Tag Archives: FDIC

Angling to get ahead of new fears that the U.S. market may veer off-track with European financial markets in a sovereign default scenario, several members of Congress released a statement Thursday that called for the implementation of the Dodd-Frank Act, citing the vulnerability of growth to changes in international derivatives markets. Recent news reports suggest added risk in the European financial and derivatives markets, which possible sovereign defaults may impact.

Nearing the conclusion of her tumultuous five-year term, outgoing FDIC chairman Sheila Bair made moves to shape the legacy she leaves behind in July, making the case for sounder policies needed to head off the potential for a replay of the 2008 financial crisis as markets and industries move forward. Meanwhile, analysts fault a mixed legacy for Bair, citing the major roles she played in expanding the FDIC's power and passing crucial language in the Dodd-Frank Act. Bair is set to leave her post as FDIC chairman on July 8.

Members of Congress linked arms with a broad coalition of community and professional associations to call for the reversal of a key provision in the Dodd-Frank Act, which critics charge will upend recovery in the housing markets, close the door on new homebuyers, and force borrowers to shoulder higher costs. The lawmakers and industry groups showed up in force at a press conference organized by the Coalition for Sensible Housing Policy, which plans to submit a white paper to authorities as official commentary.

The Commodity Futures Trading Commission has issued a six-month delay for the finalization of rules and regulations in sync with the Dodd-Frank Act, temporarily checking a host of new requirements that analysts fear will distress the derivatives, financial, and mortgage banking markets. The Federal Reserve, FDIC, and the Office of the Comptroller of Currency fell behind schedule in the lead-up to Dodd-Frank's implementation phase, which goes into effect on July 16 despite that over half of the required 387 provisions need writing.

As officials consider a new candidate to head the Consumer Financial Protection Bureau, the Obama administration may soon nominate a state and federal banking regulator to lead the Office of the Comptroller of the Currency (OCC). It's being reported that the administration may put forward Thomas Curry, a current member of the board of directors of the FDIC and a past bank commissioner for Massachusetts, to fill the role of comptroller of the currency.

The top three U.S. banking regulators have issued guidelines that would require comprehensive stress tests every year for lending institutions with assets totaling $10 billion or more. The Federal Reserve, FDIC, and Office of the Comptroller of the Currency proposed guidance material that would test a bank's capital preparedness and lending ability under national economic duress. The evaluation would also appraise the integrity of the banks' payout plans for shareholders.

The FDIC has filed a complaint with a California federal court against the owner of mortgage broker Amerifund Financial, Inc., seeking $1 million in damages based on civil fraud allegations. The suit alleges that the defendant, Eric Matthew Anderson, and several others submitted $2.4 million in fraudulent loans to the Downey Savings and Loan Association. The FDIC says Downey S&L later filed for Chapter 7 bankruptcy after incurring $1.2 million in losses directly related to the Amerifund loans.

The nation's largest association for mortgage bankers has issued a statement praising a last-minute extension of the comment deadline for Dodd-Frank's controversial risk-retention rule and its Qualified Residential Mortgage (QRM), which opponents charge will make loans more expensive for homebuyers. The Mortgage Bankers Association says the rule will have a "profound long-term effect" on the mortgage financing industry, which is good reason to give stakeholders more time to understand its full scope.

As the Dodd-Frank Act moves slowly to implementation, banking officials speaking at the recent Chicago Federal Reserve Bank's annual conference pointed to the need for continued monitoring of financial services markets to mitigate the risk of future economic crisis. Federal Reserve Chairman Ben Bernanke called for regulators to focus on two key types of risk: gaps in regulatory coverage and risks that vary with the economy, such as the buildup of lending leverage.