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Has government regulation gone too far?


The Consumer Financial Protection Bureau is in the process of defining a "qualified residential mortgage," which determines what makes a loan safe. It requires banks to retain 5% of the risk on non-QRM loans it securitizes before packaging and selling them to investors.

The risk retention requirements were called for in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The rule is an attempt to correct market practices that led to the housing crisis: allowing people to buy more house than they could afford with no financial stake in whether they were able to repay their loans or not.

But critics are saying the regulation will do more harm than good, cutting perfectly capable borrowers out of the market or into higher cost loans.


"I want to be sure that our government fixes whatever broke the housing market," writes Michelle Singletary, a syndicated columnist who appears in The Buffalo News. "But if borrowers have to wait to save up a 20 percent down payment to qualify for the best mortgage deal, we will be putting home ownership out of the reach of a lot of people, particularly low- to middle-income borrowers."

She's not alone in believing the regulation could negatively affect low-income families and people of color

The Woodstock Institute, a non-profit research and policy organization, said the idea behind the so-called "QRM" is a good one, but that "unfortunately, regulators went overboard in defining [it]."

It sees other problems, too.


"Lenders may raise prices to compensate for having to retain some risk and it may crowd out smaller lenders who can't afford to retain risk, shrinking the mortgage credit market," writes the Woodstock Institute. "More importantly, a 20 percent down payment doesn’t significantly lower the default rate."

The National Association of Realtors is against it. So is the Center for Responsible Lending. The Mortgage Bankers Association, too.

Where do you stand on the issue? If larger down payments aren't the answer, what is?



State hanging "open for business" sign


Gov. Andrew M. Cuomo's $50 million advertising campaign to attract businesses to New York State is set to launch next week. The money will pay for ads around the country letting business owners know that New York is "open for business."

There is debate over whether that is money well spent.

The Manhattan-based agency that landed the contract to handle the campaign, BBDO, is certainly happy about the launch, as are many economic development agencies and other groups.

But not everyone is singing the project's praises.

"If Governor Cuomo really wanted to make New York "open for business," he could do it without spending a dime," writes the Suffolk County Liberal Report. "Just focus on cutting the three New York State business killers--taxes, regulations and eco insanity."

Cuomo has also vowed to pump $1 billion directly into the Buffalo economy in the form of incentives offered to companies willing to build or expand here. In his keynote address at The Buffalo News' Prospectus launch, M&T Bank CEO John R. Koelmel said the money presents the opportunity of a lifetime.

"We as a region need to get behind and help--and be part of what will be and must be a real success. We finally have a road map for sustainable success, and we just need to get after it," he said.

 What do you think? Is this influx of money a good investment in Buffalo and New York State?

Concerned bank investors speak out.

From Business Today:


First Niagara Financial Group CEO John R. Koelmel spent much of the company's annual meeting defending himself and the company's business strategies Wednesday. He spoke before about 75 investors, many of them disgruntled about First Niagara stock's decline and dividend cut in 2011. Koelmel attributed the bank's slipping performance to several factors outside the company's control and said it had nothing to do with its $1 billion purchase of 195 HSBC Bank USA branches.


Profits were up at Evans Bancorp during the first quarter. Profits rose at the 26.9 percent from a year ago.  It reported net income of $2.4 million, or 58 cents per share, up from $1.9 million, or 46 cents per share, in the same period a year ago. The increase was attributed to growing loan revenues, rising deposits and strenghtened credit. Evans Bancorp is the Hamburg-based parent of Evans Bank.


Pinnacle Airlines will be under the microscope of federal aviation safety inspectors since filing for bankruptcy, to be sure the company's financial problems will not encourage it to take shortcuts that might put passengers at risk. Enhanced oversight is the standard policy for the Federal Aviation Administration when any passenger airline files for bankruptcy.


The New York State Power Authority's Recharge New York program will give 64 Western New York Companies low-cost electricity. The biggest local recipient, Calspan Corp., will receive 5,500 kilowatts. Others to receive the low-cost power include Roswell Park Cancer Institute, Buffalo General Hospital, and Yahoo Inc.



Profits were up at Financial Institutions during the first quarter. Profits rose six percent, while the company reported net income of $6.2 million, or 42 cents per common share, up from $5.8 million, or 33 cents per share, a year ago. The bump is attributed to an increase in loans and lending income. Financial Institutions is the Warsaw-based parent company of Five Star Bank.

Who is getting hired, promoted and honored?

The Reverend Horton Heat will be at the Tralf tonight:


Western New York Recharge New York Power Allocations

Click below to see list of the Western New York power allocations:

Download Western New York April 2012 RNY Allocations

New venture funding for local firm

From Business Today:


Profits were up at Community Bank System during the first quarter. The DeWitt-based bank is in the process of buying 19 bank branches from HSBC Bank USA and First Niagara Financial Group. Profits rose 16.5 percent, while the company reported net income of $18.8 million, or 48 cents per share, up from $16.2 million, or 48 cents per share. The increase was attributed to higher revenues from an earlier acquisition last April, as well as growth in deposits.


Liazon Corp. has received $18.2 million in venture funding from Bessemer Venture Partners and Fidelity Biosciences, along with follow-up capital from existing investors Bain Capital Ventures and Buffalo-based Rand Capital SBIC. The Buffalo-based company operates a private health insurance exchange system for small businesses.


Profits at Northwest Bancshares were down during the first quarter. The Pennsylvania-based company is the parent of Northwest Savings Bank, which operates as Jamestown Savings Bank in Chautauqua County. It had net income of $15.2 million, or 16 cents per share, down from $17.3 million, or 16 cents per share, a year ago. The loss was attributed to lower revenues and higher expenses despite loan growth and an improvement in credit quality.


Accounting students from the University at Buffalo’s School of Management donated nearly 2,200 hours of tax service during the 2012 season, preparing more than 900 tax returns for low-income taxpayers. That resulted in a total of $1.35 million being refunded to individuals and families.


Who is getting hired, promoted and honored?

Speaking of taxes:


Embrace our Canadian visitors.

From Business Today:


 Retailers in Western New York know what a boon Canadian shoppers are to their bottom line, but businesses in other industries apparently don't, according to new market research. Visiting Canadians spent $933 million here last year, but just 13 percent of it was spent on sightseeing and recreation. That's an untapped audience with huge potential and spending clout. Executives from Visit Buffalo Niagara and the Niagara Tourism and Convention Corp. shared ideas for how local businesses could better take advantage of the opportunity at two seminars Monday.


A public authority oversight agency has determined that, according to current laws, a company that eliminated workers here committed no job piracy. After taking 15 years of tax breaks from the ECIDA, VWR Education eliminated 41 jobs at its warehouse in the Town of Tonawanda. At the same time, it added seven jobs at its facility near Rochester, and received tax breaks from the Monroe County IDA for doing so. Politicians and activists filed a complaint, saying the company was shifting jobs around New York State at taxpayer expense, but the New York State Authorities Budget Office disagreed, according to a report resulting from its investigation.


Profits were up during the first quarter at a Buffalo-based information technology staffing and services company. Computer Task Group saw an 18.8 percent increase in profits. It reported net income of $3.36 million, or 20 cents per share, up from 42.83 million, or 17 cents per share, compared to the same period a year ago. The increase is attributed to higher revenues, especially from electronic medical records and other health care technology solutions.


After being ordered by state regulators to check their insurance records against federal death data, life insurance companies found that hundreds of millions of dollars in insurance policy claims have gone unpaid. More than 30,000 policies and $262.2 million in benefits went unpaid because insurers failed to check whether their policyholders had died. In New York State, 7,525 policyholders have received $95.9 million in unpaid benefits. The results came after an investigation was launched by the state Department of Financial Services. To search for a lost policy, click here.

Who is getting hired, promoted and honored?

Looks like another lovely spring day:


Elmwood Avenue apartments.

From Business Today:


The Lafayette Avenue Presbyterian Church will convert its office space and former school into about 23 market-rate apartments. The added income would help support the struggling church, whose congregation has gotten smaller and smaller throughout the years. The church has lined up a construction loan and long-term mortgage from Evans Bank and will also use historic tax credits and invest some of the congregation's money to finance the work.


Check out what real estate sold for in Erie and Niagara counties in today's real estate listings.

Who is getting hired, promoted and honored?


From MoneySmart:

The lessons people learned during the Great Depression stuck with many of them throughout their lives--even when times got better. The lessons from the Great Recession have been a bit more fleeting. Get a refresher course on thriftiness in today's MoneySmart from a true depression-era pro.

It's beginning to look a lot like Christmas out there:



Getting back to work.

From Business Today:

JobSeekersThe job-growth rate in the Buffalo Niagara region accelerated in March. The region saw a one percent annual growth rate compared to the same month last year, adding 5,400 jobs. It's the strongest growth rate in six months. The labor department attributes the improvement to strong growth in construction work and a rebound in manufacturing.


Sprint Nextel Corp. has been purposely dodging taxes since 2005, according to Attorney General Eric Schneiderman. The cell phone company failed to collect $100 million in state sales tax from customers, ducking out of its obligation to pay New York State $200,000 per week. Schneiderman called the failure to pay a "deliberate" plan to keep the cell phone company's prices more competitive.  Dupont

  The blast that killed a welder and injured an Angola man two years ago was partly caused by procedures followed at the DuPont plant on River Road in the Town of Tonawanda. According to a report released Thursday by the U.S. Chemical Safety and Hazard Investigation Board, technicians should have tested the tank the welders were working on to be sure they weren't flammable.  

 The Clarence Industrial Development Agency will consider tax breaks for a new office park on Sheridan Drive near the Eastern Hills Mall. The IDA will hold a public hearing next month in consideration of granting tax breaks to the $2.1 million project. The Rockledge Professional Office Park is being proposed for vacant land at 8175 Sheridan Drive, on the south side of the street, just east of Transit Road.


Profits soared at First Niagara Financial Group during the first quarter. First-quarter profits were up 22 percent from a year ago, thanks to higher loan and fee revenues offsetting higher expenses from an acquisition in Connecticut. The company reported net income available to common shareholders of $54.8 million, up from $44.9 million.

 Who is getting hired, promoted and honored?

I'll bet Grant Cardone is glad it's Friday. The motivational speaker who appeared in Buffalo this week was on the Delta flight that had to make an emergency landing after striking birds. Here is a video from Cardone after it happened:


Getting motivated, getting confident.

From Business Today:


Motivational sales expert and author Grant Cardone spoke to about 250 attendees at Statler City Wednesday. It was one of 20 pro-bono stops on his speaking tour, donated to churches, schools and communities. His message incorporated the usual get-you-hyped-up stuff, but also tied in references to the recession and Western New York's challenging economy. He encouraged attendees to see both as an opportunity to be bold when their competition is being defensive.


For the first time in five years, consumer confidence in the Buffalo Niagara region is on the upswing. A survey of 400 people conducted by researches at Siena College has revealed that consumers here are more willing to make purchases than they have been during any year since the first quarter of 2007, before the Great Recession hit. Shoppers here are especially willing to buy furniture and pay for home improvements, the survey said.



Three local banks have been ranked among the best performing in the nation by Virginia-based industry research firm SNL Financial. Buffalo-based First Niagara Financial Group, Community Bank System of DeWitt and NBT Bancorp of Norwich ranked in the top 25 regional banks based on profitability and other factors, according to SNL.


West Herr Automotive Group has opened its new Mercedes-Benz of Rochester dealership, which employs 52 people. West Herr bought Mercedes-Benz of Rochester and BMW of Rochester from Holtz House of Vehicles in 2010. It leased that facility while it completed the new one at 4296 West Henrietta Road in Henrietta.

Who is getting hired, promoted and honored?

Grant Cardone uses a video of his child crying to help him close sales. When one client hesitated to pay his full speaking fee, he sent a link to this video and told him, "You're not paying me to speak. You're paying me to leave my family."


Small business, schools and the border.

From Business Today:

The annual meeting at M&T Bank is a must-pay-attention-to eventBANK_002 because of the star speaker, the bank's Chairman and CEO Robert G. Wilmers. Each year, Wilmers uses the bully pulpit to discuss issues affecting the bank and the economy. This year, Wilmers addressed two somewhat related themes: the difficulty of small business to get going and hire more people and the failure of schools to prepare students to enter the workforce. 

The counsul general of Canada says the smoother the U.S. and Canada can make border crossing, the better for both economies. MOSZCZENSKAMarta Moszczenska spoke at a World Trade Center event, noting that the border crossing will never go back to the days a few decades ago when crossing was simple. but keeping the crossing as open as possible will help the Niagara region stay close and maximize the economies of both sides.

The Gaymar Industries factory in Orchard Park is for sale, even though the company is still operating. Gaymar's owner, Stryker Corp., of Michigan, announced in December it was closing the Orchard Park facility. It's getting a head start on selling the place.

The East Village Lofts project on Broadway in Buffalo has been refinanced by a firm that helps support low-income housing projects. The converted warehouse at 937 Broadway near Fillmore Avenue now has 42 apartments. The project was Broadway Apartmentsdeveloped by Eran Epstein's E-Square Capital and his Long Island-based partner Christopher Gerhart.

Who is getting hired, promoted or honored?

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