People of Modest Means But Nice Cell Phones
If the credit union industry is going to continue its statutory commitment to serving people of modest means, then it better increasingly rely on mobile phone technology. That’s one of the biggest take aways from the Federal Reserve’s Second Annual Report analyzing consumer use of mobile technology to perform both banking and payment activities. Most intriguingly, use of mobile banking services remains “generally unrelated to household income.” In addition, rates of mobile phone usage remain consistent across demographic and socio-economic categories, although the use of smart phones still skews heavily toward those with higher income.
Against this backdrop, perhaps it shouldn’t be all that surprising that the use of mobile financial services is particularly prevalent among the 10% of the population that is classified as un-banked or under-banked. In addition, this demographic continues to perceive financial institutions as unresponsive to their financial needs either because they don’t have enough money or because they simply don’t see the need to open an account. Other interesting factoids from the survey show that while people are increasingly willing to use their cell phones for basic banking services such as checking their account information or making transfers, they remain hesitant to use payment services, in part because of concerns about safety. In fact, people are slightly less confident in the safety of mobile payments than they were a year ago.
Finally, one area that I would like to see researched more is a growing digital divide within the financial services industry. Smaller community banks are much less likely to offer mobile banking services than are their larger counterparts and it is safe to assume that the same can be said of credit unions when compared to banks. This may seem obvious, but as consumers grow to expect access to mobile banking services, if this technology disparity between big and small banks continues, it is bound to drive away more and more of our potential members.
Court of Appeals Rules on House Prices
When a purchaser breaks a contract to buy a house and walks away from a sale, what is the appropriate measure of damages that should be awarded to the seller? New York’s Court of Appeals decided that it should be the difference, if any, between the contract price and the fair market value of the property at the time of the breach. While this is apparently consistent with courts around the country, it does seem to put the seller of property at a disadvantage. The ruling seems to provide a perverse incentive for a would-be buyer who realizes he or she overpaid for a house to walk away before the closing. Now that New York’s highest court has confirmed New York’s law in this area, don’t be surprised to see seller’s demand larger, non-refundable down payments, particularly in downstate areas where housing prices tend to be higher.