Tuesday, November 3, 2009

Coleman Research Group’s Healthcare department highlights Tax-Loss Carryback in Congress and Japan Helps Consumer Lenders

Coleman Research Group’s Healthcare Team facilitates consultations between our clients (institutional investors) and leading healthcare professionals on a wide variety of topics including pharmaceuticals, biotechnology, clinical research, medical devices, healthcare providers, insurance, and regulatory issues.

Our Healthcare network spans technology industries across the globe and includes doctors, researchers, scientists, healthcare executives, consultants, and former regulatory officials.


Tax-Loss Carryback Provision Glides in Congress

Congress appears to be on the verge of giving a $30 billion-plus handout to U.S. corporations but—unlike so many other spending provisions—this one is provoking little opposition on Capitol Hill.

The legislation would tweak corporate tax rules that would allow businesses to apply losses sustained in recent years against taxes on profits paid in earlier years. It would do this by extending the so-called net-operating-loss carryback period for firms of any size from two years to five years and would apply to losses for both 2008 and 2009. A similar expanded loss-carryback provision was part of the Obama Administration's original fiscal stimulus plan, but the final bill was cut back to apply only to small businesses.


As Japan Helps Consumer Lenders, Bankers Worry About Zombies

In Japan’s consumer lending industry, there has been little to cheer about lately. Less than three years ago, the government began tightening rules on consumer financing firms to discourage them from charging consumers exorbitant rates on loans. It also let borrowers who had crushingly high interest payments request a refund. Then came the global financial crisis, piling on the pain for consumer lenders.

One sign of just how bad things have gotten: In late September, Aiful, Japan’s second-biggest consumer lender, asked its own creditors for more time to pay off debts. With new tougher regulations set to go into effect next June, including a lower cap on what consumer lenders can charge, the industry was starting to resemble a train wreck in slow motion. Last fiscal year, Promise and Takefuji swung to an operating loss, while Acom’s profits fell to less than half the previous year’s level. By the end of September, the number of consumer lenders had fallen to less than 5,000, from more than 14,200 in March 2006, according to the Financial Services Agency.


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