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Nonrevolving credit drives consumer credit growth

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WASHINGTON (3/10/14)--Student loans and pent-up demand for autos helped boost nonrevolving consumer credit by $13.7 billion in January, according to Friday's data from the Federal Reserve.
 
The $2.8 billion increase in nonrevolving credit more than covered the $700 million drop in revolving credit at credit unions in January.
 
"Consumers are taking advantage of extremely low interest rates" to finance education and big-ticket items such as autos and vacations, said analysts at Moody's ( Economy.com March 7).
 
Credit unions' revolving credit experienced a 7.4% slowdown in January from December's seasonally adjusted numbers.
 
The Fed's report indicates consumers are reluctant to take on too much credit card debt with revolved credit ticking downward 0.2%, Moody's said. After two months of harsh weather, however, consumers may be ready to take on new purchases delayed by snow.

Credit quality continues to improve as well. According to the American Bankruptcy Insitute, total bankruptcy filings in the U.S. decreased 12% in February over the same period last year. Consumer filings dropped to 69,380 from February 2013's number of 78,614.

Total commercial filings in February decreased to 2,813, representing a 24% decline from the 3,722 business filings recorded a year prior. Total commercial chapter 11 filings also decreased 27%, to 452 filings in February from the 619 filings recorded a year ago.

Japan officially declares Bitcoin is not currency

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TOKYO (3/10/14)--The Japanese government Friday declared that Bitcoin was not legal tender, but that the digital peer-to-peer payments system could be subject to taxes.
 
"Bitcoin are neither Japanese nor foreign currencies and its trading is different from deals stated by Japan's bank act as well as financial instruments and exchange act," according to a document from Prime Minister Shinzo Abe's cabinet ( The Wall Street Journal  March 7).
 
Japan did say that the bitcoin sales, related transactions and gains on exchange rates would be subject to income, corporate and consumption taxes.
 
The country is trying to define Bitcoin and the government's role in regulating it in light of the bankruptcy of Mt. Gox, a Tokyo-based Bitcoin exchange. The Feb. 28 bankruptcy filing cited a loss of 850,000 bitcoins, worth about $450 million at the time ( News Now March 3).
 
In other Bitcoin news, the Canadian-based Flexcoin exchange also closed down last week after hackers made off with about 440,000 euros ($610,000). It said owners could receive some bitcoins back from computers that weren't connected to the Internet and couldn't be raided ( Euronews.com March 5).