Banking Law Prof Blog

Third Quarter News for Banks is Gloomy as a Result of Mortgage Market Woes

FDIC reports that net income for insured commercial banks and savings institutions for the third quarter 2007 is down 24.7% compared to the third quarter 2006.  In other bad news, FDIC says provisions for loan losses rose sharply; asset quality indicators continue to deteriorate; noninterest income declined; and retail deposit growth lagged behind asset growth.  Commercial and industrial loan growth, however, remained strong. 

Looking on the bright side, FDIC Chairman Sheila Bair said, ""Because insured financial institutions entered this period of uncertainty with strong earnings and capital, they are in a better position both to absorb the current stresses and to provide much needed credit as other sources withdraw." 

Link to Press Release:  http://www.fdic.gov/news/news/press/2007/pr07097.html

(ag) Dec. 4, in FDIC

Opportunity to Comment on Proposed FACTA Regs

The federal financial institution regulatory agencies have adopted Proposed Regulations to implement FACTA requirments designed to help assure accuracy of information provided to consumer reporting agencies.  The new regulations will allow consumers to dispute credit report inaccuracies directly with entities such as financial institutions that furnish information to consumer reporting agencies. The comment period will extend for 60 days following Federal Register publication. 

Link to Nov. 29, 2007, Press Release & Text of Proposed Regulation:  http://www.fdic.gov/news/news/press/2007/pr07098.html

(ag) Dec. 4, 2007, in FACTA

Balancing Inflation Concerns Against Financial Markets Volatility

Dallas Federal Reserve President Richard Fisher, who rotates onto the Federal Open Market Committee in January 2008, expressed concerns about whether the Federal Reserve Board's current and future interest rate decisions could lead to higher inflation.  Although he recognizes the serious concerns raised by turmoil in the financial markets, he sees the national economy as basically strong. 

The Dallas Morning News posted a story today, analyzing Fisher's remarks delivered in Amarillo, Texas, and comparing Fisher's viewpoint with that expressed by Federal Reserve Vice Chairman Donald Kohn, also delivered today, which suggests that we may see another interest rate reduction in response to conditions in the financial markets.

Link to Kohn speech:  http://www.federalreserve.gov/newsevents/speech/kohn20071128a.htm

Link to Dallas Morning News article:  http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/112907dnbusdallasfedinflation.ab5e0d.html

(ag) Nov. 28, 2007, in Economy

OCC's Ombudsman

Report of the OCC Ombudsman for 2005-06 is now available on the OCC website.  The OCC is trying to buff its consumer-friendly image & this report is part of that effort.  However, the Office of the Ombudsman has been in place for 13 years.  Bank lawyers should not forget about this resource when their clients encounter "personality conflicts" with the examination staff.  The Report outlines the Appeals Process.  The Ombudsman's Office is not in the chain of command for the examination function and can often assist in resolving significant issues between a bank and the examination staff.  Sam Golden, who has served as Ombudsman from the inception of this office has announced his retirement in February 2008.  He will be missed.

Link:  http://www.occ.gov/Ombudsman/2006OmbudsmanReport.pdf

(ag) Nov. 28, 2008, in Consumer Protection

Microlending Here We Come!

FDIC plans to introduce a two-year pilot program for very small loans up to $1,000.  FDIC is seeking applications and will select 20 to 40 financial institutions to begin this pilot program.  Of course, these loans will qualify for favorable CRA treatment, and FDIC says they may help banks tap new markets.  The idea is to identify best practices for affordable small-dollar lending.

Link:  http://www.fdic.gov/smalldollarloans/