Tag Archives: business

New fed payday lending rules draw praise, criticism in TN

The head of a Tennessee-based consumer advocacy group lauded as a ‘good start’ the federal Consumer Finance Protection Bureau’s proposed rules on small-dollar lending by the payday and car title loan industry, reports the Chattanooga Times-Free Press.

Charging the industry is filled with “loan sharks” and “predatory lenders,” Andy Spears, executive director of Tennessee Citizens Action, said at a news conference today that his group has unsuccessfully sought to curb the industry’s worst practices in the state Legislature but run into road blocks.

“Tennessee families pay more than $400 million a year in payday and car title lending fees,” Spears told reporters. “The average Tennessee borrower pays $490 in fees to borrow $300 for five months.”

Spears said “today’s proposed rule by the CFPB is a good start. It focuses on the ability to repay which is a critical element missing because the current standard is the ability to collect.”

In announcing the proposed federal rules, CFPB Director Richard Cordray said in a statement that “too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt.

“It’s much like getting into a taxi just to ride across town and finding yourself stuck in a ruinously expensive cross-country journey,” Cordray added.

But the Tennessee Flexible Finance Association is attacking the proposed federal rule, saying it threatens to ruin the industry and thereby restrict access to low-dollar loan credit for thousands of Tennesseans. Continue reading →

Scott County’s only hospital files notice of closing

Pioneer Health Services has notified the State of Tennessee that it could potentially close its Scott County hospital although local administrators remain hopeful that the worst-case scenario will not pan out, reports the Oneida Independent Herald.

The Magee, Miss.-based corporation filed its 30-day notice with the state last week, as required by law. Tony Taylor, CEO of Pioneer Community Hospital of Scott, said his managers learned of the development Tuesday morning.

…Taylor, who has been chief administrator at the local hospital since Pioneer opened the facility in 2012, said the notice is not a guarantee that the the hospital will close.

“This is just a way of them fulfilling their obligation of notice,” Taylor said. “After June 26, they could close the hospital, if they chose to do so.”

PHS is currently restructuring, two months after filing for Chapter 11 bankruptcy protection. As part of that bankruptcy filing, PHS closed its MedSurge program at the Scott County facility, ending inpatient services while keeping all outpatient services — including surgery, physical therapy and diagnostics, among others — along with its emergency room.

Reportedly, PHS has been willing to entertain offers to sell the Scott County hospital. It is not known whether the corporation has been able to attract potential suitors.

Taylor said Pioneer has put no timeline on the hospital’s future.

…If the hospital closed, ownership of the real estate would revert to Scott County. The county is currently in the midst of a 10-year contract with Pioneer that requires the facility — ownership of which was transferred to Pioneer in 2012 at no cost — to be operated as a hospital or be returned to the county.

However, that, too, could be complicated. First National Bank currently has a lien on the property after Pioneer borrowed $400,000 for improvements in 2015. The Internal Revenue Service has also filed a separate $500,000 tax lien on the property due to back taxes owed by the corporation.

Haslam frets about Trump triggering a trade war

Responding to questions after a Knoxville Rotary Club speech, Gov. Bill Haslam said he’s worried that Donald Trump as president could trigger a trade war damaging to the Tennessee economy, reports the News Sentinel.

After a brief talk about state accomplishments, Haslam took questions from the audience and was asked if he had concerns that if Donald Trump were elected president, he might involve the country in a trade war at a time Tennessee and the Knox County economies have extensive economic ties with other countries.

“I’m actually really worried about this,” he said.

Haslam said that within the past few weeks, he wrapped up a trade trip to China, South Korea and Japan and those he spoke with had the same question: “Tell us, does Donald Trump mean what he says?”

Haslam said that, next to California, Tennessee is Japan’s largest U.S. trading partner. Tennessee tends to export 25 percent more goods to countries with which it has trade agreements, he said.

It is not realistic to think America can be a completely self-sufficient nation, Haslam said. “And, if you like that thought, then just be prepared for everything you pay for to cost a lot more.”

Placing tariffs on foreign goods will just bring tariffs on local goods, he said.

Greg Adkins chosen chair of international hotel association

NASHVILLE, Tenn. (AP) — The president of the Tennessee Hospitality and Tourism Association has bene selected as the chairman of the International Society of Hotel Association Executives.

Greg Adkins, a former councilman in Nashville, heads the state group that represents more than 1,800 lodging properties, restaurants, attractions, convention and visitors’ bureaus, chambers of commerce, convention centers and universities.

Adkins has also been named a board member of the American Hotel and Lodging Association.

Hospitality and tourism are Tennessee’s second-largest industry, bringing in an estimated $18 billion in revenue per year. About 10 percent the state’s job work in the tourism and hospitality sector.

Adkins earned his undergraduate degree from Tennessee Tech and his law degree from the Nashville School of Law.

Chattanooga payday loan operator pleads guilty to usury in New York

A used car salesman turned tech entrepreneur who operated an illegal payday lending syndicate from Chattanooga will pay $9 million in fines and restitution, as well as serve 250 hours of community service and three years of probation, after pleading guilty to felony usury in New York.

Further from the Times-Free Press:

Carey Vaughn Brown, 57, admitted to New York prosecutors that he broke the law from 2001 to 2013 by lending millions of dollars — $50 million to New Yorkers in 2012 alone — with interest rates well in excess of the state’s 25 percent annual percentage rate cap.

A Times Free Press investigation in 2011 found that Brown was making loans that, at times, carried an annual interest rate of more than 1,000 percent. Such loans would have also been illegal in Tennessee, though officials at the Tennessee Department of Financial Institutions never took any public action against Brown.

Brown’s admission of guilt came after years of denials, lawsuits against whistleblowers, and attempts to camouflage his profitable web-based payday loan business by disguising it as a network of unrelated shell companies in Chattanooga, which shut down in 2013 after banks refused to do business with him anymore.

Brown declined to comment, citing the terms of his plea agreement.

His companies sported generic names including Terenine, Area 203, ACH Federal and Support Seven, and performed legitimate marketing and technology work for well-known companies and nonprofit organizations such as the Chattanooga Area Chamber of Commerce, Focus on the Family and Precept Ministries.

But behind the scenes, the network of businesses operated as a single syndicate to generate high-interest, short-term loans through websites like MyCashNow.com, PayDayMax.com and DiscountAdvances.com.

“It’s a horrible mark on Chattanooga, and it never should have happened,” said Chris Christiansen, the former director of infrastructure architecture and design for Terenine, one of Brown’s now-shuttered shell companies.
Continue reading →

Haslam: Asian executives anxious over U.S. presidential race

Associated Press

NASHVILLE, Tenn. (AP) — Republican Gov. Bill Haslam said Friday that the U.S. presidential race is weighing heavily on the minds of executives that he met with on a recently concluded trade mission to Asia.

Haslam told reporters in a conference that he and Economic and Community Development Commissioner Randy Boyd met with about 250 business leaders during the trip to South Korea, China and Japan.

“In every country, we got asked about the presidential election pretty frequently,” Haslam said. “There is a high degree of concern in Asia about how the U.S. sees its role in the world going forward.

“I’d say there was a high degree of anxiety,” he said.

The governor said those concerns include questions about the fate of the Trans-Pacific Partnership trade agreement that has been criticized by Democratic candidate Hillary Clinton.
Continue reading →

With TDEC approval (?), chicken farmers dodge pollution regulations

With apparent approval of the Tennessee Department of Environment and Conservation, WTVF-TV reports a Macon County husband and wife split their chicken production property in half to avoid the need for a permit and the stricter regulations that go with it.

The farm’s owner Ryan Russell applied for a permit to house up to 70 thousand chickens, but a farm that size required annual inspections and regular oversight. So Russell divided his property between the barns — putting two barns in his wife’s name — and two in his name.
Suddenly both were small enough to avoid the stricter regulations.

(The four chicken barns provide chickens for a Cobb-Vantress, a subsidiary of Tyson Chicken.)

… Sierra Club Attorney Brian Paddock was shocked when we showed him how the husband and wife operations were able to get around regulations… “They’re doing everything they can to avoid regulation and they probably know that the cop waves them through,” Paddock said.

The cop in this case is the Tennessee Department of Environment and Conservation — which is supposed to make sure tons of manure from the barns doesn’t pollute surrounding streams.

Our investigation uncovered e-mails in which an executive with Cobb – Vantress laid out plans to split the farm to the state.

The executive writes “just wanting to make sure we are on the same page before Ryan spends the money to have his two farms split up. If he has two farms split up to where one is in his name and one is in his wife’s name will that make it so that he doesn’t have to apply for a CAFO permit.”

After the state gave the split their approval, the Cobb – Vantress executive forwards the e-mail to farmer Ryan Russell… with an FYI and an explanation point.

TDEC would not do an interview about the situation. But their spokesperson said the land owners may have taken advantage of the situation, but insisted the state never advised them to split their property.

…Cobb-Vantress said in a statement… “The email you have referred to is a communication to clarify a request about information regarding the farms’ operation status. Our complex manager asked TDEC a question and TDEC responded. Our manager then provided the information to the farmer.”

Regulators close Memphis bank

NEW YORK (AP) — Regulators are closing a small Tennessee bank, marking the second failure of a federally insured bank this year.

The Federal Deposit Insurance Corp. said that Trust Co. Bank of Memphis, Tennessee, was closed Friday,

As of Dec. 31, Trust Co. Bank had about $20.7 million in total assets and $20.3 million in total deposits. It operated four branches.

The Bank of Fayette County of Piperton, Tennessee, agreed to buy about $3.9 million of the failed bank’s assets and assume all of its deposits.

The failure is expected to cost the FDIC $7.2 million.
—
Note: News release from the Tennessee Department of Financial Institutions is below. Continue reading →

Judge backs requiring deposition of Jimmy Haslam

MOBILE, Ala. (AP) — Cleveland Browns owner Jimmy Haslam is a step closer to having to answer questions about fraud at the truck stop chain where he is president and CEO.

Haslam has denied any knowledge of the scheme that has cost Pilot Flying J $177 million in settlements with customers and the government since it came to light after federal agents raided the company’s Knoxville, Tennessee, headquarters in April 2013.

Pilot’s former president and seven others, including two former top executives, have been indicted and face trial next year on charges they conspired to cheat customers out of promised discounts and rebates. Another 10 former employees have pleaded guilty in the fraud. But Haslam has not been charged criminally and for three years has fought legal efforts by trucking companies to depose him.

While about 5,500 firms were part of a class-action lawsuit against Pilot that settled quickly, Mobile-based Wright Transportation is one of several that opted pursue their own lawsuits in state court. Haslam has been ordered to sit for a deposition in that case.

On Friday, Mobile Circuit Court Judge Sarah Stewart declined Haslam’s request to reconsider her order, according to al.com. But that does not end his attorneys’ efforts to stop the deposition. They have also filed a motion for a protective order, claiming the case should not move forward until jurisdictional issues are resolved. On May 13, the court will hear arguments on that motion.

Pilot is owned by Haslam and his brother, Tennessee Gov. Bill Haslam, who has said he is not involved with operating the company. It is the nation’s largest diesel retailer with $31.4 billion in revenue in 2014.

Haslam, Boyd headed for China, Korea and Japan

News release from Department of Economic and Community Development
NASHVILLE — Tennessee Gov. Bill Haslam and Economic and Community Development Commissioner Randy Boyd will travel to Asia on an economic development trip focused on increasing foreign direct investment opportunities specifically related to the automotive, high tech and advanced manufacturing sectors.

The 10-day business trip is scheduled from Monday, May 2 to Wednesday, May 11 and will include stops in Korea, China and Japan. Haslam and Boyd will meet with executives of existing Tennessee businesses as well as work to expand relationships between Tennessee and Asian business communities.
Continue reading →