Capitol Bancorp Receives Approval to Consolidate Three Georgia Banks

/PRNewswire/ -- Capitol Bancorp Limited (NYSE:CBC) announced today that it has received regulatory and shareholder approval to consolidate Bank of Valdosta, Peoples State Bank and Sunrise Bank of Atlanta. Effective July 30, 2010, all three locations began operating as Sunrise Bank.

Capitol's Chairman and CEO Joseph D. Reid said, "To date, Capitol's consolidation strategy has resulted in a reduction of 34 bank charters into seven. These bank consolidations have positioned us to preserve core capital, strengthen operational efficiencies and enhance risk management oversight."

Leadership for the consolidated bank will be headed by Clinton Dunn, who will serve as the Chairman and CEO of the consolidated bank. Joining Dunn on the executive management team are Matt Stanaland, who will serve as President and Kay Howell, who will serve as the Market President of Jeffersonville.

"We will continue to provide the same great service that our customers have grown accustomed to. At Sunrise Bank, we remain committed to supporting our local communities through community involvement and local decisions," added Dunn.

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Georgia Power Announces Planned Redemption of Series O 5.90% Senior Notes and Series R 6% Senior Notes

PRNewswire -- Georgia Power today announced the planned redemption June 24, 2010 of all $150 million aggregate principal amount of its Series O 5.90% Senior Notes due April 15, 2033 and all $200 million aggregate principal amount of its Series R 6% Senior Notes due October 15, 2033.

The redemption price for the full redemption of the Series O 5.90% Senior Notes due April 15, 2033 (NYSE:GPD) and the Series R 6% Senior Notes due October 15, 2033 (NYSE:GPJ) will be 100% of the principal amount thereof ($25 per senior note), plus accrued and unpaid interest to the date of redemption.

As trustee, The Bank of New York Mellon is expected to notify each registered holder by first class mail on or about May 25, 2010. The Bank of New York Mellon is located at 101 Barclay Street, 1st Floor East, New York, New York 10286.

Georgia Power is the largest subsidiary of Southern Company, one of the nation's largest generators of electricity. The company is an investor-owned, tax-paying utility with rates well below the national average. Georgia Power serves 2.3 million customers in all but four of Georgia's 159 counties.

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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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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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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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Statement: Alan Essig, Executive Director, on October Revenue Decline and Worsening State Budget Deficit

The dismal October revenue numbers released today underscore the depth of Georgia's fiscal crisis. For these first four months of the new fiscal year, revenues are down by 15.1 percent.

The governor's preliminary analysis of the FY 2010 revenue projection estimates a 6.2 percent revenue decline, a decrease from the nearly 4.0 percent revenue decline the governor announced in July.

Although there has been no public announcement, this analysis is contained within the Official Statement for the State of Georgia General Obligation Bond Sale dated October 26, 2009.

The revised projection means Georgia likely is facing a $1.26 billion budget shortfall. This is an additional $320 million budget shortfall on top of the $940 million budget shortfall previously announced.

In response to the projections, the governor's budget office has a contingency plan that requires state agencies to cut their budgets again, this time by $320 million dollars (an additional three percent). This comes on top of the five percent budget cuts announced in July ($800 million dollars of cuts), and the double-digit percentage cuts ($500 million) already implemented when the FY 2010 budget was passed last April.

Also problematic are more than $2 billion in non-recurring revenues in the base of the FY 2010 budget. Unless lawmakers take a more balanced approach to solving this fiscal crisis, an approach that includes revenue options, Georgia will be facing further cuts to vital public services in FY 2011 and 2012, including those to healthcare, public safety, and education.

It is time for Governor Perdue and the General Assembly to bring a balanced approach and transparency to this fiscal crisis. The General Assembly should hold public hearings and learn about the state's revenue outlook from leading economists in the state.

The General Assembly also should hear from state agency staff and citizens about the impact of the budget cuts already in place and the potential impact of planned cuts.

In order for Georgia to prosper, lawmakers must not rely soley on cuts to public services. Georgia can not cut its way to prosperity. The governor and General Assembly must look to raise revenues, as a majority of states have done, including a majority of our conservative southern neighbors. They must take a balanced, informed, and thoughtful approach to solve the state fiscal crisis, and this must include strategic revenue options.

Alan Essig
The Georgia Budget & Policy Institute

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INPUT Issues New Report Card on Economic Stimulus Package

(BUSINESS WIRE)--INPUT, the leading authority on government business, today announced an updated Report Card grading the Obama Administration on its execution of stimulus package objectives for the American Recovery and Reinvestment Act (ARRA) of 2009. The new grades were issued based on the release of the much anticipated recipient reports required by the ARRA. They cover four key recovery areas: Speed of Spending, Job Creation, Transparency & Reporting, and Contracting Effectiveness.

Since its first Report Card in June, which graded the Obama Administration on its execution of stimulus objectives during the first 100 days of the ARRA, INPUT has made noteworthy updates to its evaluation. Contracting Effectiveness received the most improved grade, moving from a C- to a B based on federal agencies’ significant improvement in the use of fixed price contracts and in the percentage of contract awards to small businesses. Transparency and Reporting also rose from a D to a C-, still leaving significant room for improvement to address late reporting and a lack of transparency surrounding grants applications for many programs. Speed of Spending continued to receive INPUT’s highest grade, earning a B+ based on the federal government’s adeptness in dispensing a tremendous amount of money very quickly. Meanwhile, Job Creation again received an Incomplete.

“The federal government has continued to dispense stimulus money at a record pace,” said Timothy Dowd, CEO of INPUT. “However, questions still remain about how that spending is translating into new jobs. While INPUT’s latest report card points to some noteworthy areas of improvement in the Administration’s execution on the stimulus, there is still much work to be done to address shortcomings across all key recovery areas.”

Speed of Spending: B+

In Vice President Biden’s first Quarterly Report to the President on Implementing the American Recovery and Reinvestment Act of 2009, he stated that the President had set a goal of spending $350 billion by Sept. 30, 2010. In order to achieve that goal, the federal government needs to spend $4.16 billion per week. The Administration’s speed of spending has remained nearly the same as INPUT’s last scorecard, averaging $3.6 billion per week. At its current pace, the administration will spend $305.2 billion by September 30 of next year, achieving 87% of its previously stated goal.

Job Creation: Incomplete

President Obama promised 3.5 million to 4.0 million jobs would be created or saved with the passage of the Recovery Act. While recently released recipient reports put that number at 640,329 eight months after the ARRA’s enactment, the unemployment rate has risen from 8.9 percent to 9.8 percent during the same period. Additionally, 2.6 million people have lost their jobs since March and 512,000 new unemployment claims were filed during the week ending October 31, 2009.

Despite the recent release of initial recipient reporting, INPUT continues to believe that accurate reporting of job creation is ultimately unknowable because of the number of recipients reporting, the complexity of the reports, the definition of a saved job, and recipients were allowed to use a calculation when they were unable to provide actual data. As a result, INPUT once again gave the Administration an Incomplete for Job Creation.

Meanwhile, recipient reporting has shown that the cost of each job created varies wildly from state to state. For example, the cost per job created or saved in Pennsylvania was $488,930, compared to $41,475 in Montana.

Perhaps the most troubling issue is the concentration of created or preserved jobs in the public sector. Based on its analysis of recipient reports, INPUT discovered that more than half of the total number of jobs created are in the areas of education, criminal justice, corrections and public administration. There are serious concerns about what happens to these jobs when stimulus money runs out and states are still faced with nearly $200 billion in budget gaps.

Transparency and Reporting: C-

INPUT has raised the Administration’s grade for reporting and transparency from a D to a C-. Each new report has been late, based on the Office of Management and Budget’s (OMB) initial guidance, and the data quality of each new report has been poor upon release. However, over time the quality and completeness of previous reports has improved and INPUT expects this trend will continue. A major area of disappointment continues to be the lack of transparency surrounding applications for many of the grant programs funded by the Recovery Act.

“INPUT encourages the Administration to reconsider its approach with respect to publication of grant applications,” said Dowd. “By allowing citizens access to grant applications before the awards are made and the opportunity to comment on those applications, federal agencies could truly be taking a proactive approach to combating fraud, waste and abuse.”

Effectiveness of Contracting: B

According to INPUT’s latest analysis, federal contracting officials have substantially improved their performance in the use of fixed price contracts, small business involvement, and the establishment of new contracts. As a result, INPUT has raised the Administration’s grade for Effectiveness of Contracting from a C- to a B.

To date, the federal government has awarded 48 percent of the reported contract obligations using fixed price contracts, a 30 percent increase over INPUT’s initial report card. In addition, 86 percent of the reported contract obligations are being channeled through competitive contracts. Almost 70 percent of the reported obligations have been issued against contracts that were already in place prior to passage of ARRA. This is a significant improvement from the 94 percent use of existing contracts in June.

In addition, nearly 27 percent of the contracting dollars awarded have been to small businesses, 4 percent above the government-wide goal of 23 percent and a substantial increase from the 11 percent reported in June. With the small businesses creating 60 percent of the net new jobs since the mid 1990s, the Administration’s pattern of spending in this sector bodes well for job growth.

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World Unlikely to Scrap Current Reserve System Despite Weak Dollar, Says CornerCap Investment Counsel

/PRNewswire/ -- Despite the recent credit crisis and headlines about the possible demise of the dollar as the world's dominant currency, it is unlikely that the world will scrap the current reserve system anytime soon, CornerCap Investment Counsel concluded in a recent report (go to http://www.cornercap.com/library/Newsletters/n2009fall.pdf for the complete report).

While the dollar will inevitably surrender some of its dominance, too many major players like China and OPEC have a vested interest in a financially strong U.S. to undermine the dollar's position too strongly, according to Cannon Carr, chief investment officer.

Instead, Carr anticipates an orderly transition to a post-dollar world, one that will take a decade or more, and probably with U.S. leadership.

"The dollar's position as the world's dominant currency has been key to our standard of living since World War II, and its standing plays a vital role in the U.S. recovery," Carr said. "Moving radically away from the U.S. dollar as the dominant currency would limit our return to economic growth, at a time when other countries need a healthy US to boost their own economies," he added.

However, high U.S. debt levels and deficits, when combined with a weak growth outlook, do increase the risk to a currency system tied to the dollar. With a sustained weak dollar, non-U.S. countries can find their exports expensive and their own economies influenced by poor policy choices by the US. So while other nations can tolerate a weak dollar, an irresponsibly sustained weak dollar jeopardizes their financial stability and could force them to seek more radical change to the reserve system.

What's more, without convincing economic growth (say 4% annually); the U.S. will have to balance national debt levels, deficits and government spending to manage the dollar's position. Special attention must be given to government spending (for growth, social programs, entitlements, or war), which is typically financed through taxation, borrowing, or inflation. Pushing too far in those areas would have serious ramifications for the dollar.

Carr believes the dollar's recent descent may reflect investors' increased risk tolerance rather than collapsing faith in the U.S. system. When fear reached its peak in October 2008, investors sought safety in U.S. Treasury instruments and the U.S. dollar. If fear returns, those two investment vehicles could be once again viewed as safe havens.

What does the dollar's outlook mean for investors? Pursuing radical strategies today are likely to yield sub-par investment results over time.

"We continue to believe deflationary forces may prevail for the immediate future but inflation has a higher probability in perhaps four to five years," Carr said. Predicting when that inevitable transition will occur is impossible, and CornerCap recommends diversified investment portfolios that balance the risk/reward across many uncertainties, including deflation, inflation, or a normal recovery.

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Small Businesses Get Whacked With Tax Increases in Pelosi Health Bill

/PRNewswire/ -- The Joint Committee on Taxation (JCT) is reporting what the small business community has been saying all along -- proposed tax increases on the "wealthy" amount to big tax increases on small business owners. In a November 3, 2009 memo, the JCT estimates that one-third of the $460.5 billion estimated to be raised from H.R. 3962, the "Affordable Health Care for America Act," through a proposed 5.4 percent surtax is business income. According to the Small Business & Entrepreneurship Council (SBE Council), America's economic recovery is highly dependent on small-business job creation and investment. Seizing more of their hard-earned capital flies in the face of White House efforts, for example, to provide small businesses with access to credit and capital, according to the advocacy group.

"No wonder small business owners are gripped by uncertainty. With mixed messages coming from Washington, they don't know whether to add to their payrolls, hoard cash, cut jobs or stay-the-course," said SBE Council President & CEO Karen Kerrigan.

Kerrigan added: "More than $150 billion of the proposed surtax alone falls on the backs of small business owners, according to the JCT. When will those who support these tax hikes wake up to the fact that they are sucking oxygen out of the very businesses that need this capital for survival and growth. Businesses can't save or create jobs without money. All of the tax increases proposed in the House health bill will deprive the private sector of the capital it needs to hold onto their workers, create more job opportunities, invest, innovate and grow."

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Small-Business Bankruptcy Filings Up 44% Year-over-year, Equifax Data Shows

/PRNewswire/ -- Commercial bankruptcies among the nation's more than 25 million small businesses increased by 44% from the third quarter of 2008 to the third quarter of 2009, according to Equifax Inc. (NYSE:EFX) , which analyzes its comprehensive small business database for the on-going study.

Comparing the month of September 2008 to September 2009 shows an increase of 27 percent. There were 9361 bankruptcy filings in September 2009 throughout the U.S., up from 7386 a year ago, according to the data.

California remains the most negatively affected state with eight MSA's (metropolitan statistical areas) among the 15 areas with the most commercial bankruptcy filings during September 2009.

Los Angeles, Riverside/San Bernardino and Sacramento metropolitan areas continued to lead the nation in small-business bankruptcy filings as they did at the end of the second quarter. The other MSA's with the most bankruptcy filings during the month include:

-- Denver-Aurora, CO
-- Santa Ana-Anaheim-Irvine, CA
-- San Diego-Carlsbad CA
-- Dallas-Plano-Irving, TX
-- Portland-Vancouver-Beaverton, OR-WA
-- California (excluding MSA's within the state)
-- Oakland-Fremont-Hayward, CA
-- Oregon (excluding MSA's within the state)
-- Chicago-Naperville-Joliet, IL
-- Houston-Sugar Land-Baytown, TX
-- San Jose-Sunnyvale-Santa Clara CA
-- Atlanta-Sandy Springs-Marietta, GA

"Economic pain is continuing for small businesses across the country. We're still seeing hefty increases in the number of bankruptcies in a lot of major metro areas." said Dr. Reza Barazesh head of North American research for Equifax's Commercial Information Solutions division.

"However, the 69 percent drop and 49 percent decline in bankruptcies in Charlotte and New York-White Plains respectively, and a 44 percent drop in Atlanta between the second and third quarters indicates that the East Coast may be experiencing an earlier recovery from the recession than the West Coast."

Charlotte - number four in June - dropped out of the top 15 entirely to 39th; Atlanta dropped from fifth to 15th; and New York - White Plains dropped from eighth to 24th.

Equally consistent with this east/west difference over the same period, the 11th, 12th and 13th MSAs with the greatest number of bankruptcies at the end of the second quarter of 2009 -- Santa Ana-Anaheim, Denver and San Diego -- increased in rank to 5th, 4th, and 6th by the end of the third quarter. Santa Ana-Anaheim increased three percent, Denver was up 13 percent and San Diego increased four percent.

For its research, Equifax reviewed and analyzed small business data for the month of September, the most recent month for which complete data is available, and compared it with results from September 2008. Equifax defines a small business as a commercial entity of less than 100 employees.

The company's report also listed the 15 metro areas with the fewest small-business bankruptcy filings. They are:

-- Charleston, WV
-- Trenton-Ewing NJ
-- Tallahassee FL
-- South Bend-Mishawaka IN-MI
-- New Jersey (excluding MSA's within the state)
-- Holland-Grand Haven MI
-- Gainesville FL
-- Baton Rouge LA
-- Wilmington NC
-- Toledo OH
-- Roanoke VA
-- Lubbock TX
-- Lancaster PA
-- Springfield MA
-- Savannah GA

For the analysis, Equifax analyzed Chapter 7, 11 and 13 filings. Chapter 7 is a liquidation proceeding in which a debtor receives a discharge of all debts; while Chapter 11 and Chapter 13 are reorganization bankruptcies enabling individuals and companies to pay off debt over a set period of years.

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Lawmakers Pass Amendment to Exclude Auto Dealers From New Federal Agency

/PRNewswire/ -- The House Financial Services Committee approved a key amendment, 47-21, to keep automobile dealers under the already effective federal and state laws which govern vehicle financing.

The amendment, sponsored by Rep. John Campbell, R-Calif., will not subject auto retailers to the regulations of the proposed Consumer Financial Protection Agency (CFPA), but will continue the full range of consumer protection rules of the Federal Reserve, the Federal Trade Commission and state laws.

The National Automobile Dealers Association (NADA) led a grassroots campaign in support of the Campbell Amendment.

"NADA and dealers across the country applaud the overwhelming bipartisan support for the Campbell Amendment," said David Westcott, chairman of NADA's Government Affairs Committee and a multi-franchise dealer from North Carolina. "It makes sense to exclude dealers. Dealers had absolutely nothing to do with the credit crisis."

H.R. 3126, the Consumer Financial Protection Agency Act, later passed the full committee with the Campbell Amendment included. However, the bill still has a number of other hurdles before reaching the White House for final approval. The House Energy and Commerce Committee, which also has partial jurisdiction over the new agency, will have an opportunity to consider the bill before a House vote. The Senate will have to go through a similar process.

NADA's legislative office, as well as dealers across the country, will continue to be involved throughout the process. "We will continue to work on behalf of consumers and dealers to maintain dealer-assisted financing as an efficient and competitive credit-delivery system," Westcott said.

"We applaud Rep. Campbell for his leadership in building strong bipartisan support in the financial services committee," Westcott said. "The overwhelming majority of committee members clearly understand that CFPA jurisdiction over dealers is unnecessary and that increased uncertainty in the auto marketplace would limit consumer finance options and increase car buyers' costs."

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Banks’ Actions on Credit Cards Undermine Consumer Protections

Low- and middle-income households with credit card debt owe, on average, $9,827 on their cards. If you make the minimum monthly payment -- under many agreements 2 percent of the balance or $10 -- at 10 percent interest, it will take you more than 26 years to pay off the balance, including $6,812 in interest payments.

But what if the rate was raised even higher, or if your rate was tacked to the prime rate (currently 3.25 percent). It could take more than a lifetime to pay off that kind of debt.

In May, Congress adopted the Credit CARD Act to protect consumers from capricious rate hikes. Under the act, banks must give consumers at least 45 days notice before raising their rates. And beginning in February 2010, banks cannot raise rates on existing balances unless a consumer is in default.

Just last week, however, House Financial Services Committee chair Barney Frank accused banks of abusing the “grace period” they were given before all the law’s provisions take effect. Unfortunately for consumers, he’s right.

For example, Wells Fargo announced last week it was raising rates on existing accounts by up to 3 percentage points. Other card issuers, including such large banks as Bank of America and JPMorgan Chase, also have been accused of raising rates on balances prior to the law’s effective date.

Additionally, in June, Bank of America and Chase switched many cardholders from fixed- to variable-rate cards. Variable-rate cardholders are not protected from unexpected rate changes under the new law, because rate changes are permitted as the prime rate moves up and down.

Those most likely to be harmed by higher borrowing costs are consumers who are relying on their credit cards to carry them through the economic downturn. According to Démos, a non-partisan research and advocacy organization, most low- and middle-income households with high debt-stress levels -- the ratio of a family’s credit card debt to their annual income -- use their credit cards to pay for unavoidable expenses, such as medical expenses or to cover household essentials after a job loss, not for discretionary items.

Higher rates lead to longer payoff periods and thousands of extra dollars in interest payments. Let’s take the case of the average low- and middle-income households with $9,827 in credit card debt. If they continue to make the minimum monthly payment on that amount but at 13 percent interest plus prime, rather than our previous example of 10 percent interest, it must pay $19,897 in interest payments over the more than 45 years it will take to clear the balance. And because the prime rate is at historically low levels, this example likely presents a best-case scenario.

Many cardholders have responded to the downturn and the higher borrowing costs by reducing their debt. In July, revolving credit, which is largely credit-card borrowing, declined. For many, however, reducing debt during these tough times is not an option.

Moreover, changes in the availability of credit are also making it more difficult for cardholders to protect themselves from the banks’ actions. In the past, cardholders could demand better terms by threatening to take their business elsewhere. Today, this option is limited, because many banks have tightened credit-card approval standards.

Banks may be putting themselves at risk by their actions as well. If consumers are subjected to usurious rates as the prime rate rises, more will inevitably default on their debt. Banks will find it difficult to make up for these losses by further raising rates on consumers who are already stretched to their limits.

Bank of America vowed last week to stop raising interest rates before the February limits take effect, making the announcement as Rep. Franks’ committee met to consider moving up the effectiveness date of the new legislation. But such a promise offers too little, too late for many consumers who have already been harmed.

It is time for banks to rethink their recent moves and for Congress to do more to protect consumers.

By Jamie Lau

Jamie Lau is a research fellow with the Community Enterprise Clinic at Duke Law School.

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Georgia Credit Unions Celebrate National 100th Anniversary With 'A Century of Good Advice'

/PRNewswire/ -- Credit unions throughout Georgia today mark the 100th anniversary of cooperative financial institutions in the U.S., and the 75th anniversary of the Georgia Credit Union League, by sharing "A Century of Good Advice." Coinciding with the celebration of International Credit Union Day on Oct. 15, this initiative includes the release of a poll on the savings and spending habits of Georgia consumers, as well as the debut of an online video featuring Georgians of both young and senior ages offering their advice, hopes and dreams for a happy, sound life. In addition, Governor Sonny Perdue yesterday signed a special proclamation honoring International Credit Union Day. The poll results and video are available at www.georgiacreditunions.org.

More than 1,000 credit union members from across the state were polled on questions ranging from the most influential person in their lives financially, to the best financial advice they ever received, to their current spending and savings habits based on the recent recession. Among the poll findings:

-- 46% spend less than they did one year ago; 41% spend the same as they
did a year ago
-- 65% of those polled say that their personal spending habits will be
changed forever because of the current recession
-- 53% say that either their mother or father was the biggest influence
in their lives about money; The breakdown of those who chose father
vs. mother was almost even: 27% said father, 26% said mother

Online Video Featuring Georgians

The short online video, "A Century of Good Advice," features Georgia seniors offering their experience and advice to younger generations for financial and emotional success, balanced with young Georgians who display their dreams for the future and the financial awareness they have gained even at a young age.

"At a time when Georgians are concerned about their spending habits and financial security, it's refreshing to see the financial struggles and triumphs of previous generations and the optimism and enthusiasm of future generations," said Michael Mercer, president and CEO of Georgia Credit Union Affiliates (GCUA). "By compiling testimonials of Georgians young and old about spending and savings habits over the years, Georgia credit unions hope to provide consumers with insight and inspiration for their own financial futures."

Video participants include: Jesus Beltran, Peachtree City; Sarah Diamond, Chamblee; Jesse Dixon, Atlanta; Bob Fowler, Albany; Grady Gafford, Macon; Brian Mulherin, Augusta; Betty Phillips, Macon; and Connie Potts, Conyers.

In addition to viewing the video at www.georgiacreditunions.org, consumers also can visit facebook.com/creditYOUnion to view the video and share their own advice.

It's important for consumers to know that it has never been easier to join a credit union. Many credit unions now open their membership to the broader local communities where they operate. To find a local credit union or for more information, go to www.georgiacreditunions.org.

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Solid Index Findings: Americans Define Themselves Based on Finances, But Don't Invest in Their Fiscal Futures

/PRNewswire/ -- The economic contraction has highlighted the internal duel between Americans' beliefs and actions according to the latest Solid Index, a survey by SunTrust Banks (NYSE:STI) that studies Americans' emotions and perceptions toward their finances. The Solid Index revealed that while more than half (58 percent) of the respondents feel that their financial situation contributes to their perceptions of self-worth, 40 percent of American adults will not be enrolling in a retirement plan this year.

The most recent survey is the fourth in a series of six throughout 2009 and it investigated Americans' thoughts around benefits enrollment, the contributors of their self-worth and their reactions to the recession. In addition to their financial situation, the findings revealed that 55 percent of Americans feel that their job contributes to their sense of self-worth, with 43 percent citing their salary and more than a third (37 percent) noting their possessions.

"It is surprising and unsettling that many Americans are neglecting to properly invest in their future even while using their financial situation as a litmus test for their self worth," said Rilla Delorier, chief marketing officer for SunTrust Banks. "In this current economic situation it may seem difficult to invest in one's retirement, but proper planning and budgeting can lead to solid behaviors and help individuals feel good about themselves now and in the future."

Other key findings of Americans' reactions to the recession include:

-- Almost two thirds (64 percent) feel that they are obligated to feel
grateful for having a job in today's economy.
-- Penny pinching is getting old, with 54 percent stating they are tired
of cutting back on the little things.
-- To combat the restrictions of penny pinching, 93 percent said that
they have purchased an item in the last three months to give
themselves a "pick me up".
-- Women are significantly more likely than men to indulge themselves by
spending on clothes (59% vs. 43% men), while men tend to be more
interested in splurging on electronics (30% vs. 18% women).

Not all reactions to the economic turbulence have been negative. One in two respondents stated that the economy has caused them to spend more quality time with their family, bringing them closer, despite the fact that 55 percent believe a night out with the family has become unaffordable. Additionally, many reported becoming more generous due to the economy by helping their friends, family and neighbors save money by giving away hand-me-down clothes (66 percent), preparing meals for others (55 percent), babysitting (38 percent) and doing renovations (37 percent).

"While Americans are challenged by this economy, they are finding new ways to enjoy their families and friends, whether it's spending more time together or swapping a solid - that is, supporting and helping each other with favors instead of paying others to do it for them," added Delorier. "These types of solid behaviors underscore the generosity and resiliency of Americans."

The Solid Index was conducted by StrategyOne as a five-question, single wave telephone omnibus survey among a census representative sample of 1,000 American adults aged 18 and older. The next wave of SunTrust's Solid Index will be released this December.

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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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Financial Peace University Classes Offered

Fayetteville First United Methodist Church is offering Financial Peace University Classes for the local community starting in September. Financial Peace University is a life-changing program that teaches one how to make the right decisions with their money. You'll be empowered with the practical skills and confidence needed to achieve your financial goals and experience true financial peace!

This is a 13 week course, commencing on Sunday, 13 September. Classes will meet from 4:30 PM to 6:30 PM, at Fayetteville First UMC at 175 Lanier Avenue in Fayetteville. The normal cost for the class is $150. The Church group rate is $110 for the 13 week course.

To sign up or obtain more information, please contact:

Laura Cox
Director of Adult Discipleship
770-461-4313, ext. 16
Fayetteville First United Methodist Church
lcox@fayettevillefirst.com
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Energy Industry Icon Re-Affirms Position that U.S. Equity Market Valuations Overdone: U.S. Energy Industry at Major Risk

/PRNewswire/ -- Karl W. Miller, a senior energy executive and institutional investor, today issued the following statement through his advisors, Re-Affirmed his position that U.S. Equity Market Valuations are Overdone and the U.S. Energy Industry is at major risk.

Mr. Miller has made it clear in prior research that there will be no meaningful economic recovery to sustain any equity market recovery until the defunct real estate holdings in the residential and commercial marketplace are properly vetted, written down to net realizable value, and sold off of the banks, hedge funds and insurance company books. This will mean bankrupting hundreds of institutions, which are already technically insolvent.

A recovery based upon negative net worth, and the U.S. Government underwriting the retail consumer and institutional marketplace on all fronts, including a ludicrous renewable energy plan and unrealistic and un-achievable health care proposal will not happen.

Retail investors should not be investing in the equity and debt markets at the current time, while the major banks, hedge funds, and private equity funds are insolvent on a majority of their asset based holdings. They require a rising equity market to float their portfolios and pull the retail investor back into the market to fill the gap. Unfortunately, the retail and high net worth investor is essentially insolvent as an investor class and the old model does will not work.

We need quick and brutal cleansing of the U.S. Financial system, and renewing Ben Bernake's term as Fed Chairman means nothing to solving the market problems and is window dressing. Retails investors should not be lured into purchasing equity or fixed income instruments until we essentially "bankrupt the US banking system" and hit the reboot button, which will have the effect of flushing out the illiquid hedge and private equity funds who are hanging on by a thread.

All of this is important, because a majority of the financial institutions can't purchase or operate critical energy infrastructure assets so desperately needed. This is what seasoned management does alongside of distressed capital investors. Unfortunately, these experts can't begin to work until the system is flushed.

The U.S. Renewable energy industry is on its rear end, and one need only ask T. Boone Pickens, who spent millions on marketing a renewable energy plan only to fail dramatically. If anyone wants to purchase distressed wind turbines, Mr. Pickens has hundreds of turbines scheduled for delivery with nowhere to go.

We have insufficient infrastructure in the U.S. to include Transmission lines, natural gas and oil pipelines and the "pork" energy plan that has come out of Washington does nothing to solve that problem.

So, where do we stand, and what should investors do? Sell the financial equity investments and get to the sidelines quickly, as the carnage is coming and is not for the faint of heart. It is best left to true distressed asset buyers and operators who know how to clean up what has become the largest financial and asset disaster in U.S. history.

Again Mr. Miller reiterates that China is irrelevant at the current time, given the fact that the U.S. is financially broke. Chasing China, Asia or Europe in the equity market rally has no relevance on the U.S. problems.

Yes, Oil is dollar based, but has no linkage to natural gas in the U.S. as it does in Europe and Asia. Essentially, Oil and Natural Gas are decoupled in the U.S. and investors should not chase a financially driven oil price when it has nothing to do with the fundamentals on the ground in the United States. Natural Gas is cheap and getting cheaper, as there is no demand. Thus, the pipeline and natural gas producers are suffering and overvalued as well. Sell them if you own them.

Mr. Miller retains a sell recommendation on renewable energy companies. We will see many of these names, which are highly levered fail and/or be purchased at distressed prices when the bust comes, and it is sure to come.

Mr. Miller re-affirms that investors should not confuse Warren Buffett's statements regarding deployment of capital versus sitting on cash with intelligent timing of investments, especially in the energy sector.

Be patient, let the assets get sorted out then make decisions about deploying capital. There is plenty of value and risk to go around.

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