April 6, 2010

News Briefs

  1. 2010 Credit Congress Attendees Gear Up for Scholarship Events
  2. Bankruptcy Dockets Running Smoothly, More Judgeships Pushed Anyway
  3. Vermont Senate Passes Credit Card Interchange Bill
  4. Bringing Value to the Credit Role
  5. U.S. Trade Rep Issues Report on Export Barriers
  6. They're Back? Confidence Returning for U.S. Automakers
  7. Two More Small Business Bills Proposed in Senate
  8. Surge in March Sales, Other Indicators Hold Steady

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Upcoming Events



2010 Credit Congress Attendees Gear Up for Scholarship Events

For the last several years, each NACM Credit Congress has hosted a dynamic duo of events that benefit the NACM Scholarship Foundation, Inc.: the Golf Outing and the Silent Auction. The 2010 Credit Congress, scheduled from May 16-19 at the Rio Hotel in Las Vegas, will be no exception. The 5th Annual NACM Scholarship Foundation Golf Outing will take place Sunday, May 16th at the Legacy Golf Club and the 6th Annual Silent Auction will take place May 17th, in the Expo Hall during the Beer & Browse Reception.

This year's Golf Outing offers attendees a chance both to network and test their abilities on what's widely considered to be the finest course in Las Vegas. The Legacy Golf Club, selected as one of the "Top 10 Courses You Can Play in Nevada" by Golf Digest, is a desert jewel of a course, featuring manicured playing conditions, multi-tiered fairways and large undulating greens. It offers both a challenge to seasoned players, yet also accommodates novices with generous landing areas and well-spaced tee boxes, all of which are in the shape of playing card suits: hearts, diamonds, clubs and spades.

Golf Outing registration covers transportation to the course, the greens fee and a post-outing luncheon. All proceeds go to benefit the NACM Scholarship Foundation.

The following day at this year's Credit Congress, attendees will have the chance to bid on an array of luxury and boutique items at the Silent Auction. Past auctions have featured everything from electronics, such as iPods and cameras, to autographed sports memorabilia to purses and fashion accessories, and this year's list of items looks just as promising. With each winning bid, attendees will receive a unique prize and know that their contribution to the NACM Scholarship Foundation has helped to make an investment in the future of their profession.

To learn more about these events, or to register for the Golf Outing, click here.

Jacob Barron, NACM staff writer

Have a Ball With Some Friendly Competition

This year's designee and GSCFM alumni event is being held at the Rio's Lucky Strike Lanes bowling alley. This is a great networking opportunity in a fun atmosphere. Connect with your peers and some pins during this evening, complete with classic alley food fare.

"Lucky Strike Lanes features oversized, retro bowling photographs both inside and outside the red brick venue. The alley is complete with oversized couches and a gigantic neon-lit, script-lettered Las Vegas sign that radiates light over the back-lit lanes. The venue houses state-of-the-art technology including five projection screens descending from a cascading, wave-patterned white ceiling, and score screens complete with picture-in-picture, perfect for viewing sporting events while also keeping track of bowlers." —The Rio Hotel

Click here for more information on this and other networking and optional events at this year's Credit Congress in Las Vegas.

Bankruptcy Dockets Running Smoothly, More Judgeships Pushed Anyway

The predominant assumption heading into an unavoidable period of massive struggles for U.S. businesses was that bankruptcy courts in states like Delaware, home to the largest number of company incorporations in the nation, would be reeling to keep up with the escalating pace of filings. However, despite a push from federal lawmakers to increase permanent bankruptcy judgeships in several U.S. states, bankruptcy attorneys haven't noticed a change.

Jeffrey Schlerf, of Delaware-based Fox Rothschild LLP, said he noticed the sharp spike in Chapter 11 filings in 2008 and 2009, as most did, in Delaware and nearby states. What he didn't notice, however, was said surge causing any sort of havoc in the bankruptcy court systems.

"While all of the courts are extremely busy, we haven't sensed any kinds of backups," Schlerf said. "The dockets are busy, but in terms of delay, we're not really seeing that. In Delaware, especially, the bankruptcy court for years has been a preferred place to file for Chapter 11. Institutionally, the judges and the administrative personnel are used to dealing with a high volume of cases." Schlerf noted that Delaware is home to more than half of companies comprising the Fortune 500. Still, judges there have continued to be available through the ongoing recession. Schlerf speculated there may be more problems on the consumer bankruptcy side, as personal finance problems have spread throughout the nation.

Wanda Borges Esq., of Borges & Associates LLC, also was quick to dismiss any talk of a bankruptcy court gridlock. "I have to give applause to the judges. They're working tirelessly to get their dockets cleared," she said. "What I am seeing more often than not is that a lot of judges are saying they're not going to let people keep delaying things." Borges said it appears as though many judges take pride in keeping their court dockets from experiencing a backlog, noting specifically a Circuit Court judge in Virginia who regularly boasts, "My court is the rocket docket."

Still, lawmakers have pushed forth legislation designed to create 13 new federal bankruptcy judgeships and extend another 22 temporary ones. The measure, the Bankruptcy Judgeship Act of 2010 (H.R. 4506), passed the House by an overwhelming 345-5 vote last month. Under the bill, which awaits Senate consideration, Pennsylvania and North Carolina would be among states gaining the most in the way of new permanent judgeships. In aforementioned Delaware, which long had operated with one full-time bankruptcy judge, five temporary positions would be converted to permanent ones.

However, the measure appears to have generated little interest on the other side of Capitol Hill, according to Senate staffers. Apparently, there was virtually no talk of getting the bill before the Senate Judiciary Committee, or any others, prior to the annual weeklong spring recess. In addition, some high level staffers said it didn't appear there would be a rush to consider a Senate version upon lawmakers' return from break. And at least one staffer of a sitting Judiciary Committee member knew nothing of the House's judgeship legislation or that a vote took place.

Brian Shappell, NACM staff writer

Important eNews Story Update

Following last week's posting of the eNews story about the emerging legal spat between MGM Mirage and the general contractor on its massive CityCenter project in Las Vegas, "Perini Files Big-dollar Mechanic's Lien Against Vegas Developer," new information warranted a reposting of the story on the NACM website. Late last week, NACM obtained a private memorandum sent by Perini Building to its subcontractors, who were notified they're not getting paid money owed any time soon because of a $492 mechanic's lien filed against MGM Mirage, that offers much more specific detail on the dispute than had previously been reported. Check out our blog page to view the story (updated on April 1) and in the future as news breaks on a variety of important industry topics. NACM also regularly posts updates on our Twitter account—You can find us under the moniker "NACM_National."

Vermont Senate Passes Credit Card Interchange Bill

After passing the state's Senate Judiciary Committee, the Vermont State Senate unanimously approved a bill that would restrict credit card companies' ability to levy fines on merchants and charge interchange, or "swipe," fees.

"Today is a significant victory for Vermont's small businesses and their customers, and we applaud the Vermont Senate for standing up to the big banks and credit card companies to get this done," said Jennifer Hatcher, group vice president at the Food Marketing Institute, member of the Merchants Payment Coalition, which has strongly supported the bill and pushed hard for nationwide interchange reform. "The unanimous passage of this legislation means Vermont is a large step closer to demanding fairness, competition and transparency from the credit card companies," she added. "Credit card swipe fees are one of the largest expenses small businesses face and these huge, hidden fees hurt small businesses and consumers at the very time we're relying on them to rebuild our economy."

Should the bill be signed into law by Vermont Governor Jim Douglas (R), it would be the first legislation of its kind and could pave the way for further state regulations on credit card companies, which have traditionally been regulated on a federal level.

Specifically, an amendment to the bill that passed the State Senate would prohibit credit card companies from fining merchants for offering discounts to customers who use a credit card that costs less for the merchant to accept. It would also allow merchants to set minimum or maximum transaction amounts without being fined or penalized and prohibit credit card companies from forcing store owners to accept their credit cards at all of their store branches should they choose to accept them at one; prohibit credit card companies from mandating the acceptance of all of their different types of cards if the merchant chooses to accept one of them; and prohibit the credit card companies from engaging in any central price setting.

Jacob Barron, NACM staff writer

MLBS Offers Complete Lien and Bond Services and More

NACM's Mechanic's Lien and Bond Services (MLBS) brings best-in-class service options to today's construction credit professional.

MLBS' Lien Navigator is a web-based service that provides up-to-date information for all 50 states and Canada, including notice, lien, payment bond and suit timelines, procedures and other relevant information in a state-by-state/province-by-province format.

MLBS also offers two preliminary notice to owner (NTO) services, deadline tracking, a lien and bond filing program, and a suit against bond and foreclosure service. Both NTO services include, at no additional charge, a Next Action Notification Email. These reminders are sent automatically to ensure that your lien and suit deadlines are met during each step of the lien process.

For more information on NACM's MLBS, click here.

Bringing Value to the Credit Role

Technology has increasingly helped ease processes for business credit professionals. It also has rendered tasks formerly completed by humans unnecessary, making it critical for credit professionals to do much more than merely setting credit lines and collecting payments, said NACM's next teleconference presenter.

"Computers have taken a lot of the technique out of the hands of professionals, so they have to find another way to bring value," said Scott Tillesen, CCE, Tech Data Corp.'s director of credit. "Just doing the old-fashioned credit thing is somewhat limited. Credit professionals can do so much more with our skills and experience to better manage the customers we deal with...it's really a preservation move as much as anything."

Tillesen will outline his thoughts on ways credit professionals can do just that in his April 14th NACM teleconference, "Bringing Value to the Credit Role." He plans to discuss methods for professionals to help customers improve the vendor-creditor relationship, manage/forecast cash flow, work on financial alternatives and reduce risk in financial portfolios, among other topics. Improving communication lines and educating customers, internationally or otherwise, adds to a company's value and credibility.

"Making them better business people lowers your risk, and just paying attention to them raises their awareness of you," said Tillesen. "It's definitely a value-add."

One particular interest of Tillesen's going into the teleconference, which begins at 3:00pm EST, is the value of building and maintaining relationships with everyone involved in a business line, from bankers to potential customers. Working on relationships often is overlooked by today's credit professional. Tillesen says evidence of this can be found on most business' websites, which regularly omit key information or provide details that are incomplete and, thus, unhelpful for a user.

"It's as if they've completely forgotten about the creditor-vendor relationship," he contends.

More information on NACM's teleconference series, including "Bringing Value to the Credit Role," is available here. Additional questions may be forwarded to Tracey Flaesch at 410-740-5560 or traceyf@nacm.org.

Brian Shappell, NACM staff writer

Join the CFDD Network

CFDD exists, in part, to dynamically impact NACM's global vision by being the leader in educational programming and direction, thereby setting industry standards for professional excellence. To learn more about CFDD, click here.

Join CFDD at Credit Congress at its annual Awards and Installation Luncheon on Tuesday, May 18th! For more information, click here.

U.S. Trade Rep Issues Report on Export Barriers

A series of reports released by the U.S. Trade Representative (USTR) identified a number of different trade barriers that are restricting U.S. exports.

Among the most notable barriers identified in reports issued alongside the 2010 National Trade Estimate (NTE) are the European Union's trade-restrictive approach to assessing standards and conformity, certain nations' rules that require products to be tested in-country rather than in the U.S., and China's current approach to developing and using regulations in the IT sector, which many believe are designed to favor China-specific approaches. All of these barriers were said to fall especially hard on small- and medium-sized enterprises (SMEs) that are attempting to increase their export activity.

Following the report, the Department of Commerce's International Trade Administration (ITA) vowed to do all in its power to reduce these barriers in order to aid exporters currently struggling with the global market. Specifically, the ITA pointed to its Trade Agreements Compliance Program as a solution to the barriers some still face in the export market. "The Trade Agreements Compliance Program is essential to ITA's mission of breaking down foreign barriers and a critical component to achieving the goals of the President's National Export Initiative (NEI) of increasing exports to sustain and create jobs in the United States," said Francisco Sánchez, undersecretary of commerce for international trade. "The International Trade Administration stands ready to continue to mobilize its resources to help U.S. exporters and investors resolve market access problems around the world."

The USTR also vowed to further drive enforcement efforts according to the issues raised in their report. "This year, we've gone beyond obligatory reporting to focus on some of the toughest hurdles America's farmers, ranchers, manufacturers and service providers face when they try to sell overseas," said U.S. Trade Ambassador Ron Kirk. "The USTR will take the information in these new reports...and use all the tools that we have to get these markets open to American products."

In addition to a report listing technical barriers, like the ones mentioned above, the USTR also released a report of sanitary and phytosanitary barriers to trade,such as countries that have imposed avian-influenza-related import bans on U.S. poultry or restrictive measures on certain biotech products despite repeated risk assessments.

To read the full reports, click here.

Jacob Barron, NACM staff writer

Credit Reports

NACM understands that business credit reports are the keystones that help credit professionals make sound credit decisions. NACM Affiliates can provide credit professionals with the most complete, objective and accurate reports available.

• Business Credit Reports
• Business Owner Reports
• Summary Reports
• Scoring Reports
• Small Business Reports
• International Credit Reports
• Country Risk Reports
• Monitoring Service
• Public Record Data

Click here to learn more about NACM's Credit Reports.

They’re Back? Confidence Returning for U.S. Automakers

While far from the profitability found in years past, domestic automakers led by Ford appear to be rising from the ashes of their late decade financial meltdowns. And whether it's attributable to innovative product lines, newfound optimism in the economic outlook or bad public relations haunting a powerful competitor, domestics appear to be pointed back in the right direction, which will only help U.S. vendors.

Those who kept close watch of the struggles of Ford and General Motors in 2009 may have needed to splash their faces with cold water in recent weeks as nearly all news about the long-struggling pair was positive: Both reported sales gains in March of 43%, the largest gains since the 1980s; Ford's rating was boosted by Moody's with talk of a second bump in the coming days or weeks; and GM officials talked up a possible return to profitability by the end of 2010 after years of running in the red. That's a stark contrast from 2009 when Ford and GM were the two single largest debt defaulters in the world and combined for 20% of total debt (nearly $125 billion) affected that year, said a March 2010 Standard & Poor's report.

Jim Gillette, CSM Worldwide's director of financial services, said the increased sales and accompanying confidence of late is an enormous help to vendors and one that will likely continue to pick up steam. The recent developments appear to have more staying power and long-term upside than industry assistance programs, namely "Cash for Clunkers," that helped move the needle last summer.

"The automakers in the last two or three months have been upping production in anticipation of increased sales," said Gillette. "These numbers will only feed into that."

While GM benefitted from government assistance and selling off pieces of the company, Ford appeared to take a different approach. Ford predicted and prepared to handle an economic debacle that stung the industry for at least 24 months and vastly improved or redesigned "tired dogs" in their production line to create new fleet of "brilliant" vehicles, Gillette noted.

It's also worth speculating that Ford gained a significant amount of respect and business from consumers during the toughest days of the U.S. economic meltdown. Instead of running to the government for bailout money, as competitors and companies from other sectors were quick to do, the automaker took on a sort of "we'll make it on our own" type of mentality and emerged on the other side even before the predicted economic rebound had a chance to begin.

"I know I applauded them personally for that," Wanda Borges Esq., of Borges & Associates LLC. "I think people may have confidence in that they did it on their own and didn't have to run to the court to do it. They made a lot of cuts and were very smart about it." Still, both Borges and Gillette acknowledge that a little bit of luck, in the form of Toyota struggling with massive recalls and media accounts of deaths caused by car defects, gave a push to Ford and GM alike.

"From a purely consumer standpoint, you have to know the horrors going on with Toyota are helping to lift everyone else," said Borges. "I think people might be gaining some confidence back in American cars largely as a byproduct of what's happening with Toyota."

For what it's worth, Toyota still registered a 41% sales surge in March following a weak February. Granted, the Japanese automaker stooped to the type of massive incentive programs it historically scoffed at in order to arrive there. The company continues to face public scrutiny and media attention, in part because opportunistic lawmakers from heavy auto production states continue to call for Toyota officials to make appearances on Capitol Hill for political tongue-lashings. Toyota was also slapped with a record fine of $16 million by U.S. regulations on Monday over its alleged slow response after learning of the pedal defects.

Brian Shappell, NACM staff writer

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Two More Small Business Bills Proposed in Senate

A pair of bills aimed at leveling the playing field for the nation's small businesses were recently introduced in the Senate, both by Sen. Mary Landrieu (D-LA), chair of the Senate Committee on Small Business and Entrepreneurship.

One bill, S. 3165, the Small Business Community Partner Relief Act of 2010, is geared toward keeping small business counseling centers from closing and enables the Small Business Administration (SBA) to temporarily waive the matching non-federal funding requirement Women's Business Centers (WBCs) and Microloan intermediaries face to receive funding from the SBA. It was co-sponsored by Sen. Olympia Snowe (R-ME), ranking member on Landrieu's committee, and Sen. Richard Durbin (D-IL).

The other bill, also cosponsored by Durbin, is the Small Business Parity Programs Act and comes in response to a recent court decision which stated that small businesses that belong to the HUBZone program had preference over firms participating in other small business contracting programs. Landrieu and Durbin both strongly disagreed with the ruling and, thus, introduced the Act to put three small business government programs (HUBZone, 8(a) and service-disabled veterans) on an equal playing field when competing for federal work.

The latter measure was originally introduced by Landrieu and Snowe as an amendment to S. 1390, the Department of Defense Authorization Act for Fiscal Year 2010, but was dropped in conference negotiations.

The two new pieces of legislation come in a long line of recent bills aimed at kick-starting small businesses and, more specifically, job creation. Landrieu has introduced four other bills that have been as-yet untouched by the full Senate and would do everything from raise the cap on small business loans to close loopholes in the government procurement process that allow multinational corporations to get small business contracts.

"Most of these proposals have passed by a large bipartisan margin out of the Committee and, for a modest amount, all of these measures will create hundreds of thousands of jobs in 2010," said Landrieu. "These proposals would also make key improvements to the U.S. Small Business Administration's (SBA) lending, exporting, contracting, innovation and business counseling programs."

Jacob Barron, NACM staff writer

Surge in March Sales, Other Indicators Hold Steady

The most striking aspect of March's Credit Managers' Index (CMI), issued by the National Association of Credit Management (NACM), is that sales in both the manufacturing and service sectors jumped—and at a pace not seen in over a year. This reinforces the news from consumer demand studies showing that spending was up last month. The increase in sales was nearly five points, faster than any increase since early 2008. This burst in sales occurred despite the fact that new credit applications were flat. There was a slight extension in the amount of credit extended, but the majority of that increase seems to have originated from companies working with the suppliers and contacts they have had for years as opposed to new additions to the business fold.

"The pace of growth in the overall economy has been uneven thus far, but is about what was expected from most analysts," said Chris Kuehl, Ph.D., NACM economic analyst. "All along, the assumption has been that this would be a recovery marked by slow and methodical reactions to demand that was expected to be spotty and very much affected by the pace of consumer attitude recovery. The fact that consumers added 0.3% to their activity despite some of the worst weather this winter appears to indicate some significant pent-up demand." CMI data bolsters this assessment.

Kuehl noted the only major change from last month's data was in the sales factor. For the most part, the negative factors remained stable with only slight improvements in items like accounts placed for collection and dollars beyond terms. For all practical purposes, there was no change in the data, but the sales numbers allowed for a gain in the combined index, which improved from 55.2 to 55.7.

"It is early in the process, but if one couples this data with reports from other sectors, there is reason to assume there will be some pretty decent progress ahead in the coming months," he said. "The consumer is getting a little more confident despite the fact that there has been no change in personal income and the business confidence level has also expanded according to data from both the Institute of Supply Management and the Conference Board."

"There are still plenty of worries about the future, but for now these are somewhat unfocused. There are signs that inflation could be an issue before the end of the year and there are continued concerns about the ability of the banking sector to recover fast enough to provide the credit that expanding demand will require," said Kuehl. "The fact that financial reform is now the topic for Congress will make banks more cautious than usual until this situation is resolved and that could take all summer," he added.

This report, complete with tables and graphs, and the CMI archives may be viewed here.


To view past eNews issues or to visit the NACM Archives, click here.



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