Local Business Headlines
- St. Louis Freightway, Port of New Orleans sign pact aimed at fostering economic growth
- J.C. Penney says it will close up to 140 stores
- Alton resident presented Living Legends Award
- Economic development course series starts March 1
- World’s Largest Garage Sale makes return April 23
- CNB Bank & Trust announces new financial advisor
- SIUE implements reverse transfer credit program with LCCC
- Divine Immanence LLC, Maryville beauty supply business, opens
More health providers drop out of Illinois’ exchange, state argues competition still exists
As the deadline looms when Illinois’ insurance exchange must be up and running under the Affordable Care Act, Illinois continues to see an exit of major health insurance providers.
Although Illinois recently predicted as many as 16 carriers would be participating in its health insurance exchange, as of press time that number had dwindled to only six. On July 15, UnitedHealth Group - the second-largest insurance company in Illinois’ non-group market - had dropped out.
Steve Klingel, an employee benefits specialist with Cassens Insurance Agency in Edwardsville, says the reason for the exodus of major health providers is simple: the new healthcare law eliminates competition rather than fostering it.
“This law (the Affordable Care Act) that they said was designed to increase competition is doing exactly the opposite, because no one wants to be the cheapest,” said Klingel. “If you wind up being the cheapest carrier, you’re going to get everybody’s bad health risks. That’s why you’re seeing these companies saying, ‘We’re not going to take part in these exchanges.’ That’s the opposite of what real competition in any marketplace should be. Competition should be providing the best product for the least amount of money. But the provisions of the ACA prevent this from occurring.”
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Regulators listen to community banks, change residential mortgage rules
Thanks to an outcry from 2,500 community banks and trade associations across the nation, regulators - in a rare move - agreed to change the rules that will ultimately impact the type of residential mortgages banks are able to offer, their capital levels and how they weigh the risk of the assets on their books.
David Schroeder, vice president of federal governmental relations at the Community Bankers Association of Illinois, says it was highly unusual to see the feds - the Boards of the Federal Reserve System, the Federal Deposit Insurance Corp. and the Office of Comptroller of the Currency - react to public input in this way. In addition, early last month, the three agencies granted a one-year reprieve on two key rules that would have otherwise taken effect Jan. 1, 2014.
“I am delighted to say the regulators changed and we got an additional year on these two rules,” said Schroeder. “The banking industry put forth an unprecedented response. Basel III and the Standardized Approach NPR (Notice of Proposed Rulemaking) will not become effective for banks until Jan. 1, 2015.”
Regulators changing the proposed rules regarding balloon mortgages was a sigh of relief for community banks, particularly those serving rural communities, whose residential mortgage loan product mainstay has long been the balloon note. This longstanding, stable lending product differs from a traditional residential mortgage in that it is not resold on the secondary market. The bank keeps the note on its books, issuing the debt for a shorter period such as five years on a 20-year adjustable term.
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