Treasury Department Proposes End to Checks for Federal Benefits

/PRNewswire/ -- Under new regulations proposed by the Treasury Department, Americans who receive federal benefits like monthly Social Security and Supplemental Security income will no longer be able to get these funds by check. Instead, beneficiaries will have to switch to electronic payments, either by having funds deposited directly into their accounts or onto a prepaid debit card issued by the government.

In comments filed with the Treasury Department, Consumers Union urged the agency to allow consumers to continue receiving their benefits by check and to limit the fees and improve the customer service associated with the Direct Express prepaid card for those consumers who choose this option.

"Electronic payments are not safer, easier, and more convenient than checks for all types of benefit recipients," said Michelle Jun, Staff Attorney for Consumers Union, the nonprofit publisher of Consumer Reports. "Consumers should be able to choose the option that is best for them, including paper checks. And if the government is going to encourage benefit recipients to use prepaid cards, it should do more to limit the fees charged for using them and make them easier to use."

The Treasury Department has received numerous comments from consumers who have raised concerns about the switch to electronic payments. Those comments and Consumers Union's concerns are summarized in the letter linked below:

http://www.defendyourdollars.org/FINALCmt31CFR208_8.9.10.pdf

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Bankers Mislead, Cajole Customers on Overdraft Fees as Opt-In Deadline Nears

/PRNewswire/ -- As the August 15th deadline nears for bank and credit union customers to opt in to high-cost overdraft programs, a new CRL analysis finds these firms market most aggressively and often misleadingly to their most vulnerable customers. Banks target these customers because they likely live on the edge financially and therefore are most likely to repeatedly overdraw accounts. To induce these customers to accept overdraft coverage, many marketing campaigns use scare tactics or incomplete information. For example, they fail to emphasize customers can have debit card transactions declined at no cost rather than incur a $34 overdraft fee. [For the full report, go to http://www.responsiblelending.org/overdraft-loans/research-analysis/banks-targ et-mislead-consumers-as-overdraft-deadline-nears.html.]

CRL's report includes:

-- Bank consultant pitches on pinpointing customers who will overdraft
most.
-- Evidence these customers are likely to be low-income, single,
nonwhite.
-- A cost comparison of overdraft programs.


Under new federal rules, banks must obtain explicit consent from existing customers by the 15th before enrolling them in a costly overdraft program for debit cards. Banks have had to obtain consent from new customers since July 1. These opt-in rules provide a first-line defense against high-cost overdraft fees, but the Federal Reserve Board and, eventually, the new Consumer Financial Protection Bureau must end all unfair overdraft practices, especially those that disproportionately hurt the most vulnerable.

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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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Consumers, Small Businesses Win as Senate Passes Swipe Fee Reform, Says NACS

/PRNewswire-USNewswire/ -- The convenience and petroleum retailing industry's nearly decade-long battle to rein in outrageous interchange fees became a reality July 15 as the U.S. Senate voted 60 to 39 in support of the financial reform package known as the Dodd-Frank Bill.

Today's (July 15) vote removes the last hurdle in getting this bill enacted into law, given that President Obama has said that he will sign the legislation once it clears Congress. The House of Representatives passed the legislation on June 30.

Provisions within the package, known as the Durbin Amendment, direct the Federal Reserve to issue rules to ensure that debit card interchange fees, also known as swipe fees, are reasonable and proportional to the processing costs incurred. Visa and MasterCard currently charge debit swipe fees of around 1 percent to 2 percent of the transaction amount -- among the highest rates in the industrialized world.

Swipe fees have been the convenience and petroleum retailing industry's top pain point and second largest expense item -- behind only labor costs -- for a number of years.

"Today's vote demonstrates the value of retailers engaging with their elected officials," said NACS President and CEO Hank Armour. "This is why NACS exists - to help bring together the industry to amplify its voice and make a difference on issues important to all of us. Last year we said that 2010 will be the year that we achieve meaningful interchange reform if we can combine the power of skillful lobbying with dramatic grassroots activity. Through consistent engagement with Congress, combined with massive consumer petition campaigns, we have clearly seen that great things are possible when our industry is engaged."

The vote to pass the financial reform package followed intense lobbying by the banking industry in opposition to the Durbin Amendment.

"From the phone calls and letters that flooded congressional offices in support of this legislation to the record-setting 5.4 million customer signatures that our industry collected demanding reform, we have made our voices heard and Congress has listened," added Armour.

"This victory shows what we can accomplish as an industry working together," said NACS Chairman Jay Ricker, chairman of Anderson, Ind.-based Ricker Oil Co. "The power of grassroots advocacy is immense, and the possibilities are endless when we fight for what is right."

The legislation includes a provision directing the Federal Reserve to issue rules preventing card networks from requiring that their debit cards can only be used on one debit card network -- ensuring that retailers will have the choice of at least two networks upon which to run debit transactions. In addition, the amendment would allow merchants to choose to decline credit cards for small dollar purchases because swipe fees often exceed profits on such sales. The amendment also clarifies that retailers can offer discounts to consumers who choose to pay with cash, check or debit card.

"At its core, this legislation simply introduces competition to a market that has not had any," said NACS Vice Chairman of Government Relations Tom Robinson, president of Santa Clara, Calif.-based Robinson Oil Corp. "Both consumers and retailers will see benefits as debit card fees will be aligned more closely with the cost of checks, as opposed to credit cards."

Founded in 1961 as the National Association of Convenience Stores, NACS is the international association for convenience and petroleum retailing, representing more than 2,100 retail and 1,500 supplier member companies. The U.S. convenience store industry, with nearly 145,000 stores across the country, posted $511 billion in total sales in 2009, with $328 billion in motor fuels sales.

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Former Federal Reserve Economist Tells Lawmakers to Slow Down

/PRNewswire/ -- As lawmakers begin meeting next week to mull over legislation aimed at averting another financial crisis, a former Federal Reserve economist cautions that such sweeping reform could have serious unintended consequences. "This is very ambitious and hugely complicated legislation that is being done very fast," says Robert Bliss, who is now a professor at Wake Forest University Schools of Business. "Some of the changes are positive, but others could create bigger problems than the ones they are trying to solve."

A House-Senate conference committee will try to reach a compromise on the financial regulatory reform bills passed by the House in December 2009 and the Senate a few weeks ago. Headed by Senator Chris Dodd and Rep. Barney Frank, the committee will work to reconcile the two versions with the goal of passing a final bill by July 4th. Among the issues the committee will be seeking to resolve is the regulation of the over-the-counter derivatives market, expanded audits of the Federal Reserve Board, and the creation of a new consumer protection agency.

But rather than trying to pass such sweeping legislation with an eye toward the November election, lawmakers would be better off taking more time to seek expert opinion. Bliss said lawmakers would benefit from bringing in more business and economic experts to advise them rather than approaching the legislation as a political issue. It also is important to take the reform's worldwide implications into account.

"The legislation and these proposals are entirely domestic, and the financial system is entirely international," said Bliss, who formerly served as a senior financial economist at the Federal Reserve Bank of Chicago.

"Although the 2008 financial crisis started in America, it impacted Europe because their banks were buying our subprime mortgages, and now we're looking at a situation where there's a major financial crisis brewing in Europe and that's going to feed back in the U.S. financial markets and our economy," he added. "In today's global markets, we can't have our heads in the sand about the reform's international implications."

Despite the inherent risks involved, Congress is likely to pass the legislation in the weeks ahead. "The financial crisis of 2008 has passed, and now we're talking about a response to it," Bliss said. "But the consequences will continue to play out well into the future."

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Is Your Spouse a Secret Spender?

/24-7/ -- The success of a marriage may not be directly affected by a couple's financial situation, but according to recent polling, it is a factor. According to PayPal, which holds an annual survey in Australia, Canada, Italy, Mexico, the Netherlands, the United Kingdom and the United States, nearly a third of all the couples surveyed (and 43 percent of all American couples), state that the recent worldwide recession has led to an increase in arguments.

Of all couples surveyed in the United States and Mexico, 14 percent admit to ending a relationship because of money, and in the United States, nearly a quarter of all couples (23 percent) have hidden purchases from their partner. It is a combination of these factors, made even more stressful by the increased financial instability since the PayPal survey last year, that may cause couples to look for signs that partners are being less than truthful about spending. Geoff Williams, the co-author of "Living Well With Bad Credit", writing at WalletPop, outlined 10 signs your spouse may be hiding spending from you.

- Unexplained items around the house. Do new items suddenly appear around the home with no explanation? It could be that your spouse made a purchase, but is hoping you don't notice, or, if you do, that you accept the flimsy explanation about their origin.
- Spouse is secretive about money. A spouse who demands to keep finances separate, even as little as a joint checking account, could be a sign that your spouse's finances are not in as good condition as they should be.
- Spouse receives a "dock" in pay. If your spouse comes home from work claiming to have received a dock in pay, but you've never seen the paycheck that shows it, the possibility exists that there was no dock in pay, and your spouse is simply keeping the "lost" money.
- Spouse is eager to get the mail. Has your spouse suddenly become extra interested when the mailman delivers the mail? It could be because an extra credit card bill is in there, extra purchases are being shipped to your address, or that your credit card bill contains extra charges you aren't supposed to see.
- Spouse applies for credit card in your name. One sign you and your spouse need immediate financial help is when your spouse applies for a new credit card in your name. Definitely a red flag that someone's finances are completely out of order.
- Receiving collection calls from unknown creditors. Calls from collection agencies aren't uncommon, but what happens when you answer a call regarding a credit card or debt you know nothing about? Time to see what purchases have been made without your knowing.
- Spouse starts paying less on monthly credit card bills. A spouse who suddenly starts paying the minimum could mean your finances aren't as healthy as you thought. Sometimes this is because the extra money is going to new purchases, or to pay off purchases you know nothing about.
- Grocery bill grows unexpectedly. With today's supermarkets becoming more like shopping malls, the grocery bill that unexpectedly balloons could be from non-essential impulse purchases made in the checkout line.
- Spouse is "extra" nice. Always the stereotypical response to having done something "bad." In some cases your spouse put a ding in the car, but other times you might be being buttered up to break bad news about extra debt.
- Spouse handles all the bills. Couples should really share in everything, and so when your spouse offers or demands to take care of the bills without your help, it could be a sign that the bills are out of control, and the spouse doesn't want you to know.

Of course, any of these signs could have nothing to do with poor finances or secret spending. But add up too many of them, too close together, and there could be a problem. So, while money troubles might not be the prime factor in divorces, distrust certainly is, and so everything ties together. Extra spending, secrets and distrust are a bad mix, so cutting off this pattern of behavior before it gets too common is the key to keeping your marriage intact and your finances in good shape.

Article provided by Jeffrey W. Goldblatt Law Office
Visit us at www.jgoldblattlawfirm.com

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134 National and State Associations Endorse Swipe Fee Reform Amendment

/PRNewswire/ -- In a letter addressed to all members of the U.S. Senate, 134 trade associations endorsed an amendment (S. Amdt. 3932) to the Restoring American Financial Stability Act of 2010 sponsored by Senate Majority Whip Richard Durbin (D-IL) that will address excessive debit card swipe fees and the anti-competitive practices of credit card companies and the big banks that issue their cards.

The common-sense amendment would free merchants of anti-competitive restrictions imposed by the credit card companies, allowing merchants to offer discounts when customers use less expensive forms of payment. The amendment would also direct the Federal Reserve to issue regulations to ensure that swipe fees imposed on debit card transactions are 'reasonable and proportional' to the cost incurred in processing the transaction.

More than 80 percent of all interchange fees are collected by the 10 largest banks. The amendment offered by Sen. Durbin exempts all banks, credit unions and thrifts with assets less than $1 billion, meaning that 92% of all banks, 98% of all credit unions, and 86% of all thrifts would be exempt, allowing them to continue to receive the same interchange fees they receive today.

According to the letter signed by 57 national associations and 77 state trade associations,

"Despite Congress' efforts to reign in abusive practices, credit card companies continue to take advantage of a major loophole in financial regulation. In fact, they announced interchange rate increases just months after the passage of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit CARD Act), effectively circumventing many of the reforms instituted by Congress. More recently, Visa Europe announced last month that it was voluntarily dropping debit card interchange fees to 0.2% in Europe, a decrease of 60%, while earlier in the month Visa increased rates on similar transactions in the United States by some 30%. Quite literally, at a rate of approximately 2.0% on debit card interchange fees, which is 10 times higher in the United States, American businesses are subsidizing European transactions.

"Simple, common-sense reforms are needed to correct this market imbalance, which would give our organizations' members additional tools to manage our costs related to interchange fees. First, the amendment would give the Federal Reserve the authority to conduct an open and fair rulemaking - without prescribing an outcome - in order to develop regulations to ensure that interchange fees imposed on debit card transactions be 'reasonable and proportional' to the cost incurred in processing the transaction. Debit transactions are not an extension of credit and are directly drawn from a consumer's checking account, yet the interchange rate on debit transactions continues to increase. Small banks, credit unions and thrifts with assets of under $1 billion would be carved-out from these rules, meaning that 92% of all banks, 98% of all credit unions, and 86% of all thrifts would be exempt, allowing them to continue to receive the same interchange fees they receive today.

"Second, the amendment would prohibit anti-competitive restrictions on discounts and the setting of minimum transaction levels, providing entities with the freedom to choose their preferred method of payment. Under current rules, any business, charity or government agency that accepts credit or debit cards is prohibited from setting a minimum transaction level, such as $3, even though the entity may actually lose money on the transaction because of slim profit margins. Visa and MasterCard can and do impose fines on small businesses up to $5,000 per day for such offenses, which has the effect of ensuring that the card companies and big banks turn a profit even if the small business loses money on the transaction. In addition, the amendment allows businesses to incentivize the use of one card network over another (e.g., a discount may be provided for Discover cards if they carry a lower interchange rate) and allows businesses to offer discounts on certain forms of payment (e.g., a discount may be offered for cash, check, PIN debit, etc., all of which carry lower rates than credit cards). This amendment would not enable merchants to discriminate against debit cards issued by small banks and credit unions. Visa and MasterCard require merchants to accept all cards within their networks, and this amendment does not change that requirement."

In the last year, small business owners have gathered nearly four million petition signatures from their customers and delivered them to Members of Congress, calling on them to reform these unfair fees.

In addition to the Retail Industry Leaders Association, organizations signing the letter included American Association of Motor Vehicle Administrators, American Dental Association, International Franchise Association, National Grocers Association, National Restaurant Association, Arkansas Hospitality Association, Louisiana Restaurant Association, Retail Council of New York State, and the Wyoming Lodging and Restaurant Association.

RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

Full letter text and list of organizations below:

May 12, 2010

TO THE MEMBERS OF THE UNITED STATES SENATE:


The undersigned organizations, representing a diverse array of interests including small business, state organizations, dentists, retailers, restaurants, grocery stores, convenience stores and others, write in strong support of S. Amdt. 3932, sponsored by Senator Richard Durbin, regarding interchange fee reforms to S. 3217, the Restoring American Financial Stability Act of 2010 now before the Senate. Unless relief is granted, interchange "swipe fees," which amounted to $48 billion in 2008, will continue to rise as card companies and issuing banks seek even higher profits, primarily on the backs of our organizations' members. This comes at a time when businesses, state agencies and charities - all of whom pay interchange fees - are struggling to help the economy grow again and when consumers can least afford pricing increases.

Despite Congress' efforts to reign in abusive practices, credit card companies continue to take advantage of a major loophole in financial regulation. In fact, they announced interchange rate increases just months after the passage of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit CARD Act), effectively circumventing many of the reforms instituted by Congress. More recently, Visa Europe announced last month that it was voluntarily dropping debit card interchange fees to 0.2% in Europe, a decrease of 60%, while earlier in the month Visa increased rates on similar transactions in the United States by some 30%. Quite literally, at a rate of approximately 2.0% on debit card interchange fees, which is 10 times higher in the United States, American businesses are subsidizing European transactions.

Simple, common-sense reforms are needed to correct this market imbalance, which would give our organizations' members additional tools to manage our costs related to interchange fees. First, the amendment would give the Federal Reserve the authority to conduct an open and fair rulemaking - without prescribing an outcome - in order to develop regulations to ensure that interchange fees imposed on debit card transactions be "reasonable and proportional" to the cost incurred in processing the transaction. Debit transactions are not an extension of credit and are directly drawn from a consumer's checking account, yet the interchange rate on debit transactions continues to increase. Small banks, credit unions and thrifts with assets of under $1 billion would be carved-out from these rules, meaning that 92% of all banks, 98% of all credit unions, and 86% of all thrifts would be exempt, allowing them to continue to receive the same interchange fees they receive today.

Second, the amendment would prohibit anti-competitive restrictions on discounts and the setting of minimum transaction levels, providing entities with the freedom to choose their preferred method of payment. Under current rules, any business, charity or government agency that accepts credit or debit cards is prohibited from setting a minimum transaction level, such as $3, even though the entity may actually lose money on the transaction because of slim profit margins. Visa and MasterCard can and do impose fines on small businesses up to $5,000 per day for such offenses, which has the effect of ensuring that the card companies and big banks turn a profit even if the small business loses money on the transaction. In addition, the amendment allows businesses to incentivize the use of one card network over another (e.g., a discount may be provided for Discover cards if they carry a lower interchange rate) and allows businesses to offer discounts on certain forms of payment (e.g., a discount may be offered for cash, check, PIN debit, etc., all of which carry lower rates than credit cards). This amendment would not enable merchants to discriminate against debit cards issued by small banks and credit unions. Visa and MasterCard require merchants to accept all cards within their networks, and this amendment does not change that requirement.

By providing these and other important reforms, the Congress will send a strong message that it supports modernizing and updating our financial payments systems while providing relief to businesses owners who have seen their interchange credit card assessments skyrocket - for many businesses exceeding the cost of providing health care benefits to their employees.

In closing, we are very concerned about the unintended consequences of not addressing interchange fees will have on our industries as the card companies and big banks continue to seek higher profits as a direct result of financial regulatory reform legislation, and other failing portfolios, through ever increasing interchange fees. We ask that you support S. Amdt. 3932, sponsored by Senator Durbin, to the Restoring American Financial Stability Act of 2010 when it comes up for a vote in order to ensure that financial regulation reform is comprehensive and complete. We look forward to working with you and your staff to incorporate these meaningful, common-sense reforms as part of the financial regulatory reform legislation.

Sincerely,




National Trade Associations
---------------------------

American Apparel & Footwear Association
American Association of Motor Vehicle Administrators
American Beverage Licensees
American Booksellers Association
American Dental Association
American Home Furnishings Alliance
American Hotel & Lodging Association
American Nursery & Landscape Association
American Veterinary Medical Association
Automotive Aftermarket Industry Association
Consumer Electronics Association
Consumer Electronics Retailers Coalition
Digital Media Association
Drycleaning & Laundry Institute
Entertainment Merchants Association
Food Marketing Institute
Footwear Distributors and Retailers of America
International Association of Airport Duty Free Stores
International Association of Amusement Parks & Attractions
International Council of Shopping Centers
International Festivals & Events Association
International Franchise Association
Jewelers of America
National Association of Chain Drugstores
National Association of College Stores
National Association of Convenience Stores
National Association of Recording Merchandisers
National Association of Shell Marketers
National Association of Theatre Owners
National Associations of Concessionaires
National Council of Chain Restaurants
National Franchisee Association
National Golf Course Owners Association
National Grocers Association
National Home Furnishings Association
National Parking Association
National Restaurant Association
National Retail Federation
National Ski Areas Association
National Small Business Association
NATSO, Representing America's Travel Plazas and Truck Stops
Outdoor Amusement Business Association, Inc.
Outdoor Industry Association
Pet Industry Joint Advisory Council
Petroleum Marketers Association of America
Petroleum Retailers & Auto Repair Association
Retail Industry Leaders Association
Service Station Dealers of America and Allied Trades
Small Business Majority
Society of American Florists
Society of Independent Gasoline Marketers of America
Specialty Equipment Market Association
Taxicab, Limousine & Paratransit Association
Tire Industry Association
Travel Goods Association
United States Association of Importers of Textiles and Apparel
World Floor Covering Association





State Trade Associations
------------------------

Alaska Cabaret, Hotel, Restaurant & Retailers Association
Arizona Petroleum Marketers Association
Arizona Restaurant and Hospitality Association
Arkansas Hospitality Association
Arkansas Oil Marketers Association
California Independent Oil Marketers Association
California Retailers Association
Colorado/Wyoming Petroleum Marketers Association
Delaware Restaurant Association
Empire State Petroleum Association
Florida Petroleum Marketers Association
Florida Restaurant & Lodging Association
Fuel Merchants Association of New Jersey
Georgia Oilmen's Association
Georgia Restaurant Association
Hawaii Restaurant Association
Idaho Petroleum Marketers and Convenience Store Association
Illinois Petroleum Marketers Association /Illinois Association of
Convenience Stores
Independent Connecticut Petroleum Association
Indiana Hotel & Lodging Association
Indiana Petroleum Marketers and Convenience Store Association, Inc.
Indiana Restaurant Association
Kentucky Petroleum Marketers Association
Kentucky Restaurant Association
Louisiana Oil Marketers & Convenience Store Association
Louisiana Restaurant Association
Maine Energy Marketers Association
Michigan Petroleum Association
Michigan Restaurant Association
Mid-Atlantic Petroleum Distributors Association
Minnesota Petroleum Marketers Association
Mississippi Petroleum Marketers & Convenience Stores
Missouri Petroleum Marketers and Convenience Store Association
Montana Petroleum Marketers and Convenience Store Association
Montana Restaurant Association
Nebraska Petroleum Marketers & Convenience Store Association
Nebraska Restaurant Association
Nevada Petroleum Marketers & Convenience Store Association
New Jersey Restaurant Association
New Jersey Retail Merchants Association
New Mexico Petroleum Marketers Association
New Mexico Restaurant Association
New York State Restaurant Association
North Carolina Petroleum & Convenience Marketers
North Dakota Petroleum Marketers Association
Ohio Petroleum Marketers & Convenience Store Association
Ohio Restaurant Association
Oklahoma Petroleum Marketers & Convenience Store Association
Oregon Petroleum Association
Pennsylvania Petroleum Marketers and Convenience Store Association
Pennsylvania Retailers' Association
Petroleum & Convenience Marketers of Alabama
Petroleum Marketers & Convenience Store Association Kansas
Petroleum Marketers & Convenience Stores of Iowa
Restaurant Association Metropolitan Washington
Restaurant Association of Maryland
Retail Council of New York State
Rhode Island Hospitality Association
South Carolina Petroleum Marketers Association
South Carolina Hospitality Association
South Dakota Petroleum & Propane Marketers Association
South Dakota Retailers Association
Tennessee Fuel & Convenience Store Association
Tennessee Hospitality Association
Texas Petroleum Marketers and Convenience Store Association
Texas Restaurant Association
Utah Petroleum Marketers & Retailers Association
Vermont Fuel Dealers Association
Virginia Petroleum, Convenience and Grocery Association
Washington Oil Marketers Association/Pacific Northwest Oil Heat Council
Washington Restaurant Association
West Virginia Hospitality & Travel Association
West Virginia Oil Marketers and Grocers Association
Western Petroleum Marketers Association
Wisconsin Petroleum Marketers & Convenience Store Association
Wisconsin Restaurant Association
Wyoming Lodging and Restaurant Association


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Federal Income Taxes On Middle-Income Families at Historically Low Levels

/PRNewswire/ -- The following release by Chuck Marr and Gillian Brunet was released today by the Center on Budget and Policy Priorities:

Middle-income Americans are now paying federal taxes at or near historically low levels, according to the latest available data. That's true whether it comes to their federal income taxes or their total federal taxes.

-- Income taxes: A family of four in the exact middle of the income
spectrum will pay only 4.6 percent of its income in federal income
taxes this year, according to a new analysis by the Urban
Institute-Brookings Institution Tax Policy Center. This is the
second-lowest percentage in the past 50 years.
-- Overall federal taxes: Middle-income households are paying overall
federal taxes -- which include income as well as payroll and excise
taxes -- at or near their lowest levels in decades, according to the
latest data from the Congressional Budget Office (CBO).

Federal Income Taxes Have Declined Significantly in Recent Decades

Federal income taxes on middle-income families have declined significantly in recent decades.

In 2000, the year before the 2001 tax cut that President Bush and Congress enacted, the median-income family of four paid 8.0 percent of its income in individual income taxes, according to Tax Policy Center estimates -- a smaller share than in any year since 1967 (except for 1998 and 1999).(1) The Bush tax cuts further reduced middle-income tax obligations.

This year, the Making Work Pay tax credit, which President Obama and Congress enacted as part of the 2009 American Recovery and Reinvestment Act, is providing a credit of $800 to married joint filers ($400 to single filers). A median-income family with two children thus will receive an $800 tax cut in the return it files this year.

With the new tax cut, the median family's federal income taxes will equal just 4.6 percent of its income in 2009. That is lower than in any year since 1955 (the first year for which these data are available) except for 2008, when another stimulus-related tax cut was in effect.

The 4.6 percent effective tax rate -- the percentage of its income that a family pays in taxes -- is well below the 15 percent marginal tax rate that a family of four in the exact middle of the income spectrum faces. Typically, such a family reduces its effective tax rate by taking the standard deduction (or, in some cases, itemized deductions), personal exemptions, and tax credits such as the child tax credit. The Making Work Pay tax credit further reduces that family's effective tax rate.

Overall Federal Taxes Also at Low Levels

The decline in income taxes on middle-class households in recent years has driven a decline in these households' overall federal taxes.

Households in the middle fifth of the income spectrum paid an average of 14.2 percent of their income in overall federal taxes in 2006, the latest year for which data are available, according to CBO.(2) This is just slightly above this group's effective tax rate of 13.8 percent in 2003, which was the lowest level since at least 1979.

Most Americans pay more in payroll taxes, which support Social Security and Medicare, than they do in income taxes. Thus, the 14.2 percent figure reflects the impact of payroll taxes far more than income taxes.

Due to the impact of the recession and the temporary tax cuts in the Recovery Act, particularly the Making Work Pay tax credit, CBO data for 2009 (when they become available) will likely show that middle-income families faced significantly lower effective overall federal tax rates than in 2006.

This analysis, and other reports that provide a greater understanding of trends in taxation, are posted to: www.cbpp.org.

The Center on Budget and Policy Priorities is a nonprofit, nonpartisan research organization and policy institute that conducts research and analysis on a range of government policies and programs. It is supported primarily by foundation grants.

NOTES:

(1) Tax Policy Center, "Historical Federal Income Tax Rates for a Family of Four," April 12, 2010. The Tax Policy Center's estimates were derived by updating (using Treasury's methodology) a 1998 Treasury Department analysis that examined changes since 1955 in the percentage of income that the median-income family of four pays in federal income taxes.

(2) The CBO study covers the 1979-2006 period and includes federal income, payroll, and excise taxes. Congressional Budget Office, "Historical Effective Federal Tax Rates, 1979-2006," April 2009.

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Stimulus Programs Remain Untapped by Most Americans: AICPA Survey

/PRNewswire/ -- The overwhelming majority of Americans haven't taken advantage of the U.S. government's programs to stimulate the national economy, according to a survey conducted for the American Institute of Certified Public Accountants by Harris Interactive.

Nine out of 10 Americans (91 percent) said they haven't capitalized on the job stimulus plan covered under the American Recovery and Reinvestment Act, the housing stimulus tax credit of 2009 and Cash for Clunkers.

The AICPA commissioned the survey in recognition of April as Financial Literacy Month. In 2007 the Institute began conducting an annual survey of Americans to determine their attitudes toward their finances.

"The government's stimulus efforts and the hard financial challenges people have faced over the past year emphasize the essential role financial literacy plays in our lives," said Carl George, immediate past chairman of the AICPA's National CPA Financial Literacy Commission, which seeks to help Americans become financially astute and achieve financial well-being. "Individuals can't always control the events that affect their finances, but they can learn to control their finances. We want everyone to understand that financial literacy can and should be a major part of their lifestyle."

Four percent of the survey respondents said they've taken advantage of the housing tax credit to buy their first home. That figure represents 5.1 million Americans(1). The housing stimulus tax credit, which now includes homebuyers who've owned their previous residence for five years and are seeking a new principal home, expires on April 30.

Only 2 percent said they applied for jobs through the stimulus program, and another 2 percent received rebates when purchasing new cars through Cash for Clunkers, the 2009 legislation that encouraged citizens to replace their gas-guzzling cars with more fuel-efficient vehicles. The U.S. government reported creating 608,000 jobs in the fourth quarter of 2009. The government also reported that Cash for Clunkers resulted in the sales of 680,000 vehicles.

The CPA profession's financial literacy efforts encourage Americans to educate themselves and consider all financial decisions in the context of their individual circumstances, George said. "Americans potentially interested in a housing stimulus credit must consider basic questions: What does the program offer? How do the provisions relate to their own personal situations? Can they afford the mortgage payments even after the stimulus credit? What is the overall financial commitment? Does it make sense for them to apply?"

Sixty percent of Americans said they were delaying major decisions because of financial concerns. Interestingly, out of a list of nine, buying an automobile is the most common financial decision Americans are putting on hold (27 percent). Buying a home ranked fourth, behind "some other major purchase or decision" and medical procedures.

The National CPA Financial Literacy Commission oversees two programs to help Americans achieve financial well-being. The first, 360 Degrees of Financial Literacy (www.360financialliteracy.org), educates Americans on how financial issues affect them at 10 life stages, from childhood to retirement. The free Web site, devoid of all marketing and advertising, includes tools and articles on homeownership and financial considerations of a job search.

A second campaign, Feed the Pig (www.feedthepig.org), created with the Advertising Council, encourages Americans aged 25 to 34 to begin preparing for long-term financial security. Ad Council research has shown that individuals who have seen or heard a Feed the Pig public service announcement are more likely to change their financial behavior for the better.

Methodology

In an effort to understand how the economic crisis has affected behaviors and attitudes among the general public, the AICPA participated in the Harris Interactive March 2010 Harris Poll Quorum telephone omnibus study. The interviewing took place from March 17 to 21, 2010. The Harris Poll Quorum is a bi-monthly survey among 1,009 U.S. adults ages 18 and older.

(1) Based on a total of 129,065,264 housing units as reported by the U.S. Census Annual Estimates of Housing Units as of J uly1, 2008.

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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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Dow Jones Economic Sentiment Indicator Up Only Slightly to 38.7; Suggests Recovery Could Be Losing Momentum

/PRNewswire/ -- The media's coverage of mixed economic news led to a marginal rise in the Dow Jones Economic Sentiment Indicator (ESI) in December. The ESI rose to 38.7, up only minimally from 38.3 in November. This slight rise is the ESI's third weakest performance in a year and much less convincing than increases in October and November.

While the ESI ends the year significantly higher than the 22.4 level it registered in January at the start of the year, December's weaker performance means the indicator failed to break back above the level it held before the collapse of Lehman Brothers in September 2008.

The Dow Jones Economic Sentiment Indicator aims to predict the health of the U.S. economy by analyzing the broad coverage of 15 major daily newspapers in the U.S. During December, media coverage that included references to better-than-feared holiday retail sales was outweighed by articles referencing mixed or negative economic news including continuing double-digit unemployment and slower economic growth.

"The ESI's significantly slower rate of improvement in December suggests the U.S.'s economic rebound could be starting to level off and that non-farm payrolls neither advanced nor declined by much during the month," Dow Jones Newswires 'Money Talks' columnist Alen Mattich said.

The ESI represents one of the most comprehensive and far-reaching examinations of media coverage as an economic indicator. The ESI's back-testing to 1990 shows that the ESI clearly highlighted the risk that the U.S. economy was sliding into recession in 2001 and 2008 and suggests the indicator can help predict economic turning points as much as seven months in advance of other indicators.

Unlike some other indicators where 50 is a clear break-point between recession and recovery, the ESI needs to be read with reference to longer trends. Based on the ESI's performance since 1990, previous recoveries have been marked by substantial month-to-month gains, with a jump of three points seeming to be a sign of significant improvement. A drop below 50 marks the point at which there is a clear risk of a slowdown.

The Dow Jones Economic Sentiment Indicator is calculated using a proprietary algorithm through Dow Jones Insight, a media tracking and analysis tool. More information about the Economic Sentiment Indicator and its development is available at http://dowjones.com/esi .

Dow Jones Insight uses innovative text mining and analytic technologies to help organizations keep informed about relevant issues, news, conversations and trends emerging in mainstream, Web and social media. Dow Jones Insight's global content collection includes more than 25,000 news and information sources as well as blogs, message boards, and posts from YouTube and Twitter.

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Five Gifts to Give Yourself in the New Year

/PRNewswire/ -- The holidays are a wonderful time full of having fun with friends and family and giving gifts to the people we care about. For many consumers, however, the joy of the season will soon be replaced by the stress of paying holiday debt.

"It is easy to get caught up in the excitement of giving during the holidays," said Mechel Glass, Director of Education for Consumer Credit Counseling Service of Greater Atlanta (CCCS). "But many overdo a good thing and then struggle to make even minimum payments on their credit cards."

CCCS of Greater Atlanta advises consumers to top their list of New Year's resolutions with a commitment to improve their financial outlook. To help consumers tackle what can be a stressful time, CCCS suggests following the following tips:

1. Know how much you owe. A common mistake is not keeping track of debt.
The thinking is that as long as you can keep up with the payments,
everything is fine. However, if circumstances change due to a layoff
or other unexpected event, you could find yourself unable to make
payments and in immediate financial stress. The only way to understand
what you are facing is to have a realistic picture of what you owe.
Gather all your credit card statements and other bills and add up the
total.
2. Create a spending plan. The easiest way to take control of your money
is to set out a plan for how you will spend it. This is not glamorous
and can be something of a task, but it gives you the power to decide
where your money goes. The plan should be flexible and include monthly
expenses such as mortgage or rent, utilities, food, transportation,
entertainment, clothing, etc. Make sure your expenses are not more than
your income. If they are, go back to the plan and make adjustments.
3. Pay off credit card debt. The average household has more than to $8,300
in credit card debt (Nilson Report, April 2009) and the interest paid
on those balances can be as high as $1,500 a year. Just think of what
you could do with an extra $125 a month in your budget! Stop charging
additional purchases today and make a commitment to yourself that once
you have paid off your debt, you will not charge any purchases unless
you have a plan in place to pay off the balance in 90 days or less.
Sacrifices now will mean less stress and a better financial future.
4. Build a savings cushion. Once you have paid off your credit card
balances, you should begin to build a savings cushion for emergency or
unexpected expenses or if you lose your job. Your goal is three to six
months of living expenses put aside in a savings account. With this
cushion in place, when the refrigerator stops working, your car's
transmission gives out or your mother-in-law moves in, you will not
have to put those unexpected expenses on a credit card.
5. Develop a strategy for your financial future. Set aside time at least
twice a month to manage your finances including paying bills, balancing
your checking account and analyzing your expenses. Begin thinking
about, and planning for retirement--consider when you would prefer to
retire, how much money you will need to live the lifestyle of your
choice and what you need to do now to get there. Establish a retirement
fund and contribute to it on a regular basis.


Not sure where to start? If you are feeling overwhelmed, there is help. CCCS of Greater Atlanta provides confidential budget counseling, money management education, debt management programs and other services to help consumers. Contact CCCS at 800-251-CCCS or online at www.cccsinc.org.

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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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Groups Warn of Risk Retention Provision in House Financial Services Bill

/PRNewswire/ -- Following is a Joint Statement on Risk Retention from the Community Mortgage Banking Project and the Community Mortgage Lenders of America:

Late Tuesday evening, the House Financial Services Committee released draft legislation to address systemic risks and "too big to fail" concerns. We appreciate the efforts of the Committee to enact reforms that will ensure that the events that led to the current financial market crisis are not repeated. However, we are deeply concerned that one Subtitle of the just-released draft Financial Stability Improvement Act would have a devastatingly, adverse impact on the secondary mortgage market, forcing community-based lenders to reduce lending or go out of business, which will significantly raise the cost of credit for consumers seeking affordable mortgages.

We are concerned that the broad risk retention provisions in the draft Financial Stability Improvement Act could jeopardize affordable mortgages for consumers by crippling the ability of community-based lenders to tap the secondary mortgage market for funding. This would further accelerate the consolidation of the mortgage market into just a handful of the largest institutions. The result would be reduced competition and choice for consumers - an ironic and counterproductive result for a bill intended to mitigate "too-big-to-fail" concerns.

The draft bill requires all lenders to retain up to ten percent of the credit risk on any loan sold into the secondary market. In addition, entities that acquire mortgages and issue mortgage-backed securities will also be required to retain up to ten percent of the credit risk. The committee's intent is to create incentives for sound underwriting standards and enhanced risk management practices by creditors and issuers of mortgage-backed and asset-backed securities.

However, by setting risk retention requirements at each step of the process from sale to securitization, and layering it over multiple years of originations, the cumulative impact of these requirements on lenders and issuers will reduce liquidity significantly and undermine the ability of the secondary mortgage market to deliver hundreds of billions of dollars of low cost mortgage credit needed each year.

The impact would be particularly severe for local lenders, including independent community mortgage bankers and local banks. Today, these lenders provide consumers with safe and affordable mortgage products, local market knowledge and top quality service. But these companies rely heavily on their ability to sell these loans into the secondary market. Today, these local lenders account for more than 40% of all home mortgage originations, and more than 50% of FHA loans. These companies are critical to our nation's mortgage supply chain, but simply are not structured to retain cumulative layers of credit risk over multiple origination cycles.

Independent mortgage bankers would be forced out of business, while community banks would face liquidity and balance sheet constraints that would sharply limit their lending activities. Even the largest institutions would be constrained in their ability to effectively utilize the attributes of the secondary mortgage market in delivering mortgage funds efficiently.

By contrast, H.R. 1728, which already passed the House earlier this year, addressed the risk retention standards in the mortgage market by establishing standards for "qualified mortgage" products that would be exempt from the risk retention requirements, and would therefore enjoy ample availability in the primary market. Qualified Mortgage products are traditional fixed and adjustable rate mortgages. These plain vanilla products, appropriately underwritten, were not the products that drove the current mortgage market debacle. Other provisions of H.R. 1728 (such as requiring creditors to document income and assets and assess ability-to-pay) help ensure that mortgage lenders utilize strong risk management practices and conduct sound underwriting, but with fewer adverse implications for secondary market liquidity.

There is no need for Congress to chance such a drastic outcome, when a more sensible compromise on this issue was forged in H.R. 1728 and passed earlier this year. The undersigned organizations look forward to working with Congress to achieve its objectives, without potentially disrupting the well-functioning secondary market for safe and affordable traditional mortgages.

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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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Will Debt-Free Retirement Be the Downturn's Biggest Casualty?

/PRNewswire/ -- Consumers are more concerned about short-term security than long-term financial goals. The 2009 Survey of Financial Values and Debt, sponsored by Securian Financial Group, indicated that saving for emergencies is among Americans' top financial priorities. And while they have found many ways to spend less, consumers are not reducing their debt. Eighty-two percent are carrying non-mortgage debt, a figure that is virtually undiminished since Securian's initial survey in 2007.

"Consumers are clutching cash and postponing debt reduction," said Kerry Geurkink, director of Individual Annuity Marketing, Securian Retirement. "They are wisely adjusting their spending and borrowing, but the ultimate goal of debt-free retirement will be more difficult to achieve without a better balance between saving and debt reduction."

Although consumers may be unable to expedite debt repayment right now, they are focused on the long-term consequences of debt. Three quarters of non-retirees are concerned about the amount of debt they may carry into retirement, a plausible worry for Baby Boomers who are accumulating new debt.

One-fifth of Boomers owe at least $50,000 in non-mortgage debt, a 10-point spike from the 2007 survey. Boomers were the only generation in the survey (which included Generations Y, X, and the Silent Generation) to add debt since 2007.

Only one in five of people polled for the Securian survey (22%) applied for credit or non-mortgage loans in the last 12 months, and they were less willing overall to take on debt for cars, vacations, gifts, home improvements or meals out. They also identified several ways to save money on everyday expenses, and eight out of 10 expressed pride in the ways they have cut back.

"It is encouraging that Americans are willing to shun new debt and adopt more cautious attitudes toward spending," Geurkink said. "But consumers need effective debt-reduction strategies to set themselves up for debt-free retirement."