USLegal Reporter » Economy

House Approves Legislation to Create Financial Fraud Commission

Dana Altman — Tue, 19 May 2009 16:54:51 +0000

Legislation called the Fraud Enforcement and Recovery Act was approved by the U.S. House of Representatives, after being approved by the Senate. It will become law once it is signed by President Obama. The bill allocates $165 million over the next two years for increased enforcement activities against fraud related to mortgages, securities and commodities, financial institutions, and federal assistance and relief programs. The funding will be shared among the Federal Bureau of Investigation, Department of Justice, and U.S. Attorneys Office.

The legislation would also create a “financial crisis inquiry commission,” consisting of ten members with subpoena power to investigate the cause of the current financial and economic crisis, as well as the collapse of major financial institutions. Commission members would be appointed by both the majority and minority leaders of the Senate and House.

Source: http://jurist.law.pitt.edu/paperchase/2009/05/house-approves-financial-fraud.php

Senate Passes Stimulus Legislation

Della Sellers — Mon, 16 Feb 2009 14:36:20 +0000

Late Friday evening, the US Senate passed the $787 billion economic stimulus legislation by a vote of 60-38. The bill has been sent to the President for approval. The close of voting was delayed to allow Democratic Senator Sherrod Brown to fly back from Ohio from attending his mother’s funeral.

Source: http://www.foxnews.com/politics/2009/02/13/congress-readies-final-vote-b-stimulus/
http://content.usatoday.com/communities/theoval/post/2009/02/62833297/1

House Passes Stimulus Legislation

Della Sellers — Fri, 13 Feb 2009 20:06:50 +0000

The US House of Representatives passed a $787 billion stimulus package today in an effort to help revive the troubled economy. The stimulus bill contains $281 billion in tax cuts and more than half a trillion dollars in government spending for items such as infrastructure, healthcare and state government funding. The vote on the bill that has been modified from earlier versions was 246 to 183. The Senate is expected to vote on the bill late today.

Source: http://news.yahoo.com/s/ap/20090213/ap_on_bi_ge/congress_stimulus

Federal Government Agrees to Provide Funds to Bailout Auto Makers

carrie — Mon, 22 Dec 2008 21:47:46 +0000

President Bush announced last Friday that the federal government will provide more than $17 billion in loans to keep two of the nation’s leading car makers operating. The money will go to Chrysler and General Motors. As a condition of the loans, the companies must set up viable restructuring plans or else they could be forced to file for Chapter 11 bankruptcy.

Source: http://www.10news.com/money/18333883/detail.html

Federal Reserve Slashes Key Interest Rate

carrie — Wed, 17 Dec 2008 20:48:58 +0000

The Federal Reserve on Tuesday lowered short term interest rates to nearly zero. This rate at which banks borrow form each other is now the lowest on record.

The Federal Reserve is also working on getting additional credit to businesses and consumers.

It is hoped the measures can help curb a deepening recession.

Source: http://www.washingtonpost.com/wp-dyn/content/article/2008/12/16/AR2008121601754.html?hpid=topnews

Leading Economists say US Officially in Recession

carrie — Mon, 01 Dec 2008 22:25:59 +0000

The National Bureau of Economic Research (NBER) said today that the United States has been in a recession since December 2007. The NBER said substantial jobs cuts in the labor market throughout 2008 was a main indicator that the recession actually began in 2007.

More than 1.2 million jobs have been lost in the first ten months of this year. The current downturn in the economy is one of the longest since the Great Depression.

Sources: http://wwwdev.nber.org/cycles/dec2008.html

http://money.cnn.com/2008/12/01/news/economy/recession/?postversion=2008120115

Government Program to Help Homeowners

Della Sellers — Tue, 11 Nov 2008 21:03:32 +0000

The Federal Housing Finance Agency and others in government and the mortgage industry announced Tuesday a new program to renegotiate home loans held by Fannie Mae and Freddie Mac. The plan, which will become effective December 15, 2008, will be available to borrowers who are at least three months behind on their mortgage and who owe 90 percent or more than the home’s current value. The program excludes borrowers in bankruptcy and investors who do not live in the homes. Under the plan, borrowers may obtain a reduced interest rate to allow them to pay no more than 38 percent of their income on housing. Other options include loan extensions to 40 years and interest-free deferral of a portion of the prinicipal amount.

In related news, Citigroup announced a moratorium yesterday on foreclosures for certain borrowers (those who live in their homes, have incomes of a certain amount and are likely able to make reduced mortgage payments), an expansion of the program to include mortgages the bank does not own but for which it collects payments, and assistance to borrowers who are close to defaulting (mortgage adustment, principal reduction and decreasing loan term). Also, JPMorgan Chase & Co. recently expanded its mortgage modification program, and Bank of Amercia as part of a legal settlement, agreed to modify loans once held by Countrywide Financial Corp.

Source: http://news.yahoo.com/s/ap/20081111/ap_on_bi_ge/meltdown_mortgages#full

New Government Financial Help to AIG

Della Sellers — Mon, 10 Nov 2008 17:49:47 +0000

The US Federal Reserve and the Treasury Department announced today that they will provide $40 billion of new financial support to insurance company, American International Group (AIG), which will increase total financial assistance to the company to approximately $150 billion. Specifically, the government plans to exercise its authority under the Emergency Economic Stabilization Act to purchase troubled assets by purchasing $40 billion in AIG preferred stock in an effort to restructure federal assistance to the company.

The $40 billion will be part of the $700 billion financial rescue plan, and will give the government partial ownership of AIG in return. AIG also must comply with executive compensation and corporate governance requirements of the Emergency Economic Stabilization Act.

Source: http://news.findlaw.com/ap/f/1310/11-10-2008/20081110032005_3.html
http://www.ustreas.gov/press/releases/hp1261.htm

Bush Administration Announces Bold Move to Buy Bank Shares

carrie — Tue, 14 Oct 2008 21:27:07 +0000

President Bush announced today that the federal government is going to invest $250 billion of monies recently authorized by Congress as part of a financial bailout plan to buy equity stakes in some of the nation’s leading banks. It will be the biggest bank investment ever made using taxpayer dollars.

So far nine of the nation’s largest backs have agreed to take the funds in return for giving the government preferred shares. Banks have also agreed to place limits on executive pay.

The latest move is part of an ongoing attempt to relieve the nation’s financial crisis. It is hoped the monies provided to banks will be used to free up lending.

Source: http://www.npr.org/templates/story/story.php?storyId=95691838

Federal Reserve Program to Buy Short-Term Debt

Della Sellers — Tue, 07 Oct 2008 16:01:36 +0000

The Federal Reserve announced today that it will begin a program to purchase short-term debt to help companies fund their day-to-day operations and to encourage companies to resume lending to each other and their customers. Specifically, the Federal Reserve plans to establish a separate entity, the Commercial Paper Funding Facility, to begin purchasing three-month unsecured and asset-backed commercial paper in an undisclosed amount from eligible issuers. Commercial paper is short-term debt, which is borrowed for brief periods such as overnight and for less than a week. As more companies have stopped buying commercial paper due to the effects of the unstable economy, the rates for long-term debt have increased.

The US Treasury Department is working with the Federal Reserve on the program and has said that it is “necessary to prevent substantial disruptions to the financial markets and the economy.” The Treasury Department will provide the funds to the Federal Reserve Bank of New York in order to support the program, which is entirely separate from the recent $700 billion bailout law. The program will continue until April 30, 2009, unless extended.

Source: http://biz.yahoo.com/ap/081007/financial_meltdown.html?.&.pf=banking-budgeting