FTC To Delay Enforcement of "Red Flags" Rule

Plan to Attend 2008 Fall Fling

Real Estate and Inventory Auction

Last Week in Washington

2009 Legislative Conference & Green Building Forum

Save the Date

84 Lumber Nixes Wichita Plans

Results of ProSales Survey

FMCSA CSA 2010 Open for Comment

Top Hiring Mistakes and How to Avoid Them

New England Sees Spread of Beetle

L-P Alabama OSB Mill to Stay Shut

Stock to Close 86 Facilities, Cut 3,000 Jobs

By the Numbers

Risk Management Strategies

Today's Quote

The Federal Trade Commission will suspend enforcement of the new “Red Flags Rule” until May 1, 2009, to give creditors and financial institutions additional time to develop and implement written identity theft prevention programs. Today’s announcement and the release of an Enforcement Policy Statement do not affect other federal agencies’ enforcement of the original November 1, 2008 deadline for institutions subject to their oversight to be in compliance.

The Red Flags Rule was developed pursuant to the Fair and Accurate Credit Transactions (FACT) Act of 2003. Under the Rule, financial institutions and creditors with covered accounts must have identity theft prevention programs to identify, detect, and respond to patterns, practices, or specific activities that could indicate identity theft.

The Rule applies to creditors and financial institutions. Federal law defines a creditor to be: Any entity that regularly extends, renews, or continues credit; any entity that regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who is involved in the decision to extend, renew, or continue credit.

Accepting credit cards as a form of payment does not, in and of itself, make an entity a creditor. Some examples of creditors are finance companies, automobile dealers, mortgage brokers, utility companies, telecommunications companies, and non-profit and government entities that defer payment for goods or services. Financial institutions include entities that offer accounts that enable consumers to write checks or to make payments to third parties through other means, such as other negotiable instruments or telephone transfers.

The Commission staff launched outreach efforts last year to explain the Rule to the many different types of entities that are covered by the Rule. The agency published a general alert on what the Rule requires, and, in particular, an explanation of what types of entities are covered by the Rule – http://www.ftc.gov/bcp/edu/pubs/business/alerts/alt050.shtm.

During the course of these efforts, Commission staff learned that some industries and entities within the FTC’s jurisdiction were uncertain about their coverage under the Rule. These entities indicated that they were not aware that they were engaged in activities that would cause them to fall under the FACT Act’s definition of creditor or financial institution. Many entities also noted that, because they generally are not required to comply with FTC rules in other contexts, they had not followed or even been aware of the rulemaking, and therefore learned of the Rule’s requirements too late to be able to come into compliance by November 1, 2008. The Commission’s delay of enforcement will enable these entities sufficient time to establish and implement appropriate identity theft prevention programs, in compliance with the Rule.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.

Plan now to attend this timely program that will help get your company on track or continuing in the right direction in 2009. The big national election will be history, and it will be time to move forward and make plans for 2009. The room reservation deadline is October 16, so call the Hampton Inn & Suites Country Club Plaza right away to be assured you have a place.

The “Fall Fling” is the Annual meeting of MLA members. Thanks to members’ enthusiastic response, we are continuing this outstanding event and it keeps getting better. This year’s seminar on Friday, November 7, will be “Benchmarking for Excellence” – a  fact-filled half-day program presented by Mike Butts of LBM Solutions. This seminar will provide the independent lumberyard with the tools necessary to benchmark or “baseline” their entire operation.

Congress ended the 110^th session with passage of the Emergency Economic Stabilization Act. In addition to giving the Department of the Treasury access to $700 billion to try to stabilize distressed banks and troubled mortgage investments and to encourage companies that service home mortgages to use the HOPE and other existing federal programs to help homeowners avoid mortgage foreclosures, major provisions include:  

Mark your calendars for what promises to be an exciting Legislative Conference and Green Building Forum. Coinciding with the important first “100 Days” of the new Administration and Congress, the 2009 conference and forum are being held jointly with the North American Building Material Distributors Association (NBMDA), which will increase the industry’s visibility and impact during the traditional Capitol Hill visits to members of Congress. Additionally, the increased networking opportunities will no doubt be an added benefit in this challenging economy. The conference will also feature top-notch speakers from government, the media and the green building community. The site for the 2009 conference and forum will be the Washington Marriott, which is offering a room rate of $199. Further program details and registration and hotel information will be released in the coming weeks. Members with questions may contact Mike O’Brien at mike@dealer.org

84 Lumber Nixes Wichita Plans… Plans to build an 84 Lumber store on 12 acres in Wichita, Kan., have fallen victim to the housing slump. The industry’s third largest chain of lumberyards, which announced two years ago that it would re-enter the Wichita market with a new store, has put the land on the market.

Jeff Nobers, Vice President, marketing and public relations, told HCN that the company has gone through the permitting process for the store, “but then the [housing] slide started” so the expansion didn’t make sense.

84 Lumber operated two small stores in Wichita in the early 1980s, according to the Wichita Eagle. The company closed them in 1984.

Source: Home Channel News, ProDealer Digest, October 15, 2008

Survey Says: The Credit Crunch Hurts, But You’re Not Reeling… The financial crisis has hurt dealers’ builder customers more than it has dealers, whose aggravation has come more from the intense attention they’re getting from banks rather than from a shutoff in loans, a new ProSales survey reveals. The special poll found roughly four-fifths of all dealers reporting their builder customers are having severe or at least slight difficulty securing loans. A quarter of dealers said their banks are more actively involved in dealers’ affairs, and roughly one out of 10 dealers said their line of credit has been reduced or even cut off. In addition, the survey shows three-fifths of dealers haven’t asked their banks for money a single time this year, and roughly 17 percent of dealer respondents sit on a board of trustees of a bank. Click here to download results.

Source: ProSales Business Update, October 15, 2008

FMCSA CSA 2010 Open for Comment… The Federal Motor Carrier Safety Administration (FMCSA) Comprehensive Safety Analysis (CSA) 2010 initiative is creating a new safety measurement system for carriers and drivers to enable the agency and state partners to more efficiently and effectively identify high-risk carriers and achieve a greater reduction in crashes. The new operational model is currently being tested in Colorado, Georgia, Missouri and New Jersey. Under CSA 2010, safety violations at roadside inspections are weighted according to its relationship to crash causation and used to determine whether a carrier needs one of a progressive range of interventions, which include a warning letter, off-site or on-site inspections, cooperative safety plans or notices of violation. The new intervention tools enable the FMCSA to more proactively work with carriers to correct unsafe behaviors before a crash occurs. NLBMDA participated in a FMCSA meeting on Oct. 16 to learn more about the initiative and the results of its first test period. For more information about CSA 2010 visit www.fmcsa.dot.gov/csa2010.

Source: NLBMDA, October 17, 2008

Top Hiring Mistakes and How to Avoid Them… Hiring mistakes can be made in an instant. Unfortunately, they often require a lot of dedicated resources to correct. While not all hiring mistakes can be avoided, many can be prevented with a thought out hiring process.
 
"Obviously, if you make a hiring mistake, the process is difficult and there are a lot of pitfalls along the way," said Fred Getz, executive director, Robert Half International's Salaried Professional Service. "More importantly, hiring mistakes are costly. It costs us time and money. We all want to try and avoid these mistakes. And if we develop a strategic process, I think we can avoid some of those."
 
Getz advised that the first thing executives should do before beginning the interview and resume review process is to take a look at their own department and company. Find out what type of individual flourishes in the environment, because not all offices are created equal.
 
Other common mistakes that employers are guilty of are creating a fantasy job description that is too lofty for many candidates to even consider; delegating the resume review process to another team member; adhering to a process that is not uniform for each applicant; and doing too much talking during the interview process. Getz said that if an executive is talking more than 20% of the time during the interview, they are talking too much.
 
Source: NACM eNews Weekly Update, Matthew Carr, NACM staff writer, October 21, 2008

New England Sees Spread of Beetle… New England authorities have a plan to deal with the growth of Asian longhorned beetles in the region. The wood-devouring beetles have surfaced on four occasions in the past.

"This insect scares us to death because if it ever got loose in the forests of New England, it would be just about impossible to contain and it'd change the landscape dramatically," said Tom McCrum, coordinator of the Massachusetts Maple Syrup Association.

Source: LBM Daily, October 23, 2008

L-P Alabama OSB Mill to Stay Shut for Now at Least Another Six Months… Louisiana-Pacific Corp. said it will not restart its oriented strand board plant in Thomasville, Ohio, as previously scheduled.

According to the Press Register, L-P told Clarke County officials that the mill will remain idle for at least another six months. Production at the plant, which employs 138 people, has been down since a May explosion.

In September, L-P announced indefinite shutdowns of OSB plants in Chambord, Quebec; and Athens, Ga. The company blamed the sluggish housing market for its decision.

Source: World Panel Industry.com, October 23, 2008

Stock to Close 86 Facilities, Cut 3,000 Jobs… Stock Building Supply, America's No. 2 LBM dealer, announced Thursday, Oct. 23, it will close 86 facilities, cut 3,000 jobs, and exit 16 markets in six states, leaving it little more than half the size it was at the housing market's peak.

The cuts are the result of a strategic review that Wolseley Plc, Stock's British-based parent, launched following Wolseley's report last month that Stock recorded an operating loss of $246 million in the year ended July 31. Stock gets more than 70% of its revenue from new residential construction, particularly by America's biggest tract builders, so it is particularly sensitive to the severe slump in that part of the U.S. housing market.

The 86 as-yet-unnamed branches to be closed represent around 25% of Stock's revenue and 28% of its headcount, Wolseley's board said in a statement. Click here to read entire story.

Source: Craig Webb, Editor, ProSales On-Line, October 23, 2008

By the Numbers… September single-family housing starts fell from the August figure of 618,000 to 544,000, a 12 percent decline, according to the U.S. Department of Commerce. This is the slowest rate of new-home production since August 1982. Overall September housing starts fell to a seasonally adjusted annual rate of 817,000, a 6.3 percent decline from the revised August estimate of 872,000. Overall starts are down 31 percent from September 2007.

Sales of new single-family homes were up 2.7 percent in September, according to the Commerce Department, but were still 33.1 percent below the September 2007 rate. Sales reached a seasonally adjusted annual rate of 464,000, eclipsing the August figure of 452,000. The median sales price for new homes sold in September was $218,400, while the average price was $275,500. Currently, the U.S. has a 10.4-month housing supply, with an estimated 394,000 new homes available.

Source: Hardwood Floors E-News, October 27, 2008

RISK MANAGEMENT STRATEGIES

For Business Owners

You Never Really Know 

Sometimes you may be tempted to take shortcuts or overlook background checks on prospective employees, if you know them and feel they are trustworthy. But, you never really know.

Even though you use a hiring checklist for new employees and try to gather all the right information, you might miss something. Just because an employee’s motor vehicle record (MVR) shows no violations, you cannot assume the driving record is spotless. If you don’t ask to see the driver’s license or check the number, you may not get an accurate MVR. 

In some states, Social Security Numbers are used as drivers’ license numbers. The Social Security Act allows any state to use the Social Security Number (SSN) to establish identity. However, individuals or the state may change drivers’ license numbers for a variety of reasons.

Always ask to see the driver’s license! Be sure to look at the license. Check to see if the driver has changed license numbers and use the current number and state of license when requesting MVRs. When an old license number is submitted, the MVR report may show “license expired.”  This may result in a dispute over the individual's status and cause unnecessary delays. It’s important to follow up on reports that seem unusual. It may be a simple error — or it could be cause for concern.

There are conditions for furnishing and using consumer reports such as MVRs for employment purposes. Employers can get a consumer report on a prospective employee if the individual provides consent. To help comply with the Fair Credit Reporting Act (FCRA) requirements, you should have prospective or current employees sign a “notice” and/or “release” form before ordering MVRs.[i]

You can obtain MVRs from local law enforcement centers, your State Department of Motor Vehicles, a consumer-reporting agency, or an MVR vendor. Insurance companies can order MVRs for underwriting purposes, but may not provide copies or release the information to employers. However, the insurer can let you know whether the driver meets its standards for acceptability.

Businesses insured with Federated Insurance may use Federated’s Driver Insurability Service to check the insurability of a prospective employee before hiring by calling 1-800-335-4687.

It is always important to check the MVR of any prospective employee who may drive a company vehicle. In most cases, ordering the report is a simple matter, especially if you have an MVR program in place. However, any time you receive a questionable report or one that shows “expired license” it pays to investigate further. You just never know.

This article provided courtesy of Federated Mutual Insurance Company, your association’s recommended insurer.

 THOUGHT FOR THE DAY

“It is amazing what you can accomplish if you do not care who gets the credit.”

– Harry S. Truman