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Fairstone Financial Inc. Extends Sagent Software Partnership Five Years to Power its Personal Loans Offerings

Fairstone Financial Inc. Extends Sagent Software Partnership Five Years to Power its Personal Loans Offerings

Deal enables Canada’s leading provider of lending solutions to realize continued pursuit of consumer-first vision

KING OF PRUSSIA, Pa.–(BUSINESS WIRE)–#fintech—Sagent, a fintech company modernizing mortgage and consumer loan servicing for North America’s top banks and lenders, today announced a five-year partnership extension with Fairstone Financial Inc. (“Fairstone”) to continue powering its personal loan servicing ecosystem. This is the latest in a series of recent deals for Sagent to transform the consumer borrower experience for financial organizations servicing millions of consumers with trillions in mortgage balances.

Fairstone will continue to drive scale servicing operations using Sagent’s cloud-based LoanServ system of record. Fairstone currently uses the nimble, highly configurable LoanServ platform to deliver a better customer experience and adjust in real-time to constantly evolving customer and regulatory needs.

“Fairstone is proud to partner with Sagent as we set the standard for the personal loan customer experience for our customers,” said Francois Pigeon, Chief Technology Officer at Fairstone. “With Sagent, we can redefine loan cycles based on each individual customer’s needs, iterate more quickly on providing tailored experiences, and continue on building meaningful relationships with our customers.”

Sagent will continue to power Fairstone’s industry-best consumer loan servicing experience by automating complex, high-volume tasks and workflows. By using Sagent technology to consolidate its installment loan tech stack, Fairstone simplifies complex financial transactions for customers by enabling customer service teams to manage quick, “one-call” outcomes.

“Powering servicing for consumer loans with scale compliance, reporting, and real-time payments is critical to borrower satisfaction,” said Dan Sogorka, CEO at Sagent. “Sagent is the only scale platform that powers every aspect of loan servicing for trillions of dollars in outstanding balances for both mortgage and consumer loans. We’re honored to build on our partnership with Fairstone and keep working together to exceed investor, auditor, regulator, and borrower expectations.”

As the housing industry’s modernized, consumer-first loan servicing system of record, Sagent powers America’s top bank and nonbank lenders to engage, care for, and retain millions of consumer borrowers with trillions in outstanding loan balances.

This is the latest in a series of new customer and renewal announcements from Sagent, most recently including Clearview Federal Credit Union, Freedom Mortgage, Mr. Cooper, and Gateway First Bank.

About Sagent

Sagent powers America’s top bank and nonbank lenders to engage, care for, retain, and modernize the homeownership experience for millions of borrowers. Servicers use our flexible, scalable, and configurable solutions to engage borrowers and earn customer loyalty, lower servicing costs, ensure compliance, and increase the value of servicing rights throughout full market cycles. Sagent is backed by Warburg Pincus, one of the world’s leading private equity investors, and powers trillions in outstanding mortgage servicing for its customers. Visit sage.com to learn more.

About Fairstone Financial, Inc.

Fairstone is a leading Canadian provider of responsible lending solutions, with close to a 100-year history. Fairstone is an operating subsidiary of Duo Bank of Canada and, combined, have over 1.5 million customers and $5 billion in assets on a consolidated basis. With nearly 1,500 employees nationally, the combined entity provides services through two business lines. The Direct Lending business offers near-prime customers unsecured personal loans, secured personal loans, mortgages and optional ancillary products such as creditor insurance to consumers online and in over 240 branches from coast to coast. The Indirect Lending business encompasses credit cards, rewards programs, retail point-of-sale (“POS”) financing through merchants, automobile and power sports through dealerships. Fairstone has again been named one of Montreal’s top employers for 2022.

More at: www.fairstone.ca


Fairstone Financial Inc. Contact:
Caroline Morin

Vice President, Corporate Communications

[email protected]
+1 833-461-2900

Sage Contact:
Chelsea Mize

Director of Marketing

[email protected]
(208) 220-4654

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Peloton loan draws strong demand from private and public lenders

Peloton loan draws strong demand from private and public lenders

Private lenders including Blackstone and Apollo joined public loan investors to bolster Peloton’s balance sheet with $750mn of new debt on Tuesday, a sign of how lines are blurring between two distinct capital markets.

Peloton, known for its web-connected exercise bikes, announced plans for the financing deal last week as it revealed widening losses and dwindling cash on its balance sheet.

The transaction, led by JPMorgan Chase, concluded quickly thanks to early support from a handful of private lenders that joined traditional investors in the corporate loan market. Orders for the $750mn of debt reached $1.5bn, said people familiar with the deal.

Private capital, usually deployed in deals negotiated directly with companies, has grown in public markets where a multitude of asset managers, hedge funds and other investors compete for allocations of debt arranged by banks.

The fresh source of funds has offered a lifeline to companies that might otherwise be locked out, with recent examples being Carvana, a used-car retailer, and CDK Global, a software company. Issuance in public debt markets has plummeted this year.

The appetite for Peloton’s debt contrasts with demand from its equity investors. The company listed in September 2019 and soon became a symbol of the pandemic stock boom, which boosted the shares of groups that served people working, exercising and entertaining themselves at home.

But Peloton’s shares have fallen about 90 per cent from their peak, dragging its equity valuation from more than $40bn to $5bn. This year the company cut jobs and replaced co-founder and chief executive John Foley with Barry McCarthy, a veteran of subscription businesses Netflix and Spotify.

Despite efforts to reduce $800mn of costs by 2024, McCarthy said last week that cash outflows had left it “thinly capitalized” for a company of its size. Peloton ended its fiscal third quarter with $879mn in unrestricted cash and cash equivalents.

Underscoring the influence and firepower of private lenders, the deal concluded so quickly that Peloton did not get a rating on the debt, which is typically necessary to draw in investors.

“The lack of rating and the uncertainty over what it may be is definitely a hurdle for some investors in the market,” said one loan investor.

Blackstone and Apollo, two of Wall Street’s largest private capital groups, declined to comment.

Peloton will need to get the debt rated within six months to avoid an increase to its interest rate of 0.5 percentage points from its current 6.5 percentage points above the interest rate benchmark Sofr, said people familiar with the deal.

The interest rate is already above the average yield in the loan market of 5.7 per cent, according to an index run by the Loan Syndications and Trading Association.

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Fung Campaign Questions If Magaziner Is Worried that Campaign Loans are Illegal

Fung Campaign Questions If Magaziner Is Worried that Campaign Loans are Illegal

Wednesday, May 18, 2022

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RI Treasurer Seth Magaziner PHOTO: GoLocal

A GoLocal report published Tuesday chronicled the $800,000 that Seth Magaziner provided to his campaign and his repeated refusal to answer the media’s questions about the source of those funds.

Magaziner, the state’s General Treasurer, is term-limited and, after initially announcing he would run for governor, is now a candidate for congress in the second district.

The failure to disclose the source of the $800,000 has now drawn the fire of leading GOP candidate for the second congressional district seat, former Cranston Mayor Allan Fung.


“Seth Magaziner likes to talk about transparency and dark money in politics, but it is his own campaign financing that seems to be shrouded in secrecy. He continues to be evasive in how he got $800,000 to loan his political campaign when he never had a job that paid him that kind of money. Maybe he won’t come clean about this loan because he’s worried that it’s illegal,” said the Fung campaign in a statement to GoLocal.

“We have enough politicians in DC who can’t give a straight answer about their personal finances. We don’t need another,” added Fung’s campaign.

Magaziner’s History and Response

Directly after graduating from Brown University, Magaziner became an elementary school teacher for two years and later joined Trillium Asset Management. He worked at Trillium for two years and three months, and according to disclosure those forms filed by Magaziner with the Rhode Island Ethics Commission, he’d earned less than $100,000 at Trillium in anyone year.

Reporters from GoLocal and other Rhode Island media companies have repeatedly asked Magaziner and his campaign about the source of the funds.

GoLocal, over the past few days, had this interaction with Magaziner’s campaign:

GoLocal asked on Sunday:

Just wanted to see if you could give a direct response as to what the sources of the funds — $800,000 — that was loaned to his campaign.

Who provided the money?

If there is more than one funding source, please break down the amount each provided?

Were the monies gifts or loans?

What was the date(s) on which the money was transferred to Magaziner?

Magaziner campaign spokesperson Patrician Socarras did not respond to GoLocal’s questions — but sent an email with the following statement, “The Treasurer has answered this question clearly on numerous occasions with media outlets including yours. The Treasurer has been transparent in saying he is fortunate that his family has been generous to him over the years, primarily through the annual gift tax exemption and he used those funds to make a contribution to his campaign when he ran for Treasurer 8 years ago.”

Magaziner’s campaign repeatedly refused to respond to follow-up questions regarding who gave him the funds and when they were given.


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Should You Ever Take Out a Payday Loan? Here’s What Dave Ramsey Thinks

 Should You Ever Take Out a Payday Loan?  Here's What Dave Ramsey Thinks

Image source: Getty Images

Could a payday loan get you into financial trouble?


  • Payday loans are a type of short-term loan.
  • Payday loans tend to have very high interest rates.
  • Finance guru Dave Ramsey has provided some advice on payday loans.

If you’re struggling to come up with cash to cover an unexpected expense, payday loans may seem like a viable solution. These loans are often available right away, and can be accessed even if you don’t have perfect credit. They have short payoff times, and typically you’re expected to repay them with your next paycheck — along with fees on top of what you borrowed.

While payday loans are easily accessible, they have some serious downsides including the fact that they are very expensive.

As a result, you’ll want to think carefully about whether this is the best method of borrowing before you move forward. If you’re trying to decide, some advice from finance expert Dave Ramsey could help.

Here’s what Dave Ramsey thinks about payday loans

Ramsey is well-known for being opposed to debt of any kind, so it probably doesn’t come as a surprise that he advises against taking out payday loans.

In fact, on the Ramsey Solutions blog, payday loans are referred to as “a slippery slope into a debt-building cycle that isn’t easy to escape.”

As Ramsey explains, many payday loan lenders charge high fees and give you little time to repay the money borrowed. Because the fees are so expensive, people who take out payday loans often end up having to borrow money again to pay it back.

Borrowers have typically been required to write post-dated checks or provide access to their bank accounts, so they have no choice but to make the initial payment when it’s due. But they then end up having to take out another payday loan right away because the initial loan plus the fees are so expensive that they can’t cover the loan and still pay their other bills.

The result is that you end up incurring so many fees because you keep borrowing, you end up paying an extremely high interest rate — which could be upwards of 900%.

Because payday loans typically end up being so expensive and leaving you trapped, Ramsey’s blog states that “Payday lenders are the financial industry’s mobsters.”

Is Ramsey right?

Ramsey’s concern about certain types of borrowing — such as mortgage loans — isn’t well-justified. But when it comes to payday loans, the finance guru is absolutely right.

These loans are one of the single most expensive ways to borrow, and payday loan lenders are often predatory and target people who can least afford to pay high rates. As a result, it’s best to avoid these loans at all costs.

Ideally, you will have an emergency fund saved, which is what Ramsey recommends, so you won’t find yourself needing to borrow to cover unexpected costs. But if you don’t yet have money and a surprise expense has cropped up that you need to pay, you should look into other options.

Same day loans from personal loan providers can be a good alternative, and even using a credit card can be better than a payday loan. Although cards have high interest rates, they’re lower than payday loan rates — and a credit card offering a 0% introductory APR on purchases may enable you to finance your expense over time without interest charges.

Of course, sometimes payday loans absolutely can’t be avoided. In that case, you should aim to pay them back ASAP and not borrow again so you don’t end up in a debt trap that’s hard to get out of.

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Auto loans remain cool and affordable while interest and debt rates increase from Federal Reserve – Post Bulletin

Auto loans remain cool and affordable while interest and debt rates increase from Federal Reserve - Post Bulletin

ROCHESTER—Buy that car while the money is still cheap.

The Federal Reserve has been raising interest rates over the past month as it continued an aggressive approach to inflation with the US Bureau of Labor and Statistics reporting consumer price index increases of 8.5% in March and 8.8% in April.

While credit card debt, mortgage rates, and rent prices continue to rise; auto loans and appliance prices are still affordable for low-income and middle class households. And with the fast rise in the consumer price index – the largest jump since 1981 – household budgets are becoming tight due to a combination of inflation and raising interest rates.

However, auto loan rates, for now, are still relatively low.

“Auto loans are not increasing as fast as mortgage rates are increasing right now,” said Jacelly Cespedes, assistant economic professor at the University of Minnesota’s Carlson School of Management. “Auto loan rates just have not caught up with other rates right now but could in the next six months

Usually, Cespedes said, when the Federal Reserve raises its interest rates, that impacts interest rates for all loan products.

With auto loan rates remaining loan, auto dealerships are seeing many customers coming through their doors now looking to take advantage of these cost saving deals. Jake Fratzke, chief finance director of Penz Automotive Group in Rochester, said a large number of customers trying to get ahead of rising interest rates.

“What I’m seeing right now is almost all customers trying to get ahead of the rates rising,” Fratzke said. “It hasn’t slowed down business by any means. As customers know that the Federal Reserve is raising the rates, they’re trying to get ahead of that curve and get the vehicle that they’ve been talking about for the last few months or the last year.”

May 16, 2022, Rochester – A family shops for a new truck at the Buick/GMC of Rochester taking advantage of low auto loans while they can.

Theodore Tollefson / Post Bulletin

Even as customers are working to get ahead of rising auto loan rates, there is still a microchip shortage among vehicle manufactures that is delaying the manufacture and delivery of new vehicles they are ordering, Fratzke said.

Whenever customers do commit to the purchase of a new vehicle, Fratzke breaks down the reality to them that if the vehicle’s completed manufacture and delivery could be six to nine months out. There is a possibility that their loans for the purchase will rise if Federal Reserve raises interest rates again in that time frame.

“As we get closer to the end of 2022, that’s where you’re going to see your peak in these interest rates. It’s just a matter of what will those rates do by the end of the year as they continue to grow higher now,” Fratzke said. “I hate to say it, but rates rising really won’t have an impact on car sales at higher rates, again, it will probably push more sales as rates rise, consumers will try to get out of those higher rates as much as possible.”

On top of considering purchases of cars while the prices remain cool. Cespedes has been advising many households to focus on their budgeting for the year as she does not see inflation decreasing any time soon.

“Overall, I think that households need to go through their budgets and try to compensate for the negative effects of inflation. A first step is to look at their budget and try to find substitutes, or replacements to what they need and don’t need and start negotiating some of the bills,” said Cespedes.


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Student-Loan Forgiveness ‘Could Be Good for the Economy’

Student-Loan Forgiveness 'Could Be Good for the Economy'

  • Treasury Secretary Janet Yellen said student-loan relief “could be good for the economy.”
  • She added there are “trade-offs” that should be analyzed, but she’ll support what Biden decides.
  • Biden recently said a decision on student-loan forgiveness will be made in the coming weeks.

Broad student-loan forgiveness remains controversial, but President Joe Biden’s Treasury Secretary suggests the relief might not be a bad thing.

“They could be good for the economy,” Janet Yellen told Georgia Sen. Raphael Warnock during a Senate hearing on Tuesday, in response to a question on the potential benefits of student-loan relief. “There are some trade-offs involved that need to be analyzed.”

Yellen also said she agrees with Warnock that student debt is “a substantial burden,” and the Treasury “will support anything that President Biden decides as a part of his policy, and he’s in the process of thinking through how he wishes to approach student debt .”

The trade-offs Yellen mentioned could be in reference to who would benefit from the relief. Biden said during a speech last month that a decision on student-loan forgiveness would be made in the coming weeks, and he added that he is not considering $50,000 in relief, suggesting whatever he implements will be closer to his $10,000 forgiveness campaign pledge. And Press Secretary Jen Psaki also recently confirmed to reporters that the relief will be targeted to borrowers making under $125,000, as Biden had suggested on the campaign trail.

Since he took office, Biden expressed concerns with student-debt cancellation benefitting wealthy students from Ivy League schools, even as progressive lawmakers and experts have pushed back on the notion student-loan relief will benefit the wealthy. Massachusetts Sen. Elizabeth Warren, for example, argued for the progressive nature of debt cancellation during a Senate hearing last week.

“It’s clear that the opponents of student loan cancellation are living in a bubble of privilege that is completely disconnected from the reality of the people who borrow money to get an education,” Warren said. “99.7% of borrowers did not get an Ivy League degree. Heck, 40% of them didn’t get any degree at all. The majority of these loans are held by people with zero wealth. And Black borrowers are not just treading water trying to keep up with their payments – they’re actually falling behind.”

When it comes to the economic consequences of student-debt relief, both Republicans and Democrats have been vocal. Rep. Virginia Foxx, the top Republican on the House education committee, has consistently said that canceling student debt will exacerbate inflation and cost taxpayers, with some of her colleagues arguing that Biden is only considering loan relief to win votes for Democrats in the midterm elections.

But advocates for loan forgiveness have said debt relief will stimulate the economy, allowing borrowers to put money they would have spent on their debt into other purchases. Biden has yet to comment on the amount of relief federal borrowers will receive, but recent data provided by Warren’s office found that if he does stick with $10,000, it would zero out balances for a third of borrowers.

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Here’s Who Qualifies For Automatic Student Loan Forgiveness Under New Biden Programs

Here's Who Qualifies For Automatic Student Loan Forgiveness Under New Biden Programs

Over the course of the last year, the Biden administration has enacted a series of student loan forgiveness initiatives. By targeting existing student loan relief programs for expansion and improvement, the Education Department estimates that nearly $17 billion in student debt will be canceled for at least 725,000 borrowers — much of it automatically.

The debate over broader student loan forgiveness continues, and there are indications that Biden is considering additional student loan forgiveness initiatives. But as of today, here’s where things stand.

Student Loan Forgiveness for Public Service Borrowers

One of the Biden administration’s most significant initiatives has been to expand relief under the troubled Public Service Loan Forgiveness (PSLF) program. PSLF can eliminate the federal student loan debt for borrowers who commit to working 10 years or more for government or nonprofit organizations. But the program has been tricky to navigate for borrowers, and the Education Department has historically done a poor job of operating the program and overseeing its contracted loan servicers who administer it.

By relaxing key eligibility criteria, the Education Department will now be able to count past loan periods that otherwise would have been rejected under PSLF — including payments made under “non-qualifying” repayment plans, and other payments rejected due to technicalities. The new initiative is called the Limited PSLF Waiver program, and a million borrowers may ultimately benefit from the program.

Borrowers who already have Direct-program federal student loans and have submitted PSLF employment certification forms will have their PSLF payment counts automatically adjusted, says the Education Department, resulting in automatic student loan forgiveness for borrowers who reach 120 or more “qualifying payments” following the changes.

Other borrowers, however, may need to take certain steps to qualify, and there’s a deadline of October 31, 2022. Borrowers with FFEL loans or Perkins loans would have to consolidate their loans via the federal Direct consolidation loan program. And borrowers who have not certified their public service employment by submitting PSLF employment certifications would have to do so.

Borrowers can learn more about the Limited PSLF Waiver program here.

Student Loan Forgiveness Through Income Driven Repayment

An even newer — and potentially more sweeping — initiative by the Biden administration is a historic fix to income-driven repayment (IDR) plans. IDR programs allow borrowers to repay their loans based on their income, and remaining in the program can ultimately result in student loan forgiveness after 20 or 25 years, depending on the plan.

But as with PSLF, the IDR program has been plagued by poor administration and oversight. Advocacy groups and government regulatory bodies have accused servicers of steering borrowers into forbearance, rather than IDR plans. And recent investigatory work revealed that the government is not adequately tracking borrowers’ progress towards student loan forgiveness.

To address shortcomings with the IDR program, the Biden administration announced sweeping fixes that will allow many past periods of repayment, forbearance, and deferment to count towards a borrower’s IDR repayment term. The Education Department will be automatically adjusting the number of qualifying payments a borrower has towards loan forgiveness, and officials have indicated that borrowers who have been in repayment for 20 or 25 years may see automatic student loan forgiveness. The Department also estimates that 40,000 borrowers on track for PSLF will get automatic student loan forgiveness as a result of the IDR adjustments.

As with the Limited PSLF Waiver, the Education Department has indicated that borrowers with FFEL loans would need to consolidate via the federal Direct consolidation program to benefit from the IDR adjustment.

Borrowers can learn more about the IDR adjustment initiative here.

Student Loan Forgiveness for Disabled Borrowers

The Biden administration has also initiated changes for borrowers seeking student loan cancellation on the basis of a disability.

The Total and Permanent Disability (TPD) discharge program can eliminate the federal student loan debt for borrowers who are unable to maintain substantial, gainful employment due to a medical condition, whether physical or psychological. Previously, the TPD discharge rules required borrowers to submit a formal TPD discharge application certifying that they met the legal standard for discharge through proof of a military service-connected disability, a signed application form completed by the borrower’s physician, or proof of receiving Social Security disability benefits with a benefits review period of at least five to seven years.

Last year, the Biden administration announced that it would eliminate red tape for millions of thousands of disabled borrowers and provide automatic relief. Through a data-sharing initiative between the Social Security Administration and the Department of Education, the Biden administration has been able to automatically cancel $7 billion in federal student loan debt for 350,000 disabled borrowers, without requiring them to submit an application. The administration also reversed the loan reinstatement of thousands of additional disabled borrowers who had their previous TPD discharges reversed due to their alleged failure to submit required annual paperwork during a post-discharge monitoring period.

Borrowers can learn more about the TPD Discharge program here.

Student Loan Forgiveness for Borrowers Defrauded By Their School

The Biden administration has also taken steps to automatically cancel student loan debt for borrowers who were harmed by misleading and deceptive school practices. The Department announced $1.2 billion in automatic student loan cancellation under the Closed School Discharge program for borrowers who attended ITT Technical Institutes before the for-profit school chain collapsed, leaving tens of thousands of borrowers with worthless degrees.

The administration has also announced a total of $2 billion in student loan forgiveness under the Borrower Defense to Repayment program, which allows borrowers to request loan cancellation if a school made serious misrepresentations about key elements of a degree program. In particular, the administration reversed a Trump-era policy that permitted the Department to award partial relief for approved Borrower Defense claims.

Borrowers can learn more about school-related student loan discharge programs here. While much of the relief awarded so far has been automatic, most borrowers seeking a Closed School Discharge or Borrower Defense to Repayment relief would have to submit a formal application.

Further Student Loan Reading

40,000 Student Loan Borrowers Will Get ‘Immediate Debt Cancellation’ Automatically — But Questions Remain

Thousands Of Jobs Qualify For Expanded Student Loan Forgiveness Program

Who Qualifies For Student Loan Forgiveness Under Biden’s Huge New Expansion Of Income Based Repayment

Student Loan Forgiveness: Education Department Launches Appeal Process For Public Service Borrowers


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EU Economic Commissioner warns members against taking “exaggerated loans” for Ukraine


Amid the ongoing Russia-Ukraine war and the COVID-19 pandemic, the European Union’s top official has warned member states to refrain from taking “exaggerated loans” to reconstruct the war-ravaged nation. In an interview with the German national daily newspaper, WELT, EU Economic Commissioner Paolo Gentiloni appealed to the members to not take any “high hope loans” for Ukraine, considering they were already facing the brunt of the COVID pandemic. During the interview, he forecast that it is not the right time for Europe to take further loans as growth has already declined compared to the pre-pandemic era.

“Europe is heading towards a recession and possibly the stagflation feared by economists,” he noted. When asked about the reports of some member states demanding a new pot of money worth hundreds of billions of euros at the EU level for the reconstruction of Ukraine, he said the team has already advised them about the current situation. He affirmed that the member states are recommended to help Ukraine as per their requirement in war – supplying cash and weapons to Kyiv. Gentiloni said that the EU has already transferred 600 million euros to the Ukrainian government and added another aid with a similar amount that will be transferred this week.

“The priority is to support Ukraine in its current expenditure. We must prevent Ukraine from going bankrupt. The EU has therefore already transferred 600 million euros to the Ukrainian government and another 600 million will follow this week,” he told WELT.

“We will discuss this with the finance ministers of the G7 in Bonn on Thursday. And at the same time we are thinking about how long-term the reconstruction of Ukraine should look like,” he added.

Russia-Ukraine war

It is pertinent to mention that Russia initiated a full-fledged war against Ukraine nearly two days after Vladimir Putin signed a decree recognizing the independence of Donetsk and Luhansk regions. Since then, it has been bombarding several cities in Ukraine, resulting in the killing of thousands of civilians and the loss of infrastructure. Despite repetitive warnings from the West, Russian Foreign Minister Sergei Lavrov, during an interview with Russian media, said, “Russia is not in the mood to wrap up the ongoing “military operations” without achieving the goal.

Follow all the Russia-Ukraine War News and Headlines on Russia-Ukraine War LIVE Updates


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Crescent City Pursues CDBG Dollars for Microenterprise Loan Program, Storm Drain Master Plan; Councilors Explore Developing Housing Rehab Assistance Program | Wild Rivers Outpost

 Crescent City Pursues CDBG Dollars for Microenterprise Loan Program, Storm Drain Master Plan;  Councilors Explore Developing Housing Rehab Assistance Program |  Wild Rivers Outpost

Jessica Cejnar Andrews / Today @ 4:28 pm / Community, Local Government

Crescent City Pursues CDBG Dollars for Microenterprise Loan Program, Storm Drain Master Plan; Councilors Explore Developing Housing Rehab Assistance Program

In addition to pursuing 2022 Community Development Block Grant dollars to continue offering micro-enterprise loans to local businesses and to develop a storm drain master plan, Crescent City staff will explore creating a grant-funded housing rehabilitation program.

But since it will take time for the city to develop the guidelines, staffing and to determine whether it’s a task it can do in-house, its grant consultant, Lorie Adams, recommended waiting until the 2023 CDBG application process before pursuing funding.

“It is a heavy lift,” she told Crescent City Councilors on Monday. “It’s just a matter of making sure you have everything in place, that your guidelines are solid, you have your housing committee and everyone is educated. Everyone is ready to hit the ground running.”

Four members of the Crescent City Council on Monday authorized staff to prepare an application for $750,000 in CDBG dollars to continue its micro-enterprise loan program, which benefits small businesses with five or fewer employees including the owner.
Councilors also authorized staff to apply for a $250,000 planning and technical assistance grant for the storm drain master plan. Mayor Pro Tem Isaiah Wright was absent.

Under the state’s 2022 Notice of Funding Availability, Crescent City can submit up to three grant applications totaling $1.5 million under the criteria of housing, public services, technical assistance and economic development, according to Adams.

Statewide, there is $30 million available in CDBG funding, which comes from the US Department of Housing and Urban Development and is allocated through the California Department of Housing and Community Development.

In addition to the micro-enterprise loan program, other CDBG-funded programs in Crescent City include the North Coast Rape Crisis team, the Community Food Council’s Pacific Pantry and Mobile Pantry and the city’s business assistance loan program.

According to Bridget Lacey, Crescent City’s grant coordinator, most of those programs are operating under open 2020 CDBG grants. Since 50 percent of those grants have not been spent yet, the city can’t seek additional CDBG dollars for those programs, she said.
The city has until June 20 to submit its application.

It was Crescent City Councilor Blake Score who brought up the idea of ​​obtaining CDBG dollars for a housing rehabilitation program. He acknowledged that creating one would be a heavy lift for staff, but argued there are “plenty of seniors” who could take advantage of such a program.

“I know when the senior center has done things like that countywide, we’ve gotten some pretty good responses from people who we’ve made some positive impacts on,” he said. “The other piece is the city has tried to be very proactive, for as long as I’ve been a Council member, to address code enforcement issues as opposed to just coming in with the red tape, coming in with the hammer basically.”

Noting that the city can apply for up to $1.5 million in 2022 CDBG dollars, Inscore pointed out that after asking for $750,000 for the micro-enterprise loan program and $500,000 for the storm drain master plan, it could pursue the remaining $500,000 for a home rehab program.

“This housing rehabilitation program could actually impact specific individuals and make material difference (for) the people that live in our city,” he said.

According to Adams, housing rehabilitation programs are popular, but take a lot of resources to implement. Some communities focus primarily on weatherizing their residents’ homes while others focus on their senior population, modifying their houses to help with any mobility issues that resident may have, she said.

Other communities work in conjunction with their code enforcement department to help residents address health and safety concerns — potential code violations — Adams said.

“The program is provided to the individuals through equity loans and some grants, and that is all designed as part of your guidelines and how you want to provide that,” she told the City Council. “Then they go through a process of working with staff to ensure they’re income eligible and that the property is eligible — there are some title issues that can cause a property not to be eligible. Then they go through the process of obtaining the loan from the city.”

According to Adams, the city sets the terms, including whether or not interest is charged as a part of the loan and whether the homeowner can defer payments. The agency also helps residents contact a contractor, she said.

To receive CDBG dollars for a home rehabilitation assistance program, the city would have to determine if it can manage that program itself or if it should contract with an outside consultant or a nonprofit organization, Adams said.

She said that her firm, the Adams Ashby Group, has worked with communities in the past to create housing rehabilitation assistance programs, including helping them develop guidelines and finding staffing.

“It’s taken about $50,000 total to get everything lined up, and that’s including my time and the staff time of the city in order to get those documents in place (and) to get the training in place,” Adams told Councilors. “We no longer implement the programs — it’s too expensive for a consultant to implement these programs on behalf of communities. A hybrid is much better, or finding a nonprofit organization that you can partner with. Then we come in and assist with the training and making sure they’re implementing (the program) appropriately.”

Adams also pointed out that the rehab projects can be large — a bathroom or kitchen remodel — requiring the resident to move out of the home for several weeks during construction. The agency often finds itself having to ensure no short cuts or side steps are being taken during the rehabilitation project, she said.

Adams pointed out that Crescent City once had a robust housing rehabilitation assistance program.

Crescent City Manager Eric Wier said the program occurred early in his career with the city, which is still managing a handful of those loans that they are dealing with on an annual basis. He argued that to be successful, the city would have to contract with the “right sub recipient.”

“To really run a successful program, it almost really sounds like you need to be there for that person and really hold their hand step by step,” he said. “It’s not like we can be the city and just give them the funds directly and it’ll just run smoothly most of the time.”

City Attorney Martha Rice also pointed out that a loan-based housing assistance rehabilitation program also requires ongoing staff time managing the loan repayment.

According to Lacey, when loan repayments come with terms that are 30 years or through the life of the property, the city can’t just take the homeowners house. There is an option in the CDBG grant for housing rehabilitation programs where there’s an end date, she said.

That end date would come in the form of a forgivable loan of seven to 10 years typically, according to Adams.

“What they will do is create a program where (the loan) is forgivable at 1/7th or 1/10th every year that the person remains in the unit,” she said. “If they stay through the seven or 10 years, then the funds are granted and it eliminates any payback requirements. If the person sells their home prior to meeting that obligation, it will require a payback of the funds.”

Inscore said that while asking the city to submit a grant application for a housing rehabilitation assistance program by June 20 would be a big ask, he wanted to explore a limited scope project so “we’re not talking about 30 year loans.” He said he liked the idea of ​​forgivable loans based on a “very specific criteria.”

“I think we have spent a lot of time over the last several years talking about infrastructure,” he said. “We’ve spent a lot of time talking about business. We’ve spent a lot of time talking about food pantries and those kinds of things, and we really haven’t had the opportunity to talk about helping people who live in the city. This is an opportunity for us to give people a hand up. And if it works, great. And if it doesn’t, I understand that, but I’d like for us to at least explore the possibility.”


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Some of Alaska’s US House candidates are millionaires. Another is paying off student loans.

 Some of Alaska's US House candidates are millionaires.  Another is paying off student loans.

Al Gross, an orthopedic surgeon running for US House in Alaska as an independent, owns a rental property in California and part of an office building in Juneau.

One of his chief rivals, Republican Nick Begich, has six figures in cryptocurrencies like bitcoin and litecoin, plus a stake worth at least $1 million in a software company he founded that now has more than 100 employees and offices in three countries.

Chris Constant, one of the Democrats in the race, is still paying off student loans.

Newly filed financial disclosures reveal huge wealth disparities that are shaping the special election between 48 candidates for Alaska’s sole House seat.

The documents, which federal law required from candidates this month, offer a glimpse of each one’s assets and business interests. They also underscore the advantages that personal wealth can bring to a congressional campaign.

Begich, who reported assets worth at least $10.8 million and as much as $46 million, has loaned his own campaign $650,000, which represents more than half the cash he’s raised so far.

Gross, meanwhile, spent $730,000 of his own money on his unsuccessful US Senate bid in 2020 — a campaign that laid the groundwork for his short-notice run this year. He reported assets, some held jointly with his wife, of at least $8.7 million and no more than $23 million.

The campaign of a third candidate, Republican former Gov. Sarah Palin, on Tuesday provided a copy of a report that it said had been filed with the US House clerk, though the document was not yet posted to the clerk’s database.

Palin reported assets worth at least $950,000 and no more than $2.4 million, with much of that tied to a Wells Fargo savings account that holds between $500,000 and $1 million.

[Voter guide: Alaska’s 48 U.S. House candidates in the 2022 special primary election]

The sums that Begich and Gross have each disclosed spending on their campaigns, meanwhile, represent roughly 10 years of income for Alaska’s median household.

Constant has spent just $400 on his own campaign, and reported assets valued at less than $100,000.

Wealthy candidates enjoy another advantage beyond the ability to spend freely on their campaigns, said Michael Beckel, research director for Washington, DC-based Issue One, a nonpartisan advocacy group that seeks to limit the role of money in politics.

They also tend to have networks of wealthier friends, relatives and professional contacts who are more likely to donate significant amounts to their campaign, Beckel said.

“If you aren’t rubbing shoulders with wealthy donors, it’s very hard to break into those circles,” Beckel said. “The odds are stacked against candidates of modest means who attempt to run for office.”

Modest income as a selling point

A half-dozen candidates in the race reported more than $1 million in assets on their financial disclosures.

They include Jeff Lowenfels, the natural resources lawyer and gardening writer who reported owning at least $500,000 in Apple stock.

Another is Tara Sweeney, the Alaska Native leader, who reported a stake worth at least $500,000 in a new Arctic-focused climate business, Seven Glaciers, which works on carbon offsets sales.

Gregg Brelsford, an independent who used to work as the manager of the Bristol Bay Borough, also reported more than $1 million in assets, as did Anchorage businesswoman Sherry Mettler.

Those fortunes exceed the wealth that US Rep. Don Young, whom the candidates are vying to replace, accumulated over his half-century in Congress. His last disclosure, filed in 2021 before his sudden death in March, reported assets valued at as little as $580,000.

While there are 48 candidates running in the June 11 special primary, the House clerk’s office had published disclosures from just 12 as of Tuesday. Campaigns that had filed the documents had different interpretations of the rules dictating when the disclosures were due, though the latest of those deadlines was Monday.

Candidates are only required to file the documents if they raise or spend more than $5,000 for their campaigns, and many of those vying for the seat formerly held by Young are running low-profile campaigns.

The rules also do not require candidates to list their homes as assets, unless they’re generating rental income. And the value of other assets — stocks and bonds, business interests, cryptocurrency — is reported in ranges like $1,001 to $15,000, rather than as exact amounts.

While some candidates’ list of assets run past 10 pages, Constant’s disclosure lists just two entries — his retirement accounts, each worth between $15,000 and $50,000.

He reported roughly $150,000 in earned income in 2021, from his jobs as an Anchorage Assembly member and at social services nonprofit Akeela, along with real estate sales.

Constant said his campaign fundraising efforts, which have yielded roughly $100,000 so far, have been successful, though that total trails the $370,000 that Begich has raised from others for his own House bid.

Nevertheless, Constant pitches his relative lack of personal wealth as a selling point.

“The advantage is, practically speaking, I understand what it’s like to earn a living, which is what most Alaskans experience,” Constant said. He added: “I am a working person. I don’t come from wealth.”

Mary Peltola, another Democrat running in the primary, reported less than $200,000 in assets and $89,000 in income last year from her job leading a tribal fisheries management group in her home region of Southwest Alaska.

Peltola said she’s taking unpaid leave from that position and, as she contemplated launching her campaign, had to consider whether she’d be able to make her mortgage, utility bill and car loan payments.

Like Constant, Peltola said her life experience makes her better suited to writing policies that will benefit working Alaskans.

“Our electoral system is really set up for those seats to be pursued by people who have financial security and who are most often retired,” Peltola said. “I think the majority of Alaskans, included me, live paycheck to three days before paycheck.”

Wealth as its own asset

The wealthiest candidates in the race, meanwhile, have access to personal assets far out of reach of the vast majority of Alaskans.

Gross, the orthopedic surgeon, did not respond to interview requests made through his campaign.

Begich, one of the Republicans in the race and a multimillionaire, rejected the idea that his money risks leaving him out of touch with potential constituents.

He said his family “struggled” when he was growing up, and at one point, Begich said, he had more than $100,000 in student loans, since paid off.

“I can certainly identify with the struggle that many Alaskans have right now,” he said in a phone interview.

One of the largest chunks of Begich’s wealth — between $5 million and $25 million — is invested in his 69% stake in FarShore Partners, the software business he founded around 2006.

It now has 150 employees and maintains offices in Anchorage, Chicago, Croatia and India. And counts Encyclopaedia Britannica, Valspar Corp. and Northwestern University among its clients, who pay Farshore to create customer- and employee-facing software.

Begich also owns a 42% stake in another business, Dashfire Management, that advises startup companies. He reported other assets tied to the company that owns the Aviator Hotel in downtown Anchorage, a business that operates a grocery store in the North Slope hub town of Utqiagvik, several investment funds, a family publishing house and a company that owns land inside Wrangell- St. Elias National Park.

In the interview, Begich said his investment and business experience would give him an important perspective in Congress.

“We hear a lot about diversification of Alaska’s economy. And diversification of the economy is going to originate from business creation,” Begich said. “This is something that I’ve spent a career doing.”

Begich also argues that his wealth itself—not just his experience accumulating it—would be helpful if he was elected. His assets, he said, insulate him from dependence on special interests or particular groups of supporters, and ensure he won’t be struggling to maintain homes in Alaska and Washington.

He said that Young, the former congressman, once described how dozens of representatives sleep in their offices at the US Capitol.

“That’s emblematic of an issue that is unsustainable: It taxes the member in a way that makes it difficult for them to do great work, if they’re worried about their personal finances,” Begich said. “I’ve worked hard, but I’ve also been fortunate enough in some of my investments and business activity that I’m able to run and not worry as much.”

Palin’s campaign did not make her available for an interview about her disclosure, though she did share the copy of the four-page document.

The disclosure does not appear to indicate a substantial increase in wealth from the last time Palin was required to report her assets, during her 2008 vice presidential bid. But it does show that the former governor has several significant sources of income.

Those include her appearances on the Cameo website, which allows celebrities to sell personalized videos to customers.

Palin, whose account has a five-star rating from 465 reviews, charges $199 for videos for “personal use,” and $1,000 or more for businesses. She reported $211,500 in income from Cameo last year, and $44,500 so far in 2022.

“Website advertising” paid Palin $88,600 last year, and $56,500 so far this year, her report says.

She collected $40,000 for speaking at a fundraiser last year for A Woman’s Haven, a crisis pregnancy center in San Antonio that tries to dissuade women from having abortions.

The conservative group Club for Growth paid Palin $10,000 last year, which she said was for participating in a bus tour aimed at boosting Republican candidates in the late 2020 runoff elections for US Senate in Georgia.

And a London-based bank, Coutts, paid her $6,700 last year for a “guest appearance.”

Daily News reporter Iris Samuels contributed to this story.


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