Consumer borrowing increased in July
WASHINGTON – Consumers borrowed more freely in July, especially when it came to taking out new loans to finance cars and other big- ticket purchases and to pay for vacations and school.
The Federal Reserve reported Monday that consumers increased their borrowing by a seasonally adjusted $6 billion, or at an annual rate of 4.1 percent. That pushed up total consumer debt to $1.77 trillion.
The borrowing behavior of consumers in July marked a pickup from June, when consumer credit rose at a tiny 0.1 percent rate, a mere $151 million. Economists said consumers tightened the belt on borrowing in June as the nation’s unemployment rate shot up to a nine-year high of 6.4 percent.
Arguments begin in labor trafficking case
TULSA, Okla. – A Tulsa manufacturer exploited and abused workers brought to this country from India, their lawyers said Monday in the first phase of a labor trafficking trial.
The 52 workers, who were recruited in their home country, came to work as welders, fitters and electricians at the John Pickle Co., which made specialized equipment for the oil industry.
“This case … is about human trafficking for labor,” Johnny Parker, attorney for the workers, told federal Judge Claire Eagan, who is hearing the civil case without a jury. The workers are seeking back wages and unspecified damages.
The workers have said they were told they would receive work at American wages but instead were paid only $2 to $3 an hour in the fall of 2001. They lived in a factory dormitory instead of the apartments they’d expected. And they said they were told to wait for a company escort before leaving the grounds.
AT&T to target more local telephone markets
NEW YORK – AT&T Corp. is broadening its assault on the local telephone market, the second long-distance provider to pounce on a federal order that fuels competition by forcing the local Bells to lease out their residential lines to rivals at attractive rates.
Already the biggest reseller of local service over Bell lines, AT&T said Monday it plans to test or launch the service for consumers in 22 more states by year-end. The company, which already provides local service to 3 million consumers in 13 states, had planned to enter only nine more states in 2003.
The move comes two weeks after long-distance rival Sprint Corp. began selling local service using Bell lines in parts of 36 states and Washington, D.C., that reach 80 percent of the nation’s households, up from 5 percent beforehand.
MCI near settlement with creditor groups
NEW YORK – MCI was close to settling Monday with two groups of creditors that opposed a deal to repay just a fraction of the company’s $41 billion debt, prompting a surprise adjournment as hearings began on a plan to emerge from bankruptcy.
A settlement could remove the last major obstacle that the company formerly known as WorldCom faces in persuading a bankruptcy court to approve the long-distance carrier’s financial reorganization after a ruinous accounting scandal.
U.S. Bankruptcy Judge Arthur Gonzalez said the talks between MCI and two groups holding close to $1 billion in combined claims against the company appeared to be showing enough progress to allow the parties another day to negotiate.
Judge sees no breach in Martha Stewart case
NEW YORK – A federal judge said Monday she saw no indication of a breach of grand jury secrecy in the Martha Stewart case, rejecting defense demands that the government investigate the source of pre- indictment leaks.
U.S. District Judge Miriam Goldman Cedarbaum said she found it difficult to understand how lawyers for the home decorating maven believed their client might have been prejudiced if someone had leaked the fact that the indictment would not include a charge of insider trading.
Compiled from wire reports
She studied the issue after lawyers for Stewart asked her to order federal prosecutors to investigate whether a government employee had released information that the grand jury would not charge insider trading.
The lawyers said the leaks violated federal rules that make grand jury proceedings confidential, and might have influenced grand jurors before they handed up the indictment against Stewart and her ex-stockbroker, Peter Bacanovic.
Bank to compensate wronged sharholders
CHARLOTTE, N.C. – Bank of America Corp. is prepared to make “appropriate restitution” to shareholders who might have lost money because of improper trading of mutual fund shares at its Nations Funds business, the bank said Monday.
The Charlotte-based bank also said it was hiring an outside firm to review mutual fund trades involving Canary Capital Partners LLC, a multimillion-dollar hedge fund. Janus Capital Group issued a similar statement Friday in response to an investigation by New York Attorney General Eliot Spitzer.
Compiled from wire reports
