Thursday, May 31, 2012

Ex-Senator Edwards acquitted on campaign finance charge

(Reuters) - Former U.S. Senator John Edwards was acquitted on Thursday on one count of accepting illegal campaign contributions, and the judge declared a mistrial on five other counts because the jury was deadlocked.

The jury's decision came on the ninth day of deliberations and marked yet another dramatic turn of events for the one-time politician who rose to become the Democratic Party's vice presidential nominee in 2004, only to see his career ruined by scandal four years later.

As the jury's verdict was read, Edwards, who did not testify in the nearly six-week-long trial, slumped back in his seat in relief.

Later, standing in front of the federal courthouse in Greensboro, North Carolina, the state he represented in the U.S. Senate from 1999 to 2005, Edwards said he never broke the law.

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Wednesday, May 30, 2012

Lenders finally loosen up on car loans

It's finally getting easier to get a car loan. Experian Automotive just announced that the average credit scores required for consumers to buy a vehicle have dropped to near prerecession levels.

The average credit score for financing a new vehicle dropped six points to 760, and dropped four points to 659 for used vehicles. By contrast, credit scores required in the first quarter of 2008 were at an average of 753 for new vehicles and 653 for used.

Experian's analysis also showed the average amount financed on new vehicles rose by $589 in the first quarter, to $25,995. For used vehicles, the average amount financed increased by $411, bringing the average total to $17,050.

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Tuesday, May 29, 2012

In the latest symptom of Europe's financial turmoil, the region's riskier companies are bypassing banks and investors at home and turning to the U.S. for loans.

European companies borrowed some €14.4 billion (about $18 billion at current rates) in the U.S. leveraged-loan market this year through Friday, more than double the €6.7 billion for all of 2011, according to data from S&P Capital IQ LCD. That is the highest amount since at least 2007, the height of the last boom in leveraged lending, when full-year loan volume was €12.2 billion, according to S&P.

The leveraged-loan market is used by companies with high-yield or noninvestment-grade credit ratings, making it particularly sensitive to Europe's debt crisis, now in its third year.

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Monday, May 28, 2012

An insurer’s view on the proposed students’ loan scheme

Education anywhere, and particularly at the tertiary level comes at a price. For far too many, the cost is simply too dear. The joy of qualifying for and being granted a study course can be cut short when one is barred from sitting for semester examinations due to failure to honour fee payments.

The recently proposed Students’ Loan Scheme Bill, therefore, provides some relief to the anguish faced by many parents and students alike, but with it come certain concerns as well. Naturally, this Bill places further pressure on an already stressed tax base and, as potential contributors, you should have a say into its drafting.

In such cases, it doesn’t hurt to examine the statistics. With an annual growth rate of 3.2%, the number of Ugandan youth passing through the education system has been steadily on the rise. Unemployment figures do not make for happy reading with the national average at 3.5% and the alarming one affecting the youth at a staggering 32.2%!

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Sunday, May 27, 2012

US debt, spending loom large as issues for independent voters


WASHINGTON - Government spending and debt are emerging as a campaign tug-of-war, with Republican Mitt Romney blaming President Obama for a "prairie fire of debt" and Obama calling the charge a "cowpie of distortion." Both candidates are reaching for independent voters anxious about who's going to get stuck with the bill.

Spending and debt now rank as high on the worry scale as lack of jobs. And it has direct appeal to independents who could decide the election in about a half-dozen states being heavily contested by both campaigns.

In turning attention to debt, Republicans are tapping a winning issue they used in congressional races two years ago. Republican pollster Wes Anderson said that just before the 2010 elections, congressional campaigns shifted "from jobs and economy to government taking us over the cliff." The emphasis proved to be successful at the ballot box as Republicans grabbed control of the House, captured Senate seats and won in state races.

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Wednesday, May 23, 2012

Consumer protections considered for prepaid debit cards

Prepaid debit cards may soon be subject to federal regulations requiring more transparent fee disclosures and increased financial protection.

The Consumer Financial Protection Bureau said Wednesday it is considering new consumer protections for the cards. Director Richard Cordray said he plans to bring more "safety and transparency" to the industry. The agency will seek comment from experts and the public on how fees are disclosed and on protection from unauthorized transactions.

Prepaid cards often come with fees associated with everything from calling customer service to using an ATM — users reported paying an average of about $2 every time they wanted to reload money on their cards, according to a study by Javelin Strategy and Research. That is significant for a product that is most popular among Millennials and consumers who make less than $15,000 a year, says Javelin President Jim Van Dyke.

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Tuesday, May 22, 2012

Your credit card could lower vacation costs

There are lots of ways to save money on your summer vacation. Go for one week instead of two. Drive instead of fly. Stay in a hotel with free breakfast and eat enough to last you until dinner.

But there’s another way to cut costs that won’t require you to stuff muffins in your purse. Pour yourself a cup of strong coffee and read your credit card agreement. While most cardholders are aware of their card’s airline miles and cash-back rewards, many are unaware that their credit card offers lots of other money-saving perks.

•Rental car insurance. Optional collision coverage could add $15 a day or more to the cost of your rental car. There’s a good chance, though, that your credit card will cover costs that aren’t covered by your personal auto insurance policy.

To qualify for this coverage, you must decline the insurance offered by the rental car agency. You must also pay 100% of the rental car costs with your credit card, says Bill Hardekopf, CEO of LowCards.com.

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Monday, May 21, 2012

Five proposals to solve $1 trillion college loan crisis

A college degree is supposed to pave the way to a better life. It didn't work out that way for Judith Tuck.

Tuck graduated from the University of Arizona in 1996 with a master's degree in rehabilitation counseling and $44,000 in student loans. She had every intention of keeping up with her loan payments, but after a series of low-wage jobs in her field, her debt began to snowball. Tuck, a 73-year-old widow, now owes more than $136,000. Her wages have been garnished and she faces losing everything, including her home.

"The only good thing about student loans is that the day I die my children will not have to pay for them," she says.

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Sunday, May 20, 2012

Chrysler's U.S. sales gains driven by better vehicles, management


Chrysler Chairman and CEO Sergio Marchionne deliberately kept expectations low at the beginning of this year.

Aside from the low-volume SRT Viper, there would be only one all-new major vehicle introduction: the Dodge Dart.

Even so, Chrysler's U.S. sales through April have increased by a third -- nearly triple the industry average.

Left for dead just three years ago, Chrysler has gained market share -- 11.6% for the first four months, compared with 9.6% a year ago. Ford and General Motors, on the other hand, have lost ground as Asian automakers recover from last year's tsunami.

"Now we've got the (new) products, we've got the highest quarterly earnings in 13 years," said Reid Bigland, Chrysler's head of U.S. sales.

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Thursday, May 17, 2012

U.S. Fed's balance sheet shrinks in latest week

May 17 (Reuters) - The U.S. Federal Reserve's balance sheet shrank in the latest week with reduced holdings of Treasuries and agency debt, Fed data released on Thursday showed.

The Fed's balance sheet - a broad gauge of its lending to the financial system - stood at $2.834 trillion on May 16, down from $2.847 trillion the previous week.

The Fed's holdings of Treasuries totaled $1.657 trillion as of Wednesday, versus $1.666 trillion the previous week.

The Fed's overnight direct loans to credit-worthy banks via its discount window averaged $10 million a day during the week from an average of $14 million a day in the prior week.

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Wednesday, May 16, 2012

Millennials use alternative financial services

Payday loans, check cashing and prepaid debit cards have found a new customer in the cash-strapped twentysomething.

Under-banked Millennials are using alternative financial services such as these at similar rates regardless of income level, according to a survey out today by Think Finance, which develops financial products for the under-banked.

Half of those in the lowest income group surveyed, earning less than $25,000 a year, said they used a prepaid debit card in the past year. That was the same percentage as the highest income bracket — $50,000 to $74,999 a year — says the survey of 640 under-banked Millennials.

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Tuesday, May 15, 2012

Senate sends Obama bill to renew Ex-Im Bank


(Reuters) - The Senate voted on Tuesday to renew the U.S. Export-Import Bank's charter through September 2014 and raise its lending cap to $140 billion, overcoming objections from conservative Republicans who wanted to shut the bank down.

The bill now goes to President Barack Obama, who said he would sign it and praised lawmakers from both parties for coming together to pass the bill.

"This important step will help American businesses create jobs here at home and sell their products around the world - all at no cost to taxpayers," Obama said in a statement.

The Senate voted 78-20 to approve the bill, just a few weeks before the bank's charter expires on May 31. Bank officials also warned they were close to reaching their current $100 billion lending cap because of record demand in recent years.

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Monday, May 14, 2012

Ally to Sell Non-U.S. Units as ResCap Goes Bankrupt


Ally Financial Inc. (ALLY) (ALLY), the auto lender whose mortgage unit went bankrupt, may sell international car- finance and insurance operations to help repay a $17.2 billion U.S. bailout, Chief Executive Officer Michael Carpenter said.

Ally is seeking to divest more than $30 billion of assets in Canada and Mexico as well as in Europe and South America, Carpenter said in an interview. The sales may allow Ally to repay two-thirds of the government rescue that left the U.S. Treasury Department with a 74 percent stake (ALLY), he said.

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Sunday, May 13, 2012

Students lament debts as loan battle gains steam in Congress

DETROIT – Sean Doerr, like thousands of college graduates this spring, is trapped between a rock and a hard place.

To get a good job, he knew he needed a college degree. But getting it cost the 22-year-old Detroiter dearly. He graduated Thursday from the College for Creative Studies in Detroit with more than $85,000 in debt.

He's far from alone: Millions of Americans now owe more for student loans than credit cards. The loans can top $100,000 — even $200,000 — and often translate into payments of more than $1,000 a month.

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Thursday, May 10, 2012

Deutsche Bank to pay $202 million U.S. mortgage settlement


(Reuters) - A Deutsche Bank AG (DBKGn.DE) mortgage unit has agreed to pay $202.3 million to settle one of the biggest U.S. government civil fraud lawsuits over reckless mortgage lending practices.

The bank's MortgageIT unit admitted it had lied to the U.S. Department of Housing and Urban Development (HUD) that loans it issued were eligible for federal mortgage insurance when they were not, the U.S. attorney's office in Manhattan said on Thursday. It said MortgageIT "repeatedly submitted certifications that were knowingly or recklessly false."

Deutsche Bank and MortgageIT did not conform to federal regulations and as a consequence, HUD incurred losses when about a third of the loans defaulted, Manhattan U.S. Attorney Preet Bharara said. He said the damages to be paid by the bank would help compensate HUD.

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Wednesday, May 9, 2012

Fannie Mae posts profit, abstains from new U.S. aid

(Reuters) - Fannie Mae (FNMA.OB), the largest backer of loans in the U.S. housing market, posted a profit on Wednesday and said it would not need more taxpayer aid for the first time since the height of the financial crisis in late 2008, when it was rescued by the government.

In a new sign that the U.S. housing market is on the mend, the mortgage giant posted a first-quarter profit of $2.7 billion. That was its best performance since being pushed to the verge of collapse by the U.S. housing crash and the surge in bad debts on its books.

Fannie Mae said it paid the Treasury $2.8 billion in dividends to the government, which owns nearly 80 percent of the firm.

The company has drawn a total of $117.1 billion in federal aid, fueling criticism from Republicans who want to end the taxpayer bailout and scale back the government's footprint in the mortgage market. So far, Fannie Mae has paid back $22.6 billion in the form of dividend payments to the Treasury.

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Tuesday, May 8, 2012

U.S. Ex-Im Bank, nearing House vote, OKs $2.95 billion loan


(Reuters) - The U.S. Export-Import Bank said on Tuesday it has approved a $2.95 billion loan to support U.S. exports for a major natural gas project in Australia, as lawmakers neared a vote on renewing the bank's charter through September 2014.

Bank officials said the direct loan for the Australian natural gas project will help support an estimated 11,000 U.S. jobs and is the second-largest single-project financing in the institution's nearly 80-year history.

Leaders in the House of Representatives reached a deal on Friday to keep the bank operating past May 31, when its current charter expires.

The bill is headed to the House floor on Wednesday under an expedited procedure that requires a two-third vote for approval. Leaders rarely place a bill on the so-called suspension calendar unless they are confident it has enough support.

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Monday, May 7, 2012

Priority Payday Loans Rebrands Site to Focus on US Market


In an effort to better reach American consumers, Priority Payday Loans recently introduced a rebranded version of the popular short-term lending resource.

LOS ANGELES, May 7, 2012 /PRNewswire via COMTEX/ -- Short-term financial resource Priority Payday Loans recently began focusing exclusively on American consumers. The site, reintroduced as USA.PriorityPaydayLoans.com, announced the rebranding initiative after reports indicated a rapidly changing overseas demand for short-term financial products. Since the launch, Priority Payday Loans is reporting a significant change in site interaction.

"We are excited to see such a positive reaction to our domestic rebranding initiative," Priority Payday Loans spokeswoman Michele Holbrook said. "The consumer interaction we are experiencing is much more targeted and our user base is expressing a higher level of satisfaction after the launch."

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Sunday, May 6, 2012

House reaches agreement on Export-Import Bank

WASHINGTON (Reuters) - Leaders of the U.S. House of Representatives said on Friday they reached a bipartisan deal to reauthorize the U.S. Export-Import Bank through September 30, 2014, and gradually increase its lending cap to $140 billion from the current $100 billion.

The deal, negotiated by Republican House Majority Leader Eric Cantor and Democratic House Minority Whip Steny Hoyer came just weeks before the bank's temporary charter was set to expire.

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Thursday, May 3, 2012

Freddie Mac posts profit, but needs $19 million in aid


WASHINGTON (Reuters) - Freddie Mac , the No. 2 provider of U.S. mortgage money, said on Thursday it will seek another $19 million in taxpayer aid after its quarterly profit failed to make up for a dividend payment to the government for its controlling stake.

The company has now drawn $72.3 billion from the U.S. Treasury since being seized by the government in 2008, and has returned $18.3 billion as the price for the taxpayer support.

It warned it was unlikely to generate enough profit to cover the dividend payments any time soon. The company's latest aid request compared to $146 million needed to stay afloat in the prior quarter.

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Wednesday, May 2, 2012

Citigroup Said to Raise $355 Million CLO for Aegon USA

Citigroup Inc. (C) (C) raised a $355.4 million collateralized loan obligation for Aegon USA Investment Management LLC, according to two people with knowledge of the deal.

The CLO, Cedar Funding Ltd., includes a $227.5 million slice rated AAA that pays a rate of 135 basis points more than the London interbank offered rate, said the people, who declined to be identified because the terms are private. The fund was increased in size from a target of $300 million, the people said.

There have been $9.9 billion of CLOs backed by widely syndicated loans raised this year, according to data compiled by Bloomberg. For the same time period last year, $1.6 billion of such funds were raised, according to the data.

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Tuesday, May 1, 2012

U.S. housing regulator fires back in mortgage flap

(Reuters) - The regulator for Fannie Mae and Freddie Mac fired back on Tuesday against claims from Democrats in Congress that he is standing in the way of letting the two U.S. housing finance giants forgive mortgage principal because of ideology.

In a sharply worded response to Elijah Cummings, the top Democrat on the House of Representatives Oversight Committee, Federal Housing Finance Agency Director Edward DeMarco defended his agency's position on loan write downs.

DeMarco has long maintained that allowing the two government-controlled mortgage firms to write down loan principal would needlessly drive up the costs of their taxpayer bailout, which has already reached more than $150 billion.

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