USDA expands aid to farmers in drought.The U.S. Department of Agriculture will utilize nearly $16 million in financial and technical assistance to help crop and livestock producers in 19 states cope with the adverse impacts of this summer's drought. In addition, USDA will transfer $14 million in unobligated program funds into the Emergency Conservation Program. These funds can be used to assist in moving water to livestock in need, providing emergency forage for livestock, and rehabilitating lands severely impacted by the drought. Together these efforts should provide nearly $30 million to producers struggling with drought conditions. The USDA also negotiated with crop insurance companies to provide an extra 30 days for farmers to make payments without penalty. The drought has affected 87 percent of the corn crop, 85 percent of soybeans, 63 percent of hay and 72 percent of cattle, according to climatologists at the National Drought Mitigation Center at the University of Nebraska..Low income designation opens 1,003 CUs to unlimited business lending.Credit unions are among those that will benefit from the drought relief measures announced by the Obama administration on August 7. In an effort to increase credit flows, the administration is encouraging 1,003 credit unions to apply for National Credit Union Administration "low-income" designation, which would exempt them from the 12.25 percent business lending cap that applies to other credit unions. The NCUA contacted each of the credit unions, alerting them they are eligible for the designation. The NCUA says the move will encourage up to $500 million in new business lending. Banking industry advocates decry the move as "exploiting the nation's drought conditions" to bypass Congress. Legislation to raise the credit union business lending cap has been languishing in Congress for more than a year..Fed ready to act on stuttering economy.In a strong statement from its August 1 Federal Open Market Committee meeting, the Federal Reserve made a conditional promise to act if the economy does not improve. The Fed said that because economic growth has "decelerated somewhat" it will "provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions." The biggest economic indicator that has made the Fed uncomfortable is economic growth. In the first two quarters of 2012, the economy expanded at a rate of just 1.7 percent, a rate far below projections. The first weeks of the third quarter have seen no increase in growth, and the unemployment rate has stalled at 8 percent..Demand for prepaid cards expected to significantly increase.The amount loaded onto general-use prepaid cards is expected to top $81.8 billion this year, according to the Mercator Research Group. In 2013, the amount loaded is expected to rise to $116.9 billion and to $167.2 billion in 2014. "Consumer demand is driving growth in the prepaid market because they like the control it gives them over budgeting and spending," said Tim Sloane, director of Mercator Research Group. The product's expected performance has drawn interest from many of the nation's larger banks as they look for new revenue sources. One reason for their attraction is the Durbin Amendment; many prepaid cards are exempt from the rule's interchange cap.
