Here are three top pieces of financial news and advice:
Default on debt, lose your license
Should people who fall behind on student loans have their driver's licenses revoked? asked Natalie Kitroeff at Bloomberg. Little-known laws that do just that are on the books in 22 states. But efforts to repeal them are gathering steam. Montana legislators are considering whether to repeal a state law that revokes occupational and driver's licenses for anyone who defaults on a student loan; a similar bill is pending in Iowa, where hundreds of student debtors have had their licenses suspended. In Tennessee, at least 1,500 people — including nurses' aides, teachers, and EMTs — have lost their professional licenses for failing to pay back loans. Debt collectors argue that these laws are "valuable tools for extracting long-overdue payments," but advocates for repeal say suspending borrowers' licenses has "real consequences" that make it harder for debtors to pay back loans.
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Tax-exempt status: Too simple?
Uncle Sam may be going too easy on would-be charities, said Patricia Cohen at The New York Times. The Internal Revenue Service is facing a surprising backlash from tax lawyers, state agencies, and even nonprofits themselves after introducing a new, "stripped-down" application, called a 1023-EZ form, for small groups seeking tax-exempt status. Charities have long complained about the IRS's 26-page tax-exemption application, with its onerous documentation requirements, but they warn that the 2½-page replacement "goes too far in the opposite direction." The new form — which only applies to charities that earn $50,000 or less — doesn't ask applicants anything about "governance, conflicts of interest, or function," making it "too easy to commit fraud."
A 'faster lifeline' for small firms
Small-business owners who need quick cash have a new "lifeline" in online lenders, said Stacy Cowley at The New York Times. Companies like Fundbox, BlueVine, and Kabbage specialize in offering small, speedy loans "to companies too new or too risky to interest banks and traditional lenders." Within an hour of signing up with Fundbox, Yaniv Liron, founder of a small New York City–based web design firm, had a $2,500 line of credit. But business owners should be careful. Because these firms make up just "a sliver of the overall market for business credit," they're often able to get away with charging "far steeper" interest rates and fees.
