US Bank BAC 2011: US Bank Official Site: The U.S. Treasury Department proposed changes to an anti-poverty tax credit program that has drawn scrutiny from some members of Congress.
The changes to the New Markets Tax Credit are designed to make the program’s benefits more readily available to businesses outside the real estate industry. Through 2009, 35 percent of money invested through the program has gone to non-real estate businesses, according to the proposed regulations issued today by the Treasury Department and the Internal Revenue Service. The agencies are seeking public comments on the proposals.
The changes to the New Markets Tax Credit are designed to make the program’s benefits more readily available to businesses outside the real estate industry. Through 2009, 35 percent of money invested through the program has gone to non-real estate businesses, according to the proposed regulations issued today by the Treasury Department and the Internal Revenue Service. The agencies are seeking public comments on the proposals.
Bank of America Corp. (BofA) headed to a two-year low in New York trading on concern that a stalling U.S. job market will drive up costs from bad mortgages.
The biggest U.S. lender by assets declined 36 cents, or 3.2 percent, to $10.92 in New York Stock Exchange composite trading at 1:58 p.m. The bank hasn’t closed at a lower price since May of 2009. The stock sold for more than $55 in 2006 before the financial crisis took hold.
Chief Executive Officer Brian T. Moynihan, 51, has assured investors that costs tied to defective mortgages and improper foreclosures can be absorbed without selling new stock to raise capital. His task may be harder after the U.S. jobless rate rose to 9.1 percent and employers added the fewest workers in eight months during May, meaning more unemployed people may fall behind on loans.
“We’ve been getting consistent signals that we continue to see growth, but those signals recently have had some choppiness to them in terms of new unemployment claims,” Moynihan said during a May 24 investor conference.
Bank of America has declined about 29 percent in the past year of New York Stock Exchange composite trading, the worst performance on the 24-company KBW Bank Index. The lender was the only U.S. bank among the largest four that had its capital plan rejected by the Federal Reserve this year.
Moynihan told investors last week that new claims tied to bad mortgages tend to track the jobless rate, and he was pursuing ways to put housing liabilities behind the firm. The bank disclosed in January a $3 billion deal to settle some loan disputes with Fannie Mae and Freddie Mac and agreed in April to pay $1.6 billion to resolve claims with bond insurer Assured Guaranty Ltd.
Resolving Fights
Moynihan, who said last year the bank was engaged in “hand-to-hand combat” to fend off the claims, told investors this month that “there’s a point when fighting doesn’t have any value.”
Bank of America, the biggest servicer of U.S. mortgages, is among firms negotiating with state attorneys general to settle allegations that the banks seized homes during foreclosures by using legal shortcuts and falsified documents. The largest servicers are discussing a framework that may let them choose from a menu of options for helping borrowers, two people briefed on the talks said in May.
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