FDIC adds new fee system to replenish insurance fund
WASHINGTON - Federal regulators on Friday adopted a new system of special fees paid by U.S. financial institutions that will shift more of the burden to bigger banks to help replenish the deposit insurance fund. The move by the Federal Deposit Insurance Corp. cut by about two-thirds the amount of special fees to be levied on banks and thrifts. It followed protests by small and community banks against a plan adopted in February that charged premiums based on the amount of deposits. The new fee system is intended to raise $5.6 billion in the face of a cascade of bank failures that have depleted the insurance fund. Strategic Capital Bank in Champaign, Ill., was seized Friday by the FDIC, making it the 35th federally insured institution to be closed this year.
- Associated Press
United Airlines to recall 107 line mechanics
CHICAGO - United Airlines says it will recall 107 furloughed mechanics. The nation's third-largest airline says it needs the line mechanics to help it with repairing cabin items, reducing the number of out-of-service planes and ensuring the reliability of the fleet. Chicago-based United says the recalls will begin immediately and will be spread across all its hubs. United, a unit of UAL Corp., has 2,995 mechanics furloughed. Shares of United parent UAL Corp. slipped 2 cents to close at $4.87 Friday.
- Associated Press
GMAC receives $7.5 billion in new Treasury aid
NEW YORK - The U.S. government could eventually own a majority stake in GMAC Financial Services after its latest $7.5 billion aid package to the ailing auto financing company. To keep loans flowing to would-be buyers of GM and Chrysler vehicles and shore up its capital position, the Treasury Department agreed Thursday to provide GMAC with $7.5 billion in loans. The new aid marks the second time the government has stepped in to prop up the former lending unit of General Motors Corp. In addition, the Federal Deposit Insurance Corp. took the rare step of allowing the low-rated company to gain access to its debt guarantee program. In exchange for the latest round of aid, the government will receive 157.5 million preferred shares of the lender.
- Associated Press
Covanta charged with violating union laws
A Massachusetts-based incinerator operator, Covanta Energy of Braintree, has been charged by the National Labor Relations Board with violating labor laws at 46 locations across the U. S., including its Dickerson subsidiary in western Montgomery County. The charge follows a complaint by the Utility Workers Union of America and its Local 369 that Covanta's policies "severely restrict" nonunionized employees from exercising their rights to organize and negotiate a contract with company management. Workers at Covanta's Massachusetts facility last year voted to be represented by the union but say they have been unable since then to negotiate a contract. The labor board's action is a sign that government wants Covanta to revise its policies.
- Ed Gunts
