Business News Roundup, Aug. 21
Federal and New York regulators have sued two companies that make loans against retirees’ pensions, saying they deceived borrowers about the high rates of the loans.
Regulators say that the companies, Pension Funding LLC and Pension Income LLC, used deceptive marketing tactics to go after the pensions of seniors and military personnel.
The U.S. Consumer Financial Protection Bureau and New York’s Department of Financial Services filed the lawsuit against the companies in federal court in Santa Ana.
The business of pension advance loans, which grew during the recession, has been under scrutiny by regulators for years.
Preying on seniors hit hard during the economic downturn, the schemes can drive retirees deeper into debt, regulators say.
“We are working to put a stop to the illegal practices these companies are using to sell their bogus product to military veterans and other pensioners,” bureau Director Richard Cordray said in a statement.
Gap is keeping its fiscal-year profit forecast unchanged after further struggles in the second quarter marked by weakness at its namesake and Banana Republic stores that offset rising sales at Old Navy.
Gap now expects $130 million to $140 million in charges connected to those moves, down from an estimate of $140 million to $160 million.
Gap said its net income fell 34 percent on costs related to the store closings, shipping delays on the West Coast, and the strong U.S. dollar.
Worldwide sales of smartphones in the second quarter grew at the slowest pace since 2013 as sales in China declined for the first time, according to research firm Gartner Inc.
While demand continues to increase in emerging markets, Gartner says overall smartphone sales were mixed.
Smartphone sales in China fell 4 percent from the same period last year — the first such decline for the world’s most populous country and biggest market for smartphones.
The number of Americans seeking unemployment aid rose slightly last week, yet remained at a low level consistent with a solid job market.
The National Association of Realtors said Thursday that sales of existing homes rose 2 percent last month to a seasonally adjusted annual rate of 5.59 million, the fastest rate since February 2007.
Steady job growth and relatively low mortgage rates have convinced current homeowners to trade up, while first-time buyers remain scarce.
The housing market contains a mere 4.8 months’ supply of homes, meaning that prices are rising for an increasingly narrow set of properties.
Mortgage giant Freddie Mac said Thursday that the average rate on a 30-year fixed-rate mortgage inched down to 3.93 percent from 3.94 percent a week earlier.
Investors and financial experts are watching for an anticipated interest-rate increase by the Federal Reserve next month, which could bring higher rates for home loans.