Georgia Department of Banking and Finance Takes Possession of Georgian Bank, Atlanta, Georgia

The Georgia Department of Banking and Finance (“Department”) took possession of Georgian Bank, Atlanta, Georgia on September 25, 2009. The Superior Court of Cobb County issued an Order appointing the Federal Deposit Insurance Corporation (“FDIC”) as Receiver of the Bank effective upon the Department taking possession of Georgian Bank.

The Department took possession of Georgian Bank pursuant to the Official Code of Georgia, Section 7-1-150(a) which authorizes the Department in its discretion to take possession of the business and property of any state chartered financial institution whenever such financial institution is either insolvent or operating in an unsafe or unsound condition to transact its business, is operating in violation of any court order, statute, rule or regulation, or requests the Department to take possession of its business and property.

Through an agreement with the FDIC, Georgian Bank will be acquired by First Citizens Bank and Trust Company, Inc. (“First Citizens”), Columbia, South Carolina.

All deposit accounts of Georgian Bank have been transferred to First Citizens and will be available immediately. On Monday, September 28, 2009, depositors will be able to access their accounts at the former main office and branch locations of Georgian Bank. Customers of both banks should continue to use their existing branches until First Citizens can fully integrate the deposit records of Georgian Bank. Additionally, the former depositors of Georgian Bank can continue to access their accounts through automated teller machine transactions, checks and debit transactions.

All deposits will be transferred to First Citizens and, therefore, it is not anticipated that there will be any loss exposure to former Georgian Bank depositors that have deposits exceeding the FDIC Deposit Insurance amounts.

The Department’s Commissioner, Robert M. Braswell, reminds depositors that deposits of all Georgia banks are insured by the FDIC up to $250,000. Special rules are in place for accounts held in trust status and joint accounts that may further expand deposit insurance coverage. You can find additional information on FDIC Deposit Insurance at www.fdic.gov.

The FDIC has established a website and a toll-free phone number to answer questions from depositors, creditors and other interested parties regarding the receivership of Georgian Bank. Please refer to the FDIC’s website for further information regarding the details of the purchase and assumption transaction. The website is www.fdic.gov and the toll-free phone number is 1-800-405-1498. The phone number is operational this evening until 9 p.m. Eastern Standard Time, on Saturday from 9 a.m. until 6 p.m. on Sunday from noon to 6 p.m. and thereafter from 8 a.m. to 8 p.m.

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Georgia Department of Banking and Finance's Order to Cease and Desist Issued to Atlanta Home Modification Services, LLC d/b/a Atlanta Home Mods Final

On September 21, 2009, an Order to Cease and Desist issued by the Georgia Department of Banking and Finance (“Department”) to Atlanta Home Modification Services, LLC d/b/a Atlanta Home Mods located at 1588 Atkinson Road, Suite 106, Lawrenceville, Georgia, 30043 became final.

This Order to Cease and Desist was issued by the Department after it obtained evidence that Atlanta Home Modification Services, LLC d/b/a Atlanta Home Mods engaged in residential mortgage brokering activities without a license or under an applicable exemption in violation of O.C.G.A. § 7-1-1002.

Pursuant to Georgia law, it is prohibited for any person knowingly to purchase, sell, or transfer a mortgage loan or loan application from or to an entity that is not licensed or exempt from licensing or registration provisions to engage in mortgage broker or lender activities.

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'The State of College Savings' Survey Finds Parent Confidence Crashing As They Rely on Loans, Shift Debt Burden to Their Children

'The State of College Savings' Survey Finds Parent Confidence Crashing As They Rely on Loans, Shift Debt Burden to Their Children - 529 Investors Still Most Successful Savers

/PRNewswire/ -- Parents' confidence in their ability to save for college plummeted over the last year, as they socked away less and relied more on the prospect of student loans and grants to fund their children's college education, according to the 2009 "The State of College Savings" survey of nearly 800 parents across regions and income levels conducted by the College Savings Foundation (CSF).

Forty-four percent of parents are "not very confident" that they will reach their college savings goals, up from 31 percent in 2008; while the number of parents who are "very confident" has plunged to 12 percent from 20 percent last year.

Reduced savings may be contributing to this malaise: one-third of parents said that they are saving less for college this year than last, with 43 percent of those prioritizing current living expenses and 29 percent suffering a cut in income. Of the total parents surveyed, 41 percent have saved nothing at all, and 28 percent have saved less than $5,000 per child.

The number of parents expecting student loans to pay for college soared to 47 percent from 37 percent one year ago. Those expecting financial aid spiked up to 73 percent from 62 percent last year. And, more parents are shifting the debt burden to their children: 68 percent versus 63 percent last year, with 46 percent expecting their kids to be responsible for up to one-third of their college debt - up from 34 percent in 2008.

Despite this behavior, parents haven't adjusted or changed their hopes and aspirations: 76 percent of parents don't expect to have to narrow their children's college choices; and 76 percent would be very disappointed if their child could not afford to go to college (at least 8 on a scale of 1-10).

Pointing to a clear strategy for bridging this gap between intention and action was the finding that parents owning 529 college savings plans were the most successful group in saving for college: 61 percent of parents with 529s have saved more than $5,000 per child, versus 22 percent of those without one.

"This survey is a call to action for parents to save early and often - even if they can only start with small amounts," said Kevin McMullen, Chairman of the College Savings Foundation, a leading nonprofit encouraging American families to save for their children's college education. "The economic reality is that parents cannot count on college loans and grants being available or affordable when their children reach college age. Any shortfall in college funding will cascade as debt burden onto their children's futures."

Parents realize that their dependence on debt will have a long term impact: 65 percent expect that it will take at least five years for them or their children to pay it off after graduation.

Those who can't get loans anticipate getting Federal or State grants: 28 percent of parents are relying on these as their primary source of college funds, compared to 20 percent last year. Seventeen percent expect financial aid to cover over two-thirds of all college costs - up from only ten percent last year. Thirty-four percent expect it to cover up to one third of college costs.

"Financial aid covers only a portion of college costs and families need to look for ways to close that gap," McMullen said. According to the College Board, in 2007-2008 undergraduate students received on average $8,896 in financial aid, including $4,656 in grant aid and $3,650 in federal loans. This represents a fraction of the average $14,333 cost of today's four-year public college, or $34,132 for a private college or university.

As in last year's survey, 22 percent of parents expect help from grandparents; and 72 percent expect no help in paying for college at all. Twenty-seven percent would ask friends and family to "trade toys for tuition," or contribute to college rather than in material gifts.

Three-quarters (74 percent) of parents do not even know how much they need to save, up from 70 percent last year.

"In the face of an economic climate that is clearly putting families under pressure, we as an industry including financial advisors and policy makers should redouble our efforts to raise awareness on how to save to stave off debt," McMullen said.

The survey showed that many parents are saving successfully through vehicles like 529 college savings plans and strategies like automatic savings programs, enabling systematic and regular contributions of funds for college savings.

Parents owning 529s were far more successful in saving than those using other investments: 34% of parents who have saved more than $5,000 per child invest in 529s as their primary savings vehicle, more than double that of the next most popular ones: 14 percent of parents who have saved more than $5,000 per child are primarily in mutual funds, and 14 percent are in cash.

The percentage of parents in 529 plans held steady from the 2008 report. Nearly one in four, or 23 percent, is invested in a 529 college savings plan, and one in five (19 percent) says that 529s are the number one college savings vehicle, exceeded only by cash at 25 percent. At the same time, in a question that permitted more than one answer, the 2009 survey found that those parents who are saving are also squirreling money away in general (57 percent) and emergency (31 percent) funds.

"While it is understandable that parents are keeping cash at hand in these uncertain economic times, families are continuing to recognize the benefits of 529 college savings plans in reducing taxes and reaching their college savings goals," said McMullen. "Parents have the option to keep 529 funds in cash as well."

The 2009 State of College Savings survey also offered these glimmers of good news:

-- Although 46 percent of parents said that they would like to save more
in general but can't because of this year's economic reality, one in
four parents - 24 percent - said that they were actually saving more
than before.
-- Parents seemed to understand that a little is better than nothing:
those who tried to save at least something edged up from last year:
28 percent have saved less than $5,000 per child - but that is up from
22 percent in 2008. Around 30 percent of those are invested in a 529.
-- Parenthood prompts saving and gives parents time to build savings
momentum: 25 percent of parents started saving when their child was
born, and 20 percent when the child was 1-5 years old. Those parents
with children 11-13 years old, and those with children 14-18 years
old, had saved more than those in other age groups. Approximately 42
percent of each of those groups has saved more than $5,000 per child,
versus 26 percent of those with children in younger and older
categories.
-- While 20% of parents used an automatic savings strategy, those that
did were successful savers. 63% of them have saved more than $5,000
per child. 35% have been able to save between $100-$300 per month.
57% of those utilizing an automatic savings strategy own a 529.

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IRS Voluntary Disclosure Program for Swiss Bank Accounts to End Sept. 23

The Internal Revenue Service is set to end Sept. 23 its voluntary disclosure program that allows U.S. taxpayers to avoid criminal prosecution if they pay taxes, interest and penalties for the past six years, in addition to a penalty equal to 20 percent of the highest account balance. Although the cost of voluntary disclosure is significant, it is much less than the costs of being pursued, either civilly or criminally, by the U.S. tax authorities.

The voluntary disclosure program was put in place after it was revealed that thousands of wealthy Americans were illegally hiding money in Swiss bank accounts. The activity came to light when a former employee of the Lichtenstein bank, LGT, provided data to the German government in 2008 on foreign accountholders using LGT to evade taxes. Later that summer a former employee of the Swiss bank, UBS, also admitted that UBS was assisting many wealthy Americans in evading taxes by hiding money offshore. Names were released and again the U.S. government was in hot pursuit of tax evaders. The UBS scandal gave rise to a lawsuit where UBS admitted to assisting in tax evasion, paid the U.S. government a $780 million fine, and ultimately agreed to turn over details on U.S. citizens with Swiss accounts at UBS.

To date, the IRS has witnessed an overwhelming response to its voluntary disclosure program. Stephen Ziobrowski, a tax partner in the Boston office of Day Pitney LLP, says: "The voluntary disclosure program has turned into a convenient revenue generator for the IRS. The IRS is able to collect significant past due taxes, interest and penalties without utilizing the resources that would be necessary to pursue these taxpayers on an individual basis." Mr. Ziobrowski added that, "Many clients come to us, unable to sleep at night, due to their fear of being caught by the IRS. Although the costs of voluntary disclosure are significant, clients often consider it a good investment to regain their peace of mind and ensure that their children or grandchildren do not someday inherit their tax problems."

Once the voluntary program ends there is no indication as to whether the IRS will extend the program beyond the current deadline. Daniel L. Gottfried, a tax attorney in the Hartford office of Day Pitney LLP, says, "The only way to resolve these tax compliance problems with a high degree of certainty is to enroll in the voluntary disclosure program, and taxpayers have a limited time to get into the program before the doors close. Affected taxpayers must consult their attorneys immediately in order to meet the Sept. 23 deadline."

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