you get your mortgage size reduced by 100,000. That 100,000 is considered income by the irs. Youre now paying income tax on 140,000 which could mean a tax bill of 30,000. It is extremely important that congress extend this tax cut. But it sounds like it could be politics as usual in washington. A spokesperson for the Senate Finance Committee Told al jazeera, quote, which hope to incorporate tax extenders as tax reform. How difficult it is to pass even the most simplest of bills i feel that Congress Wont get it done. Reporter a scenario that could have broad implications for the Housing Market and the entire economy. Jp morgan settlement really highlights the need to extend that law so we can have a housing recovery. Reporter a need that congress can fulfill. Well good news more elizabeth, people who already had mortgage principle reduced before the decembe december 31st deadline will be protected from paying taxes from the mortgage debt relief act. The number championships killed off a lot of small Community Banks in america. Today the ones that survived are serving people in ways that big banks dont. Well get a look at a bank in harlem later. And see how google is in the driver seat with technology that will one day put you in the backseat. Those stories and more as real money continues. Keep it right here. We got a closer look on wednesday the fine line that the Federal Reserve is trying to walk as it prepares to stop propping up the u. S. Economy. That look came in minutes in the policy meeting last month. The up shot is that the feds could stop weaning the economy from its massive 85 billion Bond Buying Program in the coming months if the job market continues to improve. But it reveals a lot of discussion of how to do that, and let investors know that the fed will continue to keep Interest Rate that it controls near zero. Its not just about huge institutions like jp morgan and others caught up in the debate of banks too big to fail. There are thousands of banks that serve people and businesses that dont fit the cookie cutter mold. Many that survive are struggling to adopt to new rules. This town needs this onehorse up institution if only to keep people from having to crawl to potter. Embodying the spirit of the american underdog. From small towns to urban streets Community Banks play a vital role in the nations economy, providing Financial Services and loans to small business, farms and individuals who dont fit the criteria of big difference the communities banks, especially smaller Community Banks, those are the areas that large banks either dont want to serve or are pulling back from serving. Typically defined as banks with less than 1 billion in assets, Community Banks fared worse than their bigger counterparts during the financial crisis. Of the 414 fdic insured banks that failed between january 2008 and december 2011, 85 were Community Banks. The roughly 7,000 Community Banks that survived the crisis are wrestling with this costly legacy, the wrath of new regulations crafted with big banks in mind that require big money and big manpower to implement. Nothing but the truth so help you god. The problem was acknowledged by Federal Reserve nominee janet yellen. Writing new rules, the feds should continue to limit the Regulatory Burden for Community Banks and smaller institutions. Reporter in the many, many Community Banks are consolidating or getting gobbled up by bigger institutions. We are seeing a declining number of them. Were not seeing new Community Banks start up. My concern is that theyre going play a smaller and smaller role in the economy. Four, three, two, one. At least on film its a happy ending. Reporter al jazeera, new york. Well, the federal Deposit Insurance Corporation has not issued a single new bank charter in two years. That campaigned with the current trend of Bank Consolidation means that businesses and individuals in especially under served communities have fewer choices of where to do their banking. They have been forced to shift their strategy, carver bank was started 65 years ago to serve africanamerican communities with limited access to mainstream finances. The chairman and ceo said the company just reported its fourth straight quarter of positive bank results. We thought about 19 different banks in the crisis. The ones who were too big to fail, and everything was directed towards them, including the rules and regulation which most americans were happy were imposed upon them. But we didnt think about the rest of you, the smaller patience that dont have the wherewithal to sustain those regulations. Well, all of us were suffering from a lack of capital, so those that survived raised capital as carver did, and being in new york city, it was a tremendous advantage. But as the statements were made earlier, the impact of the regulations has been pretty dramatic. Weve had to hire additional people who are not focused on lending and new business development, theyre focused on making sure that we dont make any mistakes as it relates to the regulation. Do you have a greater proportion of people who you lend to, who are higher risk or lower credit ratings. Are you at greater risk or is the proportion of safe loans the same. I think with the oversight there are many people in our community that need lending products and hav dont have the strongest credit, and we cant go there any more. When you drive around manhattan there is a bank on every corner probably at least, if not more than one. What do you offerthere is no shortage of banks here unlike the rural areas that patricia raceways talking about, what do you offer that the big banks dont . How do you compete with that. You have to be able to get the attention of the global banks. When we look at a loan that is 1 million or below, thats our sweet business when it comes to nonprofit lending and real estate we can do larger. Its very hard for an operator of that size to go into a global bank and get attention. One of the interesting things is that nationwide the fed, the fdic said in 2007 that about 17 million people, about 8 of americans are unbanked, and 18 are under banked. Which means they have an account but they dont have any savings. You find in a place like harlem or under served areas those numbers are higher. Much higher, a third, and in some neighborhoods more. The city of new york did its own study that confirmed that the neighborhoods surrounding our branches, the numbers are much more significant. So we decided, look, thats not a thing that we should go after instead of hide from. We established our own Check Cashing line, and coupled that with financial li literacy. Its not a huge mountain mountainits not a huge moy maker thats how we met, at one of the financial literacies. The harder thing is if youre a business person or a church, and you need a 500,000, or 2 or 3 million, those are hard and they have to be under written on a case by case situationish whicsituationishwhich we do. Debra wright is ceo of carver bank. Thank you. Its the Science Fiction any more. Cars that drive themselves. Well look at when and how youll be able to take a backseat and let the car steer. Thats next on real money. A clip from back. The future with doc brown in a delorean blasting off. You may have thought this is what the car of the future would be like, but the car of future is right here, and it looks more like this. This fully autonomous car. It can drive itself. What youre looking at exists right now. You cant buy one just yet there are already cars on the road that can sense trouble, hit the breaks for you. There are cars that Parallel Park themselves today. And yody i audio is working on e that uses sensors to working on its parking. The Driverless Cars will arrive in the future but technology and the auto world is on the opposite sides of the spectrum when the cars will hit the road. While they have many benefits there are challenges. The former senior editors at edmonds. Com, doug, thank you for joining us. People who dont know about Driverless Cars, many say thats a stooped idea. Why would you have a car without a driver. Thats the most unsafe ridiculous thing i ever heard of. But, in fact, the truth is quite the opposite. Thats true, thats true. Drivers, most drivers think they can drive really well, and everyone thinks that theyre the best driver, but drivers make mistakes, and machines dont make as many mistakes with sensors and cameras, were really starting to see this move towards the car driving itself. Its being talked about in a lot of circles, the addition of the new yorker magazine which has just come out has a cover story on them, its quite a good one that i would recommend people reading. Where do you see driverless vehicles fitting in . Are we looking at a day where most vehicles will be driveless and when . I think so. We have an aging population, a lot of baby boomers. Theyre not going to give up driving. And a lot of young people just arent interested in driving as much as earlier generations. Its really appealing to them. Some people say they would rather text than drive, and with the automous is car us that is o be. It could really save lives. There are two school of thoughts where engineers are taking work off the drive, park yourself, find a parking shot, lane assist, make sure that you dont change lanes and bang into another car and eventually a number that i heard by 2025 you might get to the point that the driver has nothing to do. Then the google car that i just showed our viewers where theyre going to come out of the gate. When doesnt know who is going to make this car but its completely driverless car. What ar is your take on these to schools of thought . Youre right when google revealed they had put 140,000 miles on its aton mouse vehicle project, without people knowing about it on public roads in california, i feel they kick started in driverless car era. You talk to auto makers and they say weve been developing autonomous driving cars for decades, thats true, but it took google getting things going. Heres the thing, youre right, auto makers have been putting systems in their cars that help people to drive, help the car drive itself, the Cruise Control that keeps the car from crashing into the car in front of it, and what were seeing from the auto makers perspective is a layering of this technology. Youre also seeing it becoming available on a lot less expensive cars as well. I was test driving a mercedes against e class, and you can let go of the wheel. It has sensors in the steering wheel. Were seeing that in production cars. Were not that far away. Google takes a different approach. Theyre developing their owe car systems and its a much more Expensive Technology but theyre starting to work with auto makers now. Google said it will have Driverless Cars on the road b by 2017. Nissan, audi, 2020 say theyll have Driverless Cars on the market. Its coming up fast. Good to talk to you at doug newcomb, well talk about this again before it becomes reality. This is our show for today. Ill see you again on thursday. Hi, im Lisa Fletcher and youre in the stream. American jews and muslims, talk distrust among their communities. Can they put aside politics and move forward in peace . Digital producer wajahat, are passionate doesnt begin to describe the interaction were seeing. Yes you and i
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