SenSage Inc. raised $3.5 million in equity funding and another $2.75 million in debt.
The San Francisco business makes security software used to detect fraud, compliance problems or cyber-threats.
Sierra Ventures, Canaan Partners, FTV Capital and Mitsui Ventures gave the equity funding online payday loans. All of them have invested in SenSage before.
MMV Financial provided the debt.
Joe Gottlieb is CEO of SenSage. The company raised $15 million in June 2008.
Miami-Dade, Broward and Palm Beach counties continued to see upward movement in the number of bankruptcy filings last month.
Only Palm Beach County showed some moderation in the number of business bankruptcies when compared to August 2009.
In the three-county area, personal bankruptcy filings were up 59 percent, to 3,387 from 2,127 in August 2009, and up 6 percent from July. Business bankruptcy filings rose 7 percent, to 119 from 111, a year earlier, but were down 17 percent from July.
In Miami-Dade County, personal bankruptcy filings rose 74 percent, year-over-year, to 1,788 cases opened, and 5 percent over July. There were 49 new business bankruptcies for Miami-Dade in August, up from 40 last year, but down from 57 in July.
Personal bankruptcy filings in Broward rose 50 percent over last year, to 1,067 cases opened, and rose 12 percent compared to July. There were 43 new business bankruptcies filed in Broward County in August, up from 41 last year, but down from 47 in July.
Palm Beach County personal bankruptcies rose 36 percent, year-over-year, to 532, but decreased by 4 percent compared to July. There were 27 new business bankruptcy filings in Palm Beach County in August, down from 30 cases last year and 40 cases in July.
The American Bankruptcy Institute said August consumer filings nationwide rose 6 percent to 127,028 from 119,874 a year earlier, but fell 8 percent from the July total.
“While monthly filings are volatile, consumer bankruptcies are still the highest they have been since Congress overhauled the bankruptcy law in 2005,” ABI Executive Director Samuel Gerdano said. “Consumer filings remain on track to top 1.6 million filings in 2010.”
A deal with Walgreens gives Capitol Federal Savings Bank 40 percent more ATM locations throughout Kansas.
For the past two years, Capitol Federal has had an agreement with Walgreens stores in the Kansas City area, allowing free ATM access for Capitol Federal customers. The addition of about 40 Walgreens locations throughout Kansas brings the Capitol Federal ATM network in Kansas and Kansas City to about 100 locations. Capitol Federal customers can use these ATMs without surcharges or other transaction fees.
“What this does is give our customers more convenience,” said Frank Wright, electronic banking officer at Capitol Federal. “We’re finding that our customers are very mobile. We have many clients who travel through Kansas, and this allows them more locations to make bank transactions. The deal with Walgreens also helps us offer this service at a lower cost than it would be for us to scout a location and set up a new ATM ourselves.”
Capitol Federal Savings Bank, which is held by Topeka-based Capitol Federal Financial (Nasdaq: CFFN), has 22 branches in the Kansas City area and 45 branches overall. It ranks sixth on the Kansas City Business Journal’s list of top area banks, with a 4.32 percent local market share of deposits — $1.76 billion.
A team of reporters from the Post-Dispatch has won a Gerald Loeb Award for Distinguished Business and Financial Journalism for a series of stories last year about the after-market auto service-contract industry in the St. Louis area.
Matthew Hathaway, Elizabethe Holland and Jim Gallagher won in the personal finance category, presented Tuesday evening by the Anderson School of Management at the University of California-Los Angeles, at a reception in New York City.
The reporters won for three stories each had a hand in writing and reporting in 2009:
— "From Prison to the Pinnacle," documenting the rise of auto service-contract marketer US Fidelis and cofounder Darain Atkinson, who went from federal prison to extraordinary wealth in fewer than 20 years.
— "Pressure Tactics Used at US Fidelis," which explained in detail the tactics used to sell the service contracts.
— "Warranty Sales Skim Top Profit," which explained how the extended auto service-contract industry works — from marketing, to financing, to refunds cash advance now.
Hathaway in particular has reported extensively on the industry, which is largely centered in the St. Louis area, where more than 30 companies are based. The companies market contracts promising to cover the cost of car repairs in exchange for a low monthly payment.
But they have come increasingly under fire from consumer advocates, regulators and attorneys general nationwide for what they have called fraudulent practices and deceptive marketing tactics.
US Fidelis, which had been the No. 1 marketer of the contracts, dropped from a 1,100-employee company to fewer than 200 in 2009 and ultimately declared bankruptcy on March 1. The company cited a precipitous drop in new business and public pressure for the decline.
The three stories that won represented a broad view of the industry, from the individuals who buy and sell the contracts, to the finance companies that cover the costs.
Amid growing concerns about deficits, Congress will in coming weeks consider a bevy of measures that combined could increase the deficit by close to $500 billion over 10 years.
And that doesn’t include the big kahuna on this year’s agenda: extending the 2001 and 2003 tax cuts, which could cost anywhere from several hundred billion dollars to more than $2 trillion.
While it is expected that many measures will be paid for with revenue-generating provisions, the total cost of all that’s on the table would not be fully offset. That’s in large part because several measures are exempt from the new "pay-as-you-go" law.
Some of the measures have already been factored into 10-year deficit projections. But in a rough mid-term election year that has seen the eruption of a debt crisis in Europe, lawmakers on both sides of the aisle are becoming more sensitive to the optics of passing measures that are not paid for, even when many consider those measures essential.
The specific contents of the major bills under consideration are still being shuffled about. But several of the measures below are likely to make the cut in one form or another.
Extension of tax breaks: Dozens of tax breaks for businesses and individuals have lapsed. The cost of extending them for this year is $31 billion.
Such "tax extenders" include the research and development credit for businesses and the choice for individuals to deduct either their state and local income tax or their state and local sales tax.
Estate tax: Defying all expectations, Congress let the estate tax die at the end of 2009. But it’s coming back in 2011. The question is at what level.
Unless Congress acts, starting next year no more than $1 million of a person’s estate would be exempt from the estate tax — which is well below the $3.5 million exemption in place last year. And the top estate tax rate would revert to 55%, up from 45% in effect last year.
President Obama has proposed permanently extending the estate tax at 2009 levels, which the Tax Policy Center estimates would cost $234 billion over 10 years.
In the Senate, however, a proposal to exempt $5 million and set the top rate at 35% has garnered some bipartisan support. Depending on how various parameters are set, the proposal could cost north of $300 billion.
Safety-net provisions for the unemployed: Some lawmakers are pushing to retain a program that extends the number of weeks an unemployed person may collect federal unemployment benefits. When combined with state benefits, under the program, that means a person can qualify for up to 99 weeks of benefits.
But the program expires in June. The measure under consideration would extend it to the end of the year.
Likewise, there’s a proposal to extend the federal subsidy to help the newly unemployed pay for health insurance under COBRA. The subsidy is scheduled to expire at the end of May, so anyone who loses their job in June would not be eligible.
Combined, the two measures would cost close to $90 billion.
Aid to states: A proposal under consideration would provide $25 billion in federal aid to help budget-strapped states meet the increased demands for Medicaid services.
Funding for education jobs: Sen. Tom Harkin, D-Iowa, has proposed that $23 billion be appropriated to prevent states, suffering from steep budget deficits, from having to lay off teachers, principals, librarians and other school personnel.
War spending: Lawmakers are considering a request for $33 billion in supplemental war spending in Iraq and Afghanistan. It is expected to be included in a bill with other supplemental spending requests — such as for disaster relief. All told, the supplemental spending requests would total $59 billion.
‘Doc fix’: Unless Congress acts, Medicare reimbursement rates for physicians will automatically be cut 21% come June 1 and by 1% to 6% in future years because of a pre-set formula that dictates Medicare outlays related reimbursements. Lawmakers are likely to override that scheduled cut for five years, at a cost of $89 billion.
Small business tax relief: President Obama has proposed excluding capital gains tax on small business stock purchased by individuals. So the tax break — estimated to cost $2 billion over 10 years — would help "angel" investors who take early stakes in fledgling, privately held companies.
2001/2003 tax cuts extension: There’s been bipartisan support for extending the 2001 and 2003 tax cuts for the majority of Americans. If Congress doesn’t act, they will expire after Dec. 31.
Extending them permanently would cost an estimated $2.2 trillion over 10 years.
It’s not clear yet how long lawmakers might opt to extend the tax cuts, or if there will be enough of a push to also extend them for high-income households. Both parties have favored making the cuts permanent, at least for most Americans. But of late some believe extending them for a year or two may be the smartest move given current political and economic constraints.
Indeed, last week conservative economist Martin Feldstein, who was President Reagan’s top economic adviser, said in a Wall Street Journal editorial that while he favors temporarily extending the cuts for everyone, the country can’t afford to make them permanent.
"Changing the Obama budget proposal to limit all tax cuts to two years would reduce the total deficits over the next decade by more than $2 trillion. No single policy change could do as much to limit the future deficits and the national debt," Feldstein wrote.
WASHINGTON — After nearly a quarter-century of selling pickup trucks and cars in North Dakota, Donovan Berscht had to shut one of his dealerships last year as Chrysler downsized. Now he is worried that a second financial jolt — this time the push for toughened economic oversight in Washington — could batter his remaining Chevrolet-Buick dealership.
If President Barack Obama has his way, loans at auto dealers would be put under the purview of a new federal consumer protection authority to guard against fraud and abuse. The prospect of increased regulations, Berscht said, “could force us out of the financing business,” and it has him so concerned that he traveled to Washington last month to ask Sen. Kent Conrad, a Democrat and one of his senators, for quick relief.
The financial reforms being debated in the Senate have prompted resistance from a variety of businesses, but perhaps nowhere more intensely than in the already beleaguered auto industry, where dealers find themselves pitted against Obama in their aggressive campaign to exempt themselves from the new rules.
For some 18,000 auto dealers in the United States, who historically have made up a potent political force, the debate presents a critical test of their continued influence in Washington, as they push lawmakers to help them hold on to revenue.
Through their lobbying arm, the National Automobile Dealers Association, the dealers have hired a crisis communication team, taken out full-page newspaper advertisements, and organized trips to Washington for dealers like Berscht to buttonhole lawmakers and make their case.
Their basic message, like those of many other industries threatened by tighter regulation, is that they did not cause the financial crisis, and they should not be penalized for it through a burdensome and costly new regulatory structure.
A vote on the proposed exemption for the auto dealers could come this week on the Senate floor, with neither side predicting victory.
For Obama, the issue is his latest attempt to push through broad legislative changes in Congress partly by singling out powerful players in the private sector.
In his successful campaign for a health care overhaul this year, Obama went after the nation’s major insurance carriers repeatedly as a symbol of why the health system needed to be fixed.
To try to restructure the country’s federal student loan program, Obama portrayed big providers of student loans like Sallie Mae as profiting from a “sweetheart deal” at the expense of struggling students. As in the health care overhaul, he won that debate in Congress, too.
And from the start of the current push for toughened financial regulations, he has cast the fight as an attempt to rein in the big banks on Wall Street, whose “reckless practices” he blames in large part for the economic downturn.
Last week, as the debate over financial regulation neared an end in the Senate, Obama identified a new target in a formal statement: The “auto dealer-lenders” seeking a “special loophole” in the legislation through an amendment pushed by Sen. Sam Brownback, R-Kan.
“This amendment would carve out a special exemption for these lenders that would allow them to inflate rates, insert hidden fees into the fine print of paperwork, and include expensive add-ons that catch purchasers by surprise,” Obama said. The proposal, he warned, “guts” the bill and encourages “misleading sales tactics.”
The administration also linked the auto dealers exemption to the exploitation of military personnel. Officials released a Pentagon letter saying that many service members, according to an informal military survey, had fallen victim to “bait and switch” tactics and other predatory practices that left them with loans they struggled to pay.
Obama’s condemnation of unfair auto loans was the first time he has weighed in with a formal White House statement on a specific amendment of the sweeping financial regulation, and it caught many dealers and industry executives off guard.
Some dealers brand the White House’s account of auto loan irregularities as “pure fiction,” saying it mischaracterizes the process by which dealers facilitate or package auto loan requests for lending companies. Moreover, they say Obama has unfairly vilified their industry.
“The way the White House is portraying us as evil, it’s just wrong,” said Michelle Primm, the general manager of a family-run import dealership, Cascade Auto Group, about 35 miles south of Cleveland.
Primm made two trips to Washington last month to speak with both of her senators and Congressional staff members about the potential harm from the auto loan provision.
She and other dealers say they are already heavily regulated, mainly at the state level, through regulations that prohibit the loan abuses cited by Obama. They said the new federal regulations would only add costs to the way they arrange loans to buyers for big lending companies like GMAC.
But the administration maintains that the new rules are needed.
An administration official said on Sunday that dealers played a critical and profitable role in arranging the loan rates for many auto buyers, often at a higher rate than they qualified for. The White House also cited industry data showing that dealers made 52 percent of their profits in 2008 from financing and insurance, more than they made on the actual car sales.
The outcome may hinge more on influence than dueling data. On that front, the auto dealers have already proven formidable.
The auto dealers’ association spent $3 million last year on federal lobbying as part of a broader effort by the auto industry as a whole. Auto dealers, their employees and political action committees made political contributions of more than $9.3 million in the 2008 election cycle, most of it to Republicans, according to the Center for Responsive Politics, a nonprofit research group.
Perhaps more important than the auto dealers’ money is their deep presence in local communities, which can have a powerful impact on the lawmakers whose communities they represent, political analysts and lawmakers said.
Brian Hart, a spokesman for Brownback, said the dealers’ strong community ties had given them in-person access to many politicians to plead their case.
“Every member was very receptive to talking to their local dealers,” he said, “because they’re truly Main Street. People drive by them every day and know who they are.”
The auto dealers already demonstrated their political muscle on the issue in October, when the House passed its version of the financial overhaul but exempted the dealers from the consumer protection provisions. The exemption was pushed by Rep. John Campbell, a California Republican who is a former car dealer, and it came over the objections of Democratic leaders.
Berscht, the North Dakota dealer, is hoping for a quick resolution.
“I’m not a political guru by any means,” he said, “but there’s a real urgency to get this amendment in there on this major bill and to provide some relief for the auto dealers.”
Higher demand and cost reductions triggered a sharp rise in net income in the first quarter at Astronics Corp., the East Aurora manufacturer said Wednesday.
Profits rose 142.7 percent to $3.4 million, or 31 cents per share, up from $1.4 million, or 13 cents per share, in the 2009 first quarter.
Sales in the 2010 first quarter were down 6.2 percent to $46.9 million from $50 million a year ago. The company noted the figure for Astronics’ DME subsidiary was for the entire period while the 2009 first quarter included DME sales for a nine week period. Astronics acquired DME on Jan. 30, 2009.
“Demand was higher than expected, especially for our in-seat power products, and our aggressive cost cutting over the last year drove solid margins,” said Peter Gundermann, president and CEO.
Astronics (NASDAQ: ATRO) produces lighting, electrical power and automated test systems for the areospace and defense industries.
The U.S. Environmental Protection Agency has awarded the city of Sacramento $200,000 to clean up and revitalize the Jibboom Street Power Station in preparation for future development, Rep. Doris Matsui, a Sacramento Democrat, announced Thursday.
Efforts are being made to raise $50 million to build a new Discovery Museum Science and Space Center in the old Pcific Gas & Electric Co. powerhouse there along the Sacramento River.
The award is a part of a $2.6 million package that was awarded to communities across Northern California through the EPA’s Brownfields Program. The program encourages redevelopment of an estimated 450,000 abandoned and contaminated waste sites.
A proposal in the Arizona House of Representatives could restore some lost funding to the Arizona Office of Tourism.
As legislators look to close a $3.5 billion state budget deficit, they have cut the budgets of a number of departments, including the Arizona Office of Tourism.
As part of the state budget just approved by legislators, the transaction privilege tax formula funding for the Tourism Office was removed. TPT money comes from bed, restaurant and amusement taxes collected from businesses across the state. Those funds totaled about $14.6 million in fiscal 2010, and legislators appropriated $10.7 million of it to the Tourism Office through the TPT formula.
But the fiscal 2011 budget removed that funding from the Tourism Office completely, eliminating the formula and earmarking all TPT funds for the General Fund instead.
Under the new state budget, the department’s funding will come only from a portion of Indian gaming fees and revenue collected under Proposition 302, a voter-approved 1 percent bed and 3.25 percent car rental tax in Maricopa County — money the office has received in prior years. While the amount fluctuates based on sales receipts, it is estimated at about $12.6 million for fiscal 2011, according to state budget documents.
By comparison, the fiscal 2010 budget totaled $22 million including the TPT funding.
The bill now being considered by state lawmakers would reinstate the TPT formula. The measure, House Bill 2243, is sponsored by Rep. Michele Reagan, R-Scottsdale. Reagan was not available for comment.
The bill would set the stage for legislators to revive the Tourism Office budget with those TPT monies at a later date, said House Republican Majority spokesman Paul Boyer.
“Even though AZOT won’t be funded (through TPT), this will put that formula back into Arizona statute,” he said.
Kristen Jarnagin, spokeswoman for the Arizona Hotel and Lodging Association, said the bill is important because the TPT formula is “the foundation of tourism funding. If the state needs to do other things with that money during tough times, we understand. We want to be supportive, but the Arizona Office of Tourism needs to have that funding renewed — and the sooner, the better,” she said.
The bill is making its way through the state House of Representatives and has passed the Appropriations and Rules committees. Still, the measure must make it through the caucus and be approved formally by the House of Representatives, then move on to the Senate for consideration. If it passes all of those steps, it would go to Gov. Jan Brewer for signature.
The Arizona Office of Tourism declined to comment.
European Central Bank President Jean-Claude Trichet pressed Greece to halt its flirtation with International Monetary Fund aid and work with European allies to tame its record budget deficit.
As protesters besieged the Greek Finance Ministry to denounce 4.8 billion euros ($6.5 billion) of tax increases and spending cuts, the Athens government said the absence of European support might force it into the hands of the IMF.
Trichet yesterday spoke out against appealing to the Washington-based lender “as a supplier of help,” keeping the pressure on Greece to cut the highest deficit in the euro’s 11- year history — and on European governments to step in if Greece can’t go it alone.
“For Trichet, using the IMF would be an admission that Europe can’t deal with its own business,” said Gilles Moec, a senior economist at Deutsche Bank AG in London and a former Bank of France official. “Trichet’s very keen on saying that Europe has its own system of safeguards. He went almost as far as saying Europe has something in the pipeline.”
The region’s biggest deficit spender collides with Europe’s largest economy when Greek Prime Minister George Papandreou meets tonight in Berlin German Chancellor Angela Merkel, co-author of a Feb. 11 European pledge of “determined and coordinated action, if needed” to aid Greece.
Domestic Pressure
Facing political pressure at home not to squander German taxpayers’ money, Merkel said two days ago that tonight’s Berlin encounter won’t be “about aid commitments.”
Starting five days of financial diplomacy that take him to Berlin, Luxembourg, Paris and Washington, Papandreou pushed for European help in getting credit at rates below the 6.11 percent investors currently demand on Greek 10-year bonds. Papandreou will meet with U.S President Barack Obama and not the IMF in his swing through Washington.
“We’re not asking for money,” Papandreou said in an interview in today’s Frankfurter Allgemeine Zeitung. “We don’t want to be the Lehman Brothers of the EU. I’m not demanding loans for Greece at the same favorable conditions that Germany gets, but we need more favorable terms than we’re getting now.”
Greece bought time yesterday by selling 10-year bonds with investors bidding for more than three times the 5 billion euros it sought to raise. The goal was to avoid a repeat of a five- year note sale in January, when the debt tumbled on the first day of trading. Greece faces more than 20 billion euros in debt redemptions in April and May.
Wage Cuts
“Now it’s really playing for time,” said Carsten Brzeski, an economist at ING Group in Brussels who used to work at the European Commission.
Tax increases and pay cuts for government employees outlined on March 3 were designed to guarantee Greece would meet a January pledge to trim the deficit to 8.7 percent of gross domestic product from 12.7 percent, more than four times the euro region’s 3 percent limit.
Concern that Europe will fail to cope with Greece’s fiscal woes has knocked the euro down 5.4 percent against the dollar this year. Trichet’s opposition to the IMF as a safety valve further undercut the currency yesterday. It fell more than 1 cent to $1.3560.
“Europe is being short-sighted,” said Ted Truman, a senior fellow at the Peterson Institute for International Economics and a former adviser to U.S. Treasury Secretary Timothy F. Geithner. “If Europeans get it wrong then this impacts financial markets. It will likely impact European growth and that of the rest of the world.”
Greek Backlash
Yesterday brought mixed messages about Greece’s romance with the IMF. Finance Minister George Papaconstantinou called the IMF a last resort if the European Union fails to “rise to the occasion.”
That shifted the focus back to Greece’s efforts to get out of the fiscal jam on its own, a job made harder by protests against austerity steps by a socialist government that came to power in October on promises of higher wages and pensions.
“Grossly unfair” was the verdict of Dimitris Bratis, president of the Greek teaching federation, on NET TV yesterday. Teachers plan to walk off the job today, along with the main public transport union.
Trichet — involved in drawing up the Feb. 11 declaration of moral support for Greece — didn’t rule out European support yesterday, while keeping vague about what the EU would do.
“I gave publicly my support for the statement,” Trichet said, reading excerpts aloud at his Frankfurt press conference. “I take that commitment as very, very important.”
German lawmakers briefed on the aid discussions have spoken of contingency plans to offer Greece about 25 billion euros, enough to cover the maturing debt. One option may be for state- owned lenders such as Germany’s KfW Group to buy Greek bonds.
“It has been a game of chicken,” said Paul de Grauwe, a professor at the Catholic University of Leuven in Belgium. “The European authorities have not been willing to give clear signals because they are afraid that the Greeks will not go far enough in budgetary tightening. But now I think we can say the Greeks have gone quite far. The euro zone governments should take a step forward now which could create a virtuous circle.”
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