What is the FDIC?

I was recently asked, “What is the FDIC?”

FDIC stands for Federal Deposit Insurance Corporation. According to the FDIC website (www.fdic.gov), it “is an independent agency created by the Congress that maintains the public confidence in the nation’s financial system by insuring deposits, examining and supervising financial institutions, and managing receiverships.”

One way it maintains confidence is by insuring deposits in banks and thrift institutions. Currently, the limit is $250,000, so if you have $250,000 in a FDIC insured institution, the FDIC guarantees you’ll receive that money should that institution fail. The limit of $250,000 is a temporary limit that was set in response to the current financial crisis. Unless extended or made permanent by Congress, this limit will revert back to $100,000 after December 31, 2009.

To determine whether you institution is covered by FDIC insurance, see - www2.fdic.gov/idasp/main_bankfind.asp.

However, not all money you have with a FDIC covered institution may be covered by FDIC insurance. To help figure out whether your deposits are covered, see the “Are My Deposits Insured?” page at the FDIC site - www.fdic.gov/deposit/deposits/index.html.

There is also a government program that covers credit unions. The entity that provides the guidance and insurance is the National Credit Union Administration (NCUA). The NCUA operates a fund to insure “the savings of 80 million account holders in all federal credit unions and many state-chartered credit unions.”

So, check to see if your bank is FDIC insured or if your credit union is NCUA insured!

Useful Links: Personal Finances

Here are some useful links to look at for personal finances:

For a website created by the Alliance Library System through a grant from the American Library Association that was funded by the FINRA (Financial Industry Regulatory Authority) Investor Education Foundation – see www.smartinvestingatyourlibrary.info. This site is dedicated to providing useful information about different types of investments and links to presentations created during the grant as well as links to resources from FINRA.

For a website created by the American Institute of Certified Public Accountants – see www.feedthepig.org. This site is aimed at 25-34 year olds and is dedicated to helping you “think through your spending and saving habits, identify ways you can start saving and commit to making changes that will reduce your debt and grow your savings.”

For another website created by the American Institute of Certified Public Accountants – see http://www.360financialliteracy.org/. This site “offers information to help consumers make sound financial decisions at every stage of their lives, from childhood to retirement.”

All of the bigger “home” pages, like Yahoo, MSNBC and Google all have finance pages/links that can provide useful information:
· http://finance.yahoo.com
· http://www.msnbc.msn.com/id/3032258/
· http://finance.google.com/finance

These sites can help you with things like mortgage payment calculators, dealing with identity theft, saving money, retirement planning, etc.

Resources for Libraries: Your Library System

The Alliance Library System is one of nine Multitype library systems cooperating to provide vital library services to the citizens of Illinois. Our membership includes school, academic, public and special libraries. Our service to our membership includes consulting, continuing education, resource sharing and delivery of library materials.

What this means for the libraries:
· Free consulting: We have a staff of consultants with a variety of library experience. This group has created some tremendous resources to help you run your libraries more efficiently. Visit our consulting & continuing education group online at http://www.alliancelibrarysystem.com/indexCE.cfm.
· Free or low cost continuing education: Our consulting & continuing education group maintains a calendar of continuing education and other networking events at http://www.librarylearning.info/?LibSys=ALS. These opportunities occur at our headquarters in East Peoria, Illinois, at various other locations throughout the Alliance Library System, and even on-line.
· Group Purchases: The Alliance Library System also strives to stretch its member libraries funding by maximizing our purchasing power; by joining together we have been able to offer a variety of discount prices with several library vendors and suppliers. Our group purchases information can be found at http://www.alliancelibrarysystem.com/indexGroupPurchases.cfm.
· Grants: The Innovation Department at the Alliance Library System is always on the lookout for grants that help our libraries in various ways – expanding collections, providing programs and providing other resources are just some of the opportunities that we have provided for our members. Visit the ALS Innovation Department at http://www.alliancelibrarysystem.com/indexInnovation.cfm.

Have a safe and happy holiday season!

Credit & Credit Reports - Part 2

Now that you know how to get a free copy of your credit report, what’s in the report and what do you do with it once you get it?

There are three main areas of a credit report:
1. Your personal information: name, address, Social Security number, telephone number, employer, past addresses, past employers, etc.
2. Account information: for each creditor, there will be the creditor/lender’s name, address, account number, type of account, opening date, terms, etc. as well as a payment history, high balance, and present balance.
3. The last section will list who’s been asking for your credit report in the last 24 months.

It may be lengthy, but you need to check all information in for accuracy. If any information is wrong or you wish to dispute an entry, you need to correct it with the credit bureau that issued the report. Under the Fair Credit Reporting Act, you have the right to have any correct or misleading information removed from your credit report. The credit bureaus have 45 days to investigate after your report an error. If, after the investigation, the credit bureau feels their information is correct, you have the right to add a short statement to your file to explain your side of the story.

Keep in mind, the better your credit history looks, the better your credit score. The better your credit score, the easier it will be for you to get credit – or get credit on better terms.

Credit & Credit Reports

Dictionary.com defines credit as “confidence in a purchaser’s ability and intention to pay, displayed by entrusting the buyer with goods or services without immediate payment.”

We use credit in many different ways:
· We purchase or upgrade a house with a mortgage or home equity loan.
· We purchase a car with a loan.
· We buy furniture on installment.
· We purchase groceries and other items with a credit card.

Our ability to obtain credit (or get better credit on better terms) is impacted by our credit history and, by extension, our credit score. You can see your credit history by getting a copy of your credit report – which contains information about your past and present credit transactions. Potential lenders use your credit report to evaluate your creditworthiness.

By law, every consumer is entitled to a free copy of their credit report every 12 months from each of the three major credit bureaus: Experian, TransUnion and Equifax. For information on how to order your free copy, visit the Federal Trade Commission’s website at http://www.ftc.gov/freereports.

Each of these credit reports contains essentially the same information, so one bit of advice is to order one credit report every four months – that way you can see your credit history three times per year. For example, get your Experian report on January 1, your TransUnion report on May 1, and your Equifax report on September 1.

Next: Understanding your credit report and what to do if you find errors.

E-Rate Discounts on Telecommunications & Internet Expenses

Take a look at your phone bill. In the “Surcharges” or the “Government Fees & Taxes” section, you should see an item titled “Federal Universal Service Fee” or something similarly titled. I typically glance right past this section right to the bottom line, but the Universal Service Fund that is fed by your payment of this fee can be a source of funds for your school or library.

One of the programs in the Universal Service Fund is the “Schools and Libraries Program,” better known as E-Rate. Under E-Rate, your library may be eligible for discounts in four different categories: telecommunications services, Internet access, internal connections, and basic maintenance of internal connections. Discounts range from 20% to 90% of the costs of eligible services, depending on the level of poverty and the urban/rural status of the population you serve.

So, you’re already paying for phone service or Internet service, why not take advantage of E-Rate and get some of that money back if you are eligible?

If you are not currently participating, check out the website of the Universal Service Administrative Company (USAC), the administrator of the E-Rate program at www.universalservice.org/sl - where you’ll find overviews of the programs and the process.

It is a lengthy process, with the funding year running from July 1 to June 30. But you need to act now –first steps need to be complete by early January 2009 to be eligible for the next funding year!

250 Words or Less

On Monday 12.08.08, Kitty Pope asked me to answer a simple question. “What’s the difference between a recession and a depression?” But, before I could provide the simple answer, she kept going. I now have a new assignment – to provide information and ideas to help our members in these difficult economic times – both at the library level and also on a personal level. To keep it manageable, I’ve decided that I will attempt to accomplish these postings in 250 words or less.

So, once? Twice? Three times a week (or whenever I can find time) I’ll post something that will hopefully be of use! Now, back to Kitty’s question.

Recession vs. Depression

According to Investopedia.com, a recession is defined as “A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP).”

From the same source, a depression is defined as “A severe and prolonged recession characterized by inefficient economic productivity, high unemployment and falling price levels.”

The recession is a returned book with a few creased pages; the depression is the same book with the cover torn off with half the pages stuck together with jelly.

So, is the US in a recession? In March 2008, Warren Buffett, told CNBC, “I would say, by any commonsense definition, we are in a recession." When the richest guy in America speaks about anything financial, I tend to listen.

What does this mean for us in library world, both for our libraries and personally?
· As discretionary income decreases, more people may tend to use the library – why buy the book when I can read it for free?
· Patrons may come to the library to learn more about budgeting, finances, and saving for retirement.
· There may be a lag, but property tax revenues to local governments may not grow as quickly.
· Will I get a raise this year?

Keep watch for answers and tips on surviving these difficult financial times.