Under the Emergency Economic Stabilization Act of 2008, more commonly known as the $700 bailout, the government promised to loan money to the nation’s banks to prevent Wall Street from completely crashing. The funds would be released in two $350 phases.
So far $161.5 billion has been given to banks. Another $108.5 billion has been applied for.
Who’s Got the Money?
So far, we know that AIG has been given some of the bailout money. Other banks include:
· Citigroup - $45 billion
· AIG - $40 billion
· JPMorgan Chase - $25 billion
· Wells Fargo - $25 billion
· Bank of America - $15 billion
· Goldman Sachs - $10 billion
· Merrill Lynch - $10 billion
· Morgan Stanley - $10 billion
· U.S. Bancorp - $6.6 billion
· Capital One - $3.5 billion
· Regions Financial - $3.5 billion
· SunTrust - $3.5 billion
Several smaller, more local banks have also received money. See a complete list of bailed-out banks at the New York Times.
Will consumers get a bailout?
The Federal Reserve announced a program that would assist banks in meeting consumer and small business needs. The Term Asset-Backed Securities Loan Facility would help banks issue consumer and small business loans including student loans, auto loans, credit card loans, and SBA loans. The Federal Reserve Bank of New York plans to lend $200 billion to this effort. Another $20 billion will come from the $700 billion bailout.
Showing posts with label bailout. Show all posts
Showing posts with label bailout. Show all posts
Friday, December 5, 2008
Tuesday, November 25, 2008
Should You Be Worried About a Bank Failure?
The FDIC reports a total of 21 bank failures in 2008, the highest number of failures in a single year since it began reporting closings in 2000. With the increased number of bank closings, it’s only natural to wonder if your bank is next. But predicting a bank failure isn’t so easy. The FDIC, Federal Deposit Insurance Corporation, compiles a list of problem banks on a quarterly basis. However, this obscure list isn’t released to the public. The corporation doesn’t want to alarm consumers which could make things worse. Even so, only 13% of the banks on the FDIC’s list actually fail, according to CNNMoney.com. So, it’s possible that you don’t have much to worry about.
If you want to know how your bank is doing, you can check any of the private bank rating companies published on a list by the FDIC.
For tips on How to Survive the Credit Crisis, click here.
Don’t worry unnecessarily about your bank failing. Instead, you should make sure the deposits you’ve made are FDIC-insured. The FDIC recently increased the insured amount to $250,000 per depositor per bank. This is a temporary amount that lasts until December 31, 2009 when the insured amount will go back to $100,000. Checking accounts, savings accounts, NOW accounts, money market deposit accounts, and CDs (certificates of deposit) are all insured up to the $250,000. Certain retirement accounts are also covered.
These types of accounts are not covered: life insurance policies, annuities, stocks, bonds, mutual funds, or municipal securities.
You may be covered for more than $250,000 at a single bank if you have money deposited in different ownership categories: single accounts, certain retirement accounts, joint accounts, or revocable trust accounts. Visit FDIC.gov for more information on insurance levels and to find out if your bank is insured.
If you want to know how your bank is doing, you can check any of the private bank rating companies published on a list by the FDIC.
For tips on How to Survive the Credit Crisis, click here.
Don’t worry unnecessarily about your bank failing. Instead, you should make sure the deposits you’ve made are FDIC-insured. The FDIC recently increased the insured amount to $250,000 per depositor per bank. This is a temporary amount that lasts until December 31, 2009 when the insured amount will go back to $100,000. Checking accounts, savings accounts, NOW accounts, money market deposit accounts, and CDs (certificates of deposit) are all insured up to the $250,000. Certain retirement accounts are also covered.
These types of accounts are not covered: life insurance policies, annuities, stocks, bonds, mutual funds, or municipal securities.
You may be covered for more than $250,000 at a single bank if you have money deposited in different ownership categories: single accounts, certain retirement accounts, joint accounts, or revocable trust accounts. Visit FDIC.gov for more information on insurance levels and to find out if your bank is insured.
Monday, November 24, 2008
Credit Crisis Could Bring Credit Repair Scams
The credit crisis has brought with it an increased number of companies claiming they can repair your credit. To someone stuck in a bad credit situation, these promises sound tempting, but when it comes to credit repair companies, things are never as they seem.
Credit repair organizations can’t work the magic they’d have you believe they can. Legally, they cannot do anything to help your credit that you can’t do yourself. The same credit laws prevent you from removing accurately reported information from your credit report hold true for credit repair companies. For example, if you really did file bankruptcy 3 years ago, that bankruptcy has to remain on your report for at least 4 more years, 7 years in some cases. If you didn’t file bankruptcy, then you can submit your own credit report dispute to have the entry removed for absolutely free.
Considering the Federal Trade Commission says they’ve never seen a legitimate credit repair company, it’s safe to assume all credit repair companies are a waste of time.
Credit repair companies have to follow the federal law called the Credit Repair Organizations Act. You should avoid any company that’s not following that law.
Any credit repair company you deal with has to give you a pamphlet titled “Consumer Credit File Rights Under State and Federal Law.” They’re also required to give you a copy of your contract before you’re asked to sign it. This contract has to spell out how much you have to pay, what services will be done, the date or time period for doing the services, and a statement letting you know you can cancel the contract within 3 days of signing. The company’s name and business address should be on the contract.
You don’t have to pay for any services before they’ve been done for you. If a credit repair company asks you to, look for another one.
No credit repair company should promise to remove accurate information from your credit report. Nor should they suggest you create a new identity.
A sure sign of a scam is an agency that asks you to sign away your rights under the Credit Repair Organizations Act. Credit repair companies aren’t allowed to ask you to do this and even if you do, the waiver isn’t legally binding.
If you’ve dealt with an unscrupulous credit repair agency, you can report the Federal Trade Commission (www.ftc.gov) and your state’s Attorney General.
Credit repair organizations can’t work the magic they’d have you believe they can. Legally, they cannot do anything to help your credit that you can’t do yourself. The same credit laws prevent you from removing accurately reported information from your credit report hold true for credit repair companies. For example, if you really did file bankruptcy 3 years ago, that bankruptcy has to remain on your report for at least 4 more years, 7 years in some cases. If you didn’t file bankruptcy, then you can submit your own credit report dispute to have the entry removed for absolutely free.
Considering the Federal Trade Commission says they’ve never seen a legitimate credit repair company, it’s safe to assume all credit repair companies are a waste of time.
Credit repair companies have to follow the federal law called the Credit Repair Organizations Act. You should avoid any company that’s not following that law.
Any credit repair company you deal with has to give you a pamphlet titled “Consumer Credit File Rights Under State and Federal Law.” They’re also required to give you a copy of your contract before you’re asked to sign it. This contract has to spell out how much you have to pay, what services will be done, the date or time period for doing the services, and a statement letting you know you can cancel the contract within 3 days of signing. The company’s name and business address should be on the contract.
You don’t have to pay for any services before they’ve been done for you. If a credit repair company asks you to, look for another one.
No credit repair company should promise to remove accurate information from your credit report. Nor should they suggest you create a new identity.
A sure sign of a scam is an agency that asks you to sign away your rights under the Credit Repair Organizations Act. Credit repair companies aren’t allowed to ask you to do this and even if you do, the waiver isn’t legally binding.
If you’ve dealt with an unscrupulous credit repair agency, you can report the Federal Trade Commission (www.ftc.gov) and your state’s Attorney General.
The Big Three Automakers Ask Uncle Sam for Help
The Big Three automakers – GM, Ford, and Chrystler – have warned that their ragged financial state could cause them to fail within the next year, if not within the next weeks. Their demise could lead to a collapse of the entire auto industry. If these three automakers fail, the U.S. economy could lose up to 2.5 million jobs, estimates Associated Press. So, the three have joined together to petition lawmakers for bailout of $25 billion.
Chief executives blamed credit problems and decreased SUV and truck purchases as the reason for their problem. Rep. Michelle Bachmann, in a statement to Congress, points out that foreign manufacturers operating in the U.S. – Toyota, Honda, and Nissan – have remained profitable despite the crisis. She suggests the companies instead restructure their debts under Chapter 11 bankruptcy. A bailout, she says, won’t fix the companies long-existing systemic issuers.
While they claimed the companies were struggling and on the brink of bankruptcy, the chief executives this week arrived at the Washington hearing held to discuss the bailout in multimillion dollar corporate jets. Hardly the choice of transportation for a near-death auto manufacturer. That decision has many skeptical about whether the companies actually need a bailout and whether they would spend it wisely.
Whether the bailout would actually help the auto industry is questionable. IndyStar reports deeper problems with the way the auto industry is structured. For example, high costs of pension and health-care benefits contribute to the companies’ high overheads. Left unsolved, these problems could lead to bankruptcy, bailout or not.
Lawmakers won’t vote on the bailout until the automakers return with a plan for how they’re going to spend the loan money. If approved, the bailout won’t come from the $700 rescue plan approved for banks earlier this year. Instead, the Bush administration recommends spending from a pool of funds that’s dedicated for more production of more fuel-efficient cars.
The government has already spent or promised to spend nearly $1.5 trillion on bailouts. Where will the line be drawn?
The Big Three have until December 2 to come up with their plan for spending the $25. Then, Congress would meet on December 8 to make a decision.
Chief executives blamed credit problems and decreased SUV and truck purchases as the reason for their problem. Rep. Michelle Bachmann, in a statement to Congress, points out that foreign manufacturers operating in the U.S. – Toyota, Honda, and Nissan – have remained profitable despite the crisis. She suggests the companies instead restructure their debts under Chapter 11 bankruptcy. A bailout, she says, won’t fix the companies long-existing systemic issuers.
While they claimed the companies were struggling and on the brink of bankruptcy, the chief executives this week arrived at the Washington hearing held to discuss the bailout in multimillion dollar corporate jets. Hardly the choice of transportation for a near-death auto manufacturer. That decision has many skeptical about whether the companies actually need a bailout and whether they would spend it wisely.
Whether the bailout would actually help the auto industry is questionable. IndyStar reports deeper problems with the way the auto industry is structured. For example, high costs of pension and health-care benefits contribute to the companies’ high overheads. Left unsolved, these problems could lead to bankruptcy, bailout or not.
Lawmakers won’t vote on the bailout until the automakers return with a plan for how they’re going to spend the loan money. If approved, the bailout won’t come from the $700 rescue plan approved for banks earlier this year. Instead, the Bush administration recommends spending from a pool of funds that’s dedicated for more production of more fuel-efficient cars.
The government has already spent or promised to spend nearly $1.5 trillion on bailouts. Where will the line be drawn?
The Big Three have until December 2 to come up with their plan for spending the $25. Then, Congress would meet on December 8 to make a decision.
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