“A big jump in disbursal of gold loans (The Economic Times)” plus 4 more |
- A big jump in disbursal of gold loans (The Economic Times)
- Loans by Black Business Support Corp. scrutinized (The Gainesville Sun)
- Data collector fined $275,000 for leaking personal data (The Register)
- Bank of America welcomes Cook as new personal banker (The Pine Island Eagle)
- Money Coach Advises "Defer, Defer, Defer" (NPR)
| A big jump in disbursal of gold loans (The Economic Times) Posted: 20 Oct 2009 04:20 PM PDT
A
'just-married' couple was spotted recently at the South Delhi branch
of a non-banking finance company for availing of a loan against the
bride's gold ornaments. The couple opted to pledge their gold for
financing a week-long honeymoon to Mauritius, the picturesque Indian Ocean
island that lies east of Madagascar. The bride's logic for such a loan was
that since she did not require to don all of the ornaments she received during
her wedding, it made sense to raise money for the trip by pledging the rest of
the gold. As both the newly-weds were well-employed, they sought to return the
principal along with interest within a month of receiving their salaries.
The aforesaid anecdote illustrates a waning resistance among Indian middle and upper middle classes towards gold loans and, coupled with the record price rise of the yellow metal, this has led to an increase in disbursals of such loans predominantly by NBFCs such as 122-year-old Kochi-based Muthoot Finance. "Apart from the price rise, the social stigma earlier attached to gold loans has almost totally disappeared and they are now widely recognised as acceptable means of raising funds for meeting urgent requirements by all segments of society," says George Alexander Muthoot, managing director, The Muthoot Group, which claims to be the country' s largest lender against gold. The stigma against pledging gold, explains a staffer from an NBFC, was reinforced by the Hindi film industry and serials which inevitably portrayed women parting with their gold as a deep tragedy. Also it easily took root in a largely male-dominated society wherein the master of the house balked at the very idea of asking his wife to part with her wealth or streedhan. But that is changing with women, especially in cities, becoming economically independent and taking an active part in the decision-making process, in the past a male's exclusive preserve. More and more people are now using such loans, whose tenures are typically up to three or six months, to finance their children's education, particularly for meeting donation demands, which a bank will not entertain, car purchases, holiday trips or even to put up margin money for a home buy. In some ways, financing the above costs by pledging gold works out to be more advantageous than taking personal loans, on account of a lower interest rate (Muthoot, for instance, has a base rate of 13% while banks are known to charge PLR + 200-400 bps — a bp is one-hundredth of a percentage point — for personal loans, which could work out to as high as 15-16% on an annualised basis), non-penalty for pre-payment, hassle-free documentation and speedy disbursal of the loan. "Borrowing against their gold jewellery is an option that individuals falling in the middle-income category are increasingly looking at," says Anil Rego, CEO of Bangalore-based financial planning firm Right Horizons. "The primary reason is that the gold rate has shot up, and, second, they are realising that the interest rate is lower than unsecured loans. In addition, the cash crunch arising out of the global slowdown has resulted in people considering this option." Little wonder then that NBFCs such as Muthoot and Manappuram — these are more popular avenues for gold loans than banks, which lack their gold assessing capabilities, according to a senior PSU banker — witnessed a rise in disbursals as well as the number of accounts. Manappuram, whose web site classifies it as the country's largest listed and highest credit rated gold loan company, has seen a 15% year-on-year rise in the number of persons taking gold loans during the first six months of the current fiscal to 105,265, and a 28% increase in disbursals to Rs 2,105 crore. Over the same period, Muthoot has clocked a robust 75% growth in the number of persons availing of gold loans at 35,000 and an 81% increase in the amount disbursed at Rs 9,091 crore. HDFC Bank, a lender that is actively promoting gold loans, has witnessed its business in this segment grow by over 60% year-on year. "There has been a change in the mindset of customers opting for gold loans with borrowers being more open to pledge their jewellery and taking loans against the same to meet their short-term financial requirements," reiterates Biju Pillai, business head (PL, LAS, GL, Home Loans), HDFC Bank.
Apart from retail customers in
urban and semi-urban areas, farmers and rural folk raise need-based loans by
pledging gold ornaments in a simple process compared to long, complex and
expensive procedure of mortgaging property to meet their needs. "The
recent spurt in the prices of gold has increased the eligible amount of loan and
helped in boosting agri loans against the pledge of gold. Such loans are
primarily used for composite needs of raising crop and meeting consumption
needs, which are normally given by way of kissan credit card," said AC
Mahajan, CMD, Canara Bank.
Standard gold of 99.5% purity prices has averaged Rs 14,903 per 10 gm in the fiscal year through October so far, up 21% from the average rate of Rs 12,349 in the year-ago period. The rise has tracked the international rate, which last week hit a record high of $1070.40 an ounce because of a steadily weakening dollar due to the mounting deficit in the US and increased fund deployment in riskier assets across the globe in light of easy monetary policies. (With inputs from Vidyalaxmi) This content has passed through fivefilters.org.  This posting includes an audio/video/photo media file: Download Now |
| Loans by Black Business Support Corp. scrutinized (The Gainesville Sun) Posted: 20 Oct 2009 03:04 AM PDT Being questioned are the following transactions: a $250,000 loan guarantee to a member of the support corporation's oversight board; a $50,000 loan to the daughter of a support corporation board member; a $50,000 loan to an Alachua County commissioner; and two other loans given to businessmen who had little or no equity for the loans. The loans were provided in part using taxpayer money allocated annually by the Florida Legislature to a statewide program intended to assist minority-owned businesses. In fiscal year 2009-2010, the program received $2.5 million. The support corporation, which serves about half of the counties in Florida, received a portion of those funds. Eight regional investment corporations serving major metropolitan areas such as Tampa, Orlando and Miami received money as well. All eight of the investment corporations and the support corporation are overseen by a board of governor appointees called the Florida Black Business Investment Board. That board is at the heart of a recently completed state investigation. Former Gov. Jeb Bush appointed Gainesville businessman Mortlake Nembhard to the investment board in 2004. A year later, while he was still a board member, Nembhard received from the support corporation a $100,000 loan guarantee which meant the support corporation would cover a $100,000 bank loan if Nembhard failed to pay. A year later, that loan guarantee was extended to $250,000. Nembhard failed to pay the bank, and the support corporation was on the hook for the amount it had guaranteed $250,000 in taxpayer money. A state inquiry was launched in July after The Sun published a series of articles scrutinizing Nembhard's loan. The inquiry, completed earlier this month, found that while there was no prohibition against board members receiving loans, perhaps there should have been. Nembhard resigned in July as chairman of the investment board after publication of The Sun's initial articles. In 2008, former support corporation board member Mickey Rawls served as the guarantor of a support corporation loan to his daughter for business startup. When the $50,000 loan was awarded, Rawls was still a member of the board. The state inspector general's report said more documentation of the Rawls loan was needed "to determine whether appropriate conflict of interest policies were employed." Efforts to reach Rawls for comment were unsuccessful as of late Monday. The state report noted, however, that there was no prohibition against board members giving family or even themselves loans, an oversight the investigation says will be remedied. Representatives at two of the regional investment corporations, reached by telephone, said they maintain a strict policy against lending money to businesses with which members of the board might be associated. The investigation also targeted a loan to Alachua County Commissioner Rodney Long. According to the state inquiry, there is a direct prohibition against lending money to businesses in which an elected official holds more than 5 percent of an interest. Long said he was not aware of that rule when he applied for and received a $50,000 loan from the support corporation. "The Office of Trade, Tourism and Economic Development's contract requires that the (Florida Black Business Support Corporation) certify that no elected official owns an interest ... FBBSC certified this to (the Office of Trade, Tourism and Economic Development)," the investigation noted. The two remaining loans that the state scrutinized were to local lawyer Chris Chestnut and Nathaniel Brown, who owns a cleaning service. Both Chestnut and Brown received "Quick Loans," which Mark Scovera, president of the support corporation, said are aimed at helping businesses with little equity receive financing. "(It) is a highly standardized loan product collateralized by some combination of real estate, business assets and personal guarantees," Scovera wrote in an e-mail to The Sun. The investigation said these loan applications, often for "working capital," do not "include a use of funds statement or certification." That means the money could be intended for any use, while the statute authorizing the minority business loan program states the money must be used to create jobs, assist with business expansion and serve other purposes that would indicate the money wasn't used solely for private gain. Dale Brill with the Governor's Office said the public can expect reform and restructuring with the Florida Black Business Investment Board programs as a result of the scrutiny from the state's investigation. Brill pointed to four new appointees to the board from Gov. Charlie Crist as a step in the right direction. However, the inquiry into various loans will continue, Brill said. Contact Megan Rolland at 338-3104 or megan.rolland@gmail.com. This content has passed through fivefilters.org. |
| Data collector fined $275,000 for leaking personal data (The Register) Posted: 20 Oct 2009 12:57 PM PDT Data collector fined $275,000 for leaking personal data$20 a head. 13,750 heads Posted in ID, 20th October 2009 19:46 GMT Watch the Application Security Regcast, right here One of world's biggest collectors of consumer data has agreed to pay $275,000 after federal authorities accused it of exposing the personal information of 13,750 people. The fine, which settles charges the Federal Trade Commission brought against Choicepoint, amounts to just $20 per exposed consumer. The breach was the result of the company turning off a database monitoring system that allowed unknown intruders to access social security numbers and other details by conducting unauthorized searches. Choicepoint's gaffe came even as the company was under court-ordered monitoring for a separate security lapse in 2005 that led to at least 800 cases of identity theft. A year later, Choicepoint paid $15m and promised to implement procedures ensuring that consumer reports were provided only to legitimate businesses for lawful purposes. The data collector also agreed to regularly get independent assessments of its data security program through 2026. Despite the ongoing scrutiny from the FTC, Choicepoint switched off an electronic monitoring system designed to identify unauthorized access to customer accounts. During the four months the system remained inactive, unauthorized individuals used stolen credentials to look up personal information on 13,750 consumers listed in Choicepoint databases, according to the FTC. Choicepoint, which is owned by Reed Elsevier, blamed the breach on a former government customer that failed to protect a user ID and password used to access its database. Its statement didn't explain why the monitoring system was shut off, but it maintained that the company remained fully compliant with its 2006 settlement agreement with the FTC. The settlement came on Monday, a day before the FTC announced settlements in two other cases that harmed consumers. The agency said the second-biggest US money transfer service had agreed to pay $18m to settle charges it turned a blind eye to crooked telemarketers who defrauded consumers out of more than $84m. Minnesota-based MoneyGram International also agreed to implement a comprehensive program to root out fraud and to perform background checks before hiring agents. From 2004 to 2008, con artists bilked the people by calling them and claiming they had won lotteries or been awarded guaranteed loans but needed to pay taxes or insurance fees before they could collect. MoneyGram was chosen as the payment method because it allowed the scammers to pick up the transferred funds immediately and payments were often untraceable. Victims also have no chargeback rights or other recourse, according to the FTC. The agency on Tuesday also said a children's clothing marketer has agreed to pay $250,000 for collecting minors' personal information without first getting their parents' permission. Iconix Brand Group had required customers to disclose a wide variety of details to receive updates or enter contests, according to the FTC. That included date of birth, full name, email address, mailing address, gender and phone number. Iconix had collected the information since 2006. The practice violated the Children's Online Privacy Protection Act, the FTC said. ® Free whitepaper – Removing the complexity from information protection This content has passed through fivefilters.org.  This posting includes an audio/video/photo media file: Download Now |
| Bank of America welcomes Cook as new personal banker (The Pine Island Eagle) Posted: 20 Oct 2009 09:18 AM PDT Having moved up the ladder at remarkable speed, Millissa Cook is now among the personal bankers employed by Bank of America. Cook only began working at the Pine Island branch two years ago when she was first hired as a part-time teller. "Prior to coming to the bank, I helped my husband with his business, but when the economy began to decline and my kids were all in school I decided it was time to look for a career," said Cook. "I have had prior experience working for a mortgage company as a loan officer and been doing business most of my life at Bank of America, so I thought it would be a good fit." Cook lives on Pine Island with her husband who owns and operates Crews Remodeling and they have three children, two who attend Pine Island Elementary School. "My parents moved to Matlacha when I was very young so I was raised here on the island. I did leave for a short period and lived in North Fort Myers but couldn't wait to return," Cook said. "The island is safe and peaceful and I am happy to be raising my children here. I couldn't see living anywhere else because this is home for me." Among Cook's responsibilities to customers of Bank of America is aiding them in opening new accounts and handling service loans. "At this point, most of my clients are looking for home equity lines of credit to purchase more property. With housing prices as low as they are, those who actually do have equity in their property are looking into taking advantage of a good time to buy," Cook said. "As for other loans, right now Bank of America has a lot of different programs. Things like the first-time buyer program and those that target special occupations such as police and firemen also are available, however, we continue to take a careful look at the loans we do make and are sure to follow local and government guidelines to ensure that the loans we make are good loans." According to Cook, business at the bank continues to grow even with the current state of the economy. "Bank of America is holding up well even if it is not reflected that way in the media. We have continued to watch our spending and we always have had stringent guidelines when it comes to loans,"said Cook. "While business may not be growing as quickly as we would like, it has continued to grow steadily and I look forward to being here for a long time." Encouraging Cook's progress is Bank of America Branch Manager JoAnn Catlin. "Millissa is a true home-grown island girl and is a hard-working, self-made person. She is very knowledgeable and this has aided to how it was that she was able to move up the ladder very quickly," said Catlin. "It also helps in that because she is an islander, she is very friendly and can talk just as easily to the year-round residents as well as the snowbirds. She has been great for business." Catlin also said that nearly all of her tellers are residents of Pine Island and while Bank of America is a large national banking system, her branch has the feel of a true home-town bank. "We do our best to help out in the community any way we can. Not only are we members of the Pine Island Chamber of Commerce, we have made donations to organizations like the Matlacha Hookers who use our parking lot each winter for their yard sale, and we try to accommodate any of the organizations in any way we can," Catlin said. The Pine Island Bank of America branch is located at 5041 Pine Island Road, just east of the island center. For more information, call the bank at 282-2050. This content has passed through fivefilters.org.  This posting includes an audio/video/photo media file: Download Now |
| Money Coach Advises "Defer, Defer, Defer" (NPR) Posted: 20 Oct 2009 08:07 AM PDT Copyright © 2009 National Public Radio®. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required. MICHEL MARTIN, host: This is TELL ME MORE from NPR News. I'm Michel Martin. For the next few minutes we are going to talk about money. We'll talk about the latest round of Wall Street bonuses. Goldman Sachs is poised to pony up $23 billion to its executives. What did they do to earn all that? We'll ask. But first, we turn to our money coach Alvin Hall about a money issue that will hit close to home for many recent college graduates. Earlier this summer, thousands of college grads donned their robes and put on their mortar boards only to face a barren job market. Now it's fall, which means many of those grads will have to face something else - their first student loan payments. The six-month grace period on student loans for the class of 2009 is about to expire. But what do you do if you still haven't landed a job? We'll ask Alvin Hall, our regular contributor on matters of personal finance and the economy. He joins us from our studios in New York. Welcome back, thanks for joining us. ALVIN HALL: I'm very glad to be here. This is a topic that I've been talking a lot about lately. MARTIN: So what should you do if your first student loan payment comes through and you don't have a job and the bank of mom and dad is kind of tight too? HALL: Get on the phone with your lender as soon as possible. Talk to a real person. Explain your situation to them. And generally, they are very kind and open. I've been dealing with two friends who have exactly this problem, and when they approached the two lenders, both of them said, fine, we can extend this for another six months or nine months. So they gave them forbearance during this period of time. MARTIN: Now, are these loans issued through the government or are they issued through private lenders? And is there a difference in the standard for getting additional forbearance? HALL: These loans were all made by the government through banks. And because it's the government, the government has greater latitude. When it's a private loan, you're either dealing with an individual or a consortium of individuals who really are making that loan either looking for cash flows or out of altruism and negotiating those loans - or forbearance on those - can be a little bit more tricky. MARTIN: Let me just ask, though, do you have a right to forbearance after six months if you are unemployed or you have other pressing financial circumstances like medical bills or is this optional? Is this up to the lender? HALL: From everything I've read, it appears to be up to the lender. But it's becoming a widespread benefit that they offer everybody. I think the lenders really know that people are having a hard time. And it's not in their benefit at all to put black marks on people's credit rating to make them look terrible. After all, the people are invested in themselves. And if the lenders can help them pay off the loans or find reasonable ways to do that, then when the people start to earn money, they will view this as a positive and live up to their obligations. MARTIN: Is there some documentation that you would have to provide to demonstrate your financial circumstances or do you think your self-reporting is enough - to say I continue to be unemployed and, therefore, I can't pay this back or I have some other circumstances like medical bills or something else? HALL: That's a very, very good question. In all the cases I've seen lately, the people simply called up on the phone, dealt with a real person. The person asked them a couple of questions - have you been looking for work? How much money are you earning if you're working part-time? And they took their word for it and gave them a year in one case not having to make any payments on that loan. So I've not seen a case, in my own personal experience, where they had to provide the document. On the other hand, another friend of mine said that his situation was a little bit more difficult, because he had lost his job and they wanted to ask him what happened, how did you lose your job? What were you earning before? Did you have any savings? But still they arranged for him to have a period when he would not have to make any loan payments. MARTIN: So let's say people disregard your advice and just chuck the bill in the trash can - just saying, look HALL: Oh, no. MARTIN: I just can't deal with this right now. What are the consequences for that - saying the heck with it? HALL: That's so wrong. Putting your head in the sand, acting like an ostrich about this is just the complete wrong action. First of all, you will go delinquent. Then you will default on the loans. Then the lender has no other choice but to notify the credit agency about this and then to pursue you. Your best action is to be proactive. Let them know what's going on with your employment or lack of employment. Let them know if you have medical bills. Keep them informed, and they will work with you. I know of so few cases, in my own experience and those of the circle of friends, where proaction has not resulted in a decent solution. MARTIN: And finally, we keep hearing about the credit crunch which remains real HALL: It's real. MARTIN: for particularly, you know, for individual consumers, for small businesses. What about the student loan situation? Let's say you haven't finished your education, what is the availability right now of student loans for people who are still in school? HALL: The government is trying to make loans available because they recognize that the next generation also will need even more education than the current generation, given the globalization of the world. So, I tell everybody if you're applying to college or university, one of the first things you need to say to that admission director is let me talk to the financial aid director of the school. Tell them the truth of your situation. And generally, again, they will try to work with you to put together a series of loans, grants and other funding sources that will help you avoid coming out of school with this onerous amount of debt. And if this school can't do it for you, look at another school. I tell people today, it's good to have one or two options if you're looking for funding because one school may not have the resources or the depth of experience to give you that information. MARTIN: Alvin, just to tie a bow on our conversation about student loans HALL: Yes. MARTIN: How long can you continue to ask for forbearance on repaying student loans assuming that your job situation remains precarious or you have other sort of pressing financial concerns? HALL: One friend of mine has had it for up to three years. He has occasionally made loan payments over that period of time when he was working. But this is his third forbearance. Another situation I know, they've had it for two years and finally they cannot get another extension at all. MARTIN: Well, it's our understanding that one can apply for up to 36 months of forbearance on government-sponsored student loans at least. But from what you're telling us is that the loans issued through private lenders may have different HALL: shorter time period. MARTIN: shorter time period. So it's best to check. But I guess your word of wisdom, Alvin, is don't throw the envelope in the drawer. HALL: Don't throw it in the drawer. Be proactive. Call the lender. Talk to a real person. Get them on your side. And generally, they will be so warm and gracious to you. They're not your adversary. They're your friend to help you find a solution to this problem. MARTIN: Alvin Hall is TELL ME MORE's regular contributor on matters of personal finance and the economy. He joined us from our studios in New York. Thanks, Alvin. HALL: You're most welcome. Copyright ©2009 National Public Radio®. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to National Public Radio. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information. NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio. This content has passed through fivefilters.org. |
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