Volume 5, Number 39, September  26, 2008


Washington Mutual (WaMu), one of Florida’s 10 largest banks, was taken over by the Federal Deposit Insurance Corporation (FDIC) Thursday night. All of WaMu’s branches, deposits and assets were immediately sold to JPMorgan Chase, providing customers full access to their accounts and the ability to continue banking as usual.

It is important for Floridians banking with WaMu to understand that due to the quick sale to JPMorgan Chase, bank branches will be open and business will continue as normal. WaMu customers with questions can visit their local branch, call the customer service division at 1-800-788-7000, or call the FDIC Call Center at 1-877-275-3342 for more information.

WaMu customers should hear from JPMorgan Chase soon, as happens under normal circumstances when one bank buys another. All deposit accounts, including savings, checking, money market, and retirement accounts and certificates of deposit, have become part of JPMorgan Chase Bank, although the signs may not change for awhile.

Direct deposits such as payroll or Social Security checks will continue as normal, as will use of your debit card. WaMu customers can still use the checks you have now, and checks already written will be honored provided that you have sufficient funds in the account. Loan payment amounts and due dates will not change, automatic payments will continue as usual and online banking remains available.

The crisis on Wall Street and in the financial markets is undoubtedly unsettling for Floridians who bank with WaMu. It also raises questions for all of us about what happens when a bank fails and what our individual responsibilities are as customers.

Here are some important things you need to know to weather a bank failure:
  • Be sure your accounts do not exceed FDIC insurance limits. The FDIC insures deposits titled in your name up to $100,000 in any one bank. Deposit accounts include checking and savings accounts, money market accounts and Certificates of Deposit (or CDs). For more information on FDIC insurance coverage of your deposits, visit the FDIC website www.fdic.gov or call them at 866-806-5919.
  • IRA accounts are also insured by the FDIC for up to $250,000. If you have more than one IRA, talk to your banker about ways to maximize the available FDIC insurance.
  • If your bank is taken over, you do NOT have to fill out any paperwork for the FDIC for your account to receive their protection. Floridians banking with WaMu do not have to do anything to continue their FDIC protection.
  • If you have a mortgage or other loan with a bank that is taken over by the FDIC, your loan terms will remain the same. Make your loan payments to the same address – and be sure they are on time! Loan payments should continue to go to the same address unless notified properly by the FDIC to send payments to a new address. Your loan may be transferred to a different lender, but the terms would remain the same.
  • Beware of scams and the opportunity for identity theft. Talk with your bank if anything seems out of the ordinary or suspicious. The FDIC and your bank WILL NOT call or email you to verify account numbers, personal information including social security numbers.
  • 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.

    CFO immediately orders corrective action to increase safeguards; CFO-ordered audit is first of its kind for Accounting and Auditing Department in ten years

    Continuing her systematic performance evaluation of the divisions within Florida’s Department of Financial Services (DFS), Florida Chief Financial Officer Alex Sink released the results of a performance audit of electronic funds transfer (EFT) processes within the Division of Accounting and Auditing. CFO Sink called for the external audit last month after her department worked with the Federal Bureau of Investigation to successfully apprehend a suspect accused of wire fraud.

    No performance audits of Accounting and Auditing’s EFT process had been performed in ten years. The EFT process was last audited by the department’s Inspector General in 1998 when DFS was then the Department of Banking and Finance.

    “As a career banker with a lifetime in risk management, I understand that audits and assessments over internal controls are essential to keeping business processes running efficiently and securely,” said CFO Sink, who oversees DFS. “This external audit provides a blueprint for demanding and instituting increased safeguards over the electronic transfer of funds, and we are acting immediately to implement the audit’s recommendations.”

    At CFO Sink’s direction, the performance audit examined the internal controls designed to prevent and detect errors or irregularities in the EFT process. The auditors also reviewed the information technology controls significant to the protection and integrity of the systems and data required for EFTs. Both the internal and information technology controls were evaluated with respect to essential risk management practices that provide necessary oversight.

    CFO Sink has promptly appointed new leadership to guide the Divisions of Accounting and Auditing and Information Systems through these crucial enhancements. Effective immediately, Craig Vollertson, the Bureau Chief of Mainframe Infrastructure, will serve as the Interim Director of the Division of Information Systems. Also effective immediately, Kimberly McMurray is being promoted from Bureau Chief of Funds Management in the Florida Treasury to the Division Director of Accounting and Auditing.


    Florida Chief Financial Officer Alex Sink today hailed the award of $541 million in housing aid to Florida’s local governments by the United States Department of Housing and Urban Development.  Florida has one of the highest foreclosure rates in the nation and the highest rate of mortgage fraud. 

    The funds, appropriated by Congress as part of the Housing and Economic Recovery Act of 2008, will be used to help local governments renovate abandoned and foreclosed properties to make them available for resale.  In turn, local governments will make these properties available to moderate and low-income Floridians. 

    “I am delighted to see that Floridians will reap hundreds of millions of dollars worth of benefits from the new law,” said CFO Sink, who oversees the Department of Financial Services.  “These resources will help thousands of Floridians who don’t currently own a home have the chance to become homeowners.  It will also help local governments meet the pressing need for housing for many of our hard-working families, including law enforcement officers, teachers and nurses.”   

    After Congress’ passage of the Housing and Economic Recovery Act of 2008, CFO Sink created a Financial Action Team to review the federal law and to conduct an outreach campaign.  The Financial Action Team is targeting new homebuyers, veterans, homeowners who are having trouble meeting their mortgage payments, and local governments.

    Sink called upon the broad coalition last month to review federal foreclosure assistance legislation

    Chief Financial Officer Alex Sink's “Financial Action Team” met Wednesday, September 24, 2008,  in Tallahassee. The Financial Action Team is reviewing Florida’s potential share of the billions in federal dollars available from the recently-passed federal Housing and Economic Recovery Act of 2008.
    During the workgroup meeting, members discussed how to use their individual and collective means to inform Floridians about the benefits of the new federal law, and also discussed the impact on the law of the new White House proposal to rescue financial institutions that are still troubled by the housing crisis.

    The FACT Team focused on a number of key provisions of the law, including the HOPE for Homeowners Act, which will provide federal guarantees for up to $300 billion in troubled mortgages, the $7,500 homebuyer tax credit, which is available to Floridians who have not owned a home in the past three years but have purchased a home this year, extensive benefits available to veterans, and the nearly $4 billion in aid to local governments which is to be used to refurbish foreclosed properties to be made available for resale – particularly for moderate and low-income homeowners.
    The FACT Team will conduct outreach efforts using the Department of Financial Services Web site, member newsletters and magazines, E-mail lists, and The Chief Financial Officer’s toll-free help line, which is 877-My-FL-CFO (877-693-5236). The CFO expects to have these resources available to Floridians over the next few weeks.

    The FACT Team will stay together to work with CFO Sink on other financial issues facing Floridians.

    Free workers’ compensation classes to help business owners, employers and contractors create a safe working environment

    Florida Chief Financial Officer Alex Sink, who oversees the Department of Financial Services and the Division of Workers’ Compensation, announced today that the department will begin offering free classes to help employers and contractors better protect their most valuable assets – their employees.

    “Floridians work hard and we want them to go home whole and healthy everyday, so we will enforce workers’ compensation laws to protect them,” said CFO Sink. “Our goal is to make it easy for employers to comply with the law so that employees can work in safe environments.”

    Classes will begin October 1, 2008, and will be led by 15 compliance investigators and supervisors who are licensed to provide instruction in Florida’s coverage and compliance requirements. The classes will provide information on what is required under Florida’s workers’ compensation law, when exemptions apply, what resources are available to help employers and contractors comply with the law, and training on workplace safety. Contractors who successfully complete the classes will be eligible for continuing education credits. For an initial class schedule and to register, click on www.myfloridacfo.com/wc  and look under “Notices.”

    Under Florida law, non-construction businesses with four or more employees must have workers’ compensation coverage, and construction-related businesses with one or more employees must have the coverage. Workers’ Compensation investigators can order non-compliant businesses to close their doors until they have coverage, and in the last fiscal year that ended June 30, 2008, the division conducted 27,674 worksite investigations, issued 2,518 stop-work orders and assessed $48.5 million in fines.

    Premiums have dropped by more than half since the Legislature passed legislation in 2003 that, among other reforms, put in place tougher enforcement penalties. In addition, compliance and enforcement activities have added more than 43,000 employees to the workers’ compensation system during the last four years.

    Florida Chief Financial Officer Alex Sink convened the legislatively-created My Safe Florida Home (MSFH) Advisory Council on Thursday, September 25, 2008, in Tallahassee at the Capitol. 

    The Council received an update on the program, which has provided more than 400,000 free wind inspections and awarded nearly 39,000 Floridians grants to harden their homes against hurricane damage. Members also reviewed Florida’s home structure rating system and new research initiatives underway.

    At its meeting, the Council unanimously agreed to pursue additional funding during the next legislative session to continue building on the momentum of the program. In addition, the Council recommended a subcommittee be established to provide recommendations for including mitigation improvements to roofs, such as roof covering, roof-to-wall connections, roof deck attachment and secondary water barrier, as grant-eligible in a future version of the program.
    Authorized by Section 215.5586, Florida Statutes, the council was created to provide advice and assistance to the Department of Financial Services regarding the administration of the MSFH program. 
    For more information on the MSFH program or the council visit www.MySafeFloridaHome.com or call the program’s toll-free at 1-866-513-6734.  On the Web site, Floridians can link to information on the council, its agenda and upcoming meetings.


    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.

    Energy-saving laundry tips

    Major appliances account for about 20% of your household's energy consumption with refrigerators, clothes washers, and clothes dryers at the top of the consumption list. Try these energy-saving ideas to save money each month.

    Wash clothes in cold water.
      Heating the water, not swishing and spinning the clothes, uses most of the energy spent to wash clothes. Save substantially by washing and rinsing at cooler or cold temperatures. Wash most clothes in warm or cold water, using cold-water detergents whenever possible; rinse in cold. You'll save energy and money. Use hot water only if absolutely necessary. Switching the washer temperature setting from hot to warm could reduce a load's energy in half.   Most natural, organic fabrics don’t need warm water attention because they're inherently antibacterial and antimicrobial—meaning that they naturally discourage mold, mildew, and allergens. 

    Don't use too much detergent.
    Follow the instructions on the box. Over-sudsing makes your machine work harder and use more energy.

    Hang it up to dry. When it's sunny, a clothesline is the most eco-friendly way to dry your clothes—with no static!  You save the energy a dryer would use, and your clothes will smell outdoor fresh without the perfumes and chemicals in fabric softeners and dryer sheets. Hang light items inside on a hanger or indoor clothesline to save energy, too. You'll get longer life out of clothes hung up to dry - dryer lint is clothes leaving pieces behind. And keep that dryer lint-trap clean.

    Reduce drying time
    If you can't air-dry your laundry, save on drying time by drying similar fabrics together, drying multiple loads in quick succession (to take advantage of residual heat), and make sure to clean the dryer filter after each use.

    Don't overdry your laundry. Clothes will need less ironing and hold up better if you remove them from the dryer while they're still a little damp. When shopping for a new clothes dryer, find one with a moisture sensor rather just a thermostat - it will know when your clothes are dry!

    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 watch dog, keep an eye on this column for money-smart ideas from the Chief Financial Officer of Florida, Alex Sink.

    IDEA: Protect against identity theft

    Know what's in your wallet. Carry only the credit cards you need so that access is limited to your accounts if cards are lost or stolen. Photocopy your cards and keep a record of customer service phone numbers.

    Shred. Open all mail and read it carefully— shred any items with personal information before discarding.

    Be suspicious. Never give out personal information until you have verified that you can trust the source -- over the phone, in-store or online.

    Monitor. Check your bank, credit card and other financial account information to reduce the risk of unauthorized charges or credit applications. If you find a suspicious charge, contact your financial institution.

    Take action. If you notice a new account has been opened without your permission, contact one of the three major credit bureaus and have a fraud alert placed on your record. The other two bureaus will be notified, and creditors will be required to contact you directly before opening new accounts or making changes to existing accounts. Then file a police report and submit a complaint to the Federal Trade Commission.

    Use the Web safely. Be sure to use a secured network, and frequently update firewall protections on your computer. Also limit the amount of personal information you post on networking Web sites.


    The Florida State Fire College, a division of the State Fire Marshal's office, sponsored and participated in the third annual Northwest Florida Volunteer Firefighter Weekend on September 19-14, 2008. The event was held for the first time at the Northwest Florida State College (formerly Okaloosa-Walton College). Nearly 200 students from Pensacola to the Keys took part in the educational experience.

    Les Hallman, left, division director of the State Fire Marshal’s Office, spoke about safety and the importance of training.  “This is what it is all about, good training in a safe atmosphere. The State Fire Marshal and the Florida State Fire College are proud and pleased to be part of this annual event.”

    Classes began on  Wednesday before the weekend with a first-time 40-hour class teaching Fire Service Course Delivery.  The participants will be able to teach other firefighters. On Friday evening, displays and demonstrations of the newest equipment used in the field of extrication permitted participants to try out the tools and equipment. 

    On Saturday, participants learned firefighting techniques through practical and classroom training programs. The Search and Rescue program is shown using the confined space prop from the Florida State Fire College. From the Midway Fire Department in Gadsden County, Colene Frederick, below in the red t-shirt, is a new volunteer and student at Florida State University. As part of an Emergency Medical Technician program she got to do ride time with local fire departments. She said, “I fell in love with the fire service and now want to pursue it as a career. This weekend is helping me to become acclimated with fire service and it is reinforcing my career decision.”

    The new burn building at the Northwest Florida State College saw smoke, fire and heat for the first time. The Farmmedic class, also taught by FSFC personnel was a big hit, teaching how to safely work with farm equipment and how to remove trapped victims in agricultural accidents. There were 27 classes and 187 students for almost 3,000 hours of training.

    As the classes wound down on Sunday afternoon Valparaiso Volunteer Fire Department Chief Charlie Frank, who serves as president of the weekend committee, was already thinking ahead to next September. “I think next year, we should be able to draw over 300. In fact,” he said to the staff, “let’s make that our goal.”


    For those residents who still intend to receive an economic stimulus payment, the Oct. 15 deadline to file a 2007 income tax return is fast approaching.

    And according to the Internal Revenue Service, there were 317,388 potential filers in Florida in mid-September who had not submitted a tax return to get the stimulus check.

    Nationally, the IRS is alerting the estimated 4.3 million retirees and disabled veterans who may be eligible to receive a stimulus payment, but who normally don't file a tax return. It's also the deadline for the approximately 10 million people who earlier this year received extensions to file their 2007 income tax return.

    Must Be Repaid Over 15 Years

    WASHINGTON — First-time homebuyers should begin planning now to take advantage of a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008, IR-2008-106.

    Available for a limited time only, the credit:
    • Applies to home purchases after April 8, 2008, and before July 1, 2009.
    • Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
    • Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.

    However, the credit operates much like an interest-free loan, because it must be repaid over a 15-year period. So, for example, an eligible taxpayer who buys a home today and properly claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on his or her 2010 return.

    Eligible taxpayers will claim the credit on new IRS Form 5405. This form, along with further instructions on claiming the first-time homebuyer credit, will be included in 2008 tax forms and instructions and be available later this year on IRS.gov, the IRS Web site.

    If you bought a home recently, or are considering buying one, the following questions and answers may help you determine whether you qualify for the credit.

    Q. Which home purchases qualify for the first-time homebuyer credit?

    A. Only the purchase of a main home located in the United States qualifies and only for a limited time. Vacation homes and rental property are not eligible. You must buy the home after April 8, 2008, and before July 1, 2009. For a home that you construct, the purchase date is the first date you occupy the home.

    Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit.

    If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 (or amended 2008 return) or 2009 return.

    Q. How much is the credit?

    A. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. The limit is $3,750 for a married person filing a separate return. In most cases, the full credit will be available for homes costing $75,000 or more. Whatever the size of the credit a taxpayer receives, the credit must be repaid over a 15-year period.

    Q. Are there income limits?

    A. Yes. The credit is reduced or eliminated for higher-income taxpayers.

    The credit is phased out based on your modified adjusted gross income (MAGI). MAGI is your adjusted gross income plus various amounts excluded from income—for example, certain foreign income. For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000.

    This means the full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less.

    Q. Who cannot take the credit?

    A. If any of the following describe you, you cannot take the credit, even if you buy a main home:

    • Your income exceeds the phase-out range. This means joint filers with MAGI of $170,000 and above and other taxpayers with MAGI of $95,000 and above.
    • You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
    • You stop using your home as your main home.
    • You sell your home before the end of the year.
    • You are a nonresident alien.
    • You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year.
    • Your home financing comes from tax-exempt mortgage revenue bonds.
    • You owned another main home at any time during the three years prior to the date of purchase. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another main home at any time from July 2, 2005, through July 1, 2008.

    Q. How and when is the credit repaid?

    A. The first-time homebuyer credit is similar to a 15-year interest-free loan. Normally, it is repaid in 15 equal annual installments beginning with the second tax year after the year the credit is claimed. The repayment amount is included as an additional tax on the taxpayer’s income tax return for that year. For example, if you properly claim a $7,500 first-time homebuyer credit on your 2008 return, you will begin paying it back on your 2010 tax return. Normally, $500 will be due each year from 2010 to 2024.

    You may need to adjust your withholding or make quarterly estimated tax payments to ensure you are not under-withheld.

    However, some exceptions apply to the repayment rule. They include:

    • If you die, any remaining annual installments are not due. If you filed a joint return and then you die, your surviving spouse would be required to repay his or her half of the remaining repayment amount.
    • If you stop using the home as your main home, all remaining annual installments become due on the return for the year that happens. This includes situations where the main home becomes a vacation home or is converted to business or rental property. There are special rules for involuntary conversions. Taxpayers are urged to consult a professional to determine the tax consequences of an involuntary conversion.
    • If you sell your home, all remaining annual installments become due on the return for the year of sale. The repayment is limited to the amount of gain on the sale, if the home is sold to an unrelated taxpayer. If there is no gain or if there is a loss on the sale, the remaining annual installments may be reduced or even eliminated. Taxpayers are urged to consult a professional to determine the tax consequences of a sale.
    • If you transfer your home to your spouse, or, as part of a divorce settlement, to your former spouse, that person is responsible for making all subsequent installment payments.

    Consumer Services Helpline 1-877-MY-FL-CFO

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