Finance and Economic

Pressure continues to mount on President Obama to select Elizabeth Warren as the nation’s first consumer financial protection regulator.

Warren, 61, has become something of a cause célèbre as the administration’s top pick to run the new agency charged with protecting consumers from abusive mortgage and credit card practices.

There’s even a Hollywood-produced Elizabeth Warren rap video circulating online called "Got a New Sheriff," featuring a rapping cowboy singing the Harvard professor’s praises.

Last week, 43 House Democrats sent a letter to President Obama, asking him to nominate Warren and requesting a meeting at the White House to discuss Warren’s appointment.

"You have an opportunity to appoint to head this body a true visionary — not the usual Washington careerist. You have an opportunity to appoint to this body the single best-qualified choice," said the letter, signed by Rep. Barney Frank, D-Mass., and Rep. Carolyn Maloney, D-N.Y., among others.

Last week, Warren sat down with the head of a large and influential banking lobbying group, the Financial Services Roundtable. The group declined to comment on the meeting.

Warren, who has repeatedly declined interview requests on this topic, has also been meeting with various key administration players, including a meeting with senior White House advisers on Aug. 12th.

The public groundswell for Warren puts the White House in a tough spot. It’s not clear when President Obama will make his decision, but an announcement is isn’t expected this week.

"The administration is hesitating because they’re faced with the traditional problem that Obama has faced," said Julian Zelizer, a professor of history and public affairs at Princeton University.

If the White House passes Warren over, Zelizer says, they disappoint liberals whose support has been key throughout the administration business card templates. If Warren gets the nod, the White House must deal with "political difficulties on Capitol Hill where centrists have quite a lot of power and Republicans are becoming quite obstinate," Zelizer said.

Warren teaches contract and bankruptcy law as a Harvard University professor and she’s also written a number of personal finance books. More publicly, she chairs a congressional oversight panel that has garnered attention for its critical reviews of government spending to bail out Wall Street banks under the Troubled Asset Relief Program.

Treasury is in the planning stages of creating the consumer financial protection bureau, which will be housed inside the Federal Reserve, thanks to the new law cracking down on Wall Street banks.

Warren is not the only candidate under consideration to run the bureau. But she is the most polarizing. Senate banking chief, Seen. Chris Dodd, D-Conan., has warned her nomination would cause a protracted and lengthy battle in the Senate, adding he isn’t sure she could secure a Senate confirmation.

Banking groups and conservatives paint her as too liberal for a regulator job. They say an aggressive regulator would undermine bank safety by crafting rules that force banks to make risky loans. They’ve also accused her of lacking the chops to be a regulator.

Supporters say the consumer regulator job was written for her. Warren came up with the idea for the consumer financial protection agency and has spent her career championing consumers duped by "tricks and traps" of the financial industry, she often says.

Other candidates rumored to be in contention for the job are Michael Barr, Assistant Treasury Secretary for Financial Institutions, as well as Deputy Assistant Attorney General Gene Kimmelman. 

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The president’s signature foreclosure rescue plan is losing its punch, according to a federal report released Friday.

Only 36,695 troubled homeowners received long-term mortgage modifications in July under the Obama administration’s Home Affordable Modification Program, known as HAMP. This brings the total to 434,717 borrowers who have successfully made it out of the trial phase.

A month ago, 51,205 delinquent borrowers were given long-term assistance.

The number of people falling out of the program, however, is on the rise. Some 12,912 homeowners had their permanent modifications canceled in July, 272 of whom paid off their loans.

Obama officials acknowledge that the foreclosure rescue program will not help every troubled homeowner and that it may be a while before the housing market stabilizes. They are shifting their focus to initiatives that are targeted to those who have been hit by the recession and declining home prices.

"While there has been some stabilization in the housing market, it remains clear that we have more work ahead," said Raphael Bostic, assistant housing secretary. "We know that we must continue to provide support to underwater borrowers, unemployed homeowners, and to the nation’s hardest hit neighborhoods."

Foreclosure prevention programs have taken on renewed importance with the housing market on shaky ground again. A spike in foreclosures, combined with weak housing sales, could send home prices plummeting again.

In July, foreclosures were up 3.6% from the month before but down 9.7% from the year earlier period, according to RealtyTrac.

Defaults on the rise

The latest report comes two weeks after the government had to revise its June redefault figures sharply higher, after analysts called the initial numbers misleading.

The revision showed that nearly 20% of homeowners were at least two months delinquent nine months after receiving a permanent modification. The initial figure showed that 7.7% had fallen behind.

The government did not provide redefault statistics for July in the current report. Officials said the data would be released quarterly.

Analysts at Barclay’s Capital said last month said 60% of homeowners may ultimately redefault instant personal loans guaranteed.

Status of trial mods

Some 96,025 people in trial modifications were canceled in July, bringing the total to 616,839 since the program began in the spring of 2009.

Homeowners usually are kicked out of the trial program because they do not make the required payments, meet the qualifications or submit the needed paperwork. Going forward, loan servicers will gather the necessary documents and review homeowners’ eligibility before entering them in trial modifications.

Once their trials are canceled, about 45.4% of homeowners receive alternate modifications, often one from their loan servicer. Some 9.8% had foreclosure proceedings started against them and 1.8% lost their home in foreclosure.

Only 255,934 troubled borrowers remain in the trial phase, some 24,577 of whom entered the program in July. Nearly 118,000 have been in trials for at least six months, though loan servicers should address these homeowners in the next month, administration officials said.

Another new program

Launched with great fanfare, the president’s foreclosure prevention plan calls for servicers to reduce eligible troubled homeowners’ monthly payments to no more than 31% of their pre-tax income. However, it has come under persistent fire for being slow to launch and for not helping enough people.

Meanwhile, the government is set to roll out yet another fix for the housing market. Borrowers can start applying for the FHA Short Refinance option starting Sept. 7.

The program allows those who owe more than their homes are worth to refinance into a Federal Housing Administration-backed loan provided they are current on their mortgages and their lender agrees to write off at least 10% of their principal balance. The initiative is open to those who do not currently have an FHA loan and who have a credit score of 500 or more.

In recent months, the administration has stressed the wide range of housing programs it has underway, including initiatives to keep interest rates low and to provide tax credits to first-time homebuyers.  

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Attorney Diana Carey was appointed Thursday to act as trustee in the involuntary Chapter 11 personal bankruptcy of Mercer Island entrepreneur Frederick Darren Berg, according to court documents.

As trustee, Carey will be monitoring the operation of Berg’s companies and his personal assets.

Such appointments are not unusual, according to Mark Calvert, trustee in the separate Chapter 11 bankruptcy of a group of seven Meridian Mortgage Investors Funds operated by Berg guaranteed payday loans. Both cases were filed in the U.S. Bankruptcy Court for the Western District of Washington in Seattle.

“It gives people comfort when a trustee is involved that the value of the assets will be maximized for the benefit of the creditors,” Calvert said.

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Salem Hospital has agreed to pay $6 million for the campus formerly used by the Oregon School for the Blind. The state announced the sale of the 8.37-acre site in Salem on Tuesday.

The Legislature voted in 2009 to close the school and sell the property. Proceeds from the sale will be split equally between a fund to provide resources and educational services to visually impaired students and the School for the Deaf payday loan.

Pending the results of Salem Hospital's 60-day due diligence period, the sale could close by mid-October.

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First Commonwealth Financial Corp., Pittsburgh, has planned a public offering of $75 million of its common stock, according to a filing made with the Securities and Exchange Commission Monday. First Commonwealth (NYSE:FCF) said it intends to use the net proceeds for working capital and general corporate purposes.

Macquarie Capital Inc. and Stifel Nicolaus & Co. Inc. are serving as underwriters; First Commonwealth said it plans to grant them a 30-day option to purchase up to an additional 15 percent of the shares offered to cover over-allotments, if any.

First Commonwealth is based in Indiana, Pa., about 45 miles east of Pittsburgh. It has assets of $6.1 billion and operates 115 retail branches, 65 of them based in the Pittsburgh area.

Last Thursday, First Commonwealth reported second quarter net income of $13.5 million, or 15 cents per diluted share, compared with a loss of $18.6 million or 22 cents a year ago, and well above Wall Street’s average estimate of 5 cents.

For the six months ended June 30, First Commonwealth earned $374,000, compared with a $16.9 million loss for the first half of 2009. Earnings per share were zero; First Commonwealth posted a 20 cent loss per share for the first half of 2009.

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GE announced Friday it will raise the quarterly dividend by 20% and will resume its share buyback program at the end of the quarter.

The Fairbanks, Conn.-based company will pay a dividend of 12 cents per share, up from 10 cents, on Oct. 25 to investors on record when the market closes Sept. 20.

The board also said it will extend the company’s $15 billion share repurchase program through 2013. The plan, which was originally set to expire at the end of the year but was suspended in 2008, has $11.6 billion in remaining authorization.

"We are able to restore the GE dividend at a historical payout level for 2010, earlier than previously anticipated," said GE chief executive Jeff Immelt, "and to extend our share buyback program because of continued strong cash generation, recovery at GE Capital and solid underlying performance in our industrial businesses through the first half of 2010 Online payday loans."

Last week, GE reported quarterly earnings that jumped 16% from a year earlier to $3.1 billion, as its finance arm GE Capital showed signs of stabilization.

Shares of GE (GE, Fortune 500) were up 3.4% in afternoon trading.  

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The University of Hawaii Board of Regents approved on Monday construction of the world’s largest telescope atop Mauna Kea on the Big Island.

The unanimous vote, required because UH is leasing the land from the state, clears the way for project developers to file for a building permit with the Department of Land and Natural Resources.

The telescope will be able to collect nine times more area, have a spatial resolution 12 times sharper and provide up to 100 times the image clarity of the most powerful telescopes currently in existence, according to the project’s website. Scientists hope the telescope will in part provide insight into the physics of the universe’s early formation as well as massive black holes.

A joint project between the University of California, the California Institute of Technology and the Association of Canadian Universities for Research in Astronomy, the project has attracted excitement within the scientific community, but also controversy.

Some Native Hawaiians argue that it will disrupt sacred land. Kealoha Tiscotti of Mauna Kea Aina Hou said the telescope threatens Native Hawaiian burial grounds and important ceremonial land.

“It’s a huge footprint,” Tiscotti said in reference to the size of the proposed telescope low rate payday loans.

Conservation groups, including Kahea: The Hawaiian Environmental Alliance, also have expressed concern over the disruption of the ecosystem.

Marti Townsend, program director for Kahea, said her organization plans to continue protesting the telescope and will register opposition with the DLNR when the building permit is filed.

The project’s directors say they have reached out to the community, meeting with Native Hawaiians, local schools, labor unions and local officials.

“We believe this partnership will benefit the Big Island and Hawaii in so many ways, with jobs, the economy, work-force development, education, the environment, culture and, of course, science,” said Henry Yang, chairman of the project’s board of directors, in a prepared statement. “The world-class stature of astronomical education and research of the University of Hawaii on all its campuses statewide will benefit, and discoveries made by this telescope will benefit not only the international science community, but all of humankind.”

The proposed telescope is projected to begin operations in 2018.

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Need a cab? Just text.

St. Louis County Cab/Yellow Cab, the area’s largest taxi company, has rolled “text for taxi.”

Customers can text their pick-up address and ZIP code to 971-TAXI (8294).

President Basil Rudawsky said the company was the first locally to offer the text service.

Customers also can order a cab online.

“We have received great feedback from our customers,” Rudawsky said.

St. Louis County Cab/Yellow Cab is owned and operated by Tom Gregerson and has a fleet of more than 250 vehicles.

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Portland’s City Council wants more time to study last-minute amendments to a long-developing plan to reform development rules along the Willamette River’s north reaches.

The council voted to further consider whether businesses could pay a set fee for developing river-area properties, instead of “mitigating” or making environmentally friendly improvements to as much as 15 percent of their land. The council also wants businesses’ consent on a plan that would allow for further review and amendments down the road.

The north reach Willamette plan is the first of three Willamette redevelopment initiatives. Businesses say the area generates an $871 million economic impact. The Portland Development Commission estimates the area employs some 38,000 workers.

Environmentalists want to protect the stretch of the river from further industrial damage while Portland officials hope to strike a balance between environmental and business concerns.

Eventually, business interests believe the final plan should give businesses full guidance as they work within federal, state and local environmental guidelines, groups such as the Working Waterfront Coalition have argued.

Environmental groups that support the so-called “River Plan” maintain that businesses are stalling in order to delay implementation of the stricter new rules. The groups, along with Portland Mayor Sam Adams, believe the city can back a plan that allows for future changes if the rules don’t work.

The council will take at least the next two weeks before reexamining the business amendments. Commissioner Nick Fish and Randy Leonard said the council needed to get a firmer grasp on the amendments. The changes were introduced, at the behest of business, between a Feb. 17 public hearing and Thursday’s council meeting.

The council had expected to give the final River Plan a first reading Thursday and vote on it next week.

In contrast to the February public hearing, all members of the public speaking on the River Plan at Thursday’s meeting encouraged the council to adopt it. Business interests from the Port of Portland and several riverfront operations had dominated testimony during the February meeting mainly because of several sidebars that caused the evening meeting to run very late.

The city and businesses have explored north reach river development reforms for longer than a decade.

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It turns out that Google isn’t the only U.S. tech company that’s fed up with China.

Go Daddy, the Internet domain registration site, announced Wednesday it is no longer offering new ".cn" Chinese Web domains, citing tough new government rules requiring extensive personal information from applicants.

The move makes Go Daddy the first U.S. Internet company to shut down some of its business in China after Google shipped off its Chinese search site to Hong Kong on Monday. Like Google (GOOG, Fortune 500), Go Daddy said access to its site has been spotty in China since its announcement.

At a hearing held by the Congressional-Executive Commission on China, Go Daddy’s general counsel, Christine Jones, told lawmakers that China recently implemented new laws requiring Go Daddy to collect color headshot photos, business ID numbers and signed registration forms from new registrants of ".cn" domain names. Go Daddy, in turn, was required to surrender that information to government authorities.

Jones said China’s new rules also applied retroactively, so the company would have to go back to Chinese customers that had already registered, asking them to provide photos, business ID numbers and registration forms.

China’s Internet Network Information Center (CNNIC), the government-controlled Internet regulator, informed Go Daddy that if existing customers did not comply, their domain names would no longer work.

"We were immediately concerned about the motives behind the increased level of registrant verification being required by CNNIC," said Jones in her testimony cash advances pay day loan. "The intent of the new procedures appeared, to us, to be based on a desire by the Chinese authorities to exercise increased control over the subject matter of domain name registrations by Chinese nationals."

Go Daddy found that its users weren’t willing to play along: Only about 20% of Go Daddy’s 27,000 affected customers submitted the required documentation and gave Go Daddy the OK to submit it to the Chinese authorities, Jones said. As a result, the company anticipated that thousands of Web sites registered by Go Daddy could be disabled by the Chinese government.

The company said it would continue to host and provide services to its existing customers with ".cn" addresses. Jones told lawmakers that the company would consider providing new ".cn." addresses if the Chinese government rescinds its new law.

Go Daddy was widely applauded by lawmakers for its actions in China, as was Google. The same can’t be said for Microsoft (MSFT, Fortune 500): at the hearing, Rep. Chris Smith, R-N.J., accused the company of "enabling tyranny" for continuing to censor search results in China.

Known for its sex-themed television commercials, Go Daddy is the largest Internet domain registration site in the world, managing more than 40 million domain names. Go Daddy also hosts about 7 million Web sites. Go Daddy began its business in China in 2005. 

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