* WASHINGTON (3/17/11)--The Federal Deposit Insurance Corp. (FDIC) Tuesday voted unanimously in favor of a plan that would build an infrastructure to support the agency’s new resolution powers over nonbanks as granted by the Dodd-Frank Act. The plan provides details of how the agency could in the future take control of a giant firm--and restore it to health. The plan, proposed with a 60-day comment period, describes the order of priority for which claims against a firm would be paid off. It also describes the process through which creditors would file claims, and how creditors can petition a court for relief. The FDIC chairman, Sheila Bair, said of the proposed process that it aims to impose market discipline, making it clear to shareholder and creditors that if their institutions fails, they--not taxpayers--are on the line for losses. (American Banker
March 16)… * WASHINGTON (3/17/11)--Department of Housing and Urban Development Secretary Shaun Donovan and Treasury Secretary Timothy Geithner, in testimony this week, appeared to refute earlier reports that predicted Fannie Mae and Freddie Mac would be exempted from a pending proposal to help standardize mortgages sold into the secondary market--at least while the government-sponsored enterprises (GSEs) are under conservatorship. (American Banker
March 16) Geithner indicated an exemption for the GSEs would be contrary to the proposals intent of establishing industry-wide rules to govern mortgage securitization by requiring lenders to retain 5% of the credit risk of loans they sell, in most circumstances. Donovan concurred saying every bit of the two Obama administration witnesses testimony before the Senate Banking Committee backed the idea of making sure the GSEs hold adequate capital against risk… * WASHINGTON (3/17/11)--Interested parties have until May 16 to comment on the U.S. Small Business Administration’s (SBA) proposed increases
to the revenue-based size definition businesses in 36 industries, and on sub-industry, need to meet to qualify as small businesses for SBA loans. The SBA reviewed 46 industries and three sub-industries and determined the majority needed their size definitions updated. The proposed changes could allow some small businesses already close to topping out on current size standards to retain small business eligibility, which in turn, the SBA says, gives federal agencies a larger selection of small businesses to choose from for small business procurement opportunities. SBA estimates as many as 9,450 additional firms will become eligible for SBA programs as a result of the proposed revisions, if they are adopted. In 2007, the SBA began the process of reviewing and updating size standards based on industry-specific data...