Denise Trowbridge

Lancaster fears cars will bypass historic sites

Some local officials fear that when the Rt. 33 bypass opens today, the absence of a brown road sign will mean potential tourists and shoppers will bypass them altogether.

The 12-mile, $141 million stretch of road is expected to be open about 6 p.m., after crews finish clearing barricades, equipment and other construction remnants. A ribbon-cutting ceremony at 1 p.m. will feature Gov. Bob Taft and other officials.

The Ohio Department of Transportation oversees the placement of brown signs that mark exits leading to historical sites, museums and recreational facilities.

But state transportation officials say Lancaster's attractions don't qualify.

"People understand that a brown sign indicates a significant attraction," said Lou Varga, a Lancaster businessman and chairman of the committee to secure the signs.

Lancaster is home to the Decorative Arts Center of Ohio, the Ohio Glass Museum, the Sherman House -- the birthplace of Civil War Gen. William T. Sherman and former U.S. Sen. John Sherman -- and the Georgian, an 1832 Federal-style home with period furnishings.

Square 13, a neighborhood of 19th-century homes laid out by pioneer Ebenezer Zane, is downtown.

Each museum every year draws approximately 7,000 visitors, about half of whom hadn't planned to stop, said Joyce Harvey, president of the Fairfield Heritage Association.

That isn't enough to meet the state criteria for the signs, said ODOT spokeswoman Cindy Brown.

"Historical sites and museums require an annual attendance of 100,000 people per year, plus an additional 10,000 visitors per mile of distance from an interchange," she said.

Without the brown signs along the bypass, Varga said, spur-of-the-moment visitors won't know the museums are near, and the number will drop even more.

ODOT's Brown suggested that the people who manage the Lancaster attractions consider the blue signs typically used to advertise gas stations and restaurants, or apply for the Tourist Oriented Directional Signs program.

The latter signs -- which cost $30 per sign per month plus $10 monthly for arrow signs -- are reserved for commercial, historical, recreational and educational sites that attract at least 2,000 visitors a year.

The program also requires that the attractions be open at least eight hours a day, five days a week.

The financial and hours-of-operation requirements are obstacles, Harvey said.

None of Lancaster's museums meets the hours-of-operation requirement. Harvey's nonprofit organization runs the Sherman House and the Georgian, both of which rely entirely on volunteers and donations.

"Even if we split the cost between four museums, I'm still not sure we could afford the signs," she said. "The fact that we don't have the financial means to stay open for longer hours does not make us any less important or attractive to visitors.".

Tom LaPorte, of the Decorative Arts Center of Ohio, said the state is sending the wrong message about what's important about Ohio's historical attractions.

"Should a museum with 100 visitors get a sign? Probably not. But should a group of four museums that brings in at least 12,000 people? Of course," said LaPorte, director and chief executive of the center.

"I understand the state needs rules, but they also need a way to handle exceptions to the rules," he said.

Varga said the economics of the signs should be considered.

"It may seem small, but I think the brown signs are an important matter for the future of Lancaster," he said. "We don't want the bypass to bypass us economically."

Denise Trowbridge, FOR THE COLUMBUS DISPATCH
Dispatch reporter Mary Beth Lane contributed to this story.

Interview with mystery author Laura Joh Rowland

A local author gives Japan's ancient mysteries a New Orleans spin

Reading local author Laura Joh Rowland's latest mystery, The Dragon King's Palace, noone would ever guess that she once thought writing was boring. "I had always associated it with term papers, so I never intended to be a writer," she says with a smile. "It really happened by accident."

Before Rowland turned to a life of fictional crime, she put her advanced degrees in microbiology and public health to use inspecting space shuttle fuel tanks for Lockheed Martin Manned Space Systems. However, she always loved painting, and decided to illustrate a children's book. Rowland wrote the story to go with the illustrations and discovered that she actually preferred the writing part. Now, with nine successful mystery novels under her belt and the tenth—The Perfumed Sleeve—due in 2004, she has secured her place in New Orleans' lively literary scene.

Changing jobs, however, is not the only way Rowland is breaking the mold—unlike many local authors, she doesn't exactly write about New Orleans—from Tennessee Williams to Francis Parkinson Keyes and newcomer Andrew Fox, whose first novel, Fat White Vampire Blues, was born in one of Rowland's writers' workshops—the Crescent City seems to be a popular subject and setting for everything from poems to plays. Rowland's mysteries, however, take place in late 17th-century Edo, now known as Tokyo, and chronicle the adventures of detective Sano lchiro, a samurai warrior who serves the royal court of the Tokugawa shogun. It's a setting that appears to be a far cry from Louisiana, but it's not as foreign as it seems. Her descriptions of Edo's Yoshiwara pleasure quarter are inspired by the French Quarter, and the district's most sought after courtesan, Lady Wisteria, bears the name of a street near the Gentilly Terrace cottage Rowland shares with her husband, Marty, and three cats—Simon, Phoebe and Fat Boy. "It's impossible to live here and not have the spirit of New Orleans creep into your work," she says. "It's just such an inspiring, intimate city.

"People here are so generous with their time and energy," she adds. "It's really a friendly, open and creative place." She notes that these characteristics—combined with a low cost-of-living and a laid-back attitude—have drawn literary and artsy folks here for centuries. Of course, it's a miracle that novelists manage to finish even one chapter. "New Orleans is so distracting," Rowland says. "There's always something—a storm, a hurricane, a flood or a leaky roof—and it's hard not to let those things drown out the writing."

Despite the city's constant curveballs, Rowland has completed at least one novel each year for the past decade. She's also actively participated in the Tennessee Williams/New Orleans Literary Festival, the local chapters of Romance Writers of America and Mystery Writers of America, as well as the New Orleans Writer's Conference and the Louisiana Book Festival. With so much to do, it's surprising she has any time to write at all. Her key to success? She simply follows the advice that she gives to others. "Put as much or more into your writing as you do everything else in your life," she says. "The true craft is having the discipline to sit down and do it everyday."

by Denise Trowbridge, New Orleans Homes & Lifestyles, October 2003

Airtran's Crew Cuts: New Orleans

AirTran Airways Crew Member  Shannon Cadres on the family-friendly side of New Orleans.

 

Shannon Cadres, an AirTran Airways reservation agent, may live in Atlanta, but she visits family in New Orleans so often, it’s like she never left. A native of Gretna, Louisiana, just across the Mississippi River from downtown New Orleans, Cadres says most people don’t think of the city as a family-friendly destination—but that’s a mistake. With seven cousins ages 13 and younger, she should know.

 

FAMILY FUN
    Cadres and her family always head to  the French Quarter’s Café Du Monde (www.cafedumonde.com;  800-772-2927) for beignets, a French donut covered in powdered sugar. Across the street, they peruse local artwork that hangs on the wrought-iron fence surrounding Jackson Square (www.jackson-square.com). “I love looking at all of the art,” Cadres says, but she usually just window-shops due to her studentsized budget. (She’s majoring in early childhood education at Georgia State University.)

 

Jackson Square is also home to  significant historical  buildings, including the St. Louis Cathedral (www.stlouiscathedral.org)—the  oldest cathedral in North  America—and the Cabildo, where the Louisiana Purchase was signed. It’s also a great spot to grab a horse-drawn carriage or catch an impromptu street concert by local musicians.

 

THE GREAT OUTDOORS
    Cadres enjoys strolling along the  Mississippi River at Woldenberg Riverfront Park, which  runs from the Audubon  Aquarium of the Americas (www.auduboninstitute.org)—a place her cousins  love—to Jackson Square.

 

City Park (www.neworleanscitypark.com), a 1,300-acre park dotted with lagoons and centuries-old live oak trees, is another kid-friendly destination. Young ones can play at Storyland—a fairy tale-themed playground—or ride the antique carved wooden carousel. “My grandfather used to take me to Storyland,” Cadres says. “Then we’d go get a snoball.”

 

The park is also  home to the New  Orleans Botanical  Garden, New Orleans  Museum of Art (www.noma.org) and Bayou  Oaks Golf Facility,  the largest municipal  golf complex in the  South. “It’s absolutely  beautiful,” Cadres says.

 

LOCAL EATS
A snoball—one of the greatest local culinary treasures—is made of shaved ice topped with thick flavored syrup and extras like crushed pineapple or sweetened condensed milk.

 

While snoball stands begin sprouting  up in April, seafood is always available.  Cadres loves Ralph & Kacoo’s (www.ralphandkacoos.com; 504-522-5226)  for local staples like gumbo, catfish  and shrimp po’boys.

 

New Orleans “isn’t like any other place in the US,” Cadres says. “You can’t go anywhere else and find this kind of food or culture. Everyone is family here.”

By Denise Trowbridge, Airtran's Go Magazine, February 2008

Your secret credit scores

You, by the numbers

Did you accidentally bounce a check? Your bank and the cashier in the checkout line know about that, too.

If you apply for a credit card or refinance your mortgage, you probably know the bank is going to check your credit report. You might even know that the higher your credit score, the lower your interest rate.

But did you know that companies have access to more information about you than just your three-digit credit rating?

Shopping around for auto or homeowners insurance? The company checked into your insurance score and your Comprehensive Loss Underwriting Exchange report, known as CLUE. Shopping for private health insurance? They're looking into your medical information.

Did you accidentally bounce a check? Your bank and the cashier in the checkout line know about that, too.

Companies use this information when they do business with you. The scores are important, as they can affect everything from the amount you pay for car insurance to whether a bank will let you open an account.

But there is good news: You can get that information, too. Thanks to the Fair Credit Reporting Act, you can get copies of these reports, improve your scores and correct errors, which could save you money.

First, you need to know how you look to the companies you do business with, and how they use that information.

THE FICO SCORE

-- What it is: This is your credit score, a history of all of the debt accounts you have had -- credit cards, student loans, mortgages, car loans, etc. The file contains information on your credit limits, current balances and number of late payments you've made. If you have accounts in collections, filed for bankruptcy or have foreclosures or liens against you, that data will appear there, too. Negative information is kept for seven years. FICO scores range from 300 to 850. The median score is 723. The higher your score, the better: 720 or above means you're likely to be approved for a loan and receive the best interest rates. Anything below 600 will qualify you only for subprime lending.

-- How it's used: Banks, creditcard and finance companies use scores to set interest rates and determine loan eligibility. These scores also play a factor in your insurance rate. Employers increasingly look at reports before hiring. Three bureaus -- Equi-Fax, Experian and TransUnion -- provide credit scores to companies.

-- Get a copy: You can get a free copy of your credit report each year from www.annualcreditreport.com or by calling 1-877-322-8228. This is for the report only; it does not include your FICO score. For a fee, you can receive all three credit bureau reports with scores from www.myfico.com. Or, you can contact each bureau individually, at www.experian.com, www.equifax.com and www.transunion-.com. This costs $10 to $15 each.

-- Correct/improve score: You can address errors with these bureaus online or via the mail. You can't remove negative items that are accurate, but you may add a 100-word note explaining your side of the story.

The most common contributors to low scores? Late payments and high balances on credit cards. Paying bills on time will raise your score. Late payments account for 35 percent of your score. Paying down credit cards can raise your score significantly. Your debt-to-credit ratio accounts for 30 percent of your score. Paying down installment loans such as mortgages, student loans and car loans won't significantly improve your score.

CREDIT - BASED INSURANCE SCORES

-- What it is: Insurers use these to determine how likely you are to file an auto or homeowners insurance claim in the next 12 months. Auto-insurance scores are a combination of your carinsurance claims history and credit score. Homeowners insurance scores are a combination of your past homeowners-insurance claims and credit score. Previous insurance claims and credit-report data such as bankruptcies and liens, and the ratio of debt-to-credit limit on your credit cards, heavily impact the score.

-- How it's used: Insurers use this, in conjunction with your CLUE report, to set rates when you apply for a policy. For car insurance, your driving record counts, too.

-- Get a copy: www.choicetrust.com. This costs $12.95 each and includes access to your Equifax credit report for 30 days. If you are denied insurance because of your score, the insurer might tell how to get a free copy of your report.

-- Correct/improve score: Avoid small or unnecessary insurance claims. If you find an error on your report, you have to write to the appropriate department noted at www.choicetrust.com.

CLUE REPORTS

-- What they are: A history of the claims you have filed with insurers over the past five years. You might have two reports, homeowners and auto. Auto CLUEs contain the date the claim occurred, type of claim (injury, collision, liability, property damage, etc.) and cost to the insurer. It includes all insured losses, including car theft and towing. It doesn't include AAA or auto-club claims. Homeowners CLUEs contain the date claims occurred, claim type (wind, fire, water, catastrophe or burglary) and how much the insurer paid. Homeowners CLUEs can be used in two ways. When buying a house, you may ask the seller to obtain a copy of the homes report, so you can see the homes insurance-claims history. If you are shopping for insurance, companies will pull your personal CLUE report, which is your history of your own insurance claims.

-- Get a copy: www.choicetrust.com; or 1-866-527-2600

-- Correct your report: If you find an error on your report, you write to C.L.U.E. Inc. Consumer Disclosure Center, Box 105295, Atlanta, Ga. 30348

CHEXSYSTEMS REPORT

Your banking history, with check-printing records, dates and amounts of any bounced checks, open and closing dates of past bank accounts, and inquiries from other banks where you have tried to open accounts. The report contains your driver's license information to help banks verify your ID when opening accounts.

-- How it's used: Used only by banks and credit unions to determine if they want to open accounts with you, and to verify your identity.

-- Get a copy: free, from www.consumerdebit.com or 1-800-428-9623. Dispute errors in writing.

-- Improve your report: Keep account inquiries to a minimum; don't try to open a lot of accounts at different banks in a short period of time. Inquiries might suggest to them that you're an unstable customer. Avoid bouncing checks. If you are denied an account because of your report and you don't have a questionable banking history, you could be a victim of identity theft. Check your report for suspicious activity.

SCAN REPORT

-- What it is: A database of bounced checks used by retailers. If you've written a check that was returned for insufficient funds, that data will show up with the date, amount of the check and how long it took you to deposit money to cover it. Information is reported for that past three years.

-- How it's used: A retailer will use this information to decide whether it wants to accept your check. National retailers may augment the information with more of their own. If your check is denied, see if you've been a victim of identity theft.

-- Get a copy: free, from www.consumerdebit.com; or 1-800-262-7771. Errors can be disputed in writing.

QUALIFILE SCORE

-- What it is: Used to predict how likely you are to have a charged-off bank account in the next 12 months. The score is a combination of information contained in your SCAN, Chex-System and one or more creditbureau reports.

-- How it's used: Banks and credit unions use it to decide if they will open an account for you. It also can be used to determine the creditworthiness of those with limited credit histories.

-- Get a copy: You can't get a copy of this score.

-- Improve your score: It's based on your SCAN and Check-Systems information, so you can improve it by not bouncing checks, or paying bounced checks quickly. Don't apply for accounts at different banks in a short period of time. Your FICO score also is part of the score, so concentrate on improving your overall credit rating. If you have a bad checking account history, you can complete a GetChecking course, at www.getchecking.org, to be eligible for a fresh start with a bank.

MEDICAL INFORMATION BUREAU REPORT

-- What it is: An overview of your medical history for the past seven years. It contains codes identifying 230 broad categories related to medical conditions you have been treated for in that span. Nonmedical items, including negative marks on your driving record, participation in hazardous sports or occupational activities might appear. Only 20 percent of consumers have such a file. Those who have applied for private (non-employer sponsored) life, disability, health or long-term care insurance have one.

-- How it's used: Insurers use this report to determine your insurability, identify potential pre-existing conditions and detect potential fraud in insurance applications.

-- Get a copy: Call 1-866-692-6901, or go to www.mib.com. Errors have to be corrected in writing.

Information came from ChoicePoint, eFunds Corp., Fair Isaac Corp. and the Medical Information Bureau. •

Denise Trowbridge, The Columbus Dispatch

Many assumptions about home insurance are wrong

 Hurricane Katrina washed ashore 1,000 miles from Ohio, but homeowners here can learn a few lessons from the storm.

The fallout from the 2005 hurricane season sent a clear message to homeowners everywhere -- don't assume that your homeowners insurance policy pays for everything when disaster strikes.

Yet, a disturbing number of homeowners nationwide don't know what is and isn't covered by their policy.

About 30 percent still think that flood damage is covered by a standard homeowners insurance policy, despite extensive coverage of flooding issues arising from the Gulf Coast hurricanes, according to a survey by the National Association of Insurance Commissioners.

Half think damage to water lines is covered, while 37 percent think broken sewer lines are covered. They're not.

Mold, termite and insect damage, earthquakes and injuries to pets aren't covered, either, even though many homeowners think they are.

"Some people take for granted that everything is covered," said Mary Jo Hudson, director of the Ohio Department of Insurance.

"Most people do more research to buy their car than they do for other important decisions such as what their insurance covers."

Taking your insurance policy for granted can be tough on the wallet.

In the case of an earthquake or a flood, you could "find out after the fact that your entire home has been damaged and you aren't covered," said Peter McMurtrie, chief claims officer with Grange Insurance.

Or your basement could flood and you could be left with no money to pay for the damage, he said.

Chances are there's a gap somewhere in your coverage that could leave you with an expensive repair bill.

"No policy covers everything," said Joel Brown, vice president of personal lines for State Auto.

Homeowners policies typically exclude damage from earthquakes, many types of water damage, war, nuclear hazards and neglect, according to the Ohio Department of Insurance.

No homeowners insurance policy covers flooding. Flood insurance can be purchased only from the National Flood Insurance Program.

Exclusions don't stop there.

Did you inherit Grandma's jewelry, silverware or fur coat? There are limits to what insurers will pay for these types of belongings and for some other types of claims.

For most policies, the only way to be sure is to read the exclusions page of your policy, Brown said.

The exclusions page is the detailed list of everything that your insurance company won't pay for.

Exclusions generally fall into three categories.

First are the big ones that are too expensive to insure, including "very big catastrophic events such as flood, nuclear, biological or chemical contamination," Brown said.

"If (we) insured them, the average person couldn't afford the policy."

Property damage caused by war, riots and chemical weapons falls into that category.

Then, there are the things that are excluded because they should be insured with a different, more suitable type of policy, such as cars or businesses.

Finally, there is damage that isn't covered but could be if you purchase a policy rider. A rider is additional insurance you can add to your standard homeowners policy, usually for a nominal price.

Think of riders as a way to customize or build your own insurance policy.

There are riders for sewer and drain backup, for the replacement cost of computers, antiques and jewelry, or for insuring home-based businesses.

You can also buy riders to cover earthquakes, fungus and dry rot, or to increase the amount your insurer will pay if someone is injured on your property.

The personal-property rider increases the amount your insurer will pay to replace the contents of your home, such as furniture and clothing. Most policies value contents at a minimum of 50 percent of the home's total insured value.

People with older homes might want a rider that will cover the extra costs of rebuilding the house to meet current building codes.

"The goal is to keep the policy affordable without forcing people to pay for an expensive policy that covers things they don't necessarily need," Brown said.

Not having any coverage isn't the only peril. You could also be underinsured and not have enough insurance to adequately cover losses in the event of a disaster.

About 59 percent of homeowners are underinsured, according to a survey by Marshall & Swift, a real-estate valuation firm in Lawrenceville, N.J.

Of those, the average home is underinsured by about 21 percent.

Homeowners often end up underinsured when they don't update their policies to reflect the value of renovations and home improvements, Grange's McMurtrie said.

"Typically, policies anticipate normal inflation," annually boosting coverage limits to reflect rising costs for building supplies, he said. They don't factor in any improvements you make to the house.

"The rule of thumb for renovations is anything beyond a simple deck, contact your agent," Brown said.

Policies should also be updated to reflect major life changes, such as getting married or divorced, an elderly parent moving in, having a baby or adopting a dog, said Mary Bonelli of the Ohio Insurance Institute.

A lot of homeowners make the mistake of getting just the coverage required by their mortgage lender when they buy the house and then never looking at the policy again, Hudson said.

Homeowners should review their coverage at least once a year to make sure it's up to date and provides enough coverage, Bonelli said.

Homeowners might also want to consider replacement cost coverage, which pays the actual cost to rebuild your house if it is damaged or destroyed, even if that amount is above the policy limit. It can be added to a standard policy as a rider.

Most standard policies have actual cash value coverage, which pays only the value of the house as it is now, which means the value is lower because of depreciation.

The difference between these two types of policies can quickly equal thousands of dollars.

Of course, all of these riders add to your annual insurance premium.

Some folks end up either underinsured or with gaps in coverage because they are reluctant to pay more for a product they hope they never have to use.

"Price is an important issue, but remember you get what you pay for," Hudson said. "If you want a less expensive policy, know that it likely has more limitations and understand what those limitations are."

Ohioans generally have it pretty good regarding insurance.

Ohio is the seventh least-expensive state for homeowners insurance, with an average annual premium of about $523. The national average is $729, according to the National Association of Insurance Commissioners. Rates went down about 1 percent in Ohio in 2006.

"It's because of our climate. We're a lower risk area," Hudson said. "We don't have (major) earthquakes or hurricanes, so more companies want to write here."

That doesn't mean Ohio has no perils. An ice storm in January 2005 caused $38 million in insured losses. In 2004, fires caused $319 million in damage, according to the Ohio Insurance Institute.

The only way to know what's covered is to read your policy and discuss any questions with your insurance agent, McMurtrie said.

"It isn't the most invigorating reading material, but considering it covers your most valuable asset, it's important."•

Sidebar: Check your policy

68 percent of homeowners think vehicles such as cars, boats and motorcycles stolen from or damaged on their property are covered.

51 percent of homeowners think damage from a break in the water line on their property supplying water to their home is covered.

37 percent of homeowners think damage from a break in the sewer line on their property that connects to their municipal sewer system is covered.

35 percent of homeowners think damage from earthquakes is covered.

34 percent of homeowners think damage from mold is covered.

31 percent of homeowners think damage from termites or other infestation is covered.

22 percent of homeowners think pets stolen from or injured on their property are covered.

Most standard policies don't cover the above.

Source: National Association of Insurance Commissioners

By Denise Trowbridge, The Columbus Dispatch

FDIC presses banks for alternatives to payday loans

Banks pressed for loan options FDIC wants lower-interest, consumer-friendly lending Federal regulators are pushing banks to offer cash-strapped Americans an alternative to high-interest payday loans. The Federal Deposit Insurance Corp. recently issued guidelines to help banks develop small loans that are significantly less expensive and have more consumer-friendly terms than payday loans. Payday loans are cash advances, usually for less than $500, that must be repaid within two weeks and carry an average annual interest rate of about 400 percent. The bank version would have a maximum annual interest rate of 36 percent and have low or no fees. The FDIC also is asking banks to divert a portion of the revenue they make from each loan into a savings account for the borrower, and to offer financial counseling to repeat borrowers who might require help learning to manage their day-to-day finances. In return, banks would receive positive marks under the Community Reinvestment Act, which requires banks to offer banking services to low- and moderate-income neighborhoods. Regulators use this data when deciding whether to approve bank mergers and acquisitions. But banks are not rushing to offer the loans, saying they just aren't profitable. "Low-dollar-denomination loans are very expensive to make and because they are uncollateralized, they are very risky," said Mike Van Buskirk, president of the Ohio Bankers League. "Banks will be cautious." Of the major Ohio banks, only Key Bank has introduced such a small loan. As part of a test program in several low-income Cleveland neighborhoods, Key provides a cash reserve line of credit of about $250. Customers can use it as "overdraft protection, which could be paid off over time, just like a credit card," spokesman Mike Sherman said. Ohio credit unions have been faster to draft low-dollar loans. The Ohio Credit Union League introduced an alternative to payday loans, called StretchPay, in June 2006. StretchPay loans have an annual percentage rate of 18 percent and must be repaid within 30 days. Borrowers also pay an annual fee of $35 for a $250 loan limit or $70 for a $500 loan limit. The annual fee goes into a fund to help credit unions that suffer excessive losses on the loans. Kemba Financial Credit Union and MidState Educators Credit Union in Columbus are two of about 30 Ohio credit unions offering the loan. "We don't want to be in the payday-loan business, but we have an obligation to consumers to offer an alternative to 400 percent interest rates," said Becky Hart, spokeswoman for the Ohio Credit Union League. Payday lenders charge about $15 for every $100 borrowed. The annual percentage rate on the average payday loan is 391 percent, according to the Community Financial Services Association of America. Payday lenders earned $6 billion in fee revenue from $40 billion in loans in 2003, according to Stephens Inc., a Little Rock, Ark.-based investment bank. StretchPay loans have been very popular, Hart said, "but they are absolutely not profitable. We aren't making money on them." Credit unions are nonprofits, and as part of their tax-exempt status, are "obligated to come up with products like this that serve the greater good" but aren't necessarily profit centers, she said. Banks don't want to risk those kinds of losses. Smaller community banks are also reluctant because these types of loans and borrowers often are considered subprime, said Robert G. Rowe, regulatory counsel to Independent Community Bankers of America, a trade group in Washington. Subprime borrowers are typically those with low or no credit, a history of late payments on bills, or a high level of consumer debt. Banks often avoid the subprime market because of "increased costs, close regulatory scrutiny, adverse publicity ... and reputation risk," Rowe said. Critics say the exorbitant interest rates on payday loans can trap some people on the economic fringe in a cycle of debt, and banks are in a unique position to help. About 75 percent of people with payday loans cannot repay the loan after two weeks, often taking out a second payday loan to pay off the first, according to the Center for Responsible Lending. Two-thirds of those who use alternative financial services such as payday lenders have a traditional bank account. "Financial Institutions can provide the same service with more appropriate loan terms and at a lower cost," read an FDIC statement to the banking industry. Payday lenders aren't convinced banks will step in. Banks probably aren't willing to "forgo billions of dollars in profits from (bounced check fees) and overdraft protection to offer" low-cost loans, said Gerald Goldman, general counsel of Financial Service Centers of America, a trade group.• By Denise Trowbridge The Columbus Dispatch

Time of easy credit for buyers ends as foreclosures mount

Home lenders lifting threshold Time of easy credit for buyers ends as foreclosures mount Ohioans with less-than-stellar credit might soon have trouble getting a mortgage, thanks to a pullback by banks that have been burned too many times. A number of banks with operations in central Ohio are tightening loan requirements and getting away from loans that are considered more riskier. JPMorgan Chase recently said it will reduce sales of "no-doc" loans, which are made to borrowers who don't have proof of income, as well as loans with high loan-amount to house-value ratios. The bank also eliminated adjustable-rate mortgages that reset after two or three years. Adjustable-rate loans have been blamed for Ohio's high foreclosure rate, as many borrowers were unable to make payments when their interest rates were reset upward. National City still is making loans through bank branches, but officials said Monday that it no longer would sell home-equity loans and lines of credit through brokers. Home-equity loans are considered riskier than primary mortgages. Huntington Bancshares, Park National Bank, KeyBank and Fifth Third Bank haven't made any changes to their mortgage loans or lending criteria. Foreclosures nationwide have increased by 58 percent in the first half of the year, compared with the same period in 2006, according to RealtyTrac, an online real-estate marketplace. Ohio had the third-highest foreclosure rate in the nation. Foreclosures are the hang- over from overly exuberant lending, said Jay Brinkmann, financial economist with the Mortgage Bankers Association. The past seven years were characterized by "over-financing of marginal buyers and a considerable degree of fraud and misrepresentation in mortgage lending," Brinkman said. "When Wall Street was pumping money into the mortgage market, lenders funded just about anything," said Fritz Elmendorf, spokesman for the Consumer Bankers Association. But the real-estate party appears to be over. Lenders are raising interest rates and shrinking the pool of people they're willing to make loans to in a bid to make their loans more attractive to investors, said Ganesh Rathnam, bank analyst for Morningstar, an investment research company. Investors, spooked by growing losses on subprime mortgage loans, have stopped feeding money into the mortgage market, forcing lenders to cut back on the number of loans they make. Lenders routinely package and sell their loans to investors as mortgage-backed securities in order to free up money to make more loans. When investors pull back, the pool of money available to consumers dries up. Would-be homeowners with so-so credit aren't the only ones being affected by the current mortgage climate. Consumers with problems documenting their income, or who have little equity or money for a down payment, are going to have a hard time finding or refinancing a mortgage, Rathnam said. Subprime borrowers, with credit scores below 620, have been frozen out of the market. Prime borrowers, those with credit scores above 700, will have the easiest time finding a mortgage. Anyone who is able to get a loan likely will have to pay more, said Mike Van Buskirk, president of the Ohio Bankers League. "Interest rates are going to go up soon, and even prime borrowers are going to pay more." For now, interest rates have held steady at about 6.68 percent for 30-year fixed-rate mortgages, according to mortgage purchaser Freddie Mac, up from 6.63 percent last year. But some banks already are raising rates. Wells Fargo, the nation's second-largest mortgage lender, raised interest rates on some mortgage loans to 8 percent last week, up from 6.875 percent. Wells Fargo, SunTrust Banks and Wachovia also stopped making loans through brokers to so-called "Alt-A" borrowers, those with average credit. Tightening credit can be bad news for people with adjustable-rate mortgages. A record $50 billion worth of adjustable-rate loans that were taken out in 2004 and 2005, at the height of the mortgage boom, are going to reset in October, according to Economy.com. Homeowners looking to refinance to a fixed-rate loan or hoping to stave off foreclosure might find themselves shut out of the mortgage market, Van Buskirk said. "We're in a period where underwriting standards are being reassessed," Elmendorf said. "The loan spigot isn't going to be shut off completely. Lenders are just being more traditional and want borrowers to have some stake in the game." People with good credit who can verify all of their assets and income still can get loans and relatively low interest rates through major lenders, said Sam Garcia, publisher of MortgageDaily.com, an online industry publication. Still, consumers do have fewer lenders to choose from, he said. About 71 mortgage companies have closed in 2007, up from 17 in 2006. The most recent was American Home Mortgage, the nation's 10th-largest lender, which filed for bankruptcy and laid off all but 10 percent of its work force last week.• By Denise Trowbridge The Columbus Dispatch

The ugly truth about Check 21

Overdrawn accounts become more common as electronic banking, Check 21 law speed transactions

Edward Cutler doesn't understand why it takes so long for the checks he deposits into his account to clear, when it seems the checks he writes to other people clear almost immediately.

"I've taught math, studied differential calculus, have a doctorate degree and even I can't figure out what my balance is to keep from bouncing checks," the Columbus pediatrician said.

One thing is clear: Managing checking-account transactions can be confusing, sometimes causing otherwise responsible customers to bounce checks.

People who do accidentally overdraw their accounts are paying a heftier price.

Bounced-check fees are at an all-time high, according to Bankrate.com. The average fee nationwide is $27.40, up from $23.06 in 1999.

And consumers seem to be paying more of them.

Banks collected $33 billion in insufficient-fund and bounced-check fees in 2003, according to research firm Moebs $ervices in Lake Bluff, Ill. Fees are expected to reach $53.1 billion this year.

A confluence of events has made it harder for consumers to manage their checking-account balances, making them more likely to overdraw their accounts, said Jean Ann Fox, director of consumer protection with the Consumer Federation of America in Washington.

"The only thing you used to be able to bounce was a

check. But now, you can overdraw your account at an ATM and using your debit card," Fox said.

"People assume that if they don't have money in their account, the bank won't clear those transactions, but that's not the case anymore."

Changes in the regulations that govern checks have also made the process confusing and frustrating for consumers, said Greg McBride, a financial analyst with Bankrate.com.

"The fact is that checks clear faster because of Check 21," he said.

Check 21, a law that went into effect in 2004, sped up checking-account debits by allowing banks to use electronic images of checks to process transactions. It turns paper checks into electronic debits that can clear almost immediately.

Unfortunately, Check 21 didn't speed deposits.

Adding to the problem is the variation in the way banks and retailers process checks and debit-card transactions. That makes it harder for consumers to keep a handle on their balances.

"Wal-Mart can take your check and convert it into an electronic (debit) right there, but a check you write to a mom and pop (store) might not get to the bank for a week," said Jeff Kastelic, senior vice president of product management with National City.

"People think the banking system works in real time, but it doesn't."

Debit transactions aren't always processed immediately, either.

A person can overdraw his account multiple times in a single day paying with a debit card, because some retailers wait until after business hours to process payments. In that case, the money isn't subtracted from the account until the end of the day. In the meantime, the bank clears purchases because it appears there is money to cover it.

"Banks assume all the transactions you authorize are against good money that you know you have in your account," said Tom O'Hara, senior vice president and director of deposit products with Huntington National Bank.

Also, no laws govern the order in which banks process the checks people write, said Val Young, vice president of retail operations with Fifth Third Bank in central Ohio.

Most national banks and larger regional banks cash the largest checks first, she said.

It's a controversial practice, Fox said. When larger checks clear first, it can cause several smaller checks to bounce, socking customers with multiple bounced-check fees.

"It's very profitable for banks," Fox said.

Banks say profit isn't the motive.

"Large checks are usually the most important in peoples' lives: their rent or their mortgage payment," said Jeff Lyttle, spokesman for Chase Bank. "Consumers don't think about it, but would you rather bounce the check you wrote to the dry cleaner or for your mortgage?"

Some banks also process withdrawals before deposits, Fox said, causing more checks to bounce.

To stay out of trouble, she said, "You have to assume the banks adopt policies to benefit the bank, not you."

"There's a misconception that banks want people to bounce checks," O'Hara said. "Unpaid overdrafts are a liability for banks. The second-most-common type of check fraud is from overdraft customers who don't pay."

American banks lost about $677 million to check fraud in 2003, according to the American Bankers Association. About 17 percent of that is attributed to unpaid bounced checks.

Overdraft fees, the group said, are "supposed to be a deterrent" to keep check fraud at the lowest level possible.

But there is no doubt that banks profit from them.

In 1984, fees accounted for 25 percent of bank income. By 2001, the amount had risen to 43 percent, according to a report by Federal Reserve economist Kevin Stiroh.

"Fee income has taken a more prominent role in bank revenue," McBride said. "The (bank's) goal is to stabilize earnings that would otherwise be subject to the fluctuation of interest rates."

Customers, it seems, are getting angry. "It's an emotional transaction. People feel guilty when they make a mistake and don't want to walk away feeling the bank was mean to them," O'Hara said.

Some banks have addressed this by implementing tiered fees for overdrafts. People who rarely bounce a check pay a lower fee than those who bounce checks more often.

Chase, Huntington, Key Bank, National City and U.S. Bank use tiered fees on some of their accounts.

Huntington recently eliminated fees on overdrafts that are less than $5, to reduce fees from debit-card slip-ups.

Banks also have tried to help customers by "spending a significant amount of money to make sure people know in real time what their balances are," O'Hara said.

Customers can keep tabs on accounts online, through automated phone services, at ATM machines, and with their monthly statements, he said.

Consumer advocates aren't buying it.

"Banks say you can avoid fees," Fox said. "But they are putting out a bunch of hurdles then telling you it's your fault if you can't get over them. There is no coincidence here."

Some relief might be on the horizon, McBride said. Regulators will be reviewing the hold times on deposits next year, to see if they can be shortened.

In the meantime, McBride said, "fees aren't going away." •

Sidebar: Account vigilance

Check your account balances frequently

* About 59 percent of people check their balance at least once a week. "That means (up to) 41 percent don't really know if the money is there or not" when they write a check, said Tom O'Hara with Huntington National Bank. Online or phone banking can give you a better idea of your balance.

Sign up for an overdraft-protection program linked to a savings account

* For less than the cost of an overdraft fee, money is automatically transferred from another account to cover the check or debit.

Forget the float

* You no longer can write a check, then deposit the money to cover it the next day. To avoid fees, assume that every check written or debit-card purchase will clear instantly.

Fake yourself out

* Stash $100 in your checking account, but don't include it in your balance. That way, when you think your account is at zero, you really have $100 to cover any accidental overdrafts.

Read the fine print

* The terms-and-conditions brochure for checking accounts should outline the bank's funds availability policy for deposits, fees for each account, and to some extent how transactions are processed. If you don't see an answer, ask before opening an account.

Sources: Bankrate.com, Consumer Federation of America, Huntington National Bank, National City Bank

By Denise Trowbridge, The Columbus Dispatch

Positions go unfilled despite pool of available talent, experts say

 It's become a real job trying to figure out today's job market.

U.S. businesses increasingly say they can't find the skilled workers they need, while millions of skilled workers say they can't find a job.

Drill down on the subject, and you'll find a myriad reasons for the disconnect.

Employers often argue that advancing technology has left gaps between work demands and the skills most job seekers possess. Critics say corporations have become overly picky and cost-conscious when recruiting.

Columbus resident Darrell Rathburn is one of the many caught up in this whirlwind.

Even though he has a master's degree in computer science and decades of experience working for Fortune 500 companies, he quit his job search after two years of looking.

"I decided to throw in the towel and accept the fact that I was involuntarily retired," he said.

In central Ohio, 68 percent of businesses said they couldn't fill jobs because they couldn't find people with the right skills or work experience, according to Community Research Partners a nonprofit economic research group in Columbus.

Yet, about 28,000 workers in Franklin County -- many with education, experience and technical skills -- can't find a job. Nationally, 8.1 million people are unemployed.

Job-seekers are scratching their heads.

Louise Karl holds a doctorate in biotechnology, has years of lab experience and has had research published in prestigious journals. She's been looking for full-time work for six years.

"There is no skill shortage," she said. "I probably know 20 people with Ph.D.s in biology, chemistry, et cetera, and none of them can even get an interview."

Karl might be on to something.

Some employment experts agree that there is no skill shortage. At least not on the scale that many business and trade groups are claiming.

Businesses have created an "artificial" talent shortage with shortsighted employment practices and inefficient use of the existing work force, said Norman Matloff, computer science professor at the University of California-Davis, in testimony to Congress about technology labor shortages.

The underlying driver is money.

"When a business says shortage, they really mean they are finding it difficult to obtain labor at the wage they are accustomed to paying," said Richard DeKaser, chief economist at National City Bank.

Ohio businesses are definitely "not willing overall to pay for skills that are in short supply," said Kathlene Tarsitano, general manager of Express Personnel Services, a staffing and recruiting company in Columbus.

About 23 percent of central Ohio employers said they had difficulty filling jobs because of the pay they were offering, according to Community Research Partners.

Industry doesn't apply the "basic laws of supply and demand to salaries," said Paul Kostek, former president of the Institute of Electrical and Electronic Engineers.

A company that underpays "will sit around and wonder why they can't find people and say it must be due to a skill shortage," he said.

Businesses are trying to lure people with perks other than money, said Stacey Jarret Wagner, managing director of the National Association of Manufacturer's Center for Workforce Success.

"Small manufacturers often can't pay 'big company' wages," she said. So they "offer alternatives such as being a great place to work, flexible hiring practices, or access to training."

Usually those efforts fall flat, especially if companies bank on retirement accounts and health insurance to lure talent, Tarsitano said. "Workers expect companies to offer those things."

But employers who offer more generous benefits seem to be avoiding skill shortages altogether. Ohio Health, which runs eight hospitals including Grant Medical Center and Riverside Methodist, launched a program in 2002 to pay 100 percent of nursing-school tuition costs for its full- and part-time employees.

"It's been a great recruiting tool, especially as the cost of college tuition has risen," said Jon Joffe, Ohio Health's vice president of human resources.

Even though Ohio had a shortage of 5,000 nurses last year, Ohio Health hasn't had trouble filling positions.

Attracting skilled workers "boils down to how you treat employees," Joffe said. Industries that "don't develop a reputation for treating people well will always struggle to attract the work force it needs."

Benefits are only part of the equation. Hiring practices also can exacerbate the skills gap.

Many companies are likely to shy away from older workers, even if someone has the skills they are looking for, said Robert Heneman, human resources expert at Ohio State University.

Older workers command higher salaries, and companies fear they will add to the company's health-care costs, he said.

It's treading the fine line of age discrimination, which is illegal, yet some workers say age is the only thing standing between them and a job.

"If (an employer) looks at your resume and gets the idea you are over 40, it's gone," Karl said.

Businesses also have grown pickier.

"Companies are very rigid in who they are going to hire, and it's gotten steadily worse," Tarsitano said.

"They would rather go with nobody than someone with comparable and transferable skills that they could train. They've cut their pool of applicants to none."

Employers are "seeing black and white, and they aren't making any consideration of an individual's potential," she said. "They're hung up on this vision of the perfect person."

Being "smart people who can learn" is no longer enough to get you in the door, Kostek said.

Why? Training budgets have been replaced with a "hit-the-ground-running attitude," Heneman said.

Companies spend 50 times more recruiting a candidate than they do training them after they're hired, according to Deloitte Research. Only 37 percent of central Ohio companies provide general skills training beyond an initial orientation.

"It's the textbook way to manage talent," Heneman said. "Companies don't want to pay to give employees skills they can take to another employer."

But the gap between job-seekers and employers isn't all the result of human-resource changes.

"The economy has changed structurally" since 2000, DeKaser said.

Globalization and outsourcing have moved more blue- and white-collar work overseas. India and China have upped competition for U.S. businesses. And companies need fewer people to do more work, because of significant increases in productivity from mechanization and technology, said Bill Lafayette, vice president of economic analysis with the Columbus Chamber.

In 1997, the average American worker produced $70,200 worth of work as a share of gross domestic product. In 2005, it was $82,700.

Businesses say the skill shortage is, in fact, very real, and is caused by many of the same rapid technological advances that boosted worker productivity.

Many unskilled manufacturing jobs have been replaced with jobs requiring advanced math and computer skills, according to the National Association of Manufacturers.

The group said 90 percent of manufacturers are suffering from a shortage of skilled workers such as machinists and technicians, in part because of trouble recruiting young workers to replace skilled retirees.

At a biotechnology conference last fall, Ben Venue Laboratories in Bedford and Amylin Pharmaceuticals in Cincinnati said they had trouble recruiting workers, including senior-level scientists. In the past year, about 50 biotech companies moved to or were formed in Ohio.

The U.S Department of Education estimates only 20 percent of the U.S. population will have the skills needed to perform 60 percent of the jobs in coming years.

Central Ohio employers expect shortages in health care, information technology, architecture, engineering, sales, and business and financial operations in the next year.

Even so, these jobs will only yield a small number of openings every year. Occupations with lower pay and fewer skill requirements will provide significantly more jobs, according to the Ohio Department of Job and Family Services.

For instance, for every one job opening for a network systems data analyst, Ohio will have 20 openings for retail salespeople.

Still, skill shortages do pose a real risk to businesses, and maybe more so in the future, Lafayette said.

"All of the baby boomers are eventually going to go away, and there's a much smaller group of folks coming through the pipeline to replace them," he said. "The real shortage hasn't happened yet." •

By Denise Trowbridge, The Columbus Dispatch

Taxpayers OK with fibbing on their filings, study shows

 It's OK to cheat on your taxes. At least, that's what the numbers say.

Plenty of people routinely fib on their tax returns.

The Internal Revenue Service estimates the tax gap, the difference between the tax that Americans owe and what they actually pay, is about $345 billion a year.

Americans are clearly underpaying, but they don't feel guilty about it, according to researchers at Youngstown State University.

Many of the millions of people who cheat on their taxes every year view themselves as "honest citizens battling an unfair tax system," the study found.

"Tax evasion has become such an ingrained part of our culture that many people believe it's no longer considered cheating," said James Tackett, one of three accounting professors who conducted the study.

About 25 percent of those he surveyed admitted to cheating on their taxes. The actual number is probably higher, because a lot of people probably cheat but won't admit it, Tackett said.

Why don't people feel guilty?

There are plenty of opportunities to cheat, there's very little chance you'll get caught, and if you do get caught the penalties are relatively small.

"People are basically doing a cost-benefit analysis when deciding to cheat," said William Raabe, tax expert at Ohio State University. "The chance of getting audited is so low that it's easy to rationalize cutting corners."

And honest taxpayers often end up footing the bill for cheaters.

The average "honest" taxpayer pays an extra $2,680 in taxes each year to subsidize tax cheats, IRS taxpayer advocate Nina Olson said.

Eventually, some of those honest taxpayers feel so much resentment that cheaters are getting away with it that they decide to cheat on their taxes, too, she said. "No one wants to feel like a tax chump."

For other taxpayers, paying less is a "protest vote," Raabe said.

If the U.S. is in an unpopular war, the president or Congress are unpopular, or there's been a government finance scandal, people are more likely to cheat on their taxes, Raabe said.

Others say the tax code is so complicated that even honest taxpayers make mistakes and might end up underpaying.

Most of the tax gap, about $285 billion, stems from people who understate their income or claim more deductions than they deserve.

IRS audit data found that workers who receive W-2 income were most likely to pay all of their taxes. Those with self-employment or business income were the least likely to pay everything they owe.

In a bid to reduce the tax gap, the IRS said in November that it would increase the number of audits for high-income earners and the self-employed. Audits of these groups increased about 18 percent last year.

Still, the overall audit rate is very low. Only about 1 percent of returns are audited, according to the Government Accountability Office.

That's not high enough to get people to pay up at tax time, Tackett said.

It'll take a significantly higher audit rate, stiffer fines for breaking the rules and more stringent income reporting requirements to narrow that tax gap, according to the Youngstown study.

Until that happens, people will keep on cheating,Tackett said. "The current system just doesn't work."•

By Denise Trowbridge, The Columbus Dispatch