From the Carnegie Mellon article:

The researchers influenced participants' perceptions of their relative wealth — or lack thereof — by having them complete a survey on their opinions of the city of Pittsburgh that included an item on annual income. The group made to feel poor was asked to provide its income on a scale that began at "less than $100,000" and went upward from there in $100,000 increments, ensuring that most respondents would be in the lowest income category. The group made to feel subjectively wealthier was asked to report income on a scale that began with "less than $10,000" and increased in $10,000 increments, leading most respondents to be in a middle or upper tier.

Participants, who were recruited at Pittsburgh's Greyhound Bus terminal, were paid $5 for completing the survey and given the opportunity to buy as many as five scratch-off lottery tickets. The experimental group purchased an average of 1.27 lottery tickets, compared with 0.67 tickets bought by the members of the control group.

A second experiment reported in the paper found that indirectly reminding participants that, while different income groups face unequal outcomes in education, jobs and housing, everyone has equal chances of winning the lottery induced an increase in the number of lottery tickets purchased. The group given this reminder purchased 1.31 tickets, compared with 0.54 for the group not given such a reminder.

In the study, the researchers note that lotteries set off a vicious cycle that not only exploits low-income individuals' desires to escape poverty but also directly prevents them from improving upon their financial situations. They recommend that state lottery administrators explore strategies that balance the economic burdens faced by low-income households with the need to maintain important funding streams for state governments.

Here's an idea, although the fact that we came up with it in 30 seconds probably means it's a terrible one: just mail a free lottery ticket to every household below the poverty line once a month.

"Why Play a Losing Game? Carnegie Mellon Study Uncovers Why Low-Income People Buy Lottery Tickets" [CMU via Very Short List]
(Photo: Kim Scarborough)

The average works out to $282 per person. It won't pay for retirement, but it's nothing to sneeze at either.

Laws on abandoned property were enacted to protect consumers — to keep banks from eating up dormant accounts through annual account fees. Theoretically, the states are simply holding the assets in safekeeping until the owners turn up to claim them.

But over the course of the last few decades, the system has become a source of cash for states, which generally do not pay interest on the abandoned funds and can use the money to fill budget holes until it is claimed. Only a fraction of these assets are ever claimed.

Anyone who sets aside money for long-term goals, such as college expenses or the final years of retirement, is especially vulnerable.

Keep the state's budget-filling hands off your money by annually making small transactions between each of your bank accounts. If you have a safe deposit box, swing by at least once a year for an in-person visit to admire grandma's old jewels. You can add it to your list of solstice activities right next to "change smoke detector batteries."

If your money is already gone, search the National Association of Unclaimed Property Administrators' database of abandoned accounts at MissingMoney.com.

Avoid account inactivity for extended periods [The Los Angeles Times]
MissingMoney.com [The National Association of Unclaimed Property Administrators]
(Photo: The Consumerist)

In a related article, CSO talks to a data breach disclosure law expert about what's going on at the federal level, where there are at least eight different proposed laws bouncing around D.C.

Forsheit: I really can't tell you why it's taking so long. There was a sense with the new Congress that there was a greater likelihood something would pass. It's just not clear why it hasn't. Clearly people are concerned with ID theft. It's mostly a bipartisan issue, so you see a lot of consensus. There are some disputed aspects, like whether notification should be mandated—as it is in many states—with any unauthorized acquisition [of data], as opposed to there being a higher threshold trigger. But those can be worked out.

SO: What about the 11 states that don't yet have laws? Are they waiting for a federal bill?

Forsheit: In some of those states, there have been proposals that just haven't made their way through. If we don't see federal legislation soon, those remaining states will likely enact some law

RELATED
"CSO Disclosure Series | What's Next with Disclosure Legislation?" [CSOonline]

The state's largest payday lender, Advance America, claims the bill would either force them to close shop or accept losses of $100,000 per storefront. They are "very concerned" for the future of the 200 employees statewide who make their living cheating hard-working consumers.

...others argued that payday loans are an option that consumers need; without them, they said, people could be driven to less-savory choices, may depend more on their towns' welfare departments or have to scrimp on necessities. Other options facing someone who's broke - such as bouncing a check - are much more costly than a title loan, they said.

Sen. Bob Clegg recounted times of struggle in the 1970s and 1980s when he had to turn to the "black market" to tide him over. "You can fail, or you can take another chance," said Clegg, a Hudson Republican. "My position, I took another chance."

He would be too embarrassed to go to a welfare office, he said, and would rather "stand tall, make my deal with them and then make my payments because that keeps me a man."

Payday loan limits passed [Concord Monitor]
PREVIOUSLY: Payday Lenders Can't Afford To Lend You Money At Only 36%
(Photo: taberandrew)

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Predatory Lenders' Partner in Crime [Washington Post] (Thanks, AB!)

The South Carolina Board of Education approved the plan last month, and appears to be moving forward with it.

"I never thought [advertising inside school buses] was a good idea to start with," said Donald Tudor, South Carolina's DOE School Transportation Director, "but when you run a state program and districts request this be set in motion, you do it so they can make a choice. Ultimately, I couldn't think of a good reason why they shouldn't have the option."

For its part, SAC promises the ads will be age-appropriate, promote a healthy and productive life, and are directly approved by district appointed personnel. Ads sold thus far are from local businesses.

"School Buses Latest Victim of Ad Creep" [BrandWeek]
(Photo: Getty)

The laws differ from state to state, and companies tend not to report on gift card income, so it's hard to get an accurate idea of what happens to all those forgotten or abandoned cards. New York state is trying to push other states to support a "uniform federal solution" that would let all states grab a slice of the gift card pie—which certainly can't impress businesses, who must report gift card amounts as liabilities until they're spent or expired.

Who gets to keep that money depends on where the retailer locates its card division. Some states, including Delaware and New York, demand unspent balances be sent to them after periods ranging from two to five years. (If the card is used after that point, the retailer generally honors it but can apply to the state for a reimbursement.) Other states, including Florida and Virginia, allow retailers to hang on to the money. In those cases, after periods ranging from 18 months to seven years, the retailer can move the money from the balance sheet directly into operating income.

Tennessee has "one of the highest numbers of bankruptcy filings in the nation," and its students scored lower than the national average on a personal finance test (not that the national average—38%—was anything to be proud of):

Scores of Tennessee high schools already offer a personal finance course as an elective. But a 2006 survey by JumpStart Coalition for Personal Financial Literacy shows that only 29.8 percent of Tennessee students who took a personal finance test passed it. The test covered topics from money management to savings and debt. Nationally, 38 percent of students who took the test passed it.

"State pushes money literacy" [The Tennessean]

RELATED
"Report Card - Survey of the States: Economic, Personal Finance, and Entrepreneurship Education in Our Nation's Schools in 2007" [NCEE]
(Photo: Getty)

Included in the report's recommendations are making companies provide an opt-out on their Web site and getting an "opt-in" approval from customers before their information is shared; moves opposed by small businesses.

"Typical California; Opportunity to add more and more layers of government and regulation at a time when we still have not seen this particular law fully tested," said John Kabateck from the National Federation of Independent Business.

The new proposals call for states to provide affordable coverage to anyone whose medical costs are expected to be at least twice the average. For other higher-risk patients who do not meet those criteria, the insurers would agree to cap the premiums at 150 percent of the market rate.

But the industry is also trying to have a greater say in any state changes that may be enacted. Many insurers chafe, for instance, over what they consider an overly regulated approach in Massachusetts, which has created an agency to oversee the market for individual insurers as part of a new law requiring everyone to buy coverage.

"This is advice to the states on how they can create functioning and viable marketplaces," said George C. Halvorson, the chief executive of Kaiser Permanente, the California insurer, who chairs the trade group.

Without futher ado, some interesting highlights:

Kentucky doesn't vary much:

Most Affordable: Florence
2007 Avg. Sales Price: $209,579

Most Expensive: Louisville
2007 Avg. Sales Price: $238,000

Variance: $28,421

California, on the other hand, is all about the neighborhood:

Most Affordable: Sacramento
2007 Avg. Sales Price: $380,625

Most Expensive: Beverly Hills
2007 Avg. Sales Price: $2,206,883

Variance: $1,826,258

Living cheaply in Illinois may require living in Rockford, but we think you can probably find some better deals:

Most Affordable: Rockford
2007 Avg. Sales Price: $199,875

Most Expensive: Chicago
2007 Avg. Sales Price: $732,333

Variance: $532,458

In New York, we should all move to Binghamton:

Most Affordable: Binghamton
2007 Avg. Sales Price: $193,382

Most Expensive: Katonah
2007 Avg. Sales Price: $904,750

Variance: $711,368

The cheapest of all? Killeen, TX:

Most Affordable: Killeen
2007 Avg. Sales Price: $136,725

Most Expensive: Dallas
2007 Avg. Sales Price: $302,198

Variance: $165,473

Affordable Homes in Every State [BusinessWeek]

From the New York Times:

Lawmakers in a handful of states — including Maine, Minnesota and Ohio — have passed measures to tighten restrictions on subprime lending. Illinois, New York and Massachusetts have formed task forces and held meetings involving members of the mortgage industry, lenders and consumer representatives to figure out ways to rework problem loans. Minnesota is acquiring some foreclosed properties to resell to low-income people.

Several states are considering laws and regulations to make mortgage brokers accountable for allowing borrowers to take on debts they cannot repay.

In all, legislators in more than 30 states have introduced close to 100 bills intended to stem deceptive-lending practices and foreclosure, some by stiffening criminal penalties.

A national solution is required to combat predatory lending. The housing market, long considered local, and immune from national declines, is about to suffer the first national slide; fifty state solutions cannot guarantee the uniformity of protection afforded only by an act of Congress.

States Begin Action on Subprime Lending [NYT]
(AP Photo/Paul Sakuma)