Why Your Bank Wants to Be Friends on Facebook

Bank wants to be your friend on FacebookWell, another Friday is upon us and we wanted to bring you the most interesting debt-related news of the week. There was a lot going on this week, as banks got more Facebook savvy, new census data showed us how many Americans are in poverty, and Congress tried to fix the finances of the federal government:

Your bank would like to be your new best friend on Facebook
It was inevitable that banks, lenders, and other financial institutions would eventually find ways of using social media to supplement their information about customers (and potential customers). The latest trend, according to an article in BetaBeat, is that your bank wants to be Facebook friends with you so that they can obtain information about you that would help them decide whether to offer you things like loans and credit cards.

Banks profit from lending money to people who will reliably pay it back, and your social media footprint can help them identify new customers in two ways: First of all, your Facebook profile could provide a much more up-to-date picture of your creditworthiness than your credit score. When you tell your friends about getting a new job or buying a new car, a bank would get valuable insights into your financial circumstances. And second, if the bank identifies you as a good credit risk, then it can usually assume that many of your friends will be too. So what can you do about this? Configure your Facebook settings properly to maximize your privacy. Oh, and if you get a friend request from your bank, it might be wise to say “No thanks.”

Census says almost half of Americans are poor or low-income
As reported in NPR, new Census data shows that about 1 in 2 Americans are classified as poor or low-income based upon the definition used by the Census Bureau. The article says 49.1 million people fall below the poverty line, which equates to a household income of about $22,000 for a family of four. And 97.3 million people are included in the Bureau’s definition of low-income, which represents a household income of $45,000 or less per year. The number of working families classified as low-income has risen for three years in a row. For many such families, debt has become a big burden, especially after the recession took place starting in 2007.

The federal government won’t shut down this weekend
Members of Congress had been debating a plan to fund the federal government, with a shutdown being imminent if no agreement was reached. Today it appears that the two parties have agreed on a plan that will allow the funding to go forward. According to the Washington Post:

The bill chips away at the Pentagon budget, foreign aid and environmental spending but boosts funding for veterans programs. The Securities and Exchange Commission, responsible for enforcing new regulations under last year’s financial overhaul, won a 10 percent budget increase, even as the tax-collecting IRS absorbs more than a 3 percent cut to its budget.

The bill will also provide $115 billion for continued operations in Iraq and Afghanistan. Meanwhile efforts to address the national debt continue but have not produced any consensus yet.

What news did we miss? Tell us below!

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