Huge losses in the Small Business Administration’s main loan program have led President Barack Obama to propose phasing out the government subsidy for 7(a) loans beginning in fiscal 2012.
This would force the agency to support its government-guaranteed loans by charging higher fees on borrowers and lenders. That’s what occurred when Congress ended the subsidy for 7(a) loans – at President George W. Bush’s request – in 2004. Congress restored the subsidy this fiscal year, at a cost of $80 million.
The economic stimulus bill provided the SBA with an additional $375 million to waive fees for borrowers on most 7(a) loans and 504 loans, which mostly finance real estate, and increase the government guarantee on SBA loans from the typical 75 percent to 90 percent. Those enhancements made the loans more affordable for borrowers and less risky for lenders, enabling SBA lending to rebound after cratering during the financial crisis.
SBA loans are an important source of credit for small businesses that can’t obtain conventional loans.
In December, Congress came up with another $125 million to extend the fee reductions and higher loan guarantee until the end of February. Obama wants Congress to pass additional legislation extending them through Sept. 30, the end of the fiscal year.
The president’s budget proposal for next fiscal year, however, reveals that defaults on SBA loans have exploded over the past year, costing the government a projected $4.5 billion. Most of the problem loans were made between 2005 and 2007.
The administration proposes a $165 million subsidy for 7(a) loans next year, double this year’s subsidy if economic stimulus funds are excluded.
Beginning in 2012, however, Obama wants to give the SBA “the flexibility to adjust fees in the program to enable it to be self-sustaining over time,” according to the president’s budget plan. This would “strengthen the program’s long-term economic foundation,” the budget plan states.
Default rates for 7(a) loans aren’t much worse than the default rates for conventional loans, said Tony Wilkinson, president and CEO of the National Association of Government Guaranteed Lenders, which represents SBA lenders.
If the economy improves, default rates should fall, he said. A better business climate also could make an end to the government subsidy for 7(a) loans bearable, he said.
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OneUnited Bank, which has skipped dividend payments on $12 million in government TARP funds, reported a 25 percent decline in deposits during 2009 as lending activity dropped off at one of the largest black-owned banks in the country.
OneUnited, which is based in downtown Boston but with major operations in Los Angeles, had $291.8 million in deposits at the end of 2009, according to a filing with the Federal Deposit Insurance Corp. That was down from $388.1 million at the end of 2008.
The bank’s net loans were $324 million at the end of 2009, down about 12 percent from the previous year. OneUnited has total assets of $540.6 million and primarily lends in city neighborhoods in Boston, Los Angeles and Miami.
The bank was not immediately available to comment for this story.
On the plus side, OneUnited turned in a full-year net profit of $3.17 million in 2009, compared with a year-ago net loss of $29.8 million when it had investment losses of nearly $60 million.
The past year has been a rough one for the bank after federal and Massachusetts bank regulators hit OneUnited with a cease and desist order. In December 2008, the regulators accused the management of OneUnited Bank of running an unsound lending operation and ordered a top-to-bottom review of executive perks that included a 2008 Porsche and a housing allowance for a beach-front home in California.
As directed by the FDIC, the bank has since sold the Porsche used by OneUnited Chief Executive Kevin Cohee.
The bank received more criticism after it received $12 million in federal bailout money, and had U.S. Rep. Barney Frank of Massachusetts, chairman of the powerful House Financial Services Committee, championing its cause. OneUnited needed the capital after investments in a poorly diversified portfolio were wiped out, leaving the bank with no capital in the third quarter of 2008.
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Toyota’s suspension of U.S. sales of some of its top-selling models — amid intense pressure from the federal government — deals a blow to the automaker’s reputation for quality.
Toyota Motor Corp. announced late Tuesday it would halt sales of certain models — including the Camry and Corolla sedans and the RAV 4 crossover — to fix gas pedals that could stick and cause unintended acceleration. Last week, Toyota issued a recall for the same eight models affecting 2.3 million vehicles.
Toyota is also suspending production at six North American car-assembly plants beginning the week of Feb. 1. It gave no date on when production could restart.
Toyota insisted the problem — sudden, uncontrolled acceleration — was "rare and infrequent" and said dealers should deal with customers "on a case-by-case basis."
Officials under President Barack Obama said they pressed Toyota to protect consumers who own vehicles under recall and to stop building new cars with the problem.
David Strickland, the administrator of the National Highway Traffic Safety Administration, told reporters in Washington that the Transportation Department had been in regular
communication with Toyota about the recall.
"Toyota was complying with the law. They consulted with the agency. We informed them of the obligation, and they complied," Strickland said. He wouldn’t address why Toyota failed to stop selling the vehicles five days earlier when it announced the recall.
Across the country, Toyota dealers —swamped by calls Wednesday from drivers — said they were concerned the move would hamper sales. They hoped parts to fix the problem could be distributed quickly.
John McEleney, who owns a Toyota dealership in Clinton, Iowa, said the sales stoppage affects about 60 percent of the inventory on his lot.
He said he was hopeful Toyota would come up with a fix soon — especially because the longer a vehicle stays on a dealer lot, the more money a dealer pays in interest fees.
"Short-term, it’s going to be difficult," McEleney said. "It will certainly set us back, but I think the impact will be very short-lived."
Still, Tom Seeger, president of Seeger Toyota in Creve Coeur, said the automaker did the right thing by suspending sales of affected models until the problems are corrected.
"I am just unbelievably impressed by the decision Toyota has made out of concern for safety," he said.
Seeger said Toyota dealerships would provide loaner vehicles for owners whose vehicles show symptoms of the problems. No one had brought such a vehicle back to Seeger Toyota by late Wednesday, he said.
Gerry Hogan, sales manager at Jay Wolfe Toyota of West County in Ballwin, said: "We’ve had calls, but it’s not as bad as I thought it would be. We’ve sold thousands of these Toyotas, and I haven’t seen one (with the gas pedal problems) yet."
Meanwhile, rental car companies Avis Budget Group and Clayton-based Enterprise Holdings on Wednesday said they were pulling thousands of Toyota models covered by the recall.
Enterprise Holdings, which controls the Enterprise, National and Alamo brands, said it would pull an unspecified number of Toyota models from its fleet, accounting for about 4 percent of the cars it has in service. The company also will stop selling used Toyotas while the automaker finds a fix for the problem.
The suspect parts are made by a U.S. supplier, but they are also found in its European-made vehicles. Toyota said it hasn’t decided what to do there.
Sean Kane, director of Safety Research and Strategies, a consumer group that conducts research into motor vehicle safety issues, said his firm has identified 2,274 incidents of sudden unintended acceleration in Toyota vehicles leading to at least 275 crashes and 18 deaths since 1999.
The firm cites as sources the National Highway and Traffic Safety Administration, direct reports from drivers and incidents mentioned in lawsuits. Toyota would not confirm the numbers.
The supplier of the gas pedals used in the recalled car and trucks, CTS Corp. of Elkhart, Ind., said it knew of only a few cases of drivers having problems with accelerators. It said it’s working with Toyota to design a new pedal.
Also late Wednesday, Toyota said it will add 1.09 million vehicles in the United States to an earlier recall over the risk of accelerator pedals becoming stuck in the floor mats.
The fresh recall would affect five models — 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, and 2009-2010 Pontiac Vibe, which is built on a Toyota platform. Toyota has already recalled 4.2 million vehicles in the U.S. over such problems. About 1.7 million vehicles fall under both recalls.
Two years ago, Toyota beat out General Motors Co. to become the world’s largest automaker. Now it is stopping some sales in its biggest market, the U.S., when it desperately needs to sell cars here after reporting its first-ever annual loss last year.
John Wolkonowicz, a longtime auto analyst with IHS-Global Insight, said Toyota is fortunate in that it has a loyal customer base — primarily baby boomers who have been buying Toyotas for decades. That, he said, will help minimize the sales impact in the short term.
"But it will further impede their ability to get the younger buyers that they so dearly want to get into the Toyota fold," Wolkonowicz said.
The sales halt calls into question the aggressive growth strategy pursued under former company president Katsuaki Watanabe, a cost-cutting expert, who led the Japanese automaker to the No. 1 spot in global vehicle sales in 2008, analysts say.
The automaker’s problems in the U.S. may be an extension of the spate of quality problems that plagued Toyota several years ago in Japan, its home market, during the aggressive growth strategy pursued under Watanabe.
In 2006, the Japanese government launched a criminal investigation into accidents suspected of being linked to vehicle problems, though no one was charged. Watanabe later acknowledged overzealous growth was behind the quality problems.
Watanabe was replaced last year by Akio Toyoda, the grandson of Toyota’s founder.
The problems hit Toyota extra hard because it has touted quality for years to gain advantage over competitors, said Brenda Wrigley, chair of the public relations department at Syracuse University’s S.I. Newhouse School of Public Communications.
"Quality was their differentiator, and now it’s their Achilles heel," she said.
The Associated Press, Detroit Free Press and Robert Kelly of the Post-Dispatch contributed to this report.
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Haitian Prime Minister Jean-Max Bellerive told an aid conference in Montreal that his country needs help with a “colossal” reconstruction from the Jan. 12 earthquake that left the nation in shambles.
“Haiti will need massive support in the medium and long term from its partners in the international community,” Bellerive said today at the conference attended by 20 governments and multi-lateral organizations. “The challenge will require that we do more, that we do better and certainly that we do differently.”
Aid groups called on those attending the meeting to cancel the Caribbean nation’s $890 million foreign debt. The meeting, to discuss long-term reconstruction and plan a full donor conference in March, is being hosted by Canadian Foreign Affairs Minister Lawrence Cannon. The U.S. is represented by Secretary of State Hillary Clinton.
Haiti was already the poorest country in the Western Hemisphere before the temblor, which killed more than 150,000 people and destroyed a third of the buildings in the capital, Port-au-Prince. The country’s infrastructure, including the water system, has collapsed and the government is unable to deliver services. Relief groups and foreign military forces are trying to reach the estimated 3 million of Haiti’s 9 million people affected by the quake.
‘Path to Development’
The donor nations’ plans must aim to “bring the country back on the path to development,” Bellerive said in a speech to the group. “Going back to the status quo ante is not an option.”
Reconstruction will have to include moving some people out of shantytowns that have overrun the capital, and fostering economic development outside Port-au-Prince, he said.
“The Haitian government is at work in precarious conditions, but it is able to provide the leadership the Haitian people expect of it in the colossal challenges on the way to development,” Bellerive said.
Most government offices and computer systems were destroyed the quake.
The U.S. has taken control of aid deliveries through Haiti’s sole international airport, and the United Nations has taken responsibility for the country’s security
Cannon said the delegates at the conference support the Haitian government’s effort to join in the reconstruction planning. Today’s meeting will help set out a “coherent” and “consistent” approach for supporting Haiti in advance of a major conference to be held in coming months.
‘Ready to Help’
“Your role is key, and your voice is clear guaranteed payday loans. We stand ready to help,” Cannon said.
Haiti’s foreign debt must be cancelled immediately, “accompanied by urgent action to support farmers and prevent a man-made food crisis exacerbating the hardship,” Oxfam Executive Director Jeremy Hobbs said in an e-mailed statement.
Cancelling debt is “indispensable to help the government of Haiti marshal the most resources possible” to rebuild the country, said Eric Faustin, president of Regroupement des Organismes Canado-Haitiens pour le Developpement, a Montreal- based non-profit aid group that focuses on Haiti.
Rescuers today wound down operations seeking survivors among the wreckage, and the UN reported that security in Port- au-Prince “remains calm but fragile, with isolated instances of looting.”
More than 150,000 bodies have been buried and 200,000 residents of Port-au-Prince have left the city, the New York Times reported Jan. 23, citing Marie-Laurence Jocelynn Lassegue, Haiti’s culture and communications minister.
Aid Groups
UN humanitarian chief John Holmes and UN development head Helen Clark are attending the Montreal meeting, along with representatives from the International Monetary Fund and the Inter-American Development Bank. Other participating nations include Japan, Mexico, Costa Rica, France and Spain.
Japan will pledge $70 million in aid at Montreal, Chief Cabinet Secretary Hirofumi Hirano told reporters today in Tokyo. The nation, which has the world’s second-biggest economy, had initially pledged $5 million, compared with the U.S. pledge of $100 million and $10 million promised by South Korea.
Japan also intends to send about 300 members of its Self- Defense Force to Haiti, serving with the UN peace-keeping troops, Hirano said.
Norway today doubled its humanitarian aid to Haiti to 200 million krone ($34 million).
Venezuela, Nicaragua and Bolivia said they will boycott the meeting to protest the U.S. military’s presence in the Caribbean, according to the German news service Deutsche Presse Agentur.
Former Cuban President Fidel Castro wrote in the official Cuban newspaper Granma that U.S. troops have “occupied” Haiti. The U.S. bolstered its presence in the country and offshore to 11,000 soldiers and sailors last week to help provide humanitarian assistance and security.
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Health care stocks rallied Tuesday in anticipation of a Republican victory in the Massachusetts Senate race. Well, now it’s official. Scott Brown has defeated Martha Coakley.
So what’s next for health care stocks? Is the Obama reform plan dead? And if so, can health care shares continue to gain ground?
Most health care stocks took a breather Wednesday. But they didn’t fall as much as the broader market did. So this looks more your classic case of buying on speculation and selling on the actual news.
Managed care companies such as Humana (HUM, Fortune 500), UnitedHealth (UNH, Fortune 500) and WellPoint (WLP, Fortune 500) would appear to have the most to gain if Brown’s victory means little change to the nation’s health care system.
These stocks performed poorly in the early part of last year — even as the broader market started to recover — due to fears about the impact a so-called public option or other plans to overhaul how Americans get health insurance would have on profits at the big HMOs.
Major pharmaceutical firms like Pfizer (PFE, Fortune 500) and Merck (MRK, Fortune 500), as well as medical device manufacturers like Medtronic (MDT, Fortune 500), also stand to benefit if gridlock reigns supreme in the nation’s capital. Investors were worried last year that reform might have led to lower drug prices and a hefty tax on medical equipment makers.
But health care stocks have been on a tear for the past few months as it became increasingly clear that Congress would probably not pass a bill that led to a drastic overhaul of the nation’s health care system. So for health care bulls, Brown’s victory is just icing on the cake.
"The Massachusetts election results confirm our view that health care reform will either be watered down or not passed at all. Generally, that’s favorable for the sector," said David Song, a health care stock analyst with Rockefeller & Co., a wealth management firm in New York.
The Health Care Select SPDR (XLV), an exchange-traded fund that owns most of the big drug, biotech, medical device and health insurance stocks, is up nearly 20% since the start of November. The S&P 500, by way of comparison, is up about 10%.
In fact, this Health Care ETF was up 4% in just the past week, a period when the overall market was flat.
Winners and losers
Charles Fernandez, president of Fairholme Capital Management, a Miami-based investment firm that runs the Fairholme fund, said that he thinks that health insurers and drug companies still have room to run. The fund owns shares of insurers Humana and WellPoint, as well as pharmaceutical firms Pfizer and Forest Laboratories (FRX).
Fernandez said that even if health care reform isn’t completely dead, that shouldn’t be a significant concern to investors.
It’s possible that the House of Representatives could try and pass the Senate version of the heath care reform bill before Brown is sworn in, he said. But that $871 billion bill, passed on Christmas Eve, does not include the controversial public option.
So he argues that health insurers wouldn’t be hurt if this became law. What’s more, the Senate bill calls for an expansion of Medicaid, which should mean more people would have access to medication us fast cash.
"The big pharma firms would be winners because more people will be insured. As more are insured, more prescriptions would be issued," Fernandez said.
Song said biotechs are another group that stand to gain if there is little or no reform from Washington. There have been some calls to include rules allowing more competition for so-called biologic drugs from generic makers. That, in theory, would lead to lower prices.
The Senate bill includes a provision giving biotechs a 12-year period of exclusivity before generics are made available. The Obama administration had been pushing for a shorter window of protection for biotechs.
Still, not all health care investors have reason to cheer Brown’s victory. Both Song and Fernandez said that a broader health care reform bill would have been a big boost to companies that operate hospitals.
That’s because hospitals would have fewer bad debt expenses if health insurance was available to a wider swath of the population. Now, hospitals are either faced with the status quo, or at best, an increase in lower-paying Medicaid patients.
With that in mind, shares of Tenet Healthcare (THC, Fortune 500), the nation’s second largest operator, fell 3.5% Tuesday and were down another 3.5% Wednesday afternoon. Other hospital operators were hit even harder Wednesday: Community Health Systems (CYH, Fortune 500) fell 5% while Universal Health Services (UHS, Fortune 500) fell nearly 7%.
Forget politics. Focus on profits.
To be sure, Brown’s victory does not mean that health care issues will no longer be discussed on Capitol Hill. But Wall Street’s attention may turn more to growth prospects over the next few years as opposed to day-to-day moves based on political headlines. That means opportunity for long-term investors.
"The noise isn’t gone. Assuming reform is dead, it’s not dead forever. We still have an uninsured population that’s not going away," said Sabrina Carollo, a research analyst with Ariel Investments in Chicago.
"But there are companies which would have limited exposure to negative aspects of potential reform. Now the focus should be on the availability of healthcare increasing globally due to favorable demographics, " she added.
In addition to an aging population that will require more medical care, Carollo points out that emerging markets such as China are becoming wealthier. That should lead to lucrative new markets opening up for health care companies.
Carollo said she is looking more for diversified health care companies that can take advantage of these trends. Health care giant Johnson & Johnson (JNJ, Fortune 500) is one such company her firm owns. Another is Baxter (BAX, Fortune 500), a firm that is involved in both the biotech and medical supplies businesses.
Will those stocks really be the best bets over the long-term? That remains to be seen. But it’s refreshing that investors should soon be able to finally have a health care debate about fundamentals instead of politics.
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The fat cats were supposed to get their comeuppance.
After Wall Street’s most prominent firms — by their own admission — helped cause the 2008 financial meltdown and got bailed out by the government, they were supposed to stop handing out million-dollar bonuses to employees. No one was supposed to get seven- and eight-figure rewards, not after the Great Recession left one in 10 Americans unemployed. Not after President Barack Obama — who on Thursday called such pay "obscene" — had promised to clamp down on lavish bonuses.
It turns out little actually changed.
Americans will see that starting Friday when JPMorgan Chase & Co. releases its 2009 financial results. The other big banks will follow. The messages will be the same: Compensation is at near-record levels.
The form of the pay is changing. Instead of cash, bonuses will be paid mostly in stock that can’t be redeemed for years. But the numbers are still staggering. Together, the six biggest U.S. banks are on pace to pay $150 billion in 2009, slightly less than the record $164 billion in 2007 before the crisis, according to New York state comptroller’s office.
How this happened is complicated. It involves a remarkable turnaround by the banks, but one fueled by the bailout. It shows the power of the financial lobby. And it highlights the age-old debate about how much U.S. companies need to pay to retain talented bankers and traders.
Scott Talbott of the Financial Services Roundtable says keeping those workers from going to overseas firms is critical. "The market will find a way to pay these people what they’re worth," says Talbott, chief lobbyist for the group representing some of the largest financial firms.
But Douglas Elliott, a fellow at the Brookings Institution and a former banker, thinks "The way the public sees it is that we wrote a $700 billion check to the banks, and they got to burn through it as they pleased."
THE BAILOUT
The government played a big role in the bonanza by bailing the banks out. In the days after the meltdown, banks were given access to cheap government loans and other federal subsidies. Because the banks weren’t required to put it toward lending, they could use it as they pleased.
Many bet on risky securities that paid off when the markets surged. The result: big profits and big bonuses. Profit at Goldman Sachs nearly doubled to $8.4 billion in the first nine months of 2009 from the previous year, and analysts expect its full-year profits to top $10 billion.
Goldman set aside $16.71 billion from January through September for compensation, including salaries, bonuses and associated costs. That puts it on pace to meet the record $20.2 billion in compensation costs it had for all of 2007.
Should Goldman’s annual compensation go that high, it works out to $600,000 each for its 31,700 employees. It won’t be distributed like that, of course. The best performers and executives stand to earn millions.
The nation’s biggest banks all took money from the Troubled Asset Relief Program. Some needed it; others were pressured by federal officials to take it. Regardless, the banks weren’t restricted in how to spend it. They faced limits on compensation, but that lasted for only as long as they held the funds, which gave them incentive to pay the TARP back quickly. In total, banks took $245 billion and have paid back $162 billion.
LOBBYING MACHINE
Bonus outrage and the momentum to do something about it peaked last February, when crippled insurer American International Group Inc. moved to pay $165 million in bonuses to hundreds of employees in the same financial unit that brought down the company. Treasury Secretary Timothy Geithner called Wall Street pay "out of whack."
The fact it didn’t happen speaks to the industry’s powerful lobbying machine. In the past decade, no industry has spent more lobbying dollars than Wall Street and its offshoots. From 1998 to 2009, the FIRE lobby — or finance, insurance, real estate — spent $3.8 billion, according to the Center for Responsive Politics. By comparison, the energy and defense industries spent $2.6 billion and $1.08 billion, respectively.
Meanwhile, Wall Street’s generosity to political candidates ramped up even as the industry began careening. Financial firms contributed a record $476 million in the last election cycle. That’s more than double the No. 2 donor, the health care industry, which gave $166 million, even as Congress began to debate landmark health care legislation.
WHAT’S NEXT
Washington is scrambling to get something done to temper the populist anger. The financial lobby still could block those efforts.
The Obama administration is proposing a 10-year tax on the largest banks to cover a projected $117 billion shortfall in the bailout fund.
The Fed is reviewing a plan that would give it more oversight on compensation by reviewing pay practices at thousands of banks. The central bank would be able to veto pay plans if it found them to encourage excessive risk-taking by executives, traders or loan officers.
The Federal Deposit Insurance Corp., which regulates most of the nation’s banks, is seeking input on a plan that would tie fees that banks pay for deposit insurance to how much a company’s compensation plan encourages workers to take risks in order to achieve higher returns.
A few in Congress want to go further. Rep. Dennis Kucinich, D-Ohio, introduced legislation Tuesday to impose a 75 percent bonus tax.
"What you’re seeing is a public-be-damned attitude from the banks," he said. "They’re rolling in dough while the taxpayer has to sacrifice.
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Treasurys were mixed late Wednesday following the government’s $21 billion offering of 10-year notes and after the Federal Reserve said economic activity is weak but recovering.
What prices are doing: The benchmark 10-year note was down less than 1/32 at 96-19/32, and the yield rose to 3.78% from 3.72% late Tuesday. Bond prices and yields move in opposite directions.
The 30-year bond was up less than 1/32 to 94-20/32 and its yield was 4.72%. The 2-year note was flat at 100-2/32 and yielded 0.96%.
What’s moving prices: Investors submitted bids totaling $63 billion at Wednesday’s auction of reopened 10-year notes. The bid-to-cover ratio, a measure of demand, was 3. That compares with 2.62 at the last 10-year sale in December.
It was the second of three auctions this week aimed at selling $84 billion worth of U.S. debt. On Tuesday the government received solid demand at its sale of 3-year notes. On Thursday, it will auction $13 billion worth of reopened 30-year bonds.
Meanwhile, the Fed’s reading on the economy, known as the Beige Book, said that while the economy remains weak, conditions are improving.
Separately, the Treasury posted a deficit of $91.9 billion in December, nearly double the shortfall of a year earlier need a personal loan with bad credit.
Bond prices were also pressured by comments from a key Federal Reserve official.
Charles Plosser, president of the Philadelphia Federal Reserve, said late Tuesday that the Fed should raise interest rates before unemployment reaches an "acceptable" level.
Plosser also said the central bank should not deviate from its plan to stop buying mortgage-backed securities this quarter.
What analysts are saying: Bill Larkin, a portfolio manager at Cabot Money Management, said Treasurys have been trading in a range since last week’s dour jobs report damped enthusiasm for more risky assets.
Government data showed Friday that employers cut 85,000 jobs in December after adding 4,000 jobs the month before. The nation’s unemployment remains at 10%.
Larkin said the market is also focused on the corporate sector as the quarterly reporting period gets into full swing.
"If earnings are mixed, we’ll probably stay where we are," he said. "If we get more strength in earnings, we could break out to higher yields."
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Heartland Bank sold its ownership in Heartland Payment Systems 10 years ago, but the Clayton-based bank didn’t quite escape involvement in the payment company’s massive computer security breach.
A $60 million settlement announced last week has the bank acting as a middle-man, passing settlement and fine money from the payment company to Visa, the credit card company, and other companies that issue credit cards.
A year ago, computer hackers broke into Heartland Payment’s computer system, compromising 130 million credit card accounts. Credit card issuers across the country, including Heartland Bank, replaced the compromised credit cards for customers.
Heartland Payment Systems, based in New Jersey, processes credit card payments for small and mid-sized merchants. Heartland Bank helped found the company in 1997, but sold its ownership in 2000.
However, Heartland and KeyBank of Cleveland remained as bank "sponsors" of the payment company. When Visa imposed a $780,000 fine, Heartland Bank and KeyBank paid it and collected the money from the payment company, according to a filing by the payment company with the Securities and Exchange Commission.
In the settlement, the payment company will pay up to $60 million to reimburse credit card issuers that absorbed costs because of the security breach. The payment company intends to borrow $53 million of that.
The settlement, if finalized, would let Heartland Bank, KeyBank and the payment company off the hook for any claims resulting from the hacking incident. Heartland Bank executives could not be reached for comment. The privately held bank had $967 million in assets as of September, ranking it a mid-sized player in the St. Louis banking market. It earned $1.7 million in profit in the first nine months of last year.
In a filing with the SEC in November, KeyCorp, KeyBank’s parent company, said it sponsored Heartland Payment’s participation in Visa and MasterCard. KeyBank said Heartland Payment had indemnified it against losses, but that KeyBank could face "significant" costs if the payment company can’t pay.
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Burlington Coat Factory will set up shop in the former Mervyn’s store in Elk Grove in the spring, Elk Grove Economic Development Corp. officials said Friday.
The New Jersey-based chain of 414 discount department stores opened a new store last March in a former Target store at County Fair Fashion Mall in Woodland.
The Elk Grove store will be located in the Marketplace 99 shopping center at Bond Road and Highway 99 and will employ about 70 people payday loans guaranteed no fax.
Burlington Coat Factory entered this market in 2001 with a store in south Sacramento on Florin Road.
Burlington Coat Factory also has a store in Citrus Heights, located in a former Furniture World.
The Arizona Cardinals well get some high-profile home games next season — including contests against the Dallas Cowboys, Denver Broncos and Oakland Raiders.
The Cardinals’ 2010 regular season schedule lineup is set in terms of teams but dates and times and what kind of national games the Cards will be play will be determined later this year. The Cardinals will also host the New Orleans Saints, Tampa Bay Buccaneers and games against NFC West foes (San Francisco 49ers, St. Louis Rams and Seattle Seahawks).
High-profile teams such as the Cowboys, Broncos and Raiders all have strong followings in the Phoenix sports market, which should insure quick sellouts for those games and push up ticket prices next year free business cards.
The Cardinals have sold out all their home games since moving from Tempe to Glendale’s University of Phoenix Stadium in 2006.
The Cards' road games include visits to San Diego, Minnesota, Atlanta, Kansas City, Carolina and the NFC West rivals.
The NFL playoffs start this weekend and include a 2:30 p.m. Sunday game between the Cardinals and Green Bay Packers that will be televised by Fox.
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