5th Georigia bank fails; 2 dozen fail nationally

The Georgia Department of Banking and Finance has closed Haven Trust Bank, the fifth bank in the state to close this year and the 24th nationally. The Federal Deposit Insurance Corp. was named receiver Friday and entered into an agreement with Branch Banking and Trust of Winston-Salem, N.C., to assume Haven Trust's $515 million indeposits for $112,000. Haven Trust's four branches reopen on Monday as branches of Branch Banking and Trust, and its depositors will automatically become depositors of Branch Banking and Trust. The FDIC says depositers can access all their money over the weekend by writing checks or using ATMs or debit cards. As of December 8th, Haven Trust had assets of $572 million, and about $55 million will be purchased by Branch Banking and Trust.

(Associated Press)

Feds: $200M lawsuit against GA credit card firm

Federal officials have filed a $200 million dollar lawsuit against an Atlanta credit card marketing firm, accusing it of deceptive practices.

The Federal Trade Commission and Federal Deposit Insurance Corporation on Tuesday filed lawsuits against Atlanta-based CompuCredit, and two out-of-state banks.

The feds say the companies, "misled" borrowers several times over a two-year period.

They allege that, in some cases, two thirds of a $300 dollar credit limit on the unsecured cards was eaten up by hidden fees.

Columbus Banking and Trust markets the cards, and were also named in the lawsuit. But rather than go to court, they agreed to pay ten million dollars in fines and restitution.

CB&T CEO Steve Melton says borrowers who took out the cards knew what they were getting into:

“...Well, they haven't been bamboozled by the small print, and the people who take these cards have been denied – and we wouldn't have issued these customers a card in the normal course of our business.”

Melton says borrowers knew what they were getting into:

“I don't want anyone to think that this market segment is a bunch of ignorant people that don't know what they're doing when they get a credit card. That's not the case.”

The feds are seeking $217 million dollars in fines and restitution from CompuCredit, and the other two banks, Wilmington-based First Bank of Delaware and First Bank & Trust of Brookings, South Dakota.

The firms deny the charges and say they'll fight the lawsuit.

FTC officials did not respond to repeated requests for comment.

If you have a credit card that bears the name of any of the following companies, or your are a CompuCredit customer, you may be eligible to receive damages: Aspen, Aspire, Aspire A Mas, Emerge, Fingerhut Credit Advantage, FreedomCard, Imagine, Majestic and Tribute.

Click here for more GPB News coverage of banking issues in Georgia, and here for more on credit card issues.

BB&T Closing Check Processing Center in Macon

Branch Banking and Trust is closing its check processing center in Macon. Company officials say new technology will now allow them to do the work at branch offices. BB&T says it will do everything possible to find jobs within the company for the 40 people who work at the processing center. Those who cannot be placed with the bank will be offered severance packages. The closing takes place on May 1, 2009.

Governor Not Counting on Federal Money

During budget hearings at the capitol today Governor Perdue said he went through his budget like a surgeon cutting out everything that's not needed. He says he is not banking on extra federal help to balance the budget.

"There's a lot of rumors out there now," he said, "but nobody is cutting any check."

Pedue says he doesn't have the money to fund the Homeowners tax relief grant which costs the state over $420 million each year. That means local governments may be forced to raise property taxes and homeowners could see their bills go up by $200 to $300 in some places. Perdue says he turned over every stone but couldn't find the money.

"If you can find a rock we haven't looked under," he told lawmakers, "then let's open it up together and I will rejoice with you."

Georgia faces a $2.2 billion budget shortfall this year and state economist Kenneth Heaghney warned lawmakers that things may not look up until later this year. He used words like skyrocketing unemployment, deteriorating labor market and sharply falling corporate growth, to describe Georgia's economy. Heaghney says Georgia, like the nation is in a deep recession.

"The average recession in the post World War II era is 10 months. We're already in it for 13," Heaghney testified before the joint house and senate appropriations committee.

Heaghney says the federal stimulus package and monetary policy on the federal level could help Georgia's economy later in the year. But he warned that any recovery would be weak.

Chambliss says he's ready to fight

The battle is on for the Georgia U.S. Senate seat held by Saxby Chambliss. Incumbent Republican Chambliss Wednesday held a news conference to express his readiness for the battle heading to November against Democratic challenger Jim Martin. Martin on Tuesday beat Vernon Jones in the Democratic runoff. Chambliss says Martin’s liberal voting record is out-of-step with mainstream Georgians. Martin fired back yesterday with accusations that Chambliss took-in at least $350,000 from various lobbyists representing oil, insurance and banking interests.

Bank Closing: Freedom Bank of Georgia

Click on the image for a mash-up map of bank failure locations in Georgia and nationwide.

Federal regulators shut down Freedom Bank of Georgia. It’s the 17th federally insured bank in the nation to fail this year.

It had about $173 million in assets and $161 million in deposits as of March 4.

Freedom Bank, in Commerce, Georgia, with $173 million in assets and $161 million in deposits, was shut by the state’s Department of Banking and Finance and the Federal Deposit Insurance Corp. was named receiver. Northeast Georgia Bank of Lavonia, Georgia, will assume deposits, the FDIC said.

The Federal Deposit Insurance Corp. says Northeast Georgia Bank will assume the bank’s deposits. It’s four branches will reopen Monday as offices of Northeast Georgia Bank.

“Customers of both banks should continue to use their existing branches until Northeast Georgia Bank can fully integrate the deposit records of Freedom Bank of Georgia,” the FDIC said.

(Associated Press)

CheckFree to be bought

Norcross-based CheckFree is being bought out by Fiserv Incorporated. Wisconsin-based Fiserv provides information management systems and CheckFree handles electronic billing and payment services and online banking. Together the two companies employ 27,000 people. No word yet on potential layoffs. The deal is said to be worth more than 4-billion dollars.

Data Shows Bank Crisis Unprecedented

The banking crisis in Georgia appears to be headed for a historic level. Loan problems are rivaling the peak of the late 1980’s Savings and Loan Crisis. The percentage of delinquent loans at Atlanta banks is actually worse than in the S and L downturn. Twelve percent of loan portfolios in Atlanta have problems. Statewide it’s 8.69 percent. That’s according to the data compiled by FIG Partners LLP. The data is setting a new standard for industry woes in the region, leading to what some are calling the worst bank market in the state’s history.

(Atlanta Business Chronicle)

Bill Heard to close all dealerships

With a struggling economy and an inventory heavy with trucks and SUV’s, the largest Chevrolet dealership chain in the country has announced closure of all its locations.

Bill Heard Enterprises will close its remaining 13 nationwide dealerships--five locations in Georgia, along with those in Florida, Alabama, Tennessee, Texas and Nevada. Another dealership in Arizona closed September 12th.

The Columbus, Georgia based company says the mix of rising gas prices, a slowdown in car sales and the banking crisis created an atmosphere where its resources could not keep pace. Last month, GMAC Financial Services pulled credit for new inventory at some of the Bill Heard dealers.

The company has also been beset by legal troubles. The Governor's Office of Consumer Affairs has a lawsuit against Bill Heard, charging it with a 16-year pattern of deceptive sales practices. It’s not known how the closures will affect the state lawsuit.

The closing of Bill Heard dealers will affect about 27-hundred employees.

Ga could join national mortgage system

The mortgage meltdown has prompted some Georgia lawmakers to consider joining a national mortgage licensing system. The House is scheduled to decide whether to allow the state's banking department to join the system. It would allow the state to share information and make standard the licensing and application processes for mortgage brokers and lenders.

Builders still banking on SW Georgia power plant

LS Power, the company seeking to build a coal-fired power plant in southwest Georgia, says it will appeal a recent court ruling that halted construction.

Mike Vogt, project director with LS Power told the Dothan Eagle newspaper,

“We’re 100 percent committed to staying the course to begin construction.”

In a landmark ruling on June 30, the Fulton County Superior Court reversed an earlier administrative court decision on an Environmental Protection Division (EPD) permit that had okayed the $1.2 billion project in Early County.

Fulton County Superior Court Judge Thelma Wyatt Cummings Moore reversed a previous decision by Atlanta Administrative Law Judge Judge Stephanie Howells, giving the go-ahead for the project.

LS Power will appeal the decision to the Georgia Court of Appeals in August.

Proponents say the project will provide hundreds of jobs and millions of dollars in tax revenue for the poor rural area.

A group of area residents and environmentalists fighting the project say the plant will emit unchecked amounts of carbon dioxide, harmful amounts of dust, and other pollutants.

The Longleaf Power Plant would be the first such facility to be built in Georgia in the last two decades.

Click here for more GPB News coverage of the issues at stake in the case.

Perdue confirms opposition to Sunday alcohol sales

Governor Sonny Perdue says he does not support the bill now in the State House that would allow alcohol sales in grocery and convenience stores on Sundays.

On Wednesday a House committee attached a Sunday sales provision to the bill that would allow alcohol sales at a new baseball stadium to be built in Gwinnett County. Perdue says it's not fair to put the two measures together.

"I was hoping Gwinnett County could have a stand-alone bill for their economic development out there. I haven't supported (Sunday sales) in the past, I don't now and frankly I'm very concerned. It puts Gwinnett County's business in jeopardy if the House chooses to take that up".

Perdue says people have six days to gather-up alcohol and store it if they want to drink on Sundays. The Governor did not say whether he would veto the bill if it passes.

Lobbyists for grocery and convenience stores have been banking on public opinion to sway the Governor and State Senate.

Tight Budget Pushes Other Issues Aside

State Senator Bill Hamrick in the Senate plenum, Tuesday, Jan. 28, 2009. (Photo: Dave Bender)

The $2.2 billion dollar budget shortfall is pushing a lot of controversial issues to the sidelines.

Lawmakers say things are different this year than any other year. The Republican controlled legislature has never faced such drastic cuts to balance a state budget.

Almost nonexistent are controversial bills on immigration and gun control. State Senator Bill Hamrick sits on the Senate Appropriations Committee. He says the energy to tackle less urgent issues just isn't there:

"It really is mentally draining when you work on this in the legislature all day and then you go home and talk to people in the grocery store who have been laid off," Hamrick says.

Some lawmakers are banking on money from Washington to help them through this budget year and take the pressure off. Other are working on Governor Perdue's recommended budget, which so far includes no new federal funds.

South GA power station backer weighing pullout

One of the backers of a controversial plan to build a coal-fired power plant in southwest Georgia says a tight credit market is forcing his company to reassess their investment.

The Houston-based Dynegy Corporation says an uncertain economy is behind their decision to reconsider their backing of LS Power. It wants to build a 1,200 megawatt power station along the Chattahoochee River in Blakely.

Dynegy spokesman David Byford:

“Last week we announced a reevaluation of our participation in future activities or projects that are outside of Dynegy’s operational footprint.”

That footprint includes six energy projects, including the Longleaf plant that Dynegy is reconsidering, nationwide.

Blakeley Mayor Ric Hall says if Dynegy drop’s their support, it would hit the rural town hard:

“…well, if they pull out, certainly it would have a devastating impact on job potential… it’s been quite a number of years now in which we have held out hope that possibly they would be able to build a plant here because of the impact that it could have economically on our community.”

Local officials say the plant would create about a thousand construction jobs, more than 100 full-time positions, and add millions of tax-revenue dollars to Early County. The county is one of the poorest in the state and is banking on the jobs.

The power plant has been talked about for the past seven years.

But plans came to a crawl earlier this year, when an Atlanta judge accepted an appeal by environmentalists against the facility. They claim high carbon dioxide, sulfur and particulate pollution levels aren’t worth the economic benefits.

Billy Fleming is the publisher of the Blakeley-based Early County News. Fleming’s a staunch supporter of the power plant, and says he wasn’t surprised by Dynegy’s reevaluation:

“With what’s going on the financial world today, we got a landscape out there today nobody ever dreamed they’d see, and everybody’s having to back up and rethink and reevaluate their positions on a lot of things. And I have no doubt that the difficulty of permitting and constructing a coal-fired plant with all the global-warming alarmists’ stuff going on is in the back of their heads as well.”

Mayor Hall agrees, and says that the environmental lawsuit hurt the plant:

“..and then of course the tremendous expense that has been associated with the legal battle that they’ve had to go through – particularly in the last three years.”

LS Power says they’re going ahead with the project, despite Dynegy’s pending decision. Officials with the New-Jersey-based firm say they’ve filed another appeal against the court ruling – one that they hope to see adjucated by the summer of 2009.

Click here for more GPB News coverage of this story.

Caterpillar theft

By: Mike Savage
WPPR Demorest

Employees at a heavy equipment plant in Northeast Georgia could be the latest identity theft victims after a computer was stolen with sensitive information.

Officials at Caterpillar say the social security numbers and banking information of hundreds of Georgia-based employees were on a computer that was stolen last month from a repair shop in Atlanta. The Illinois-based company says the computer belonged to a benefits contractor.

Caterpillar, which has a plant in Pendergrass in Jackson County, waited three weeks to disclose the theft to workers. The company has not given a reason for the delay. Caterpillar also has declined to say how many of its 95,-thousand current and former employees nationwide are affected.

The company doesn't believe any personal data has been accessed or used.

The missing data comes at a time when more companies are disclosing that the personal information of employees was either lost or stolen. Last month, Fruit of the Loom workers in Clayton were notified of stolen personal information. And last year, Atlanta data broker Choice Point admitted that the personal information of thousands was accessed by a thief posing as a business client.

Electronic Health Records Comes to GA

Federal health officials were in Atlanta today, to announce that Georgia was chosen for a pilot program for electronic health records. It's a system that keeps patient records in a computerized data base. The program will work with one hundred physicians throughout the state. Governor Sonny Perdue says electronic health records are the wave of the future.

"This is sort of what the ATM card was to banking just a few years ago. No longer do we have to wait for the office to be open Monday through Friday for business hours. No longer will we have to fill out forms in triplicates just to obtain your medical records."

The idea is that by turning from paper to electronic records, mistakes can be avoided and costs can be cut.

Atlanta bank fails; 16th in US this year

The state has shut down a failed suburban Atlanta bank. The Georgia Department of Banking and Finance closed the two branches of Alpha Bank and Trust in Alpharetta on Friday. The Federal Deposit Insurance Corporation has transferred all accounts to Stearns Bank based in St. Cloud, Minnesota. It will be business as usual for most of the bank's customers because they are covered by FDIC insurance. But 59 of Alpha's bank accounts whose assets total $3.1 million exceed the federal limit of $250,000. It's the 16th FDIC-insured bank closure this year in the U.S. and the most recent in Georgia since August. Customers with accounts exceeding the FDIC limit can call (800) 591-2912 for assistance.

(Associated Press)

Synovus spinning off TSYS

Synovus' Columbus headquarters. (Dave Bender)

Electronic payment processor TSYS (NYSE:TSS) said Thursday it will spin-off from parent Synovus Financial (NYSE:SNV) Corp. to become an independent company.

Financial services company Synovus, which owns an 81 percent stake in the company, will distribute all of its shares of TSYS common stock to Synovus shareholders.

Synovus CEO Richard E. Anthony, in a statement to stockholders said:

"This change presents an exciting opportunity for each company to focus exclusively on its core business, which we believe will lead to increased shareholder value."

Under terms of the agreement, TSYS will pay a one-time cash dividend of $600 million to all TSYS shareholders, including Synovus. The company plans to fund the dividend through a combination of cash on hand and a revolving credit facility. Based on the number of TSYS shares outstanding as of Sept. 30, TSYS expects its shareholders to receive a cash dividend of about $3.04 per share.

The transaction is expected to be completed by the end of 2007, subject to certain conditions, including the approval of the Georgia Department of Banking and Finance.

(With The Associated Press)

Click here for more GPB News Georgia business coverage.

Two new scams arise

The state Department of Revenue is warning Georgians of two new scams. The Atlanta Business Chronicle reports the scams involve fake checks. In one scam, people get a letter with a phony check worth $50,000 allegedly issued by the DOR. The second scam involves people getting checks from a company called AIRSERV with inaccurate banking information.

Magazine says Medical College of Georgia's bio-business incubator in Augusta ranks among top in country

The Medical College of Georgia's business incubator in Augusta has been named as one of the top five organizations in the U.S. helping biotechnology businesses.

Expansion Solutions magazine ranked the incubator on its recruiting, retaining and assisting of these businesses.

The incubator provides space, equipment and mentoring services for its tenants.

MCG's incubator currently houses four entrepreneurial businesses, including one working on a new anthrax vaccine and another specializing in cord blood banking and the cryopreservation of reproductive tissue.