ACAP seeks partner to spur consumer finance business

She said that OKCASH had room to grow in lending to SMEs as banks are more cautious, and focused on sustaining their reserves in order to maintain their capital ratios, in keeping with the international regulatory framework for banks (Basel III).

SMEs have demanded increases in working capital to improve their liquidity, while we will be completing our internal restructuring begun in the middle of last year, making us ready to provide working capital to SMEs aggressively, she said.

OKCASH is targeting new loans of more than Bt2 billion this year, up from Bt350 million last year.

ACAP will issue debentures worth Bt2 billion and bills of exchange (B/Es) worth Bt1 billion as raise funds to support the lending target, she said.

The company has to lock in low funding costs via debentures and B/Es before interest rates in the country rise again in the second half of this year, Sugunya added.

She said a major source of revenue for ACAP was Global Service Centre, another subsidiary that offers call-centre and debt-collection services.

Many companies hired Global Service Centre as an outsourcing company to service their customers, which, as a result of the great number of call-centre staff, has an advantage for ACAP in managing debt|collection. The back office of |ACAP is strong enough to deal with bad debt and the company |will aggressively chase lending, she said.

FAQ: Everything you wanted to know about tipping

Only non-supervisor employees who provide service to diners such as servers, busboys, bartenders, hosts, line cooks and dishwashers can be part of the pool.

Line cooks and dishwashers? I thought kitchen staff couldnt participate in the tip pool because they do not provide direct table service?

That was true until a few years ago. In California, the idea that tips may be earned only by those who provide direct table service is rooted in a 1990 appellate court case, Leighton vs. Old Heidelberg, Ltd. The restaurant in question, Old Heidelberg, was the German restaurant of choice if you lived around Van Nuys (there were lederhosen and schnapps). A server, unhappy that the tip pool included busboys and bartenders, sued the restaurant. In validating the restaurants tip pool arrangement, the court said that the restaurant simply followed a house rule which is the industry practice, that tips left on table be pooled and distributed among employees who directly provide service to the tipping patron. That language caught on and was widely interpreted to mean that only those employees who come face-to-face with diners can be included in a tip pool. Which meant that cooks were left out of the pool.

That narrow interpretation of service doesnt quite correlate with the reality of the dining experience, of course. After all, how much you tip may be just as dependent on a servers friendliness as it is on whether the steak was cooked correctly. And in 2009, an appellate court agreed. The case was Etheridge vs. Reins International; the tip pool in question included kitchen staff, bartenders and dishwashers. The court, rejecting the idea that only those in the direct chain of service may receive tips, noted that, because the kitchen crew isnt visible to most diners, its critical to include them in a tip pool.

Stephen Berry, a partner at Paul Hastings employment law department who also cowrote an amicus brief in support of the restaurant in the Etheridge case, says that the case is still good law in California. And for what its worth, the Department of Industrial Relations, the agency entrusted with enforcing the states labor laws, notes in its own Frequently Asked Questions that employees who are in the general chain of service may receive tips so long as their role bears a relationship to the customers overall experience.

But doesnt federal law say that cooks cant be part of the tip pool?

Yes and no. The federal law that governs tip pooling is the Federal Labor Standards Act (FLSA), and the Department of Labors guidelines explicitly exclude cooks and dishwashers from tip pools. But the 9th Circuit, which has jurisdiction over two territories and nine states, including California, decided in a 2010 case that the tip pool provisions of the FLSA dont apply to states (like California) that dont credit tips against an employers minimum wage obligations (the so-called tip credit) meaning that a restaurant may include its kitchen staff in its tip pool without running afoul of federal law. As one might expect, the department did not agree, and litigation followed after that. The relevant case, Oregon Restaurant and Lodging vs. Perez, is pending in the 9th Circuit, so the department isnt enforcing its position on tip pooling in 9th Circuit states like California that dont take the tip credit.

What does tipping have to do with the minimum wage?

In states that take the tip credit, quite a lot. Employers in tip credit states may apply an employees tips against their minimum wage obligations, though how much an employer must pay before taking the tip credit varies from state to state. Because California doesnt permit employers to take the tip credit, employers are required to pay their employees the states full minimum wage (currently $10 per hour), regardless of whether the employee also receives tips. Thus in some high-end restaurants, the front of house crew may earn considerably more than the kitchen.

Tien Nguyen is a Los Angeles-based food writer and lawyer.

food@latimes.com

Renting instead of owning may be the right choice

We made a budget and we think we can pay off the equity loan within three years. Should we go ahead with our plan? — Stella

DEAR STELLA: It sounds like you have your affairs in order. I dont see anything wrong with the proposal you have made. Youre correct in observing that you will be paying substantially less to the bank than you are to the credit card companies. In short, you thought it out well, and I applaud your thinking.

DEAR BRUCE: I saw an article about a firm that was trusted to do debt consolidation. Could you please tell me how to reach them? — RS

DEAR RS: There are a number of companies that can be trusted to help with debt consolidation. My personal experience leads me to recommend American Consumer Credit Counseling. They will take you under their wing and show you how to reconstruct your payments to your best advantage.

I am not suggesting this is going to be easy, but the fact that you recognize that you need some help is a wonderful first step. If youre not satisfied with this company, there are many others that would be productive.

Send questions to bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.

Business news in brief

Big Sexy Food out to feed many or a few

Big Sexy Food started up Jan. 1 in Northwest Arkansas. The business is a catering group that offers in-home and small-venue dining for two to 40 people.

Brent Hale is owner and executive chef. He began his catering company in the Dallas area in 2001 and relocated to Northwest Arkansas.

The business has predesigned menus, but makes meals around a clients needs. Each dish is prepared from scratch in the customers home and uses locally sourced food and beverages.

Hale said the company provides the elegance of five-star restaurant dining with the personal touch of your own home.

More information is at www.BIGsexyFood.com.

Credit counselor earns reaccreditation

Nonprofit organization Credit Counseling of Arkansas achieved national reaccreditation through the New York-based Council on Accreditation.

The accreditation process involves a detailed review and analysis of an organizations administration, management and service delivery functions against international standards of best practice.

Credit Counseling of Arkansas provided written evidence of compliance with the Council on Accreditation standards and a group of trained volunteer peer reviewers confirmed adherence to these standards during a series of on-site interviews with trustees, staff members and clients.

Credit Counseling of Arkansas is a United Way agency that is supported by grants to provide free financial seminars, free and confidential counseling on budgeting, credit, homebuying and mortgage delinquencies and a debt-management program. The organization was founded in 1995 and offers in-person, phone and online counseling.

Centerton dentist building new offices

Holman Family Dentistry of Centerton will begin construction on a new facility in March.

The new space is scheduled to open in the fall and will sit on about an acre of land west of Berkshire Road at 1138 E. Centerton Blvd. It will have about 1,800 square feet of rental space attached to the dental office.

Dr. Thomas Holman offers a range of dental services including cleanings and routine examinations, fillings, root canals, crowns, bridges, cosmetic dentistry and emergency dental care. His office is at 431 W. Centerton Blvd.

He graduated from the University of Central Arkansas and Louisiana State University School of Dentistry and is a member of the American and Arkansas dental associations and the Academy of General Dentistry.

Whitbeck labs adding research facility

Whitbeck Laboratories Inc. broke ground last week on a 7,500-square-foot research and testing facility in the Springdale Technology Park. The company is a full-service, independent commercial laboratory offering a mix of microbiology, chemistry and serology testing.

Construction on the testing facility, at the southeast corner of Huntsville Avenue and Kawneer Drive, is expected to be complete by mid-July.

The company added six positions in the past two years and has 19 employees at its Springdale facility.

The new office will almost double the amount of lab space available to the Springdale company, which was founded in 1978 by Gordon Whitbeck. Whitbeck Laboratories offers lab services for the food and poultry industries, and diagnostic services for veterinarians.

Briefs are for businesses in Northwest Arkansas that are new, have moved or closed, opened a new branch, changed owners or have been honored by an independent organization. Email items to cswanson@nwadg.com. Information will be published as space allows.

SundayMonday Business on 01/24/2016

Saturday Q&A: An analyst’s alternative to Social Security

Peter Ferrara is senior fellow for entitlement and budget policy at The Heartland Institute. He served in the White House Office of Policy Development under President Ronald Regan and as associate deputy US attorney general under President George HW Bush. Ferrara spoke to the Trib regarding Social Securitys future.

Q: How bleak will it be for future retirees if Social Security isnt reformed?

A: Social Securitys collapse is increasingly imminent. The latest projections of the Social Security actuaries is that the system will run short of funds to pay promised benefits in about 13 years. So there are people who are retired today who are going to face the threat of losing Social Security benefits, and this is an epic battle because there is nothing saved within Social Security to pay those future benefits. The Social Security trust funds are just a pile of internal federal government IOUs. So the federal government is going to have to either raise taxes on working people or the general public, or increase the national debt by assuming more of the debt to borrow the money to pay seniors back.

Q: Youve previously pointed to a Chilean retirement savings model that seems to offer a possible solution to the problem. Can you explain what that entails?

A: In 1981, Chile gave people the freedom to choose personal savings investment accounts to pay the benefits promised by Social Security. That is the only real solution to the Social Security problem — to shift to a real savings and investment system. Most people think of retirement programs as saving while you are working and investing the money and earning returns so that youll have substantial funds when they retire. People would get far higher benefits if they could save and invest what employers are annually paying in taxes today over their working years.

When Albert Einstein, the inventor of the atomic bomb, was asked what was the most powerful force in the universe, he said “compound interest.” Thats what youre deprived of with Social Security — the most powerful force in the universe.

Q: How successful could a similar program be here in the United States?

A: Studies have shown that the Chilean program has been enormously successful. We have a study coming out soon that demonstrates people of all income levels would get (as much as) four times the benefits promised by Social Security that Social Security cant even pay. In addition, all of that savings and investment would benefit the economy today. These personal accounts would become mighty rivers of savings and investment flowing into the economy, creating jobs and raising wages today.

Q: If this or some other type of reform isnt enacted, does Social Security go bankrupt?

A: Oh yes. Bankruptcy is a real issue. And if they run short of funds to pay the promised benefits, the Supreme Court already has ruled that seniors have no contractual right to their Social Security benefits.

Eric Heyl is a Tribune-Review columnist. Reach him at 412-320-7857 or eheyl@tribweb.com.

A checklist on taxes, investments for this time of year

Even in those seven years when stocks began sharply lower in January — a monthly drop of 5 percent or greater — prices rebounded on five occasions while continuing to decline just twice, in 2000 and 2008. These figures, gleaned from the Ibbotson SBBI Yearbook published by Morningstar, include reinvested dividends. They attest to the markets tendency to bounce back after losses.

The time to budget

Plenty of Americans struggle financially, yet only about two in five prepare and follow a budget, according to surveys by the National Foundation for Credit Counseling. If you dont have a good idea of where your money goes or lack an emergency cash reserve, it might be smart to track your income against expenses.

Nows the time to do it. Your yearly tax information should be at hand, and perhaps you also have summarizes of your spending behavior for the past year from bank or credit-card statements. Recurring expenditures for rent, the mortgage or car payments are easy to track, but you also need to remember about items like insurance or property taxes that you might pay just once or twice a year.

Will the youngest generation ever get to retire?

But social security as we know it was invented by German statesman Otto von Bismarck in 1889 to distract the working class from a burgeoning socialist movement–and the benefits kicked in at age 65, far beyond life expectancy at the time. And American social security, under constant threat of cuts from Republicans, was never intended to completely fund modern old age, as the millions of elderly Americans living in poverty can confirm.

The condos and cruises of modern retirement were largely funded by defined benefit pensions, which barely exist anymore. Few private companies ensure their workers monthly paychecks from retirement to death, and public pensions are being gutted. Reagan-era power brokers successfully marketed 401(k)s, once an obscure pension supplement for executives, to the majority of American employers. With promises of expert investment in the then-booming stock market (and with disappearance of union adversaries), employers shifted the risk and administrative cost of retirement to employees, improving their bottom lines and creating a cottage financial services industry.

Its tempting to imagine sticking around and growing old, Slack-ing and vesting among the snacks.

People my age–many of whom are living off sporadic freelance checks or several fast food jobs that pay by the hour–consider themselves lucky if they have a 401(k), even if their employers don’t match their contributions. But unlike pensions, 401(k)s are voluntary, and the default contribution rates are low. Even if returns are good again, employees can take money out, and to withdraw is human. Nowadays, half of older workers–the first generation of the 401(k) era to retire–have no retirement savings, according to the Government Accountability Office, and decades to live.

In other words, the conditions for easy, middle-class retirement have all but vanished, and the need for personal savings is greater than ever, even if financial institutions have failed to sell us on it. It’s painful to consider entering a financial relationship with the entities that got us into this mess. When I’m not anticipating oblivion, I’m crossing my fingers for revolution. But also, I’m tired. When do I get to stop checking my email?

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Workers lack retirement savings options

Retirement Pew national survey provides support for Oregon effort toward saving

A new report by the Pew Charitable Trusts lends support to Oregon and other states seeking to expand the ability of private-sector workers to save for retirement.

The report, released Jan. 13, said about 30 million full-time US workers 200,000 of them in Oregon lack access to a plan through work. An earlier Oregon report sets a higher number, but both agree that about half of Oregons private-sector workforce has no access to plans at work and few sign up for plans on their own.

Nationally, the Pew report said 58 percent of full-time private-sector workers have access to a plan, and 49 percent of workers overall participate. The comparable numbers for Oregon are slightly higher: 64 percent with access and 55 percent overall participation by workers. When a plan is available at work in Oregon, 86 percent choose to participate.

Financial security is vital to the quality of life for every Oregonian and the Oregon Retirement Savings Plan will allow more than 600,000 people to start saving through their place of employment, said state Treasurer Ted Wheeler, who has led a three-year effort to craft a state-sponsored plan. Thats good for all of us for workers, for employers and even for taxpayers, because todays lack of adequate savings could put a heavy strain on already-frayed public services.

Oregon is among a handful of states, including California and Illinois, now crafting a state-sponsored plan. Other states are exploring options and Washington has set up a marketplace that allows shopping for plans by self-employed and other workers. Massachusetts has a plan for employees of nonprofit groups.

We are not recommending any particular policy initiative. This research provides facts for policymakers as they consider these different options, said John Scott, director of retirement savings at the Pew Trusts. However, providing access for workers is key to boosting retirement savings. Most workers will participate in a retirement plan if given a chance. But many workers will still not participate even if offered a retirement plan, so employers and policymakers need to consider ways to boost participation.

Oregon and other states are looking at some form of individual retirement accounts or other defined-contribution plan, such as a 401(k), under which workers are automatically enrolled unless they choose to opt out. The savings plan would be available only to workers whose employers do not offer one now. Employers would not be required to contribute to the plans, only to allow for payroll deductions by employees.

Oregons plan is scheduled to start up in mid-2017. Lawmakers authorized it last year after a study was completed in 2014.

At a recent meeting of the Oregon Retirement Savings Board, led by Wheeler, members heard not only from experts in Oregon but about similar efforts in California and Connecticut. The board is forming work groups and has put out a call for proposals.

There is going to be a lot of learning that goes on from state to state, Pews Scott said. But as policymakers are developing their initiatives, they have to keep in mind that they have particular needs and characteristics that have to be reflected in their policy development.

The federal government also has taken steps to broaden access to retirement savings plans through a new program called myRA – although there is a $15,000 cap on the amount of savings – and a pending Department of Labor rule to ensure that state-sponsored plans do not conflict with a 1974 federal law governing pensions.

Wide variations

Although such plans constitute most of the personal savings accumulated to supplement Social Security benefits in retirement, the Pew report said access and participation to them are inconsistent across the nation.

Wisconsin ranked highest among the states with access by 70 percent of private-sector workers and participation by 61 percent. Florida ranked lowest with access by 46 percent and participation by 38 percent. The US medians half the states above and half below the numbers are 62 percent access and 53 percent participation.

The numbers are higher in New England, the Midwest and parts of the Northwest, and lower in the South and West.

The fact that we see wide variation across the states suggests a need to understand what is going on at the state level, Scott said.

The report said access and participation are influenced by several factors:

Size of business: Just 19 percent of workers employed at businesses of 10 or fewer have access to a plan, and 23 percent participate. On the other hand, 73 percent of workers at businesses of 500 or more have access, and 82 percent participate. The report also said Oregon has the 15th highest share of workers employed by businesses of fewer than 50.

Setting up and administering a plan can be an obstacle, particularly for smaller firms that might be newer or face more uncertainty, said Kevin Whitman, a senior research officer with the project.

Industry: Manufacturers (69 percent) are far more likely to offer plans than the leisure and hospitality sector at 34 percent and construction at 40 percent.

Race/ethnicity: Whites are more likely to have access to and participate in plans (63 percent, 55 percent). Minority-group access and participation are below those figures, but the largest disparity is with Hispanics, at 38 percent access and 30 percent participation.

Whitman said many minority-group workers have lower earnings and are more likely employed in jobs that do not offer plans. He also said many are unfamiliar with or distrust financial institutions.

Age: Younger workers (18-29) are less likely to have access to plans at work (47 percent) or to participate (34 percent). For the oldest workers (45-64), access is 63 percent, overall participation 57 percent.

Income: Workers earning less than $25,000 annually report only 32 percent access and 20 percent participation in plans. For those earning more than $100,000, 75 percent report access and 72 percent participation.

Education: Those without a high school diploma are the least likely to have access (29 percent) and participate (21 percent). Workers with at least a bachelors degree are likely to have access (69 percent) and participate (62 percent).

Gender: Men and women working full time have access to plans and participate at similar rates. But Whitman said women need to have more savings because their life expectancy is longer, they are more likely to have part-time jobs that have no access to plans, and they are more likely to be out of the workforce longer than men.

New help for consumers struggling with student loan debt

In the past, when consumers got into debt trouble it usually involved huge credit card balances. But in recent years, there has been another credit burden to deal with.

Millions of students have borrowed money to attend college, graduating with enough debt to finance a condo. According to the Consumer Financial Protection Bureau (CFPB), outstanding student loans total more than $1 trillion.

The National Foundation for Credit Counseling (NFCC), whose non-profit members provide credit counseling services to consumers, is expanding its scope to offer specialized advice about student loans.

“The NFCC has developed a best-in-class program that helps our members uphold the highest standards when serving the needs of Americans with student loan debt,” said Susan C. Keating, president and CEO of the NFCC, in a release. “Our certified counselors are uniquely qualified to address the full range of financial challenges consumers face every day, now including student loan obligations.”

Growing faster than credit card debt

The NFCC says student loan debt is now greater than total credit card debt and growing at a much faster rate.

When people take out student loans they usually assume that with a college education, they will earn enough to pay back the loan without too much pain. But the fact is, some borrowers never graduate. Others get a degree, but not the good job they anticipated.

Among the 43 million total student borrowers, the NFCC says 7.3 million are at least 90 days delinquent on their loans, 5.0 million are in default, and millions more are in negatively-amortizing income-driven repayment plans.

All of this, the NFCC says, has the potential to be the next major financial crisis affecting millions of Americans. It says participating credit counselors have completed training that covers the full inventory of student loan programs associated with repayment, forbearance, or other loan modification options. You can find out about them here.

Addressing the problem

As student loan debt has mushroomed, consumer advocates and policymakers have tried to help students avoid amassing college loan debt in the first place.

The CFPB has devoted part of its website to helpful advice for paying for college. It advises students who have to borrow to strongly consider federal student loans over private loans, which are offered by banks.

It points out that when you start to pay back your federal loans, the interest rate will be fixed, which will help you predict your payments after graduation. And in some cases, the federal government will pay the interest on your loans while you are in school – these loans are called subsidized loans.

The most common private student loans are offered by banks. Their interest rates are often variable, which means your interest rates and payments could go up over time. Private loans can also be more expensive – rates have been as high as 16% over the past couple of years, according to the CFPB.

Of course, the best option is to not borrow at all. Most colleges offer financial aid packages and grants. We recently reported on a handy tool to find how much you might get.

Weve also reported on the companies that pay all, or part of their employees tuition. Working part-time for one of these firms while attending school could allow you to graduate with little or no debt.

Student loan debt delaying other life investments

Related Coverage

(KIMT) – The burden of paying back student loans can last decades, and now a new study suggests borrowers are less likely to make any other large investments until that debt is taken care of.

The group American Student Assistance says of the borrowers surveyed, more than 50 percent say their student loans affected their ability to purchase a car. Nearly as many borrowers say it also affected whether they could afford buying a home.

Researchers say in past years, students at for-profit schools and students who dropped out of school faced the most difficulty in paying back their loans. Now, however, researchers say the majority of borrowers are facing similar challenges.

“The “American Dream” used to be for a family to purchase their own home and by putting that off due to other issue that can be worked with, that’s always a concern because that’s something that we all want to have,” said Kathye Gaines, Branch manager with Consumer Credit Counseling.

Besides deterring borrowers from making large investments, surveys suggest borrowers were more likely to adjust their lives in other ways as well.

  • 53 percent responded that their student loan debt was the deciding factor, or had considerable impact, on their choice of career field.
  • 21 percent indicated that they have put off marriage as a result of their student loans.
  • 28 percent said that student debt has delayed their decision to start a family.

Despite the risks involved with not paying your loans, researchers say more than 65 percent of students still believe that higher education is worth the investment.

“With some lenders, they will not look at it as negative for having student loans. As long as you are keeping up everything else, but it is still a concern for many lenders whether or not they are going to look at your credit score and see what’s going on and see that amount of student debt,” said Gaines.

According to the National Foundation for Credit Counseling, student loan debt continued to grow in 2015 and eventually eclipsed total credit card debt.

Today, more than $1.3 trillion is owed among 43 million borrowers in the country. Of those student borrowers, more than 7.3 million are at least 90 days delinquent on their loans.

The foundation predicts that the next economic crisis the US faces, will likely involve student loan debt and the interest rates involved.