Credit Card Statements Will Have A New Look in February

/PRNewswire/ -- The Credit Card Accountability Responsibility and Disclosure Act of 2009, commonly known as the CARD Act, has been signed into law and the Board of Governors of the Federal Reserve System has issued a final rule elaborating on some of the CARD Act's requirements.

Even though the implementation deadline for certain CARD Act requirements is not until February 22, 2010, many credit card issuers already have several elements of their CARD Act compliance plan in place. For instance, consumers can expect their February credit card statements to have a new look.

One prominent change to statements is the requirement that consumers be provided with an illustration of how long it will take them to pay off their balance, illustrating paying only the minimum amount due each month versus paying off the debt in three years. This will be a real eye-opener for millions of Americans who will now see each month just how serious their debt obligations are.

Further, the statements will now include contact information for nonprofit counseling agencies that may serve as a resource for sorting though their financial challenges. The Act requires issuers to prominently display a toll-free number where consumers may receive information about accessing credit counseling. Not only will this information help make consumers aware that help is available, but it will add a layer of protection by directing them to government-approved nonprofit counseling agencies for assistance.

As the largest and longest-serving network of community-based nonprofit credit counseling agencies in the nation, it is no surprise that the National Foundation for Credit Counseling (NFCC) has stepped-up to the plate and enhanced its National Locator Line (NLL) to support the government's new requirements. Through the NFCC NLL consumers will have access to certified counselors in 50 states and Puerto Rico and have the ability to receive assistance in 31 languages.

"The NFCC has always encouraged consumers to deal with their credit problems sooner rather than later. Now, with the help of the government, they will receive contact information on their monthly statements, so they can do just that," said Susan C. Keating, president and CEO of the NFCC. "This is a critically important step particularly since so many American consumers are in serious financial trouble and need help, and is consistent with the NFCC's mission to promote the national agenda for financially responsibly behavior."

Already more than 200 lenders have elected to utilize the NFCC's network to comply with the CARD Act and to assist their customers in need of financial counseling and education. The NFCC's enhanced NLL is operational now, well in advance of the February 22 deadline, allowing those who receive their February statements early in the month the ability to immediately reach out for help.

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Federal Home Loan Bank of Atlanta Utilizes Congressional Authority to Provide More Than $2.2 Billion in Credit Support for Tax-Exempt Municipal Bonds

/PRNewswire/ -- Federal Home Loan Bank of Atlanta (FHLBank Atlanta) today announced that it has utilized authority approved by Congress to provide over 50 letters of credit totaling more than $2.2 billion for non-housing-related tax-exempt bond transactions, stimulating economic development and lowering the cost of borrowing for public finance projects.

The Housing and Economic Recovery Act of 2008 (HERA) authorized FHLBank Atlanta to provide credit support for tax-exempt bonds issued or refunded between July 30, 2008 and Dec. 31, 2010. Traditionally, FHLBank Atlanta provided letters of credit for housing-related and taxable financing, and HERA now permits the support of a wider range of public projects, including economic development, public utility, and healthcare facilities.

FHLBank Atlanta's triple-A credit rating allows local governmental entities to borrow at lower costs while helping to maintain the flow of financing within a tighter credit market. In a typical transaction, FHLBank Atlanta serves as a provider of credit enhancement for the transaction on behalf of its member institutions as they work directly with municipal bond issuers.

Since Aug. 2008, FHLBank Atlanta has provided confirming letters of credit under HERA authority on behalf of 11 member financial institutions to support transactions that include $1.2 million for the Industrial Development Board of the City of Oxford (Alabama) and $108.7 million for the North Carolina Medical Care Commission.

"By lowering the cost of municipal bond transactions, we continue to support economic development activities in these communities during an ongoing period of budget constraints," said Richard A. Dorfman, FHLBank Atlanta President and Chief Executive Officer. "This Congressional authority has provided FHLBank Atlanta with the opportunity to make an important difference in the communities we serve through our member institutions."

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New Bill Signed by President Obama Allows Taxpayers to Claim Haiti-Related Contributions on 2009 Tax Return

/PRNewswire/ -- Taxpayers wishing to lend their support to relief efforts in Haiti now have an additional incentive to do so, thanks to new legislation signed into law by President Obama.

Through the new bill, H.R. 4462, taxpayers have two options regarding monetary contributions for Haitian Earthquake Relief. They can either deduct contributions made after January 11, 2010 and before March 1, 2010 on their 2009 return or can wait and claim the deduction on their 2010 return. In addition to allowing the contributions to be deducted on a 2009 tax return, the bill also includes a provision that recognizes donations made to a charitable organization via text message, provided that a copy of the phone bill showing the date, time, organization name, and donation amount is available.

"The nation of Haiti is suffering a devastating humanitarian crisis, and millions of Americans have already been moved to donate money to charities that are taking part in relief efforts," said Mark Steber, Chief Tax Officer, Jackson Hewitt Tax Service Inc. "Having the President specifically designate that Haiti-related monetary contributions may be acknowledged on a 2009 tax return, even though the calendar year has passed, is a powerful way to encourage this kind of giving - while also reminding taxpayers of the financial benefits of charitable contributions."

Here are some tips from Jackson Hewitt on how to make and record charitable donations and claim them on a 2009 tax return:

-- There are several ways to make a tax-deductible contribution to a
qualified charitable organization: through a cash payment, a check, a
credit card charge or by making a payroll deduction to a charity. The
Internal Revenue Service allows taxpayers to search for a qualified
organization on its Web site at http://www.irs.gov/app/pub-78/

-- Keep records of your donations. Acceptable records include a receipt
from the organization that states the date, name, address, location,
and amount of the donation; a cancelled check; or other bank documents
that provide the same information.

-- Don't forget to claim all the household items and clothing you donated
to your church, school, or other local charity during the year. The
fair-market value of all items in good or better condition that are
donated to a qualified organization are deductible. Make sure you
keep a list of all items donated and their value when you contributed
them.

-- If you volunteer, you can also deduct out-of-pocket expenses you have
that are directly related to your volunteer work.

-- Out-of-pocket expenses include mileage related to charitable work
(at present, 14 cents per mile), the cost of uniforms required
while doing the volunteer work (such as for scout leaders, EMTs,
firefighters, etc), and any supplies needed to do this work.
Remember to keep your receipts with the date and the
organization's name for your records.

-- If you are claiming mileage, make sure you have a record of the
miles driven, the date, and the organization's name. You should
also indicate starting point and destination.


"Charitable contributions claimed on a 2009 tax return must have been contributed in the 2009 tax year," notes Steber. "The new Haiti legislation is an exception."

More information about charitable contributions can be found on the Jackson Hewitt web site at www.jacksonhewitt.com. To find a nearby office or speak with a local tax preparer, call 1-800-234-1040.

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Pension Crisis Threatens Financial Health of States

/PRNewswire/ -- State employee pension systems are facing severe shortfalls, and these growing liabilities threaten to drive many states deeper into the red. This is according to "State Pension Funds Fall Off a Cliff," a new 50 state study co-authored by Dr. Barry Poulson of the University of Colorado and Dr. Arthur P. Hall of the University of Kansas.

The report, published by the American Legislative Exchange Council (ALEC), the nation's largest individual membership association of state legislators, shows that as of 2006, states have accumulated nearly $360 billion in unfunded pension obligations. However, the authors warn the problem is even worse, as investment losses from the recent economic downturn have not been fully realized in the official government statistics.

A sampling of data from 2008 reveals much trouble ahead if states do not undertake fundamental reform of pension systems. Illinois comes in with the worst funded pension plan in the nation at 46.1 percent. Private defined-benefit pension plans are deemed to be "critical" if the funded portion of the plan is less than 65 percent.

"The underfunding of public pension plans has become the 900 pound gorilla in the area of state budgets," said State Senator Jim Buck of Indiana, Chair of ALEC's Tax and Fiscal Policy Task Force. "If legislators do not properly address the crisis in public pensions, it will make current budget problems in the states look trivial."

The authors of this study conclude that the first step towards real pension reform is to increase transparency of unfunded pension liabilities by meeting the guidelines established by the Governmental Accounting Standards Board (GASB). According to the authors, the only viable long-term solution is to replace current defined-benefit plans with 401(k) style defined-contribution plans for new employees.

The full report is available for download at www.alec.org.

The American Legislative Exchange Council (ALEC) is the nation's largest nonpartisan, individual membership organization of state legislators.

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Commercial Mortgage Defaults in 2010: Hard Times for Some Banks

/PRNewswire/ -- Commercial mortgage defaults will be highly elevated in 2010 and could wipe out profits at a number of U.S. banks.

But it does not appear that this problem will morph into a true crisis that would endanger U.S. or global financial systems.

These are the key conclusions of a research study published today by SMR Research Corp. It is entitled The Commercial Mortgage Dilemma: Banking's Next Credit Challenge.

"The saving grace for the financial system is that most really large U.S. banks are modestly exposed," said SMR President Stuart A. Feldstein.

For example, highly delinquent commercial mortgages recently were only 0.1% of Citigroup's assets. JP Morgan Chase also appears "walled off" from the dilemma. Exposure at Bank of America is just slightly higher. None of the nation's largest banks risk failure due to commercial mortgage defaults, SMR noted.

The same cannot be said for some medium-sized and smaller banks. At small banks with less than $1 billion of assets, commercial mortgages recently were 32.5% of total assets - a level of dependence six-fold higher than at big banks with $50 billion or more of assets.

As of September 30, 2009, 154 banks had highly delinquent commercial mortgages equal to 3% or more of their total assets. In a reasonably good year, banks earn profits of only about 1% of assets. Many of these institutions will be hard-pressed to make any money in 2010, SMR said. Some could become insolvent.

The study includes specific 2010 risk rankings for each of the nation's 477 largest bank holding companies.

As of late 2009, the 90-day-plus delinquency rate on all commercial mortgages (including multi-family apartment building loans and commercial construction loans) was rising fast. It reached 5.59% on September 30, up from 3.51% just six months earlier.

Meanwhile, the vacancy rate on apartment buildings had reached its highest level since at least 1965. Vacancy rates were high as well at shopping centers and office buildings. The total commercial mortgage loan market was $3.4 trillion as of the third quarter of 2009.

Despite the gloom, SMR found reasons for cautious optimism.

Among them: The early-stage delinquency rate on commercial mortgages appears to have peaked in the first quarter of 2009.

In addition, overall delinquency and write-offs on commercial mortgages were still below levels seen in the last commercial lending crisis in 1991.

"If the economic recovery continues apace, the new commercial mortgage crisis may peak in 2010 and improve in 2011," Feldstein said.

SMR utilized more than 150,000 regulatory financial reports from banks and thrifts to present an 18-year history of commercial mortgage credit figures, from 1991 to 2009.

The firm also tapped its property records database to calculate recent foreclosure rates on commercial properties by type, by state, and by metro area.

Multi-family apartment buildings had the highest foreclosure rate. Properties dependent on consumer discretionary spending - including greenhouses and car washes - also showed high foreclosure rates.

Foreclosure rates were low at churches, medical buildings, funeral homes, and private schools.

Some local markets with high home foreclosures also had high commercial foreclosures, including Arizona and Florida. But the correlation wasn't perfect. Hawaii, for example, showed a high commercial foreclosure rate as the falloff in tourism clobbered hotels and restaurants.

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Consumer Credit Counseling Service of Greater Atlanta to Offer Free Reverse Mortgage Counseling

/PRNewswire/ -- Beginning immediately, Consumer Credit Counseling Service (CCCS) of Greater Atlanta will offer free reverse mortgage counseling sessions nationwide.

The decision comes as a result of a $1.8 million grant from the U.S. Department of Housing and Urban Development (HUD), which was awarded to the national nonprofit counseling agency late in 2009. While most of the agency's other services are offered free to consumers, reverse mortgage counseling has historically required a consumer payment. This new grant funding will allow CCCS of Greater Atlanta to provide more than 12,500 reverse mortgage counseling sessions at no cost through September 2010.

A reverse mortgage (also called a home equity conversion mortgage, or HECM) is a loan that allows a homeowner to convert the equity in their home into tax-free income without having to sell the home, give up the title, or take on a new or additional monthly payment. Instead of making mortgage payments each month, the homeowner can receive income in the form of a lump sum, or as monthly payments. As long as the homeowner lives in the home, pays the property taxes and insurance, and keeps the home in good condition, they will not lose the home.

To be eligible for a reverse mortgage, homeowners must be 62 years of age or older, have paid off their mortgage or have only a small balance remaining, and their home must be their principle residence. In addition, HUD requires consumers to speak with an approved HECM counselor prior to obtaining the loan.

"A reverse mortgage can offer seniors greater financial security," said Suzanne Boas, president of CCCS of Greater Atlanta. "It can be used to supplement social security or meet unexpected medical expenses, allowing seniors to remain in their homes. However, it can be an expensive option, and is not the right solution for everyone."

"We hope seniors across the country will take advantage of this opportunity," Boas continued. "Obtaining this free counseling from a reputable and qualified nonprofit agency will help them understand all aspects of a reverse mortgage loan, and make an informed decision that is best for their unique situation."

HUD requires all reverse mortgage lenders to provide homeowners a list of nonprofit counseling agencies that provide reverse mortgage counseling. CCCS of Greater Atlanta is one of a small number of counseling agencies designated by HUD to provide counseling nationwide.

Seniors can schedule a reverse mortgage counseling session by calling CCCS of Greater Atlanta directly at 866-616-3716, seven days a week, in English and Spanish. Counseling can also be initiated online at www.cccsinc.org/reverse.

All of the agency's reverse mortgage counselors are college graduates, have completed the Home Equity Conversion Mortgage (HECM) qualification exam approved by HUD and participate in reverse mortgage education classes.

To learn more, visit www.cccsinc.org and click on "I'm looking for information on a reverse mortgage" in the "Get Help Now" menu. There you will find a step-by-step guide to evaluating a reverse mortgage as well as helpful resources from organizations such as AARP.

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AICPA Supports IRS Plan to Register All Tax Preparers, Expresses Concern Over Wider Plan to Certify Non-CPAs

/PRNewswire/ -- The American Institute of Certified Public Accountants supports a proposal announced today by the IRS to regulate U.S. tax preparers by requiring nationwide registration of paid tax return preparers in 2011. The IRS's goals are to enhance compliance and elevate ethical conduct of tax preparers which are consistent with the AICPA's code of conduct and tax standards.

"The AICPA worked closely with the IRS during the public comment period leading up to this proposal and we believe this change will foster greater compliance with the tax code and better, more reliable service for U.S. taxpayers across the board," said AICPA President and CEO Barry Melancon.

"However, we have concerns about the IRS plan to provide tax preparers who are not already CPAs, enrolled agents or attorneys with a certification based on limited qualifications," Melancon said. "A new IRS examination process may cause confusion among taxpayers about the relative qualifications of tax return preparers."

The IRS plans to conduct a campaign to educate the public about the need to regulate tax preparers and the AICPA will work with the IRS to help it implement the recommendations to meet both the public interest and CPA practice requirements.

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