“UAE personal loans slow down (AME Info)” plus 4 more

UAE personal loans slow down (AME Info)
Personal Credit Reports Reflect Business Loans (BusinessWeek)
UAE’s personal loans slow down in Jan-July (Arabian Business)
WTO says Airbus loans illegal: U.S. lawmakers (Washington Post)
U.S. Takes Key Role in Mortgage Lending (Washington Post)

Posted: 06 Sep 2009 02:02 AM PDT

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Personal Credit Reports Reflect Business Loans (BusinessWeek)

Posted: 04 Sep 2009 01:05 PM PDT

As technology advances, it's likely that info about your business repayment history could influence your personal credit score

By Karen E. Klein

Do business loans show up on personal credit reports?

—J.P., Milwaukee

Traditionally, business loans were considered separate from business owners' personal credit reports. But that has been changing as technology makes cross-reporting more feasible, says Jordan Peterson, senior vice-president for business banking at PNC Financial Services Group (PNC).

"In the past, banks didn't have technology to report business-loan data back to the credit bureaus," Peterson says, but automation has become more common over the last decade. "There are business bureau repositories built by companies like D&B that many banks belong to now. They report business loan repayment history, and other members of that repository can look at it as long as they supply data to it."

No Uniform Policy

In other words, if your bank supplies information to a business data bureau that is used as a resource by the credit bureaus, it's likely that information about your business repayment history could indeed influence your personal credit score. The practice applies primarily to small, privately held companies and startups whose owners are likely to be asked for personal guarantees to obtain credit. That means not only self-employed people, but also owners of smaller LLCs and S-corporations as well.

It's difficult to know for sure, however, because there isn't a uniform policy on this issue. "It will depend on what bank you've got a loan with and what kind of reporting they do," Peterson says. You can certainly ask your bank loan officer or bank manager what its policy is on sharing business loan data with credit bureaus.

He compares the shift on business loan reporting to the 1980s, when some banks expanded their portfolios to include smaller loans—under $100,000—to entrepreneurs. "Banks used to think it was too expensive to deliver credit to smaller companies. That's when credit scoring was put on the table," he says.

Banks evaluating small business loans began to rely heavily on consumer credit scores at that time, because personal repayment history has proven to be predictive of how likely a business is to pay back its loans. "The bank really cannot separate an owner from the business because the owner drives the business," Peterson says.

Growing Trend

Even if your bank loan history is not being shared with credit agencies now, it probably will be in the future. With technology making data-sharing cheaper and easier, banks will increasingly expect more information on the loans they underwrite, including data on how applicants' have performed on past business loans.

Along with paying back both personal and business loans on time, business owners looking for credit can benefit from establishing relationships with local bankers. "Having an advocate who understands you and your business can help a lot, especially if you're in an industry that's been badly affected by the downturn," Peterson says. And expect banks to ask for personal guarantees on loans—even for businesses that are doing well despite the recession.

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

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UAE’s personal loans slow down in Jan-July (Arabian Business)

Posted: 05 Sep 2009 01:23 AM PDT

Personal loans extended by UAE banks sharply slowed down in the first seven months of 2009, according to a report.

Spending appetites seem to have been affected by the global downturn, resulting in poor public confidence, according to the Emirates Business daily.

According to the central bank, personal loans rose by only 0.7 percent to AED208.8bn ($57bn) at the end of July, from around AED207.2bn ($56bn) at the end of 2008, the newspaper added.

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The loans had declined to AED203.8bn by the end of February and continued dipping to reach AED202.7bn in March and AED201.7bn in April. They rose to around AED207.6bn, before slipping to AED205.2bn in May, according to Emirates Business.

The slackening growth was in tandem with a general slowdown in total loans, which grew by only around 1.4 per cent to AED1,007 trillion at the end of July from around AED993.7bn at the end of 2008. This compares with a growth of nearly 7.5 per cent in the H2 of 2008, the daily added.

Last week, Mashreq Bank said that it has launched the UAE's first debt counselling service for customers struggling to repay their loans.

Mashreq Assist has been set up with the sole purpose of helping individuals and small and medium sized enterprises restructure their outstanding cards, loans and facilities.

The UAE's third biggest bank by market value said that an increasing number of customers over the last few months have come to the company asking for financial counselling and support.

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WTO says Airbus loans illegal: U.S. lawmakers (Washington Post)

Posted: 04 Sep 2009 03:59 PM PDT

The findings, which came in a confidential 1,000-plus page ruling, are the latest chapter in a decades-old battle between U.S. manufacturer Boeing and European rival Airbus for dominance of the global aircraft market, a major source of jobs on both sides of the Atlantic.

The decision, which will not be made public for months, was handed out to the United States and the European Union at WTO headquarters in Geneva.

Lawmakers from Washington state, where much of Boeing's production work is done, said the WTO agreed with the United States that European "launch aid loans" to help Airbus develop the A380 and other top-selling planes violated global rules.

"I applaud the WTO's decision that government subsidies of Airbus are illegal," said Senator Maria Cantwell. "When finalized, this long-awaited ruling will help restore true competition in the commercial aviation market."

Representative Norman Dicks also welcomed the ruling, which he said "definitively confirms" the U.S. argument in the case.

"But what is discouraging is the damage that has been done to America's premier airline manufacturer, which has suffered the loss of 20 percent of the market share -- representing hundreds of billions of dollars in value and tens of thousands of jobs -- since our concerns were first raised with the Europeans," Dicks said.

Dicks and Cantwell were briefed on the ruling by U.S. trade officials, their spokespeople said.

European sources said the ruling was not as clear-cut as the lawmakers and U.S. private sector sources claimed.

'NOT A GREAT VICTORY' FOR U.S.

"The ruling is not a black-and-white case. It is simply not a great victory for the United States," one EU source told Reuters on condition of anonymity.

"The assertion that the WTO report says that all 380 funding is a prohibited subsidy is wrong. The findings are much more nuanced than that. The panel did not find that launch aid is a program," a second European source said.

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U.S. Takes Key Role in Mortgage Lending (Washington Post)

Posted: 06 Sep 2009 04:45 PM PDT

Now the pendulum has swung to the other extreme. Only one lender of consequence remains: the federal government, which undertook one of its earliest and most dramatic rescues of the financial crisis by seizing control a year ago of the two largest mortgage finance companies in the world, Fannie Mae and Freddie Mac.

While this made it possible for many borrowers to keep getting loans and helped protect the housing market from further damage, the government's newly dominant role -- nearly 90 percent of all new home loans are funded or guaranteed by taxpayers -- has far-reaching consequences for prospective homebuyers and taxpayers.

The government has the power to decide who is qualified for a loan and who is not. As a result, many borrowers among both poor and rich are frozen out of the market.

Nearly one-third of those who obtained home loans during the boom years of 2005 and 2006 couldn't get one today, according to mortgage industry analysts. Many of these borrowers were never really able to afford their homes and should not have gotten loans. But many others could, and borrowers like them are now running into tougher government standards.

At the same time, taxpayers are on the hook for most of the loans that are still being made if they go bad. And they are also on the line for any losses in the massive portfolios of old loans at Fannie Mae and Freddie Mac, which own or back more than $5 trillion in mortgages.

There is growing evidence that many loans being guaranteed by the government have a significant risk of defaulting. Delinquencies are spiking. And the Federal Housing Administration, another source of government support for home loans, is quickly eating through its financial cushion as losses mount.

The outlay has already reached about $1 trillion over the last year and is rising. During that time, the government has pumped more money into the mortgage market than has been spent on Medicare or Social Security or the defense budget, more even than Washington has paid to bail out banks and other struggling companies.

"Absent government intervention, there would be no lending," said Nicolas P. Retsinas, director of Harvard University's center for housing studies.

Government officials generally agree that it would be better for private lenders to resume their traditional role as major providers of finance for home loans. But policymakers now face some tough choices. They must decide how to reduce support for the mortgage market without letting it collapse. And they must decide what kind of support the government should provide in the long run.

"The problem was a long time brewing, and the problems in our mortgage finance system will take a long time to repair," said Michael Barr, the Treasury's assistant secretary for financial institutions.

Government Role

Fannie Mae and Freddie Mac were chartered by Congress four decades ago to create a marketplace where mortgage lenders could sell the loans they made and use that money to make more loans. The two companies were owned by private shareholders and for a fee guaranteed investors in mortgage loans that they would get paid. After the government seized Fannie and Freddie, it offered them an unlimited line of credit and pledged to inject up to $400 billion to keep them solvent.

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Sunday, September 6, 2009