January 2008 Archive

The Board of Directors of the Finance Authority of Maine (FAME) recently approved a program of commercial loans and loan insurance to assist Maine lobstermen comply with new federal regulations requiring the replacement of floating trap lines. 

The FAME Board found on December 20, 2007 that substantial public benefit will result from providing special assistance to Maine lobstermen affected by new federal regulations that will take effect October 2008.  The regulations will require the replacement of floating trap lines with sinking ones. 

“We are pleased to assist this traditional Maine industry as it complies with new federal regulations.  FAME stands shoulder-to-shoulder with its fishing partners as they seek to adapt and thrive in the global economy,” stated FAME Board Chair Joyce Maker. 

Banks providing loans to affected lobstermen will be able to obtain a maximum of 75% (as opposed to the usual 60%) commercial pro-rata insurance under FAME’s OnLine Answer (OLA) Program.  FAME insurance exposure is limited to loan proceeds used only for line replacement.  The maximum FAME exposure under the OLA Program is $250,000.  Additionally, the Board voted to reduce the interest rate offered through its Economic Recovery Loan Program from Prime plus 2% to simply Prime.  The Prime Lending Rate is currently 7.25%.  There will be no loan limit so long as loan proceeds are used by fishermen for line replacement.  The loan term will be set for a maximum of three years.  These programs were designed only for loans to Maine-based lobster businesses that will be directly affected by the new federal regulations.  Loan applications must be received by December 31, 2008 and are subject to other terms and conditions deemed necessary or appropriate by FAME. 

The changes will allow Maine lobstermen to begin replacing their lines well before the Fall 2008 deadline, their busiest time of the year.  FAME estimates that the average cost of line replacement to each lobsterman will be $15,000.

"FAME, and the state as a whole, has a strong interest in supporting Maine lobstermen respond appropriately to federal directives that increase their operating costs,” stated Beth Bordowitz, Acting CEO of FAME.  “Maine’s lobstering industry has a great history and hopefully an equally great future, as well.” 

Two of the lending entities with whom FAME will be partnering are Machias Savings Bank and Farm Credit of Maine.

"Machias Savings Bank has always made an extra effort to meet the needs of its commercial fishermen.  This group is occasionally dealt a unique challenge, such as the new sink rope law.  It is with great gratitude that Machias Savings Bank pledges to utilize the programs of FAME to support the lobster industry in its time of need,” stated Dave Eldridge, Vice President of Commercial Banking at Machias Savings Bank.

Robert Horne, Vice President of Farm Credit of Maine, commented:  "Farm Credit of Maine is one of the major lenders to the lobster industry here in the state.  We have heard the concerns from operators about the cost of converting to sinking lines.  Knowing that many operators already have a loan on their boat, teaming up with the Finance Authority of Maine to provide these gear loans makes good sense."

Lobstermen Fact Sheet CLI-OLA1 12-07

Lobstermen Loans Fact Sheet and Application ERLP

The Finance Authority of Maine (FAME) today announced the creation of a comprehensive default prevention and outreach program, “GOAL$,” which stands for “Great Opportunities to Achieve Life Success.”

FAME created the program in light of the following statistics:

• Maine has the 7th-highest student debt level nationally (source: Project on Student Debt, Sept. 2007).
• The average debt for a Maine student is $ 22,877.
• 72% of Maine students graduate with some form of student loan debt (source: Project on Student Debt, Sept. 2007).
• 36% of Maine colleges have cohort default rates that are higher than the national average of 4.6%.

Through “GOAL$,” FAME is renewing its commitment to college access, financial literacy, and default prevention by implementing a series of new initiatives such as:

• naming Angela Dostie to fill the new position of Outreach & Default Prevention Manager.  Angela brings more than 10 years of financial aid experience to the position;
• recently hiring Mary Dyer for the new position of Default Prevention Specialist to implement a comprehensive default prevention program at FAME.  Mary has significant experience in college financial aid;
• expanding programs designed to assist high-risk borrowers during their grace periods;
• creating on-line Alternative Loan Counseling & Money Management tutorials for students;
• providing new financial literacy tools, publications and training;
• expanding college access, outreach & default prevention content on FAME’s website, www.famemaine.com; and
• increasing college access, outreach & training services to schools throughout Maine.

FAME recently earned the distinction of having the second-highest recovery rate in the nation in the Federal Family Education Loan Program (FFELP) for the federal fiscal year ending September 30, 2007.  Through FAME’s recovery efforts, borrowers who are in default on their Federal Family Education Loans can restore their loans to good standing and, as a result, avoid many of the negative aspects of default such as damaged credit and loss of Title IV aid eligibility. 

"FAME is aggressively taking steps to educate and assist Maine students and families as they navigate the complex world of student loans,” stated FAME Acting CEO Beth Bordowitz.  “We are pleased to offer ‘GOALS’ as a comprehensive default prevention and outreach program so that borrowers may avoid defaulting on their loans and may adopt healthy fiscal habits early on.”

College Goal Sunday is another resource FAME annually coordinates for Maine students and their families.  College Goal Sunday is a statewide volunteer program that provides free information and assistance to students and families who are applying for financial aid for post secondary education.  The program brings together financial aid professionals from colleges and universities, along with other volunteers, to help college-bound students and their families complete the Free Application for Federal Student Aid (FAFSA) form.  This year College Goal Sunday will take place on Sunday, January 27, 2008 at 2 p.m. at various locations throughout the state.  FAME also has made available several interactive television (ITV) sites for more rural areas.  To learn more about the program, or for directions to a location near you, visit www.collegegoalsundaymaine.com.  Interested individuals also may contact FAME at 1-800-228-3734 or by email at education@famemaine.com.