2013 August FIRE Policy News

Issue Date: 
August, 2013
Newspaper PDF: 

The August issue of FIRE (Finance, Insurance, and Real Estate) Policy News reports on Detroit’s continuing financial woes, including its mid-June default on a scheduled debt payment. This issue, which went to press before the city declared bankruptcy, helps explain that move.

Also in this issue:

  • The Federal Housing Administration’s losses over the next 30 years could be much higher than originally projected, according to the findings of a congressional committee. The dismal forecast has some bracing for another taxpayer-financed bailout.
  • Anaheim, California small business owner Tony Jalali faces the loss of his office building, which is worth $1.5 million, even though he has committed no crime. The city of Anaheim is colluding with federal prosecutors to do an end-run around state laws to take away Jalali’s building because he rented space to medical marijuana dispensaries, even though they operated legally under California law.
  • The Consumer Financial Protection Bureau is now investigating bank overdraft practices since consumers paid $32 billion in overdraft fees in 2012. The CFPB study shows overdraft coverage varies significantly by financial institution and that consumers who sign up for overdraft coverage have higher costs and more involuntary account closures. Overdraft and nonsufficient fund fees have become a huge source of industry revenues.
  • Sen. Bill Nelson (D-FL) announced he may soon reintroduce his proposal to have taxpayers across the county backstop the risks of state catastrophe funds. His home state of Florida is the only state with an existing catastrophe fund that would qualify for the proposed federal backstop.
  • Since 1984, St. Louis has split its federal Community Development Block Grant funds by ward, giving individual aldermen substantial power in determining which projects get funded. The process has drawn the ire of HUD officials, who say the city’s disbursement method doesn’t comply with federal regulations and opens the program up to corruption, nepotism, and other forms of local political favoritism.

Newspaper Articles in this Issue