The koH Resources Blog, Questioning Answers

SBA Experts Offer Assistance

admin — Mon, 01 Mar 2010 04:13:56 +0000

WASHINGTON – The SBA Web Chat will highlight assistance to small businesses looking to grow or expand in the federal government marketplace, and businesses that need surety bonds to do public and private contracting. Business owners can find out how to position their business to sell to the government and how to obtain bonding.

Karen Hontz, Office of Government Contracting and Business Development, and Pam Swilling, Office of Surety Guarantees at the U. S. Small Business Administration will host the February Web chat on “Contracting Opportunities & Surety Bonds.” Hontz and Swilling will answer questions on doing business in the federal market and how small contractors can get assistance in obtaining surety bonds.

SBA’s Web chat series, providing small business owners with an opportunity to discuss relevant business issues online with experts, industry leaders and successful entrepreneurs. Chat participants will have direct, real-time access to the Web chats via questions they submit online in advance and during the live session, with instant answers.

March 4, 2010, 1 p.m. ET, Hontz and Swilling will answer questions for one hour. Participants can join the live Web chat by going online to www.sba.gov, and clicking “Online Business Chat.” Web chat participants may post questions before the chat by visiting http://web.sba.gov/livemeeting/Mar10/ and posting their questions online. Web chat archives: http://www.sba.gov/tools/monthlywebchat/index.html. For further information you may contact Cecelia Taylor at 202-401-3059 with Advisory Number MA10-03.

SBA Re-Activating Recovery Loan Today

braudis — Mon, 22 Feb 2010 15:52:47 +0000

WASHINGTON – SBA issued the following statement February 19th from Administrator Karen Mills regarding efforts to ensure continued funding for two key provisions in the American Reinvestment and Recovery Act (ARRA) of 2009:

“SBA’s most popular ARRA provisions – the increased guarantee and reduced fees in the two largest lending programs – have helped engineer a significant turnaround in SBA lending. Continuing those ARRA provisions is SBA’s top priority. Through the original $375 million and the additional $125 million appropriations for these two provisions, SBA has supported more than $20 billion in lending to small businesses across the country and seen its average weekly loan volume increase by nearly 90 percent since February 2009. Through ARRA we brought nearly 1,100 lending institutions back to the SBA’s programs that had not made an SBA loan since at least 2007. All told, these steps have benefitted tens of thousands of small businesses and supported hundreds of thousands of jobs during these tough economic times. However, we know there is still more work to be done. As the President has requested, we will continue to work with Congress to extend these programs through September 2010.

“The additional $125 million appropriation approved in December to extend SBA’s 7(a) loan guarantee to 90 percent and reduce or eliminate borrower fees on both the 7(a) and 504 loans will be used faster than expected. Loan volume has surged since earlier this week when an Information Notice was released to lenders. SBA communicated with its lending partners today that it will re-activate the Recovery Loan Queue no later than Monday, Feb. 22. The Queue is an efficient and transparent process that will ensure that every remaining dollar possible is made available to help small businesses drive economic recovery across the country.

“The SBA advocates for small businesses across the federal government and will continue its efforts to keep America’s small businesses on a path to recovery and long-term success. Small businesses are a central piece of President Obama’s Jobs Plan because they have been and will continue to be a key engine for job creation across the country. With that in mind, President Obama laid out an aggressive agenda for providing small businesses with the support they need to create jobs and drive economic recovery. That agenda includes proposals in three key areas: expanding access to capital; providing tax incentives to encourage job creation; and maximizing the potential of innovative, high-growth companies.”

SBA’s ARRA Programs: SBA received $730 million in ARRA to support economic recovery programs for small businesses. Included in the appropriation was $375 million to support raising the government guarantee to 90 percent on SBA’s 7(a) loans and reducing some lender and borrower fees on its 7(a) and 504 loans, the agency’s two largest lending programs. The funds for these popular provisions ran out in November 2009. SBA received an additional $125 million appropriation in December 2009 along with authority to continue both of the programs through February.

SBA’s 7(a) and 504 ARRA Transition Plan: SBA is in the process of finalizing the plan for transitioning its 7(a) and 504 programs back to their pre-ARRA terms and communicating those plans with its lending partners. This plan, when implemented, will include re-activating the Recovery Loan Queues no later than Monday, Feb. 22, 2010. The Queues will operate in the same manner as when originally implemented in November 2009. Sometimes previously approved loans are later cancelled or never disbursed for a variety of reasons.

The Queues take this into account and beginning on the transition date will allow eligible small businesses, in consultation with their lenders, to choose to be placed in the queue for possible approval for an ARRA loan if funding becomes available. Small business owners and lenders will have transparent access to the queue via www.sba.gov/recoveryq and will be able to remove themselves from the queue at any time to be considered for a non-ARRA SBA loan with all applicable fees and, for 7(a) loans, standard guaranty levels.

The authorization for the 90 percent guarantee on 7(a) loans ends Feb. 28, 2010, though funds may be exhausted sooner. Furthermore, applications in the Queues after Feb. 28, 2010 will only be eligible for decreased or eliminated borrower fees when funds become available. To learn more about SBA’s ARRA programs and other resources for small businesses, please visit www.sba.gov.

Your Small Business Resource

braudis — Tue, 09 Feb 2010 18:54:30 +0000

As part of their continuing efforts to be Your Small Business Resource , SBA is holding a Free Panel Discussion: “Gaining the Edge Needed for Success” on Wednesday, March 24, 2010, 6:30 pm to 9:00 pm at the UB Center for Tomorrow in Buffalo, NY.

The U.S. Small Business Administration and its nationwide network of partners help millions of potential and current small business owners start, grow and succeed. Resources and programs targeting small businesses provide an advantage necessary to help small businesses effectively compete in the market-place and strengthen the overall U.S. economy. For detailed information on Panels and Panelists and how to register, click here.

Obama Out Of The White House

braudis — Sat, 06 Feb 2010 02:21:57 +0000

Straight out of The White House, an immediate release from the Office of the Press Secretary: President Obama Outlines Latest in a Series of New Small Business Proposals.

Successful SBA programs expanded to increase working capital, help businesses refinance.

WASHINGTON – Today in Lanham, Maryland, President Obama proposed the expansion of two critical Small Business Administration (SBA) lending programs, aimed at allowing small businesses to refinance and increasing limits for working capital. These are both legislative proposals designed to help small businesses through what continues to be a difficult period in credit markets.

President Obama said, “The true engine of job creation will always be businesses. What government can do is fuel that engine: by giving entrepreneurs and companies the support to open their doors, expand, and hire more workers. Today, we’re taking another step towards assisting small business owners get the capital they need to grow and hire.”

SBA Administrator Karen Mills said, “These proposals will provide us with two effective tools to help small businesses meet specific challenges brought on by the recession. First, in the tight credit market of the last two years, lines of credits have been cut for small firms. Raising the limit on SBA Express loans to $1 million will mean more small business owners will have quicker access to this source of capital to help restock inventories and support larger revenue sales, and literally take that next step to grow their business and create new jobs. Second, thousands of good, credit worthy businesses find themselves caught by declining real estate values as a result of this recession. With many of them now facing mortgages coming due in the next few years, the ability to refinance into SBA’s 504 loan will give them the chance to lock in long-term, stable financing, as well as protect jobs by protecting small businesses from foreclosure.”

Details of the President’s new small business initiatives are below:

1. Expand SBA’s existing program to temporarily support refinancing for owner-occupied commercial real estate loans:

The Administration is proposing legislation to temporarily allow for the refinancing of owner-occupied commercial real estate (CRE) loans under the SBA’s 504 program, which provides guarantees on loans for the development of real estate and other fixed assets. Currently, 504 loans cannot be used for the refinancing of maturing debt. This change would respond to the difficulties many current, solvent borrowers face in refinancing existing commercial real estate loans.

Businesses with a loan maturing in the next year who are current on all loan payments will be eligible. Lenders that are refinancing mortgages for existing customers will make a loan for up to 70 percent of the current property value; and SBA will help finance the remaining 20 percent. For new lenders taking on a refinancing project, SBA will take on a greater share of financing, up to 40 percent. SBA’s proposal for a temporary, zero-subsidy CRE refinancing program would be funded through additional fees for refinancing projects, not through a Congressional appropriation. This proposal will help refinance up to $18.7 billion each year in commercial real estate that might otherwise be foreclosed and liquidated.

2. Temporarily increase the cap on SBA Express loans from $350,000 to $1 million:

The President is proposing to temporarily increase the maximum SBA Express loan size to $1 million, which would expand the program’s ability to help a broad range of small businesses through a streamlined approval process. Unlike traditional 7(a) loans, lenders can use their own paperwork for SBA Express loans, which can be structured as revolving lines of credit. Currently, these Express loans are capped at $350,000 and carry a 50 percent guarantee. Fees would cover virtually all of the added costs of this proposal.

These proposals complement the President’s broader small business agenda – a key part of his overall jobs plan. The other elements of the small business agenda include:

• Extending small business expensing and bonus depreciation for 2010. Eliminating capital gains taxes for small businesses in 2010.

• A Small Business Jobs and Wages Tax Credit that would cut taxes for
more than 1 million small businesses by paying up to $5,000 for every net new
job and covers payroll taxes on overall wage increases in excess of inflation.

• A proposal to transfer, through legislation, $30 billion to a new Small
Business Lending Fund that will support lending by community and smaller
banks.

• Additional SBA lending proposals, including an extension of the Recovery Act programs that eliminate fees and raise guarantees on SBA’s two largest loan programs and permanent increases in the maximum loan sizes for major
SBA programs.

An SBA Fact Sheet on these proposals is available at: http://www.sba.gov/idc/groups/public/documents/sba_homepage/sba_rcvry_factsheet_cre_refi.pdf

How To Purchase Commercial Real Estate-Revisited

braudis — Thu, 04 Feb 2010 01:34:16 +0000

How? Owners of small and mid-sized businesses can preserve capital and maximize cash flow to better afford the purchase of commercial real estate with the SBA 504 Loan Program. You receive all the benefits of ordinary bank financing but with less money down, longer fixed rate terms and below market interest rates.

The SBA 504 Loan Program enables 90% financing of the total project costs to preserve more capital for an appreciable asset while lowering current real estate expenses up to 40% instead of leasing, and up to 25-year fully amortizing terms to lessen the impact on cash flow while obtaining below-market, long-term fixed interest rates. Maturities of 10 and 20 years are also available.

There’s a great bonus: it allows the financing of closing costs and other normally out-of-pocket fees to be financed as part of the loan amount. Better yet, on top of all of this is a fantastic boon: the loan is assumable!

There’s long-term, fixed-rate financing for real estate and/or equipment purchases through SBA-licensed certified development companies (CDCs). Proceeds from 504 loans must be used for purchasing fixed assets such as: land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities, or modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment with a useful life of at least 10 years.

The loan is secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a fixed rate loan secured with a junior lien from the CDC (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and at least 10 percent equity from the small business.

Soft costs like architectural and legal fees, environmental studies, appraisals, and interest and fees on the construction and/or interim bank loan can also be rolled into the note. The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing existing debt. The small business will realize upfront cash savings of approximately $100,000 on a $1 million project.

Interest rates on 504 loans are pegged to an increment above the current market rate for five-year and 10-year U.S. Treasury issues. The rate on the 504 loan is fixed for the of the loan and is set when the CDC sells the bond to fund the loan. 504 bonds are amortized securities. Fees total approximately three (3) percent of the debenture and may be financed with the loan. Currently, these fees are waived, although it may only be until the end of December or whenever the Stimulus funds runs out. Whichever comes first.

So, a low down payment of just 10 percent, which allows the business to preserve cash for working capital; fixed rate on the SBA 504 portion, whereupon small businesses don’t have to worry about the prime lending rate rising; long term, therefore reduction in monthly payments; and low blended interest rate, the rate between the bank portion and the SBA’s 504 portion, answers the question how to purchase commercial real estate if you are a small business. And remember: SBA 504 financing is available to purchase commercial real estate andcapital equipment.

As a footnote, all SBA loan programs are reserved for small businesses. SBA defines a small business as net worth under $7 million and net profits after taxes under $2.5 million. Click here for further details to find out how to qualify and what type of business may apply for the SBA 504 Loan Program. And as another footnote, this post also appeared slightly different in ezinearticles.com

SBA, Minority Business RoundTable Renew Partnership To Expand Outreach to Minority Entrepreneurs

braudis — Mon, 25 Jan 2010 16:48:23 +0000

WASHINGTON – The U.S. Small Business Administration announced today that it renewed its two-year partnership agreement with the Minority Business RoundTable (MBRT) to continue joint outreach efforts to minority entrepreneurs.

“During these difficult economic times, it is imperative that we provide small and minority businesses with the necessary tools to drive economic growth and create jobs in their communities,” said SBA Administrator Karen Mills. “Far too often, minority-owned small businesses and entrepreneurs encounter hurdles to getting capital, contracts and other assistance to help them succeed in the marketplace. Making sure we do all we can to remove these hurdles is a top priority for SBA and the Obama Administration.”

The strategic alliance is part of SBA’s ongoing effort to support small business development initiatives in underserved communities. The agreement allows the organizations to share resources and educate minority entrepreneurs on how to use SBA products and services to establish and grow their businesses.

SBA has supported substantial financing to minority-owned small businesses under the American Recovery and Reinvestment Act. Since the Act was signed into law on Feb. 17, 2009, minority-owned small businesses have
received more than $4 billion in SBA-backed loans, about 23 percent of the more than $18.5 billion in small business lending SBA has supported under the Recovery Act. Minority-owned businesses continue to account for about 29 percent of the agency’s overall lending and 37 percent of its microloans.

Minority-owned small businesses also have received more than $3 billion worth of federal contracts under the Recovery Act.

MBRT is a national membership organization for minority CEOs that serves as a unified voice for minority businesses. Through this partnership, the SBA and MBRT intend to help more of these businesses succeed and stimulate economic growth in their communities and the nation’s economy.

The SBA and MBRT alliance is intended to strengthen and expand small business development across the nation for minority entrepreneurs. SBA will provide MBRT with timely information on the agency’s programs, services and
resource partners, participate in roundtable discussions and conferences and advise them on events that will impact their mission.

As part of the resource pooling, MBRT will cooperate with SBA and its resource partners to provide information to members about its business development programs and services, and share current SBA news and information. The two-year agreement is a renewal of the partnership between the SBA and MBRT and was implemented on January 11, 2010.

2010 For New York Entrepreneurs!

braudis — Sun, 10 Jan 2010 18:24:45 +0000

Starting or growing your business in 2010, a day inspiring entrepreneurship. Actual or potential small business owners looking for a way to launch or grow their business, have an opportunity to learn about small business success in a half-day event entitled “Straight Talk 2010”, on January 23. For the past 14 years, Straight Talk has provided one-on-one business counseling, business information booths, important contacts, networking opportunities, education, training and more.

Participants will be able to participate in seminars such as “Business Basics”, “Show Me the Money”, “Make Yourself Credit Worthy”, “Advantages & Benefits of Being Certified”, “Taxes, Permits, Licenses, Oh My!” and “Home Based Business Issues”, and new for 2010, “Business Assistance for Veterans”. In addition to the seminars participants will be able to meet with SBA and SCORE and several other private and community organizations that deliver helpful financial and information tools to assist entrepreneurs to succeed.

Straight Talk comes once a year so register early and SAVE $5.00—– This year’s seminar will be held on Saturday, January 23, 2010 at 8:00 a.m. – 1:00 p.m in Buffalo Niagara Convention Center, Buffalo, New York.

For registration contact Pamela Andolina, SBA at 716-551-4301 ext. 301 or Buffalo_DO@sba.gov

Cost: $15.00, Pre-paid registration
Day of Event: $20.00
Student: $10.00
Veterans: FREE (I.D. required)

Last post for 2009: A happy, healthy and prosperous New Year for all!

braudis — Fri, 01 Jan 2010 04:52:59 +0000

2010 will be the best year yet if we see the Light and keep it simple! Happy New Year!

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$4.5 Billion Additional Funding for SBA Recovery Lending Programs

braudis — Tue, 29 Dec 2009 15:17:20 +0000

President Obama signed the U.S. Department of Defense (DOD) appropriations bill December 19, 2010, which included $125 million to continue through Feb. 28, 2010, the enhancements made possible through the American Recovery and Reinvestment Act (ARRA) to SBA’s two largest loan programs. The SBA estimates the additional funding will support $4.5 billion in small business lending. New approvals of loans with the higher guarantee and reduced fees made possible by ARRA are expected to begin by Dec. 28. Loan applications from borrowers who chose to be placed in the SBA’s Recovery Loan Queue will be funded first, followed by new loan approvals beginning on or before Dec. 28. As part of ARRA, SBA received $730 million, which included $375 million to increase the SBA guarantee on 7(a) loans to 90 percent and to waive borrower fees on most 7(a) and 504 loans. The funds for these programs were exhausted on Nov. 23. SBA created the Recovery Loan Queue as part of its transition back to pre-ARRA lending on Nov. 23 because previously approved loans were sometimes canceled or never disbursed for a variety of reasons. Eligible small businesses, in consultation with their lender, could choose to be placed in the queue for possible approval of an ARRA loan if funding became available. Currently there are 1,069 loans totaling almost $530 million in the Recovery Loan Queue. The extension included in the DOD bill authorizes the higher guarantee levels through Feb. 28, 2010. The fee relief is authorized until this additional funding is exhausted or the end of the fiscal year, whichever comes first. As was the case in November, SBA will transition into a queue system as the funds start to wind down in order to ensure the maximum simulative effect of the programs and disbursement of funds. For non-ARRA 7(a) or 504 loans funded during the transition period, this extension does not provide a retroactive guarantee or waived fees. Loans that were funded under non-ARRA terms cannot be canceled and resubmitted to take advantage of the ARRA extension provisions. This extension does not affect other SBA ARRA programs, including the America’s Recovery Capital (ARC) loan program or the agency’s microloans. ARRA funding still remains for both of those programs.

SBA and Dell

braudis — Tue, 15 Dec 2009 00:27:56 +0000

The U.S. Small Business Administration and Dell launched an online video series today, offering tools and strategies to help small business owners rebound from the economic recession and put themselves in a position to expand and create jobs.

It’s called Strategies for Growth: Advice for Expanding Your Business. It includes real-world insight, solutions and advice from small business owners who’ve succeeded, in good and bad economic times. Additionally, the series draws on the expertise of counselors, policy makers and others for accessing resources and tools available to small business owners.

The Strategies for Growth partnership with Dell was announced today at a National Press Club luncheon where Administrator Mills discussed the outlook for small business and the economy in the coming year, including the Administration’s efforts to boost the small business sector and to drive economic recovery through public-private partnerships. Joining Administrator Mills for the announcement was Dell’s Vice President of Government Affairs Becca Gould.

The Strategies for Growth video series highlights key topics that engage small business owners in issues critical to small business growth. These areas include Planning for Growth, Government Contracting, Team Building, Marketing, Technology, Exporting Opportunities, and Disaster Recovery. Also featured is a Profiles of Success segment that spotlights two successful entrepreneurs.

The Strategies for Growth video series features a range of growing small businesses from across the country, including a design firm, a vegetarian restaurant and bakery, and a green construction company.

The SBA provides free small business counseling and training through a variety of programs, services and resource partners, located throughout country. Each of the business owners featured in Strategies for Growth benefited from a variety of training and resource tools offered by the SBA.

Strategies for Growth is available on the SBA’s Web site at www.sba.gov/strategiesforgrowth and at the SBA’s YouTube channel at www.YouTube.com/sba. Each topic is indexed by subject and includes additional resources for entrepreneurs.

Tax Preparation Help for Small Business Owners

braudis — Sun, 13 Dec 2009 04:08:44 +0000

Small business owners can begin to prepare now as the 2009 tax filing season approaches by utilizing the Live Web Chat on Wednesday, December 16, from 1:00 p.m. to 2:00 p.m., Eastern Time. The SBA’s Web Chat series with host Thomas P. Ochsenschlager, Vice President of Taxation, American Institute of Certified Public Accountants, picks up in December with useful year-end tax tips and information.

Business owners can learn more about tax savings tips and mistakes to avoid. Ochsenschlager will \answer questions for one hour. SBA’s Web chat series provides small business an opportunity to discuss relevant business issues online with experts, industry leaders and successful entrepreneurs. Chat participants will have direct, real-time access via questions submitted online in advance and during the live session, with instant answers.

You can join online at https://eweb1.sba.gov/livemeeting/Dec09. You can also post questions for Ochsenschlager in advance online at the same URL; and to review archives of past Web chats, visit online at http://www.sba.gov/tools/monthlywebchat/index.html.

SBA To Host Small Business Financing Forum

braudis — Mon, 16 Nov 2009 22:49:06 +0000

WASHINGTON – On Wednesday November 18th from 9AM to 3PM, Treasury Secretary Tim Geithner and Small Business Administrator Karen G. Mills will convene a forum on small business financing issues for a range of key stakeholders including policymakers, lenders, and small business owners to explore new ideas and strategies for expanding access to financing for small businesses. The event, which President Obama called for last month, is part of a larger effort to help small businesses grow, create new jobs, and contribute to our economic recovery and to challenge the private sector to increase lending to small businesses.

The forum will be held in the Cash Room of the U.S. Treasury Department at 1500 Pennsylvania Ave., NW, Washington, D.C. 20220. It will be Open Press Coverage on closed-circuit tv; and will also be streamed on www.whitehouse.gov/blog.

Federal Reserve Abolished And Currency Issued Only By The Government

braudis — Mon, 16 Nov 2009 04:41:32 +0000

The Federal Reserve abolished and currency issued only by the government… How would you like to soon see that as fact? Some of us are still ignorant of the fact that the national debt is owed to the Federal Bank, a private corporation that prints the money and lends it to the government of the United States of America with interest. This interest is paid to the Fed. It is not used for what Americans need, like better schools, highways, etc.; it’s used for what the bank needs. Magic, huh?

Zeitgeist The Movie 9 of 13 – Behind Curtain

In my opinion, our government should run the currency and eliminate the current banking system that has burdened our country with incredible debt. Then we will be a free country. Otherwise, this body of ranting and raving that we do everyday, wrapped in the cloth of politics and finance, is pointless. What’s your opinion?

SBA Adds New Training Tools for Veterans

braudis — Tue, 10 Nov 2009 22:21:22 +0000

SBA, Six Universities to Offer Business Training For Iraq/Afghanistan Disabled Veterans

The U.S. Small Business Administration today announced a three-year agreement to expand and deliver entrepreneurship training for service-disabled veterans of the wars in Iraq and Afghanistan. The agreement with SBA’s Office of Veterans Business Development will support the expansion of the year-long Entrepreneurship Bootcamp for Veterans with Disabilities (EBV). The expansion of this management training and mentorship program will maximize small business programs for veterans, service-disabled veterans, reserve-component members, and their dependents or survivors.

Additionally, SBA launched a new online contracting tutorial on www.sba.gov, as part of its ongoing efforts to expand services to veterans and service-disabled veterans. Veterans and military spouses who own small businesses can utilize this free online course to learn how to identify and take advantage of federal contracting opportunities.

Working with Syracuse University’s Whitman School of Management, the University of Connecticut School of Business, Mays Business School at Texas A&M, UCLA Anderson School of Management, Florida State University’s College of Business, and the Krannert School of Management at Purdue University, SBA’s grant and other assistance will significantly expand the reach and impact of the EBV initiative and help maximize economic opportunities for U.S. veterans with disabilities.

The expansion of SBA’s entrepreneurship training initiatives builds on SBA’s support for veterans through its Patriot Express loan program. In less than two-and-a -half year’s time, this pilot loan initiative has supported nearly $400 million in loans to more than 4,700 veterans and spouses looking to establish or expand their small businesses. As a result of the American Recovery and Reinvestment Act, which raised loan guarantees to 90 percent and temporarily eliminated fees, the number of Patriot Express loans increased by more than 20 percent this year over 2008. Local SBA district offices have a listing of Patriot Express lenders in their areas. Details on the initiative can be found at www.sba.gov/patriotexpress.

Goodbye Capital One

braudis — Sat, 07 Nov 2009 02:11:34 +0000

Capital One Financial Corp., which bought Chevy Chase Bank earlier this year, is closing half a dozen branches of Chevy Chase Bank that were erected over the past decade in the Washington, D.C. area “to improve branch efficiency and performance, while also managing costs”.

Capital One merged Chevy Chase Bank into its charter July 30^th and plans to begin converting Chevy Chase to Capital One Bank in the second half of next year. Chevy Chase Bank locations in Bethesda, Hagerstown, Laurel and Rockville will close Dec. 19, 2009. Branches in Waldorf and Bethesda are scheduled to be closed Jan. 9, 2010.

According to deposit figures released by the FDIC on June 30th, Charlotte, N.C.-based Bank of America saw a surge in local deposits and overshot Wachovia Bank, which lost deposits, to become the area’s largest bank. Bank of America’s increase was driven by growth in its retail banking business. The figures are from the FDIC’s annual survey of each branch. McLean-based Chevy Chase Bank also gained ground with deposits, surpassing Atlanta-based Sun Trust Bank to reach third place. Chevy Chase’s figures don’t include deposits held at Capital One Bank, which merged Chevy Chase into its charter after numbers were collected.

Overall, community banks did a little bit better than large banks, taking about 1 percent of local market share from Bank of America, Wachovia, SunTrust, BB, Chevy Chase, Citibank, M&T, PNC, HSBC and TD Bank, which held 80.55 percent of local deposits, down from 81.49 percent a year ago.

So why am I telling you this? Remember my scenario of last month, what the Capital One manager said about not being able to make any adjustments in my favor because of the economy and consequent defaults which gravely effected their bottom line? Well, their bottom line was huge in the black. Don’t take my word for it, get evidence of their earnings straight from Capital One! Goodbye Capital One, there’s something new in my wallet. Hello Community Banks!

President Obama vs. Capital One

braudis — Thu, 29 Oct 2009 18:24:54 +0000

According to an article in Law.com, one can surmise that President Obama’s Credit CARD Act has not given Capital One pause, among other banks like Bank of America; all being banks bailed out by America. The Act limits when credit card interest rates can be increased on existing balances and allows consumers whose interest rates have been increased to reduce their annual percentage rates (APRs) to previous levels if they’ve honored their contract for six months.

Ryan Schneider, president of Capital One Financial, stated in a letter to Rep. Betsy Markey, he will not raise rates as she requested after she had drafted a letter signed by 17 members of Congress. They continue to raise rates in New York, but slyly, through the practice of imposing annual fees that were waived in prior years for their customers in good standing. When annual fees are challenged, they point to the economy and their credit card losses. How ironic and arrogant.

How do I know this? I personally called Capital One on October 27^th and had a major discussion with an account manager about raising interest rates and annual fees. He diplomatically explained to me the business of business: profit; and how their profits had been grossly and negatively affected by current consumer default and late payments (America will see the truth of that at the end of the quarter).

I’m no Ann Minch aka Rockerchic4God, but the silent retort in my head was “Capital One, are you stupid?” My argument was simply that if Capital One or any other bank continually raises interest rates and tacks on or reinstates annual fees, you will continually have credit card default and late payments. I further explained that it makes sense to do for their customers what the Administration did for them. Of course they are not in the business of making sense, so no resolve.

On the evening of October 28^th when I contemplated contacting Suze Orman (since she had Ann Minch on her show), guess who calls me for a chat? Capital One! I was elated! I thought, hey they considered our conversation and they’ll drop the annual fee and return my interest rate to 6.17%. Nope. That makes too much sense. It was a survey. A survey? Yep. A survey to zero in on the issue and the customer service rendered. They asked questions to which I was to answer; but they already knew the answers. I was to rate the answers. Just taking up my time. More arrogance! Let us think credit unions and community banks…

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