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Inside Washington (10/19/2009)
* WASHINGTON (10/20/09)--Reports by the Federal Deposit Insurance Corp.’s (FDIC) Office of Inspector General indicate the FDIC did not “enforce its own guidelines to rein in excessive commercial real estate lending by at least 20 banks that later collapsed” (Bloomberg Oct. 19). FDIC examiners didn’t find the issue early enough and should have taken stronger action after seeing the banks had “dangerously” high loan levels before failing, the reports said. Ninety-nine financial institutions have closed this year--compared with a historical high of 179 in 1992 during the Savings and Loan crisis. The number of failed banks is expected to increase because of delinquency rates on commercial real estate (CRE) mortgages, said Matthew Anderson, partner, Foresight Analytics, a real-estate market consulting firm. FDIC Chairman Sheila Bair has said CREs pose the largest threat for banks ... * WASHINGTON (10/20/09)--The House Financial Services Committee will vote today on a preemption measure that would allow state governments to protect bank customers by restricting the banks beyond federal laws. The measure, if approved, would roll back a preemption doctrine that has allowed banks to answer only to federal regulators (The Washington Post Oct. 19). The Obama administration supports the change because it views preemption as a cause of the financial crisis. If the change is approved, 50 additional regulators would oversee the nation’s largest banks. The issue of preemption has gradually gained more attention. In 1999, when the Office of the Comptroller of the Currency said banks didn’t need to comply with California ATM fee laws. In 2004, the OCC issued a blanket exemption that asserted sole authority to oversee national banks--a stance that has been consistently upheld by federal courts ... * WASHINGTON (10/20/09)—The Federal Trade Commission has extended the comment period on its proposed changes to the Telemarketing Sales Rule (16 CFR part 310) to address concerns about debt relief services. Originally set to wind down Oct. 9, the FTC extended the comment period to Oct. 26. The FTC proposed rule, issued in July, is intended to fight deceptive and abusive telemarketing of debt relief services that hawk their ability to reduce consumers’ credit card and other unsecured debt…

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