Economy Briefs

ENERGY

ExxonMobil, Kurds ink deal over Baghdad’s objections

SULAIMANIYAH, Iraq — The Kurdish regional government has signed a deal with ExxonMobil Corp. to explore oil fields in northern Iraq, Kurdish officials said Sunday, putting them in sharp conflict with Iraq’s national government.

The government in Baghdad wants to control all energy contracts signed in Iraq. The deal makes ExxonMobil the first major oil company to do business in the Kurdish region in defiance of the central government’s wishes.

The deal was announced Sunday by Kurdish officials at an oil and gas conference in Irbil in comments carried on Kurdish television. “These deals are legal. There is no legal problem about them. We will go on with these deals,” Kurdish Natural Resources Minister Ashti Hawrami said at the conference.

The Iraqi government on Saturday slammed the agreement, details of which were published Friday by the Financial Times.

“The Iraqi government will deal with any company that breaks its laws in the same way that it has dealt with similar companies in the past,” Deputy Prime Minister Hussain al-Shahristani said.

CONSUMERS

U.S. senator threatens retailers’ layaway plans

ALBANY, N.Y. — The return of layaway plans this holiday shopping season is raising concern that the break from credit cards might actually cost consumers far more.

For example, a rock ’n’ roll Elmo doll that requires a $5 layaway fee and a 10 percent down payment for a month can equal a credit card that charges more than 100 percent interest, Sen. Charles Schumer, New York Democrat, said Sunday.

Mr. Schumer is asking major retail associations to tell members to more clearly present their layaway fees to customers. He said if stores don’t better present the cost of layaway purchases, he will ask the Federal Trade Commission to determine whether the use of layaway is a deceptive or misleading business practice.

But it’s wrong to compare layaway fees to credit cards and the fees are already clear, a major retail association says.

“Layaway is not credit, period,” Brian A. Dodge of the Retail Industry Leaders Association said Sunday. “Layaway programs provide consumers with a responsible, low-cost alternative to credit cards that allow customers to buy an item that they want but the flexibility to pay for it over time without accumulating debt.”

FEDERAL RESERVE

Fed to conduct 4th round of bank stress tests

The second-ranking member of the Federal Reserve said the central bank will conduct fourth round of stress tests in the coming weeks to determine whether U.S. banks can withstand a recession.

Vice Chairman Janet Yellen said Friday that the tests are necessary because of the increased risks that Europe’s debt crisis pose to the U.S. economy and financial markets. She made the comments during a speech at the Federal Reserve Bank of Chicago.

“We are monitoring European developments very closely, and we will continue to do all that we can to mitigate the consequence of any adverse developments abroad on the U.S. financial system,” she said.

The Fed oversees Wall Street’s biggest banks, including Citigroup Inc., Bank of America Corp., JPMorgan Chase & Co., and Wells Fargo & Co.

PENNSYLVANIA

Talks on recovery plan for state capital deadlocked

HARRISBURG — With a Monday deadline looming, Harrisburg’s mayor and City Council were deadlocked Friday over a financial recovery plan for Pennsylvania’s struggling state capital.

Both sides said they are willing to continue the discussions, but no further meetings were scheduled.

The city has until Monday to submit to the state Department of Community and Economic Development a plan for paying down $300 million in debt tied to the city’s incinerator and stop a potential state takeover under a newly passed law.

A majority on the council has filed for bankruptcy protection in an effort to get the city’s creditors to forgive $100 million of that debt, but the largest of the creditors — bond insurer Assured Guaranty Municipal Corp. — rejected that idea Wednesday.

A federal bankruptcy judge has set a Nov. 23 court date for oral arguments on legal questions surrounding the Chapter 9 filing.

The takeover law gives Harrisburg a grace period of 30 days, ending Nov. 25, to develop a financial recovery plan. If those 30 days pass without a plan agreeable to the city and the state, the state Commonwealth Court could authorize Gov. Tom Corbett to appoint a receiver with the power to sell city assets and approve contracts — but not raise taxes — to pay down the city’s debt.

From wire dispatches and staff reports