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45 and counting
Regulators shut 5 banks; 45 failures this year
By STEPHEN BERNARD and MARCY GORDON
NEW YORK (AP) - Regulators on Friday shut down five small banks, boosting to 45 the number of failures this year of federally insured banks. More are expected to succumb in the prolonged recession.
The Federal Deposit Insurance Corp. was appointed receiver of the failed banks: Community Bank of West Georgia, based in Villa Rica, Ga.; Neighborhood Community Bank, located in Newnan, Ga.; Horizon Bank in Pine City, Minn.; MetroPacific Bank in Irvine, Calif.; and Mirae Bank in Los Angeles.
Community Bank of West Georgia had $199.4 million in assets and $182.5 million in deposits as of May 15. Neighborhood Community Bank had $221.6 million in assets and $191.3 million in deposits as of March 31. Horizon Bank had $87.6 million in assets and $69.4 million in deposits as of March 31. MetroPacific Bank had $80 million in assets and deposits of $73 million as of June 8. Mirae Bank had $456 million in assets and $362 million in deposits as of May 29.
The two closures in Georgia brought to 14 the number of banks in Georgia that have failed since the beginning of last year, more than in any other state. Most of the failures have involved banks in the Atlanta area, where the collapse of the real estate market brought economic dislocation.
CharterBank, based in West Point, Ga., agreed to assume all of the deposits of Neighborhood Community Bank and to purchase about $209.6 million of the assets; the FDIC will retain the remaining assets for later disposition. Neighborhood Community's four offices will reopen as branches of CharterBank.
The FDIC said it will mail checks to Community Bank of West Georgia depositors for the amounts of their insured funds. Direct deposits from the government, such as Social Security and veterans' benefits, will be transferred to United Community Bank in Blairsville, Ga.
All of the deposits at Horizon Bank will be assumed by St. Cloud, Minn.-based Stearns Bank NA. Stearns Bank also agreed to purchase $84.4 million of Horizon Bank's assets. The FDIC will retain the remaining assets for later disposition. Horizon Bank's two offices will reopen Saturday as branches of Stearns Bank, and customers accounts will automatically be transferred to Stearns Bank.
Nearly all of MetroPacific Bank's deposits will be assumed by Tustin, Calif.-based Sunwest bank. Only about $6 million in brokered deposits will not be absorbed by Sunwest. The FDIC will pay brokers directly for the amount of those funds. Virtually all of MetroPacific Bank's assets are being purchased by Sunwest Bank. MetroPacific Bank's lone office will reopen Monday as a branch of Sunwest Bank. Deposits will be automatically transferred to Sunwest Bank.
Los Angeles-based Wilshire State Bank will assume all of Mirae Bank's deposits and $449 million of its assets. The remaining assets will be retained by the FDIC for later disposition. Mirae Bank's five offices will be reopened Monday as branches of Wilshire State Bank.
The 45 banks closed nationwide this year compare with 25 in all of 2008 and three in 2007.
The FDIC estimates that the cost to the deposit insurance fund from the failure of Community Bank of West Georgia will be $85 million. CharterBank's failure will cost the fund $66.7 million. The failure of Horizon Bank is expected to cost the fund $33.5 million, while the closure of MetroPacific Bank will cost the fund about $29 million. Mirae Bank's failure will cost the fund $50 million.
As the economy has soured, with unemployment rising, home prices tumbling and loan defaults soaring, bank failures have cascaded and sapped billions out of the deposit insurance fund. It now stands at its lowest level since 1993, $13 billion as of the first quarter.
While the pounding from losses on home mortgages may be nearing an end, delinquencies on commercial real estate loans remain a hot spot of potential trouble, FDIC officials say. If the recession deepens, defaults on the high-risk loans could spike. Many regional banks hold large numbers of them.
The number of banks on the FDIC's list of problem institutions leaped to 305 in the first quarter - the highest number since 1994 during the savings and loan crisis - from 252 in the fourth quarter. The combined assets of those banks rose to $220 billion from $159 billion.
The FDIC expects U.S. bank failures to cost the insurance fund around $70 billion through 2013. The agency recently adopted a new system of emergency fees paid by U.S. financial institutions that shifts more of the burden to bigger banks to help replenish the fund.
Congress has more than tripled the amount the FDIC may borrow from the Treasury Department if needed to restore the insurance fund, to $100 billion from $30 billion.
Government "stress tests" of the 19 biggest U.S. banks last month showed that 10 of them had to raise a total of $75 billion in new capital to withstand possible future losses.
A key government effort to ease the credit crisis reached a milestone on June 17 as 10 large banks said they had repaid a total of $68 billion in federal bailout funds.
The Obama administration on Friday established its process for pricing billions of dollars worth of warrants that large banks must repurchase to exit the $700 billion bailout program.
In addition to the $68 billion in bailout funds repaid by the 10 large institutions, another $2 billion has been repaid by smaller banks.
The closing last month of struggling Florida thrift BankUnited FSB is expected to cost the insurance fund $4.9 billion, the second-largest hit since the financial crisis began. The costliest was the July 2008 seizure of big California lender IndyMac Bank, on which the insurance fund is estimated to have lost $10.7 billion.
The largest U.S. bank failure ever also came last year: Seattle-based thrift Washington Mutual Inc. fell in September, with about $307 billion in assets. It was acquired by JPMorgan Chase & Co. (JPM) (JPM) for $1.9 billion in a deal brokered by the FDIC.
http://apnews.myway.com/article/20090627/D992S6D00.html

For sale on eBay: Obama's 'Kenyan birth certificate'
BORN IN THE USA?
For sale on eBay: Obama's 'Kenyan birth certificate'
Seller claims Mombasa document 'certified copy'
Posted: June 27, 2009 12:40 am Eastern
By Bob Unruh © 2009 WorldNetDaily
With dozens of lawsuits filed over access to Barack Obama's certified long-form birth certificate, many more lawyers working on his behalf to keep it secret and the validity of the U.S. Constitution hanging in the balance, guess where a "certified copy" of the original Mombasa "document" has been found? On eBay.
Item No. 160344928067, at least as of today, is described as "a certified copy of President Barack Obama's Kenyan Birth Certificate."
The seller, identified by the user name " colmado_naranja," states, "President Barack Hussein Obama II was born in The Coast Provincial Hospital at Mombasa inKenya at 7:24 PM on August 4th, 1961."
eBay offer for Obama's Kenyan birth certificate
The suspicion that Coast Provincial is, in fact, Obama's birth hospital is not new, with the subject having been discussed on both Internet blogs and forums already.
But the seller, who according to the eBay rankings has completed dozens of transitions on the behemoth auction site without difficulties, said this is the real deal.
The seller, who did not respond to a WND request for an interview, said online he was traveling in Kenya and repeatedly heard stories that Obama actually was born in Kenya.
"Kenyans were amused at how gullible Americans could be when it came to obvious things like the fact that Kenyans overtly admit to Barack Jr's Kenyan birth, yet the Americans continue to believe that they know better," the seller writes.
"I delved further and found that a birth certificate was on file at The Coast Provincial General Hospital at Mombasa," said the seller, who claims the certificate is in Cedar Rapids, Iowa.
"I know several American expats that reside in Kenya. I asked the three that I could reach if they were aware of President Barack Obama's Kenyan birth. All three said that they were most obviously aware of his Kenyan birth. I was shocked. They went to further say that they weren't much concerned with it, after all they'd left the U.S. to start a new life abroad and didn't have much interest in what was taking place in the States. Besides, they said, who would believe them anyway?
"Along with my Congolese brother Andylenny (brother in heart, not blood) and a 1993 BMW with only one working door I was off to Mombasa to get myself a copy (certified I hoped) of Barack Jr's birth certificate," the seller reported.
Actual details of how the "certificate" was obtained are not reported.
Search of eBay auction site for 'birth certificate' brought up this list
"I am not posting any photos of the birth certificate here on eBay. I have not seen this birth certificate anywhere on the Internet, to post it here on eBay would lead to a flood of facsimiles on the Internet. This would inadvertently decrease the value of the certificate as well," the seller said.
WND has reported on dozens of legal challenges to Obama's status as a "natural born citizen." The Constitution, Article 2, Section 1, states, "No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President."
Some of the lawsuits question whether he was actually born in Hawaii, as he insists. If he was born out of the country, Obama's American mother, the suits contend, was too young at the time of his birth to confer American citizenship to her son under the law at the time.
Other challenges have focused on Obama's citizenship through his father, a Kenyan subject to the jurisdiction of the United Kingdom at the time of his birth, thus making him a dual citizen. The cases contend the framers of the Constitution excluded dual citizens from qualifying as natural born.
Complicating the situation is Obama's decision to spend sums estimated in the hundreds of thousands of dollars to avoid releasing a state birth certificate that would put to rest all of the questions.
WND has reported that among the documentation not yet available for Obama includes his kindergarten records, his Punahou school records, his Occidental College records, his Columbia University records, his Columbia thesis, his Harvard Law School records, his Harvard Law Review articles, his scholarly articles from the University of Chicago, his passport, his medical records, his files from his years as an Illinois state senator, his Illinois State Bar Association records, any baptism records, and his adoption records.
Where's The Birth Certificate?" billboard in Pennsylvania
Because of the dearth of information about Obama's eligibility, WND founder Joseph Farah has launched a campaign to raise contributions to post billboards asking a simple question: "Where's the birth certificate?"
The campaign followed a petition that has collected almost 400,000 signatures demanding proof of his eligibility, the availability of yard signs raising the question and the production of permanent, detachable magnetic bumper stickers asking the question.
The birth certificate seller is a self-proclaimed "collector of old Dominican and Cuban money" and has worked in the Congo.
"This spring I traveled through Kenya and its capital Nairobi. I was overwhelmed by the 'iconicized' face of U.S. President Barack Obama that displays itself throughout the country. I had lunch at a small eatery and noticed that the club sandwich with fried plantains was now known as 'Obama's Plate of the Day,'" the seller writes. "As an American I was bombarded with questions in English (English is national language of Kenya) on my feelings and opinions of a Kenyan governing the United States of America. The first several times I responded in saying that not enough time had elapsed since Barack Obama's appointment as president of the U.S.A., and that I'd have to hold my official opinion until at least January 2010, a year in office might be sufficient for me to judge his ability to govern the U.S.A.
"Naturally I thought that by 'Kenyan' they were referring to Barack Obama's blood, being that his father Barack Obama Sr. was a native of Kenya. After a day and a half of my being in Nairobi I learned that they were literally referring to President Barack Obama Jr. as being born in Kenya, a native of Kenya."
The seller also cited the fact that Obama has not release his "Hawaiian" birth certificate. His administration, the seller sayd, "in an attempt to put the birth certificate issue to a rest, has presented the American public with a FAKE, FORGED, Fraudulent Hawaiian Birth Certificate."
The seller indicated a willingness to respond to questions about the item, for which bidding was set to begin at $1,000. But the seller said questions would be evaluated and may not get a direct response.
The "certification of live birth" posted online and widely touted as "Obama's birth certificate" does not in any way prove he was born in Hawaii, since the same "short-form" document is easily obtainable for children not born in Hawaii. The true "long-form" birth certificate – which includes information such as the name of the birth hospital and attending physician – is the only document that can prove Obama was born in Hawaii, but to date he has not permitted its release for public or press scrutiny.
Oddly, though congressional hearings were held to determine whether Sen. John McCain was constitutionally eligible to be president as a "natural born citizen," no controlling legal authority ever sought to verify Obama's claim to a Hawaiian birth.
If you are a member of the media and would like to interview Joseph Farah about this campaign, e-mail WND.
http://wnd.com/index.php?fa=PAGE.view&pageId=102271

Mounting Jobless Claims Force States To Borrow Funds
The government checks keeping Candy Czernicki afloat are fast running out. The reason? U.S. states obligated to pay benefits to the swelling ranks of jobless Americans are piling debt onto strained budgets.
Fifteen states have depleted their unemployment insurance funds so far, forcing them to borrow from the U.S. Treasury.
A record 30 of the country's 50 states are expected to have to borrow up to $17 billion by next year, said Rick McHugh of the National Employment Law Project, a nonpartisan advocacy group.
"We are setting the stage for big pressures for states to restrict eligibility and benefit levels," McHugh said. "Those type of restrictive actions undercut the (Depression-era program's) economic and social stability purposes."
The state-run unemployment insurance programs are normally financed with payroll taxes paid by employers on each worker. But the funds' tax revenues are falling at the same time as benefit demands are rising.
Nine million Americans are receiving jobless benefits, triple the number who got checks at the beginning of the year. Experts predict the number of recipients will peak sometime this summer as long-term unemployed run out of benefits, which were recently extended and last for 59 weeks in most cases.
"I believe I have two months of benefits left," said Czernicki, 44, who was laid off from her Eau Claire, Wisconsin, newspaper editing job last year.
Unforeseen Impact
"I am living with my sister because, after eight months of unemployment, I couldn't be living on my own any more," she said. "I don't think my sister will throw me out. I know at least that I am not going to be homeless."
Jonathan Cohen was laid off by a New Jersey nonprofit a few months ago and is growing discouraged. Competition for available jobs is fierce and he fears his monthly unemployment insurance checks will stop before he lands a new position.
"Once unemployment runs out then I'm 100 percent drawing down on my savings," Cohen said. "I'm hoping that as the (federal) stimulus money gets through the pipelines you'll start to see more openings."
The majority of states that did not foresee the recession's devastating impact and failed to create an adequate cushion in their unemployment insurance funds may seek to raise payroll taxes, meeting resistance from employers, experts predicted.
"State unemployment taxes will have to go up, but unemployment will have to come down," said Andrew Stettner of the National Employment Law Project.
The financial stress on states is only part of a larger budget debacle most face.
Forty-six states have collective budget deficits totaling at least $130 billion, according to the Center on Budget and Policy Priorities, and lawmakers are having to make unpalatable choices between tax increases and spending cuts.
Stimulus Helped
The $787 billion federal stimulus package offered the states $7 billion to expand who qualifies for unemployment benefits, and to extend the length of time benefits are paid to 59 weeks from 26. The package also permitted states to borrow interest-free through 2010 but the money must be repaid.
The last time so many states needed to borrow because of depleted unemployment insurance funds was in the 1980s.
"It's nothing new and it has been done before. So far ... not one unemployment check has bounced in this country and it just won't happen," said Diana Hinton Noel of the National Council of State Legislatures.
CNBC.com Blog: Executive Careers
One difference is the current recession is broader and has spared few states. The economy shed more than 500,000 jobs in each of the first four months of the year and the U.S. jobless rate is expected to climb above 10 percent by year-end.
Michigan, which of all the states had the highest unemployment rate in May at 14.1 percent, has doubled borrowings for its unemployment insurance fund to more than $2 billion since the beginning of the year. California owes the federal treasury nearly $1.5 billion and New York owes more than $1.3 billion, up from $358 million in January.
A few years ago, Texas sold up to $500 million in municipal bonds to meet its unemployment insurance obligations.
Jobless benefits are typically about half the worker's last salary. European countries are more generous, paying 60 percent to 80 percent of a worker's lost wages for at least a year.
A recent U.S. survey by CareerBuilder.com, an online job search Website, concluded that 23 percent of jobless Americans rely on unemployment checks to get by.
The checks often supplement meager earnings from part-time or temporary jobs.
"I have been taking just about anything but I don't know if I am going to be steadily employed," said Harvey, 53, a Milwaukee, Wisconsin, salesman who declined to give his last name. He was let go a year ago by a store selling recreational vehicles when customers stopped showing up.
"When you lose your job, your bills don't stop, they keep coming in. It's a tough market out there. I have lowered my standards, taken odd jobs. No one wants to pay you benefits or a decent wage," he said.
http://www.cnbc.com/id/31565441

Pentagon to Track American Consumer Purchases
WASHINGTON — A massive database that the government will use to monitor every purchase made by every American citizen is a necessary tool in the war on terror, the Pentagon said Wednesday.
Edward Aldridge, undersecretary of Acquisitions and Technology, told reporters that the Pentagon is developing a prototype database to seek "patterns indicative of terrorist activity." Aldridge said the database would collect and use software to analyze consumer purchases in hopes of catching terrorists before it's too late.
"The bottom line is this is an important research project to determine the feasibility of using certain transactions and events to discover and respond to terrorists before they act," he said.
Aldridge said the database, which he called another "tool" in the war on terror, would look for telltale signs of suspicious consumer behavior.
Examples he cited were: sudden and large cash withdrawals, one-way air or rail travel, rental car transactions and purchases of firearms, chemicals or agents that could be used to produce biological or chemical weapons.
It would also combine consumer information with visa records, passports, arrest records or reports of suspicious activity given to law enforcement or intelligence services.
The Defense Advanced Research Projects Agency is home to the Pentagon's brightest thinkers -- the ones who built the Internet. DARPA will be in charge of trying to make the system work technically.
Rear Adm. John Poindexter, former national security adviser to President Reagan, is developing the database under the Total Information Awareness Program. Poindexter was convicted on five counts of misleading Congress and making false statements during the Iran-Contra investigation. Those convictions were later overturned, but critics note that his is a dubious resume for someone entrusted with so sensitive a task.
Aldridge said Poindexter will only "develop the tool, he will not be exercising the tool." He said Poindexter brought the database idea to the Pentagon and persuaded Aldridge and others to pursue it.
"John has a real passion for this project," Aldridge said.
TIAF's office logo is now one eye scanning the globe. The translation of the Latin motto: knowledge is power. Some say, possibly too much power. "What this is talking about is making us a nation of suspects and I am sorry, the United States citizens should not have to live in fear of their own government and that is exactly what this is going to turn out to be," said Chuck Pena, senior defense policy analyst at the Cato Institute.
Pena and others say the database is an even greater violation of privacy rights than Attorney General John Ashcroft's nixed proposal to turn postal workers and delivery men into government tipsters. No matter what protections Congress requires, Pena fears a database big enough and nimble enough to track the entire nation's spending habits is ripe for abuse.
"I don't think once you put something like this in place, you can ever create enough checks and balances and oversight," Pena said.
But proponents say big business already has access to most of this data, but don't do anything with it to fight terrorism.
"I find it somewhat counter intuitive that people are not concerned that telemarketers and insurance companies can acquire this data but feel tremendous trepidation if a government ventures into this arena. To me it just smacks of paranoia," said David Rivkin, an attorney for Baker & Hostetler LLP.
The database is not yet ready and Aldridge said it will not be available for several years. Fake consumer data will be used in development of the database, he said.
When it's ready, Aldridge said individual privacy rights will be protected. But he could not explain how the data would be accessed. In some cases, specific warrants would give law enforcement agencies access, he said. But in other cases the database might flag suspicious activity absent a specific request or warrant, and that suspicious activity could well be relayed to law enforcement or intelligence agencies.
"I don't know what the scope of this is going to be," Aldridge said. "We are in a war on terrorism. We are trying to find out if this technology can work."
http://www.foxnews.com/story/0,2933,70992,00.html