In brief: Consumers continuing to cut back on credit use

WASHINGTON – Consumer borrowing fell in June for a fifth straight month as households keep cutting back on credit card use.

Borrowing dropped at an annual rate of $1.3 billion in June, the Federal Reserve reported Friday. That marked the 16th drop in overall credit in the past 17 months.

Americans backed away from swiping their credit cards for the 21st straight month. That offset a rise in the number of auto loans.

Households are borrowing less and saving more, and that has dragged on the overall economy by lowering consumer spending.

The $1.3 billion June drop in borrowing was much smaller than the $5 billion decline that economists had expected. The government also revised the May decline to show a smaller drop of $5.3 billion rather than the initial $9.2 billion decrease.

Associated Press

WASHINGTON – Two American tobacco companies are paying nearly $30 million to settle charges that they bribed foreign officials to get lucrative overseas tobacco sales contracts.

The companies, Universal Corp. of Richmond, Va., and Alliance One International of Morrisville, N.C., faced civil and criminal charges from the Securities and Exchange Commission and Justice Department, the government said Friday.

Universal was accused of bribing officials in Thailand, Malawi and Mozambique. Alliance One is accused of bribing officials in Thailand, China, Greece, Indonesia and Kyrgyzstan.

To settle the charges, Alliance One has agreed to pay a criminal fine of $9.45 million and return $10 million in profits. Universal has agreed to pay a criminal fine of $4.4 million and return $4.5 million in profits.

Associated Press

Modesto, Calif. – A California meat processor recalled about 1 million pounds of ground beef products Friday after seven people were sickened by E. coli contamination.

Valley Meat Co. sold the potentially contaminated beef patties and ground beef in California, Texas, Oregon, Arizona and internationally, the U.S. Department of Agriculture said.

The beef was processed from Oct. 2, 2009, to Jan. 12, 2010. Most of the products were sold frozen.

The California Department of Health notified the USDA in mid-July of a cluster of E. coli-related illnesses, leading to the recall. The department said at least seven California residents were sickened.

Associated Press

Briefcase

• Motorists heading out for back-to-school shopping trips or a late-summer vacation will pay a few cents more for a gallon of gas this weekend. Pump prices rose this week because of a rally in oil. The national average for a gallon of unleaded regular gasoline was $2.78 Friday, about 3.8 cents higher than a week ago.

• The insurance giant AIG on Friday reported a $538 million loss in the second quarter due to charges related to selling assets to repay the federal government bailout it received during the financial meltdown.

• Warren Buffett’s company reported a 40 percent drop in second-quarter profit because largely unrealized derivative losses of $1.4 billion outweighed improvements at Berkshire Hathaway Inc.’s operating companies.

Wire reports