7 On Your Side

Coronavirus: Consumers given assistance through new rules to protect their finances: 'the law has changed'

Friday, May 8, 2020

From your credit score to your savings accounts to even financial resources for those on Social Security Disability Insurance, the coronavirus pandemic has lead to changes in Californians' personal finances.

SAN FRANCISCO (KGO) -- The pace of change in the financial sector is stunning. The rules are changing; it's hard to keep up. There are new rules from the federal government and Federal Reserve... even the credit reporting companies are changing how they do business. To come out ahead of the game you need to learn the new rules, so you can work the new system.

If you can't pay your bills during this pandemic, most credit card companies, banks and other financial institutions will work with you. You know that already, but did you also know they can't tell anyone you had a problem?

"The law has changed," says Edgar Dworsky, the founder of ConsumerWorld.Org, "They can not report you as delinquent if you were on time with your payments at the time you made the deal with the bank."

Dworsky says the three major credit reporting agencies -- Equifax, Experian, and TransUnion -- have all agreed to give consumers one free credit report a week. That is a major upgrade; they used to give you one a year.

"You do it by going to the same old place that you have been going for the past few years: AnnualCreditReport.com," he says. "You can get a free copy of your report from each of the bureaus once a week. That way you can double check to make sure make sure they are not dinging your credit if you have made a deal with a credit grantor."

The next change comes directly from the Federal Reserve Bank. It is a change to regulation 'D.'

Ken Tumin of DepositAccounts.com explains the regulation limited the withdrawals from bank and credit union accounts.

"The old version -- that you could not make more than six transactions on your savings accounts per month," Ken says. "Now that has been eliminated, so you can make more than six payments and withdrawals from your savings account."

Each withdrawal after the first six came with fees, usually $10. That forced many consumers to get checking accounts.

"Typically, savings accounts earn more interest than checking accounts," Tumin says. "So you can keep more in your savings account, and make more payments from your savings account; you can earn more interest."

Another fairly recent rule change helps those getting Social Security Disability Insurance checks. If the money isn't spent with in a year, the recipient could be hit with financial penalties. However there is a work around: the state-sponsored CalABLE account.

Dante Allen is Executive Director of CalABLE.

"You can put up to $100,000 into a CalAble account," Dante says, "and Social Security will disregard all of that money as a resource."

That means those most in need won't be take a financial hit. Think of CalABLE as a kind of IRA for those receiving SSI payments.

Changes in federal law makes it possible, and the program itself is run by California State Treasurer, Fiona Ma's office.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

If you have a question or comment about the coronavirus pandemic, submit yours via the form below or here.

Get the latest news, information and videos about the novel coronavirus pandemic here

RELATED STORIES & VIDEOS: