Volume 5 Number 38 September 19, 2008 |
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CONSUMER SERVICES HELPLINE
877-MY-FL-CFO |
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This was a history-making week in the global financial
markets. Lehman Brothers, a 158-year-old investment firm,
has declared bankruptcy; the federal government is
financially supporting AIG, a large insurance and investment
company; and the United States Treasury is working on a plan
to purchase the billions in “bad debt” carried by financial
firms in an effort to improve the American economy.
Many of us have heard about the current financial crisis on
Wall Street, but it can be difficult to understand exactly
what it means. Recent events make crystal clear the need for
increased regulatory oversight of large financial
institutions to better protect consumers. But what does this
week’s news mean to the average Florida family?
Simply put, this is NOT the time to panic and take your
money out of your bank or out of the market. Many of your
accounts are probably protected:
- Your Bank—Make
sure your bank is FDIC-insured. As an individual, your
deposits are insured up to $100,000 in an FDIC-insured
bank. This includes your savings, your checking, any
certificate of deposits (CDs) and money market accounts.
Joint accounts can be insured up to $200,000. IRAs and
Keoghs for the self-employed — can be insured up to
$250,000. Talk to your banker if you have questions or
concerns about your accounts.
- Lehman Brothers
–If you have a brokerage account with Lehman Brothers,
your investments will be protected up to $500,000 by the
Securities Investors Protection Corp (SIPC). For more
information on these protections, visit the SIPC Web
site at www.sipc.org.
- Merrill Lynch—If
you have investments with Merrill Lynch, they will
become part of Bank of America and are subject to the
same SIPC protections. For more information, call your
local Merrill Lynch advisor or their U.S. customer
contact line at 1-800-MERRILL (637-7455)
- AIG—If you have
an insurance policy with American International Group
(AIG), do not be alarmed. It is NOT AIG’s insurance
companies that are having difficulty, and these policies
are not impacted by the news. Even when an insurance
company has financial problems, the state insurance
regulator where the company is headquartered will take
control of the company and ensure claims payments are
made. If you have questions, contact your insurance
agent for additional information.
If you have additional questions, please feel free to
contact the Department of Financial Services Consumer Help
line at 1-877-MY-FL-CFO. Or visit our Web site at
www.MyFloridaCFO.com.
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CFO SINK LEADS FLORIDA CABINET IN REJECTING OVERPRICED
LAND DEAL
Florida Chief Financial Officer Alex Sink led the Florida Cabinet in
objecting to using nearly $38 million in tax dollars to purchase a
parcel of land known as Pine Plantation that the state twice appraised
for $28 and $25 million, respectively. Following CFO Sink’s comments and
a lengthy discussion, the Florida Cabinet voted 2-2 against paying a
Central Florida attorney $15 million more than his purchase price only 2
½ years earlier.
Following the Florida Cabinet meeting, Chief Financial Officer Alex Sink
offered the following comments:
“I’m proud that the Florida Cabinet made the right decision today to
reject spending $38 million in tax dollars in an overpriced land deal.
People are suffering right now, and our state has enormous economic
needs.
"As Florida’s fiscal watchdog, I am committed to speaking out about
wasteful government spending. Like Florida’s families are doing
everyday, government must set priorities and only spend tax dollars when
it is wise and economically sound to do so.”
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CFO SINK ON WALL STREET FINANCIAL CRISIS
Millions of Floridians awoke this past Monday to news of
increased volatility among several global financial
institutions. Monday’s tumultuous events continue the global
financial turmoil witnessed during the last 18 months, and
provide clear evidence that the federal government needs to
provide increased oversight of large financial institutions
to better protect consumers.
The Florida Treasury held $139.5 million par value in Lehman
Brothers Holding, Inc., bonds as of Friday, September 12,
2008. Of this amount, $104.1 million was senior debt and
$35.4 million was subordinated debt. The total exposure
represents less than 0.6 percent of Treasury investments,
which total $24 billion. The Treasury is proceeding with an
orderly liquidation of the subordinated debt this month.
Florida Chief Financial Officer Alex Sink offered the
following comments on the growing Wall Street financial
crisis:
“As Florida’s Chief Financial Officer, my highest priority
during the last 20 months has been working to increase
safeguards over Floridians’ tax dollars. Under my direction,
the Treasury has tightened its investment decisions and
limited exposure to any one individual corporation. While
our nation is experiencing significant financial disorder,
investment firms can and do fail from time to time, and
investors must position portfolios to weather financial
storms. We have positioned Florida’s Treasury to meet the
cash needs of investors and balance the obligations of the
state.
“Finally, as one of three Trustees for the State Board of
Administration (SBA), I have asked General Milligan, the
Interim Executive Director of the SBA, to provide analysis
during Tuesday’s Cabinet meeting of any potential impact the
financial markets may have on our retirees’ pension fund and
other SBA-managed funds.”
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| Right,
CFO Alex Sink with Claudia Sachs |
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Left
to right: AG Bill MCollum, Gov. Charlie Crist, CFO
Alex Sink, Agric. Comm. Charlie Bronson, Paul
Auslander, Allen Arntzen, Matthew McGrath, Michael
Zmistowski, Claudia Sachs, Kevin Berkowitz |
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CFO ALEX SINK RECOGNIZES 'FINANCIAL
PLANNING WEEK'
At Tuesday's meeting of the Florida Cabinet, Florida Chief
Financial Officer Alex Sink designated the week of October 6
through 12, 2008, as “Financial Planning Week.”
CFO Sink’s resolution, also recognizing the Financial
Planning Association of Florida, designates “Financial
Planning Week” as a time to remind Florida’s citizens of the
importance of financial planning to assist in making prudent
financial decisions to achieve their goals and dreams.
“During this volatile economic climate, it is essential that
Floridians plan financially as much as possible,” said CFO
Sink, who oversees the Department of Financial Services
(DFS). “Too many Floridians are living paycheck-to-paycheck,
not saving for a rainy day and living above their means.
This week and throughout the year, my office is working to
educate Floridians on making better financial decisions and
planning for a more financially secure future.”
CONTINUED |
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Energy tips for Florida families - these actions
represent ways to behave kindly toward Mother Earth,
AND save money as well as energy.
Presented
by
CFO Alex Sink's science advisor Meg Lowman, Ph.D.,
on the faculty at New College of Florida. Dr. Lowman
has written numerous award-winning books and is an
expert on the rain forests of the world. |
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Lower your energy bill with efficient water heating
Water heating is the third largest energy expense in your
home, typically accounting for about 13 percent of your
utility bill. Try to cut your water heating bills by
turning down the thermostat on your water heater, using less hot
water, insulating your water heater, buying a new, more efficient
water heater or installing a solar water heater.
Much of your household energy bill comes from maintaining
hot water in the storage tank, ever ready to be utilized. Lower the
thermostat - water heaters come from the
factory with high temperature settings, but a setting of
120°F provides comfortable hot water for most uses.
First try a few degrees lower than it is currently set, then
lower again to reach the optimum
level of comfort for your family.
Bathing uses the most hot water in the average household.
Showers are more efficient than baths - and take shorter
showers.
Insulate your hot-water storage tank, being careful to
follow the manufacturer's recommendations. Although most
storage-tank heaters last 10-15 years, start thinking about
a new one if yours is more than seven years old.
Efficiency has improved in newer models.
CONTINUED
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MORTGAGE BROKER AND PASTOR CHARGED WITH
BILKING CONSUMERS IN $1 MILLION SCHEME
A Florida mortgage broker and her husband, a pastor and
popular radio show host from Jensen Beach, are facing
numerous felony charges stemming from a state investigation
that found the couple allegedly scammed consumers in a real
estate investment scheme. Investigators said the couple has
been enjoying expensive leased vehicles while sticking their
“clients” with more than $1 million in mortgage debt.
Shalonda McGill and her husband Rodney McGill were arrested
today on charges of Racketeering, first degree; Conspiracy
to Commit Racketeering, first degree; Grand Theft, first
degree; Grand Theft, third degree; and Obtaining a Mortgage
by False Representation, third degree. The Department of
Financial Services’ (DFS) Division of Insurance Fraud and
the Office of Financial Regulation (OFR) conducted the
investigation.
“It appears that these individuals used their positions in
the community to take advantage of people who trusted them,”
said Florida Chief Financial Officer Alex Sink, who oversees
DFS. “The evidence our investigation uncovered indicates
these two improved their own bottom line while financially
devastating the Floridians they promised to help.”
CONTINUED
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My Family CFO
Are you the chief financial
officer of your family? Are you always looking out
for the best deals, wise investments and smart moves
for your family's financial security?
As your family's fiscal
watchdog, keep an eye on
this column for money-smart ideas from the Chief
Financial Officer of Florida,
Alex Sink. |
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Idea: Know the details of your financial accounts
Your brokerage account will be protected up to $500,000
by the Securities Investors Protection Corp. The Securities
and Exchange Commission has strict rules about keeping the
brokerage’s money separate from your investments. If the
firm goes under, your money should still be there.
IIf you’re worried about the health of your bank, make sure
your bank is FDIC-insured. As an individual, your deposits
are insured up to $100,000 in an FDIC-insured bank. This
includes your savings, your checking, any certificate of
deposits (CDs) and money market accounts. Joint accounts can
be insured up to $200,000. IRAs and Keoghs — these are
retirement plans for people who are self-employed — can be
insured up to $250,000.
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THIRD ANNUAL VOLUNTEER FIREFIGHTER TRAINING
THIS WEEKEND
The third annual Northwest
Florida Volunteer Firefighter Weekend will be held September
19 -22, 2008, at the Okaloosa/Walton College, 100 College
Blvd., in Niceville, Florida.
Chief Financial Officer Alex Sink's State Fire Marshal's
office and the Florida State Fire College will be assisting
with the volunteer firefighter weekend which offers Florida’s
volunteer firefighters access to training to keep them
up-to-date on new firefighting techniques so they can better
protect their communities.
Starting today, firefighters from across Florida
will kick-off the weekend of free training with an
extrication extravaganza. A record number of participants is
expected, with the opportunity to view and
use some of the newest technology available for rescuing
those trapped by accidents and disasters, manmade or
natural.
The
weekend classes, ranging from four to 16 hours
in length, will feature live fire evolutions, a National Fire Academy
program, a wild lands fire class, a firefighter safety and
survival program and a highway safety operations class.
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INSURANCE CONSUMERS PROTECTED BY SOLVENCY
STANDARDS
Regulatory Safeguards Offer ‘Insurance Policy’ in Times of
Crisis
KANSAS CITY, Mo. (Sept. 16, 2008) — National Association of
Insurance Commissioners (NAIC) President and Kansas
Insurance Commissioner Sandy Praeger issued the following
statement in response to the financial issues facing
American International Group (AIG):
“We have a very strong message for consumers: If you have a
policy with an AIG insurance company, they are solvent and
have the capability to pay claims. Our job is to ensure that
they continue to have the ability to pay.
“In this particular instance, AIG’s insurance subsidiaries
are being asked to provide liquid assets to the financially
distressed non-insurance parent company in exchange for
non-liquid assets. The New York State and Pennsylvania
Insurance Departments are working with AIG to review the
transaction. State insurance regulators will only approve
this type of action if they are assured it is part of a
total resolution of the liquidity issue at the parent
company and fairly compensates its insurance company
subsidiaries.
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