* WASHINGTON (6/1/09)--The Obama administration has sent up a “trial balloon” for a plan to revamp regulation of the nation’s financial institutions into a single entity, and critics have rendered it as “dead on arrival.” In a Tuesday interview, House Financial Services Chairman Barney Frank (D-Mass.) said there is little chance Congress would pass such a plan (American Banker
May 29). Under the Treasury Department’s plan, the Federal Deposit Insurance Corp. (FDIC) and the Federal Reserve Board would continue to exist, but would have other responsibilities, though FDIC would continue to insure deposits. The American Banker
article explored the issue in a “frequently asked questions” format. It asked how the plan would undermine the dual banking system and how it would be better than the current system in place ... * NORWALK, Conn. (6/1/09)--The Financial Accounting Standards Board (FASB) may not issue a final rule on enhanced disclosures for fair value measurements until mid-November, although its original intent was to have it out either the second or third quarter of the year. FASB’s technical director said May 27 that the board’s plan to debut the strengthened disclosures during an informal trail period would push back the originally planned timeframe. The test disclosure documents have yet to be drafted. The idea behind the trail is to discover, prior to a final vote, whether the revised disclosure requirements would be practicable for a range of entities. (BNA, Inc. Daily Report for Executives
May 28)… * WASHINGTON (6/1/09)--The Federal Reserve Board’s Consumer Advisory Council will meet June 18. As time permits, the council will discuss the following subjects: The future of the Community Reinvestment Act; the impact of credit scoring on the credit environment, and related issues; neighborhood and community stabilization strategies; foreclosure prevention, the performance of modified mortgages, and other issues related to foreclosures; and reports by committees and other matters. The advisory council’s main function is to advise the Fed board on its responsibilities under various consumer financial services laws… * WASHINGTON (6/1/09)--The Federal Deposit Insurance Corp. (FDIC) has tightened its rate restrictions for institutions that are less than well capitalized. The Federal Deposit Insurance Act requires the FDIC to prevent banks that are less than well capitalized from seeking deposits at rates significantly higher than prevailing rates. Currently, the FDIC ties these permissible interest rates on deposits solicited nationally to the comparable maturity Treasury yield. Interest rates on deposits solicited locally are tied to undefined prevailing local interest rates. “The subjectivity in our current rule is allowing some weak banks to drive up costs for the rest of the industry,” said FDIC Chairman Sheila Bair in a release. “Supervisors and banks need a simpler and more objective tool for achieving the statutory goal. “Starting Jan. 1, the FDIC’s final rule
will define nationally prevailing deposit rates as a direct calculation of those national averages, as computed and published by the FDIC based on data available to it. The rule applies only to the small minority of banks that are less than well capitalized… * WASHINGTON (6/1/09)--The Small Business Administration (SBA) announced Thursday it will guarantee loans to finance inventory for auto, recreational vehicle, boats and other dealerships beginning July 1. The Dealer Floor Plan can “offer some dealerships the opportunity to get through these tough economic times by allowing them to keep their inventory and cash flow intact, as well as save the jobs these small businesses provide,” said SBA Administrator Karen Mills. The program will be available through Sept. 30, 2010, when SBA will decide whether to continue the program. Loans will be available for a minimum of $500,000 up to $2 million under the 7(a) program ... * WASHINGTON (6/1/09)--Clara Pratte will serve as national director for the Small Business Administration’s Office of Native American Affairs. Pratte will work to ensure that American Indians, Native Alaskans and Native Hawaiians have the tools they need to create, develop and expand small businesses. Pratte previously worked for the Navajo Nation as a policy analyst and legislative liaison. She also was employed by the Department of Commerce at the International Trade Administration as a trade specialist in the U.S. Foreign and Commercial Service. She is an enrolled member of the Navajo Nation ... * WASHINGTON (6/1/09)--The Federal Deposit Insurance Corp. (FDIC) board approved creating an FDIC advisory committee on community banking to provide the agency with guidance on policy issues that impact small community banks. The committee is expected to look into issues including examination policies and procedures, credit and lending practices, deposit insurance assessments, insurance coverage issues, regulatory compliance matters and obstacles preventing the growth of the banks. Paul Nash, deputy to the chairman for external affairs, has been named as the designated federal official for the committee ...