Consumer Groups Call On Fed to Adopt Stricter Gift Card Rules

/PRNewswire/ -- In comments filed with the Federal Reserve Board today, consumer groups urged regulators to rein in gift card fees and related terms and conditions that can quickly diminish their value. The Fed is considering a set of proposed gift card regulations that are required under the Credit CARD Act of 2009 and will go into effect on February 22, 2010.

"Banks earn billions every year from gift card fees just because consumers don't always get around to using their cards right away," said Michelle Jun, staff attorney with Consumers Union. "Congress passed limits on gift card fees earlier this year and now it's up to the Fed to make sure consumers are fully protected. The Fed should impose reasonable limits on fees so consumers stand a better chance of enjoying the full value of the gifts they receive."

Many consumers end up losing money on their gift cards because they don't redeem them right away. A recent Consumer Reports poll found that one quarter of those given gift cards last holiday season still have at least one card they haven't used and 11 percent of recipients have four or more. The TowerGroup estimated that about $8 billion remained unredeemed on gift cards in 2006.

In a letter to the Fed today, Consumers Union, Consumer Action, Consumer Federation of America, and the National Consumer Law Center urged regulators to:

-- Cap the amount that gift card issuers can charge for inactivity fees.
The Credit Card Act of 2009 prohibits card issuers from charging
inactivity fees on cards if they have been used within the past 12
months. After twelve months of inactivity, card issuers will be
allowed to charge a monthly inactivity fee. Consumers Union urged the
Fed to protect consumers more fully by limiting the amount that that
can be charged for inactivity to no more than the actual cost incurred
by card issuers for maintaining the card.

-- Limit fees on low value cards. Consumers Union urged the Fed to
follow the lead of states like California, Oklahoma and Washington
which have limited fees that can be charged for inactivity when the
balance on the card is $5 or less. These states limit card issuers to
charging a $1 per month fee.

-- Limit when inactivity fees can be charged. Many consumers report that
they face difficulties using their gift cards because merchants often
will not accept their cards when they don't cover the full cost of the
purchase or when they cannot determine the remaining amount on the
card. Consumers Union urged the Fed to count such transactions as
"activity" on the card so that consumers don't start incurring
inactivity fees when they've attempted to use them.

-- Make sure consumers are protected from early expiration of gift cards.
Under the Credit Card Act of 2009, gift cards cannot expire less than
five years from the date the card was purchased or money was last
added to the card, whichever is later. However, many gift cards are
stamped with a "valid thru" date," which is the estimated lifespan of
the card's magnetic stripe and could be less than five years from the
time the card was purchased. Consumers Union urged the Fed to require
card issuers to select expiration periods long enough that the card
will have at least five years of remaining life when it is purchased.
Card issuers should be required to disclose on the card that the card
may be valid beyond the date imprinted on it and to provide an 800
phone number on the card that consumers can use to easily find out
when their cards actually expire.

-- Protect consumers from losing funds on lost or stolen prepaid cards.
Prepaid cards are reloadable cards that can be used to make payments
similar to debit cards and are becoming increasingly popular. But
consumers using prepaid cards don't enjoy the same safeguards as debit
cards if their cards are lost or stolen and could end up losing all of
their funds. Consumers Union urged the Fed to ensure that prepaid
cards come with the same protections as debit cards so the consumer's
liability is limited to $50 and he or she can recover missing money.


The new gift card regulations will cover both retailer gift cards and prepaid general use gift cards (the ones that often are branded as Visa, American Express, MasterCard, or Discover). The law does not cover rewards, loyalty, telephone or promotional cards and does not cover paper gift cards or paper gift certificates.

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Financial Reform Approved Today by U.S. House Contains More Good Than Bad for Consumers, but More Work Needed, Says Consumer Watchdog

/PRNewswire/ -- Consumer Watchdog applauded approval by the U.S. House of Representatives of its financial regulatory overhaul bill, H.R. 4173, including the creation of a strong consumer regulator, but cautioned that more must be done to protect American homes and savings and prevent the big banks and Wall Street from dragging the nation into the next economic crisis.

An amendment to the bill that would have eliminated the consumer regulator from the bill entirely was defeated by just 15 votes, demonstrating the continuing efforts of the financial industry, which gave $28 million to members of the House this year, to defeat real reform.

Critical protections for American consumers, homeowners and investors are missing from the House bill. Problems that still must be addressed include:

-- Limits on the authority of states to act on citizens' behalf to
address financial abuses (inserted into the bill late Wednesday after
New Democrats held the bill hostage; read the Consumer Watchdog
analysis of financial industry contributions to New Dems and amendment
sponsors here:
http://www.consumerwatchdog.org/politicians/articles/?storyId=31656)
-- Loopholes in derivatives regulation proposal that could leave 30% or
more of the multi-trillion dollar market unregulated
-- Exemptions for some public firms from outside audits of their books
(rolling back provisions of post-Enron accounting reforms)
-- Little authority to break up banks that endanger the financial system
with their size or behavior
-- No relief for struggling homeowners to allow bankruptcy judges to
adjust the terms of home mortgages


"It's vital that the consumer protection agency withstood the assault from the banks, but restrictions on states' ability to protect consumers and exemptions for some financial institutions must still be addressed. The House bill takes critical steps towards reform, but was weakened by the financial firms who want to avoid strong oversight," said Carmen Balber, Washington director for Consumer Watchdog. "We look to the Senate to strengthen financial reform as it moves forward so consumers are truly protected against abuses and outrageous treatment by lenders and financial institutions."

Download a detailed analysis of the good and bad in the bill, compiled by Americans for Financial Reform, here: http://www.consumerwatchdog.org/resources/HR4173goodbad.pdf

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Council Applauds House Passage of Financial Reform Bill

/PRNewswire/ -- The Council of Institutional Investors applauds the House of Representatives' efforts to strengthen the regulation of the U.S. financial system through the reforms contained in the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173).

The Council is grateful to Representative Barney Frank (D-Mass.), chairman of the House Committee on Financial Services and prime sponsor of the bill, for his leadership on this important and comprehensive legislation.

"The House of Representatives has taken a significant step toward restoring trust in U.S. financial markets," said Ann Yerger, executive director of the Council of Institutional Investors. The Council believes that the global financial crisis revealed critical gaps in the regulation of U.S. markets and the urgent need for improvements in corporate governance. "The Wall Street Reform and Consumer Protection Act gives regulators and investors new tools to oversee financial firms more diligently and promote market stability," Yerger added.

Many provisions of the act are in tune with Council priorities and the recommendations of the Investors' Working Group, which the Council has endorsed. In particular, the Council welcomes the act's affirmation of the authority of the Securities and Exchange Commission (SEC) to give shareowners the right to place their nominees for directors on company proxy cards. Making it easier for investors to nominate their own candidates for director would invigorate board elections and make directors more responsive, thoughtful and vigilant.

The Council also lauds measures in the legislation that enhance the oversight and accountability of credit rating agencies and bolster the resources of the SEC. However, the act's provisions to regulate over-the-counter derivatives trading, while an improvement, need to be strengthened.

Passage of the Wall Street Reform and Consumer Protection Act of 2009 marks progress toward an urgently needed, broad overhaul of financial markets and corporate governance regulation. The Council looks forward to Senate approval of comprehensive regulatory reform legislation next and is eager to work with Senate Banking Committee Chairman Christopher Dodd (D-Conn.) and Senator Richard Shelby (R-Ala.), ranking member of the Senate Banking Committee, on the proposed Restoring American Financial Stability Act of 2009.

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State Bank and Trust Company Acquires Assets and Deposits of The Buckhead Community Bank and First Security National Bank from FDIC

/PRNewswire/ -- Georgia Department of Banking and Finance and the Office of the Comptroller of the Currency announced December 4 that State Bank and Trust Company has agreed to acquire assets and deposits of The Buckhead Community Bank and First Security National Bank, in a transaction facilitated by the Federal Deposit Insurance Corporation (FDIC).

State Bank is one of Georgia's healthiest and best capitalized community banks with branches throughout Middle Georgia and Metro Atlanta. As of December 5, 2009, all bank branches previously owned and operated by Buckhead Community Bank and First Security National Bank will become branches of State Bank.

The Buckhead Community Bank was founded in 1997 in Atlanta with branches in Buckhead and Midtown, as well as Sandy Springs, Alpharetta, Cobb County, Cumming and Gainesville. As of Sept. 30, 2009, the bank had $856.2 million in assets and $813.7 million in deposits.

First Security National Bank was founded in 1985 in Norcross, Georgia with branches in Atlanta, Cumming, and Canton. As of Sept. 30, 2009, First Security had more than $128 million in assets and $123 million in deposits.

The acquisitions became effective at the close of business on Friday, after regulators closed the banks and named the FDIC as receiver. The FDIC then approved the whole bank acquisitions with loss share by State Bank, which includes all deposits, loans and other assets.

State Bank was determined the winning bidder after submitting to the FDIC a bid for the assets and deposits of the banks. With FBR Capital Markets serving as placement agent, State Bank previously raised close to $300 million, including investments from the executive management team, to provide the capital to facilitate these acquisitions.

This is the second FDIC transaction that State Bank has completed. In July 2009, State Bank acquired certain assets and deposits of the bank charters owned by Security Bank Corp. That acquisition made State Bank the market leader in Middle Georgia with a presence in Metro Atlanta. Evans and the State Bank management team previously led Flag Financial Corp., which was acquired by RBC Centura in 2006.

"With the addition of these two established community banks, State Bank solidifies its position as one of the best capitalized and largest community banks in metro Atlanta," said Joe Evans, chairman and CEO of State Bank. "We are especially pleased to have secured a presence in Buckhead, where my team and I were so successful at Flag Bank."

"We have made great progress with our integration of the former Security Banks. Our strong capital position and depth of experience allows us to continue to pursue other opportunities that fit our strategic goals," Evans said. "As we stated previously, developing a significant presence in Metro Atlanta is a central part of our strategy."

"Our first order of business is to assure the customers of these banks that their deposits are safe, sound and readily accessible," Evans added. "State Bank is one of the healthiest financial institutions in Georgia, with a sound balance sheet and very strong capital ratios."

Customers of The Buckhead Community Bank and First Security National Bank should continue to use their existing branches, checks, ATM or debit cards. If clients have any questions regarding their accounts involved in this transaction, they should continue to use the same channels as they have in the past, including contacting their local branch. All offices and branches will be open during their normal days and hours as in the past.

For more information, bank customers can contact State Bank at 1-800-414-4177 or visit their branch location. They can also go to www.StateBT.com.

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Market Gains in November Boost Funding Status of U.S. Pensions, According to BNY Mellon Asset Management

/PRNewswire/ -- U.S. stocks rose 5.7 percent in November, contributing to a 2.6 percentage-point improvement in the funded status of the typical U.S. corporate pension plan, according to monthly figures published by BNY Mellon Asset Management. The funded status of the typical plan improved to 82.5 percent at the end of November, which was the highest level since May, and up from 79.9 percent at the end of October, according to the BNY Mellon statistics.

Assets for the typical U.S. corporate plan rose 3.6 percent, outpacing the 0.2 percent gain in liabilities during the month, which reflected interest accruals as the discount rate for November was unchanged from October. For the year, through November 30, the funding ratio for the typical plan is up 8.6 percentage points, as represented by the BNY Mellon Pension Liability Index.

"U.S. corporate pension plans continued their road to recovery as domestic and international equity markets registered strong results," said Peter Austin, executive director of BNY Mellon Pension Services, the pension services arm of BNY Mellon Asset Management. "Equities have rallied in eight of the last nine months and have been the driving force for the funding improvement. Liability discount rates are only 14 basis points lower for the year, which has limited the impact on pension plan liabilities. Plan sponsors that maintained their equity allocations, which hasn't been easy given market volatility, have been rewarded for their commitment to their strategic asset allocation."

Plan liabilities are calculated using the yields of long-term investment grade corporate bonds. Lower yields on these bonds result in higher liabilities.

"With funding levels near 2009 highs and 2010 financial planning underway in many organizations, there is increased interest in discussing pension risk reduction programs," said Austin. "These programs would include new or increased allocations to liability driven investing (LDI) strategies. Plan sponsors remain fearful of plan surplus/deficit volatility, which remains a relevant topic given the fragility of the global markets."

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The Consumer Credit Bureaus are Unraveling American Self-Reliance and Compromising Our Greatest National Assets: The Individual and Small Business

/Standard Newswire/ -- The Consumer Credit Reporting Bureaus, which purport to help lenders
evaluate risk, control the flow of credit and encourage fiscal responsibility, have instead played a significant role in destabilizing the economy and are impeding America's recovery.

It is a predatory system that seizes on financial hardships and turns short-term setbacks into long-term liabilities. For the small business owner, he risks losing not only his business but also his personal livelihood and often a lifetime of investment.

And the nation loses its critical buffer: the once-resilient small business, when 'big business' falters.

"The Consumer Credit Bureaus have been ruthlessly chipping away at small business and are now derailing America's economic recovery. We created the website
www.abolish-the-credit-bureaus.com (http://rs6.net/tn.jsp?et=1102862490430&s=13633&e=001-W_WIUx6oUMs-HrxjHW-kUMAKm-mqGf8-RqK0quO-dbijcIIobiKZ5H55jw28xFYz0vX66C5COpZBuxbiFlL30CbIO4k32wakPqjbtyOvY80th7xxAqN3_ozoDI3Pjaq1cd--vN5l44=), Video-short and Petition as vital tools for change; including examining recent comments by President Obama and Federal Reserve Chairman Bernanke," says small business owner, Deborah Fineout-Launey, of marketing firm LHH&F.

"Second mortgages, personal credit cards, large personal guarantees and the Consumer Credit Score should not be the tools for corporate lending. A national summit on small business is meaningless without lending reform," says Ms. Fineout-Launey.

When economic setbacks or downturns occur, many in the economy are affected - not because of
credit 'abuse.'

Yet, in this system, the small business owner, working in good faith to stabilize his business and
ride out the economy, finds that:

· A personal debtor's prison quickly arises;
· Leading to usurious fees;
· Loss of essential banking relationships;
· Credit defaults increase;
· Assets, personal and corporate, are stripped;
· Putting all parties' investments in escalating risk

The result is the unmerited loss of viable small businesses, loss of essential tax revenues, rampant unemployment, loss of real estate leases, healthcare, personal livelihoods, home foreclosures, and a dangerously weakened middle class.

"It is time to abolish the Consumer Credit Report and Score from small business lending and, frankly, in general. It reduces the small business owner's significant investment, and the investment of his lenders, to a gamble of epic proportions. It is a matter of moral conscience and economic necessity," she adds.

Robert Launey and Deborah Fineout-Launey are small business owners in New York, committed to drawing attention to the economic fallout created by the Consumer Credit Report and Score in small corporate lending.

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Upcoming Tax Season Provides Unique Tax Savings Opportunities through Roth IRA Conversions

/PRNewswire/ -- A change in the federal tax law, effective January 1, 2010, will permit Roth IRA conversions for taxpayers at all income levels. In the past, this option was only available to those with an adjusted gross income of $100,000 or less.

"Taxpayers may now convert part, or all of their assets from a traditional IRA into a tax free Roth IRA," says Kevin McCormack, President of Pension Parameters Financial Services.

"While many individuals and businesses are carefully scrutinizing their budgets, creating a Roth and taking advantage of a unique opportunity this year and next, and in some cases, even borrowing money to cover an investment like a conversion today, can pay off."

Details related to the change include:
-- Any portion of a traditional IRA may be converted
-- Conversion to a Roth IRA in 2010 allows for a 50-50 income tax split
for the 2011 and 2012 tax years - and the split is only applicable if
you convert in 2010
-- Though account balances have decreased in the past 18 months, the
upside is that reduced balances will lower conversion tax and yield
the potential to recover in a tax-free account
-- With tax rates at an historical low, converting to a Roth IRA in 2010
may help protect retirement assets should tax rates rise


Pension Parameters has been helping self-employed individuals and small business owners with retirement plan development and investment management since the 1970s. The company is known for its customized retirement plans and extensive follow-up with clients. McCormack states, "Unlike many pension plan managers, we do not simply collect monies and set up the plan and invest. When we see market changes, our market manager personally calls each client to recommend the right move to make."

According to McCormack, those establishing their first company retirement plans are often confused about their options such as a 401(k) plan, which allow owners and employees to make contributions through pre-tax payroll deductions, or a defined benefit plan, which may allow a business owner to make the highest possible annual contribution to his or her retirement account. Pension Parameters lately has been recommending new comparability plans, a profit-sharing option that allows certain businesses to make discretionary contributions to a qualified plan.

A Roth IRA ultimately saves tax dollars as well. Since you have already paid the tax upfront when establishing the account, the need to pay tax later is eliminated. The money you make in a Roth IRA will all be yours (or your heirs) in the end, not the government's.

Pension Parameters Financial Services is a New York and New Jersey based full service 401(k) plan provider including investment advisory and management services for the small business market. For more information regarding Pension Parameters or Roth IRA savings opportunities call: 212-675-9360 or visit them on the web at http://www.pensionfinancialservices.com/.

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