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

-----
Community News You Can Use
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page
Follow us on Twitter:  @GAFrontPage

Direct Deposit Push Exposes Social Security Recipients to Bank Payday Loans

/PRNewswire/ -- The federal government's push to require all recipients of Social Security and other benefits to receive payments by direct deposit will expose many seniors to predatory payday loans made by banks.

That's the conclusion of "Runaway Bandwagon: How the Federal Government's Push for Direct Deposit of Social Security Benefits Has Exposed Seniors to Predatory Bank Loans," a new report issued by the National Consumer Law Center.

"Treasury must stop banks from making these high-cost, short-term loans to Social Security recipients," said Margot Saunders, an attorney with NCLC and an author of the report. "These loans are only made because they are fully secured by a borrower's next direct deposit of federal funds."

"While federal law protects Social Security and other benefits from seizure by creditors, banks regularly take those benefits as repayment for what are essentially payday loans that they have made without even assessing borrowers' ability to afford those loans," Saunders added.

"Runaway Bandwagon" spotlights account advance loan products - some with Annual Percentage Rates as high as 1,800% - that some banks offer to customers with checking accounts or prepaid debit cards. Banks help themselves to funds from customers' accounts to repay loan principal and fees, so that these loans closely resemble both fee-based overdraft programs and payday loans.

"With these loans, banks profit from vulnerable and hard-pressed recipients of federal benefits, trapping them in a cycle of mounting debt and high borrowing costs," said Leah Plunkett, an attorney with NCLC and an author of the report. "In effect, these high-cost loans are used to hijack benefits federal law intends to provide for the basic needs of elderly and disabled citizens."

More seniors and vulnerable benefits recipients will become the targets for such loans as the Treasury Department moves forward with its plan to require electronic payments to all federal benefit recipients by 2013. New protections are needed to prevent the victimization of seniors and other vulnerable consumers and preserve income from Social Security and other social insurance programs that many seniors depend upon for survival.

Treasury must ensure that when accounts used for benefit deposits are used to secure loans, those loans are made only after an evaluation of the borrower's ability to afford repayment, carry APRs including fees of no more than 36%, have a term of at least 90 days or one month per $100 borrowed and allow repayment in multiple installments. Treasury must also prohibit banks and other lenders from requiring borrowers to provide as security electronic access to a bank account. Borrowers who do allow lenders such access must be permitted to end that access at any time and at no cost.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page
Follow us on Twitter:  @GAFrontPage

BB&T pays Treasury more than $3.1 billion to exit TARP

/PRNewswire / -- BB&T Corporation (NYSE:BBT) today said it has exited the Troubled Asset Relief Program, or TARP, by buying back the preferred stock sold to the U.S. Treasury Department under the Capital Purchase Program last November.

BB&T will pay approximately $3.1 billion to the Treasury to repurchase the preferred stock, plus a final dividend payment of about $13.9 million, bringing BB&T's total dividend payments under TARP to approximately $92.7 million.

"This was, in fact, an excellent investment for the American taxpayer," said BB&T Chief Executive Officer Kelly King. "Our strong capital position allowed us to pay back TARP in a very short amount of time. But what's important today is that we've repaid the government, and now we have a singular focus on the business of serving our clients.

"Throughout this period, BB&T has experienced very good loan growth," King said. "We will continue to actively pursue and make every good loan we can find."

BB&T has notified the Treasury of its intent to repurchase the outstanding warrant associated with TARP, which allows the Treasury to purchase up to 13.9 million shares of the company's common stock. Any adjustment resulting from the repurchase of the outstanding warrant will be accounted for in the second or third quarter of 2009.

With $143.4 billion in assets, Winston-Salem, N.C.-based BB&T Corporation is the nation's 10th largest financial holding company. Founded in 1872, it operates more than 1,500 financial centers in 11 states and Washington, D.C. More information about the company is available at BBT.com.

This news release contains certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results may differ materially from current projections. Please refer to BB&T's filings with the Securities and Exchange Commission for a summary of important factors that may affect BB&T's forward-looking statements. BB&T undertakes no obligation to revise these statements following the date of this news release.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

New Online Treasury Management Course Available

/PRNewswire-USNewswire/ -- The Government Finance Treasury Management course is now available online through a collaborative effort between the University of Georgia's Carl Vinson Institute of Government and the University of Georgia Center for Continuing Education. Treasury Management is a self-study, 30-day, CEU-awarding course offering the basics of treasury management in a governmental environment.

Treasury Management is one of several online Government Financial Management programs offered by UGA. The course will familiarize you with the legal and political considerations and parameters within which a treasury management system functions.

"The Treasury Management class becomes the fifth online class we've launched in governmental finance to keep meeting our client demands for distance learning. We feel participants will gain a great overall understanding of treasury in a government setting by participating in the online Treasury Management Course," said Sabrina Wiley Cape at the Carl Vinson Institute of Government.

You will also learn how governments utilize investment economics and various investment alternatives, banking systems and how they affect local government treasury management and the concepts of contracting for banking services.

Online lessons include:
-- Cash Management
-- Banking Services
-- Forecasting
-- Collections
-- Disbursements
-- Investments
-- Internal Controls
-- Staffing and Supervision
-- Accounting and Reporting


For more information or to register, please contact Bob Wells at the University of Georgia Center for Continuing Education at (706) 542-6692, (800) 325-2090 or e-mail Bob.Wells@georgiacenter.uga.edu. The Online Treasury Management course can be viewed at www.georgiacenter.uga.edu/is/treasury.

For more information on other online Governmental Finance courses offered, please visit www.georgiacenter.uga.edu/is/govtacct and www.georgiacenter.uga.edu/is/debt. Additionally, new Governmental Finance courses are being developed and will be available in 2009.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

Regions Selected to Participate in U.S. Treasury Capital Purchase Program

(BUSINESS WIRE)--Regions Financial Corporation (NYSE:RF) announced today that it has received preliminary approval from the U.S. Treasury Department, subject to standard closing conditions, for the investment of $3.5 billion in the company as part of the government’s effort to restore confidence in our nation’s financial system, increase the flow of credit to consumers and businesses, and to provide additional assistance to distressed homeowners facing foreclosure. This will increase Regions’ Tier 1 capital to approximately 10.5 percent.

The Treasury’s plan to invest $3.5 billion in preferred stock and warrants in Regions is part of its program to provide capital to the healthy financial institutions that are the core of the nation’s economy. Treasury originally announced the infusion of $125 billion into nine large banks, and encouraged other strong financial institutions to also participate.

“Regions believes this government program is important to restoring the flow of funds to consumers and businesses, both large and small, who are at the core of our economy,” said Dowd Ritter, Regions’ chairman, president and chief executive officer. “These funds, while still strengthening our capital base, will enable us to expand lending and step up acquisitions.”

Regions will pay the government a 5 percent dividend, or $175 million annually, for each of the first five years of the investment, and 9 percent thereafter unless Regions redeems the shares. The government will also receive 10-year warrants for common stock, which will give the Treasury the opportunity to benefit from an increase in the common stock price of the company.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

The Bank of New York Mellon Chosen to Assist the U.S. Department of the Treasury

PRNewswire-FirstCall/ -- The Bank of New York Mellon today (October 14, 2008) confirmed that it has been selected by the U.S. Department of the Treasury to provide a broad range of services to support the government's Troubled Asset Relief Program authorized under the Emergency Economic Stabilization Act.

Treasury has hired the company to provide the accounting of record for the portfolio, hold all cash and assets in the portfolio, provide for pricing and asset valuation services and assist with other related services. The Bank of New York Mellon will serve as auction manager and conduct reverse auctions for the troubled assets.

The company's support will be administered through its securities servicing businesses. The company is the largest U.S. institution providing auction services and is currently responsible for transactions that represent about one-third of the market. In addition, the company offers clients worldwide a broad spectrum of specialized asset servicing capabilities, including custody and fund services, securities lending, performance and analytics, and execution services.

"Our market leadership and experience have given us a keen understanding of the challenges facing the U.S. Treasury in these extraordinary times," said Robert P. Kelly, chairman and chief executive officer of The Bank of New York Mellon. "We will immediately deploy our resources and expertise, joining the team of public and private organizations that are working hard to earn the trust of the American taxpayers and to address the ongoing economic challenges."

The Bank of New York Mellon has a long history of partnering with the U.S. government to drive the development of the markets. Its founder, Alexander Hamilton, was the first Secretary of the Treasury. The company made the first-ever loan to the U.S. government and provided financing for the construction of the Erie Canal. Another key company leader, Andrew Mellon, served as Secretary of the Treasury during three presidential administrations.

Today, The Bank of New York Mellon is the global leader in securities servicing and asset management with $23 trillion in assets under custody and administration, more than $1.1 trillion in assets under management and services $12 trillion in outstanding debt. The company operates in 34 countries serving more than 100 markets and is a leading provider of financial services for institutions, corporations and high net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. The company also has extensive experience servicing all major debt categories, including corporate and municipal debt, mortgage-backed and asset-backed securities, collateralized debt obligations, derivative securities and international debt offerings. Additional information is available at bnymellon.com.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

Duke: Treasury Action Should Work, But at High Cost to Taxpayers, Professor Says

The Treasury’s proposed action to use government money to purchase mortgage-backed securities held by financial institutions should work, but at an unnecessary cost to taxpayers, says Steven Schwarcz, the Stanley A. Star Professor of Law & Business at Duke University.

Schwarcz has studied systemic risk for more than a year and has suggested, in congressional testimony last October, that the government should consider acting as a market liquidity provider of last resort, but to do so at the outset of a financial market panic. His article, “Systemic Risk,” will be published next month in the Georgetown Law Journal.

“The focus from the outset should have been on treating loss of confidence in the financial markets, which is the underlying cause of problems in the financial system,” Schwarcz says. “While it may have been necessary under the circumstances for the Fed to act to prop up AIG and Bear Stearns, among others, preventing financial institution failure amounts to treating symptoms of the disease, not its underlying cause. By delaying, the government missed a vital opportunity to nip the problem in the bud at a much lower cost to the American taxpayer.”

The Treasury’s proposed bailout plan is a semi-strong version of Schwarcz’s proposal, which he said would work most effectively if used at the outset of a market panic. The current panic has become so entrenched, however, that financial institutions now distrust the creditworthiness of other financial institutions; they do not know how much in mortgage-backed securities those institutions hold or the value of those securities.

The Treasury, therefore, needs to address both this counterparty risk perception and the market collapse. It is proposing that government money be used to purchase, at a deep discount, mortgage-backed securities held by financial institutions, which would stabilize market prices and reduce counterparty risk.

'This should work," says Schwarcz, "but it will be much more expensive than if the government had stabilized the market at an earlier point."

-----
www.georgiafrontpage.com
Georgia Front Page
www.fayettefrontpage.com
Fayette Front Page

Federal Home Loan Bank of Atlanta Approves Agreement with the U.S. Treasury as Backup Liquidity Source

PRNewswire/ -- The Federal Home Loan Bank of Atlanta ("Bank") announced today it has approved a lending agreement with the U.S. Department of the Treasury ("Treasury") that is designed to serve as a source of contingent liquidity for the Bank's debt issuance activities.

The agreement stems from provisions of the Housing and Economic Recovery Act of 2008, which provided the Treasury with the authority to establish such a facility. The terms of the agreement are described in the Bank's Current Report on Form 8-K filed today. The agreement expires on Dec. 31, 2009, or sooner if the Bank determines it will not need the Treasury support. Any loan under the agreement would be secured by certain Bank assets, such as advances to members or by mortgage-backed securities issued by Fannie Mae or Freddie Mac.

"The Bank appreciates the U.S. Treasury's interest in establishing a clearly-defined operational agreement should the Federal Home Loan Banks require added liquidity support for our debt," said Richard A. Dorfman, FHLBank Atlanta President and Chief Executive Officer. "It is essential that the Bank continue to execute its mission of providing affordable liquidity to lenders, and this agreement makes it clear the federal government supports that role."

Each of the 12 Federal Home Loan Banks has entered into such an agreement. Extensions of credit by the Treasury to the FHLBanks, or to any FHLBank, will be considered a consolidated obligation and will be the joint and several obligation of all of the FHLBanks. However, Dorfman noted that at this time, the Bank does not anticipate that it will need to tap the lending facility.

About the Federal Home Loan Bank of Atlanta

The Bank is a cooperative financial services organization that provides funding, community development grants, and other banking services to more than 1,200 member financial institutions in Alabama, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and the District of Columbia. The Bank is one of 12 district banks in the Federal Home Loan Bank System (the FHLBank System), which since 1990 has contributed more than $2 billion to affordable housing development in the United States.

Some of the statements made in this announcement, including, without limitation, the Bank's plans to not access funding under the lending agreement, are "forward-looking statements," which include statements with respect to the Bank's beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, many of which may be beyond the Bank's control, and which may cause the Bank's actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by the forward-looking statements.

The forward-looking statements may not be realized due to a variety of factors, including, without limitation: legislative and regulatory actions or changes; future economic and market conditions; changes in demand for advances or consolidated obligations of the Bank and/or the FHLBank System; changes in interest rates; political, national and world events; and adverse developments or events affecting or involving other Federal Home Loan Banks, GSEs or the FHLBank System in general. Additional factors that might cause the Bank's results to differ from these forward-looking statements are provided in detail in our filings with the Securities and Exchange Commission, which are available at http://www.sec.gov/ .

You should not place undue reliance on forward-looking statements, since the statements speak only as of the date that they are made. The Bank has no obligation and does not undertake to publicly update, revise or correct any of the forward-looking statements after the date of this announcement, whether as a result of new information, future events or otherwise, except as may be required by law.


_____
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page