Montana 1st CU Blog

I have long subscribed to the theory that when the rest of the nation is in boom, Montana is steady, and when the rest of the nation is in bust, Montana is steady.  I think this economic period is showing that this theory has some truth to it. 

For example, these are the economic stories today nationwide:

This however is the economic news in Montana:

HELENA - State government’s financial picture looks a lot rosier than it did in last year’s crystal ball.

Montana showed a general fund surplus, or ending fund balance, of $400 million at the close of the fiscal year June 30, Gov. Brian Schweitzer said Wednesday. That’s more than twice the $190 million the Legislature projected last year.

What’s more, the early estimates are that surplus also will remain in the $400 million range in mid-2009 - more than three times than what was projected last year.

“Good news. Good news,” Schweitzer said. “Where we’re at is in a better place than we thought we would be at.”

Schweitzer attributed the surplus increases to a variety of factors. Individual income tax revenues are up $90 million over last year. Oil and gas revenues are $47 million higher, and other natural resource revenues are $8 million higher. He said state agencies squeezed their allotted budgets and turned back $34 million to the treasury. The state won an $8 million court settlement from PPL Montana.

Despite the more optimistic projections, Schweitzer still struck a note of caution because of the cyclical nature of the Montana’s resource- and agriculture-based economy.

“My experience in Montana, going all the way back to my grandfather’s days, is there’s about three bad years for every good year in Montana,” he said, adding that the state has seen three or four good years. “So it never hurts to have a little extra grain in the bin.

“It’s the same kind of philosophy,” he added. “There will be some tough years in the future, and I don’t know if it’s happening sooner or later.

A number of states are facing tough economic times. The National Conference of State Legislatures reported that 20 states faced widening budget gaps in June between declining revenues and rising spending.

By mid-November, Schweitzer must propose a state government budget to the Legislature for the next two years. If Republican challenger Roy Brown unseats Democrat Schweitzer in November, he can modify the budget request.

Brown said that Schweitzer’s announcement shows Montanans lost out in the 2007 Legislature.

“Instead of families getting permanent property tax relief, we have the biggest budget in history - so big it couldn’t all be spent, and we have a higher ending fund balance in Helena,” said Brown, a senator from Billings. “If most folks around the state were given the choice between real tax cuts and a fatter bank account in Helena, nearly everyone would choose to keep more of their own hard-earned money.”

Schweitzer said it’s too early to say if he will propose returning money to taxpayers as he did with his $400-per-household property tax rebate in 2007. When the 2007 Legislature started work, the projected state budget surplus for mid-2009 topped $1 billion.

At the same time, Schweitzer vowed he won’t raise taxes if re-elected.

“The last thing Montanans need is a state tax increase,” he said.

State residents already are facing higher costs for gasoline and diesel, health care, utilities and groceries, he said.

“This cushion is good. It says that we will be able to continue to maintain the services of state government, that I’ll be able to continue to not raise taxes and that Montana has money in the bank,” he said. “So this is good news.”

Schweitzer said it’s fortunate that Montana’s economy is diverse and “continues to tick along.”

I guess it holds true…Montana is the place to be.  Alternatively it could mean we pay too many taxes, and/ or that we should look to BOOM on occasion.

Recently the media has been flush with stories of “bank runs”, and economic dooms day predictions.  I would like to take this opportunity to educate our membership about the safeguards that are in place at our FEDERALLY INSURED CREDIT UNION to keep your money unexposed to the financial climate.

Please read the following articles from NCUA and The Wall Street Journal:

http://online.wsj.com/article/SB120917138228646561.html

http://ncua.gov/news/press_releases/2008/MR08-0714.htm

“But he that filches from me my good name/Robs me of that which not enriches him/And makes me poor indeed.”  Shakespeare, Othello

What is identity theft?

The short answer is that identity theft is a crime>  ID theft and fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.

Unlike your fingerprints, which are unique to you and cannot be given to someone else for their use, your personal data - especially your Social Security number, your bank account number or credit card number, your telephone calling card number, and other valuable identifying data - can be used, if they fall into the wrong hands, to personally profit at your expense.

In one notorious case of id theft, the criminal, a convicted felon, not only incurred more than $100,000 of credit card debt, obtained a federal home loan, and bought homes, motorcycles, and handguns in the victim’s name, but called his victim to taunt him — saying that he could continue to pose as the victim for as long as he wanted because identity theft was not a federal crime at that time — before filing for bankruptcy, also in the victim’s name.  While the victim and his wife spent more than four years and more than $15,000 of their own money to restore their credit and reputation, the criminal served a brief sentence for making a false statement to procure a firearm, but made no restitution to his victim for any of the harm he had caused.  This case, and others like it, prompted Congress in 1998 to create a new federal offense of id theft.

Many people do not realize how easily criminals can obtain our personal data without having to break into our homes.  IN public places, for example, criminals may engage in “shoulder surfing” - watching you from a nearby location as you punch in your telephone calling card number or credit card number - or listen in on your conversation if you give your credit card number over the telephone to a hotel or rental car company.  USING YOUR MOUSE, NOT YOUR KEYBOARD, CAN PROTECT YOUR DATA!

In recent years, the Internet has become an appealing place for criminals to obtain identifying data, such as passwords or even banking information.  In their haste to explore the exciting features of the Internet, many people respond to “spam” - unsolicited E-mail - that promises them some benefit but requests identifying data, without realizing that in many cases, the requester has no intention of keeping his promise.  In some cases, criminals reportedly have used computer technology to obtain large amounts of personal data.  DON’T RESPOND!

Even the area near your home and office may not be secure.  Some criminals engage in “dumpster diving” - going through your garbage cans or a communal dumpster or trash bin — to obtain copies of your checks, credit card or bank statements, or other records that typically bear you name, address, and telephone number.  SET UP E-STATEMENTS TO ELIMINATE A PAPER TRAIL AND WHAT YOU DO GET ON PAPER SHRED!

IT’S HARD TO BELIEVE SOMEONE BECOMES A VICTIM OF ID THEFT EVERY THREE MINUTES!  LEARN HOW TO PROTECT YOURSELF NOW!

Is there just one credit score?

Why do I have different credit scores?

One of the most common myths about credit scores is that there is only one credit score.
Credit scoring is used by lenders, insurers, landlords, employers, utility companies and even judges to evaluate your credit behavior.

Thousands of different credit scoring formulas exist today for various evaluation purposes. Although some scores are used more predominantly than others.  Each unique credit scoring system is accurate and correct for its own application. The credit scores you can order online use a formula created for consumers that approximates these different formulas. Your online credit scores may vary a bit from the score your lender uses, but they should be in the same range.

We realize credit scores can be confusing for people outside of the “financial world”.  With that said, we are happy to help you learn more about your score, assist you by being your credit report tour guide, and/or help you improve your score through sound financial managment!

Well…the news on the economy doesn’t seem to be getting any rosier these days.  Food prices hit new highs in May by jumping 1.4% following a .2% gain earlier.  Food prices are expected to jump 7-9% in 2008 and another 7% in 2009.  That doesn’t sound tragic except when you find that prices the previous two years ran at 2.4% when annualized. 

Food prices are by far and away not the only dark spot in the economy.  Energy prices continue to rise, seemingly without end.  Energy prices rose 4.9% in May which was the largest increase since November of last year.  As I write this post, oil is flirting with $135.00 per barrel in trading.  Like anything in a robust economy there are multiple factors at play here:  Middle East Tension, Reports of Low Oil Reserves, and the new one…oil speculation.  We’ll talk about that another day.

As far as a solution, Secretary of the Treasury Henry Paulson believes the light at the end of the tunnel will be within reach by 2009.  With that said, the good secretary’s opinion doesn’t necessarily match that of ”most” economists.  With inflationary pressures becoming a real concern to the Fed this month, “most” economists are predicting that the Fed will be increasing rates by year end.  An increase in rates could cause a further stall in the US economy by restricting funds available to consumers.  This is exacerbated in recent years due to the fact that the US economy is becoming more and more consumption based…again a topic for another day.

Politicians are fast developing economic stimulus plans to curb consumer fears in an election year…should be a fun ride!

T-     

Did you know, if you deposit a bad check into your account, you have lost money, plus there is a good chance you will be whacked with a fee?
With an increasing number of consumers selling personal items or services to other individuals, it is certain that more and more people will find themselves stuck with an occasional bad check.
The job ahead of you is recovering the money owed to you by the bad check writer.
Your options include:
1) Call the check writer and ask that they come up with the money. It may have been an innocent mistake that can be made right.
2) Check with County Attorney”s office. http://www.co.missoula.mt.us/cattorney/badchecks/bad_check_policy.htm
3) Check with State Attorney Generals Office, http://www.doj.mt.gov/  because bad check law varies from state to state, and you may find that you have options other than small claims court.
4) Send the check writer a certified letter asking that the money be paid in 5 days.
DATE:
NAME:
ADDRESS:
Dear :
NOTICE is hereby given that you issued to us your check number ______ in the amount of $______, drawn on the _____________________ bank, on the ____ day of ________, 200_, which the bank has refused to honor.
As provided in Section 45-6-316, MCA, you are hereby given five (5) days from receipt of this letter in which to make this check good. If you fail to do so, the matter may be turned over to the Missoula County Attorney’s Office.
Issuing a bad check under $1000 is punishable by 6 months in Missoula County Detention Center and/or $1000 fine. Issuing a bad check over $1000 or issuing three or more bad checks is punishable by 10 years Montana State Prison and/or a $50,000 fine.
Submit cash or a money order to ___________________ within five days.
Sincerely,
By________________________

5) IF the check writer does not pay, you can go to small claims court. The clerk’s office will give you instructions for how to proceed.

You can go through the justice system, sue, get your day in court and win a judgment. The problem is the judgment is nothing more than a piece of paper. There is always the problem of getting the money. Additionally, an individual may or may not know exactly how to go about executing a judgment.  Judgments are usually good for about 10 years and can be renewed, so long as you have a long time to recover the money. 

When in doubt, it is best to err on the side of caution with cashing a check from someone you don’t know.  Heck, you should err on the side of caution when accepting checks from someone you don’t know. 

J-

-this does not constitute legal advise.

There has been a ton going on here at the CU.  We opened the branch on North Reserve this week.  It’s an awesome place to see.  Be sure to come out and see the new digs, and especially the new interactive kiosks, they are the best when you need in and out fast.  Or, there is free ice cream in case you get hungry while drivin’ by. The CU also is giving 6% for 6 months on a special certificate…that’s not bad considering the rest of the world thinks the dollar is “useless” and “declining in value.”  Or if you want to do your part for the economy you can get a loan for around 3.75% with no payment for the first 90. Good Stuff…

Have you or any of your friends ever dreamed of being a millionaire? It may seem like a very difficult thing to achieve, but if you save and invest your money it may be easier than you think. As a youth saver at MT 1st Credit Union you have a great opportunity to save. The following are some important saving tips to help you start making moolah:

*Start saving now. It doesn’t take much to start and the sooner you begin savings the sooner you will have your first million.

*Pay yourself first. Basically, whenever you receive money the first thing you should do is put some of it into your savings account. A good habit to get into is to save at least 10% of everything you earn.

*Look for a high rate of return. Regular youth savings accounts pay lower interest than share certificates or certificates of deposit (CDs).

*Look for compounding interest. Compounding interest means you are earning interest on interest you have already earned. This is key to building your fortune.

Just remember that your savings may seem small in the beginning but you will see really big changes in later years. You can never start saving too early and if you don’t already have a savings account it is never too late to set one up.

Take a moment and imagine your child stomping their feet, pulling their hair, and screaming at the top of their lungs, “mommy I want that toy right now, I want it now!” As your face turns red and the embarrassment sets in, you give into the tantrum and you have now sealed your fate as your child’s personal ATM.

According to The Office of Public Affairs (November 13, 2000), 190 billion dollars in purchases made, were influenced by children ages four to twelve. Teen spending amounted to another 140 billion dollars. Daily life presents many opportunities to teach your child money management skills. Children learn by example, by playing and by participation. The following are ideas can help you teach your child how to save, spend and share:

*In a store, give your child some change to spend. Help them spend their money responsibly and give them the option to save the money at home instead of spending it.

*Communicate your own spending goals and options. Say, “We won’t go to the movies this week because we are saving for vacation.”

*Have your child set out three boxes. Label one box sharing, one savings, and one spending. Help your child develop a system that divides money they receive into each box.

It seems today that to say the US is in recession is as un-patriotic as questioning governmental intent. So…for the baby ears out there, I will be speaking of the US economy in terms “that rhyme with schmissmession”. Perhaps this recession is more difficult for “officials” to recognize because it is not lead by the business cycle, but rather by changing consumer behavior.

Why has consumer behavior changed? First, when adjusted for inflation “real wages” have declined by 1% this year, and have declined for 5 consecutive years. Meanwhile, oil has hit a record $118 per barrel, natural gas costs have risen 93%, energy as a whole has increased 15%, medical costs are up 77% from 2005, and food costs are rising rapidly. Simultaneously, consumers are being hit with a phenomenon not seen since 1987, declining home values and stock prices. With declining wages, declining asset values, and prices rising, is it a big mystery why consumers are not spending like they used to. But we should ask ourselves, is that a bad thing?

Americans are now spending more than they save, as represented by a negative national savings rate. More than half of Americans (52%) say they cannot afford to save or have not saved enough. Seventeen percent say they cannot afford to save at all, while 35% save but not enough for short-or long-term financial needs. Factors cited as barriers to savings include: large regular expenses (72%), unexpected expenses (42%), low or unreliable incomes (66%), and large consumer debts (60%).

On the spending side-which accounts for 2/3 or the US economy-growth will be limited if not non-exsistent. Projections suggest the slowest growth rate in 17 years. Economists were projecting a 2.1% increase in spending over 2008, which would have been the smallest increase since 1991, but now are expecting no growth in 2008.

Now…are we in a recession? Or just in a “period of slow growth”? According to the most accepted definition, a recession is two or more consecutive quarters of decline in GDP. By this definition we are in a “period of slow growth”. Fourth Quarter 2007 saw GDP growth decline from 4.9% (third quarter) to .6% (fourth quarter). First quarter data are not out yet, but even with further retraction we would need one more quarter of decline for a recession. However, “The Business Cycle Dating Committee at the National Bureau of Economic Research (NBER) provides a better way to find out if there is a recession taking place. This committee determines the amount of business activity in the economy by looking at things like employment, industrial production, real income and wholesale-retail sales. They define a recession as the time when business activity has reached its peak and starts to fall until the time when business activity bottoms out.” By this definition, we are arguably in a recession.

So are we in a recession? It depends on who you ask. I say the best metric for anything is to look at your peer group (unless your last name is HILTON), if you’re all spending freely chances are the economy is doing well, if not, we might be in a shmissmession.