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Inside Washington (12/06/2011)
  • WASHINGTON (12/7/11)--While large banks are providing detail-filled resolution plans, regulators appear to have accepted condensed versions since the "living wills" requirement was finalized three months ago. As part of the Dodd-Frank Act, the Federal Deposit Insurance Corp. (FDIC) and Federal Reserve Board finalized rules in September that require large banks to provide resolution plans for how they would unwind in the event of failure (American Banker Dec. 6).  An initial plan and regular updates are required of firms with more than $50 billion in assets and nonbanks deemed systemically risky. But while a living will for the largest banks could run to thousands of pages, participants in recent discussions said the regulators have indicated an interest in "quality over quantity," according to the Banker. Regulators appear willing to work to build a dialogue with banks to develop proper plans if an institution can show regulators how to find information as needed, John Bovenzi, a partner in Oliver Wyman's financial services practice and former FDIC chief operating officer …
  • WASHINGTON (12/7/11)--The Federal Deposit Insurance Corp. (FDIC) is claiming the same rights as other banks in collecting losses from directors and officers of failed banks. In one instance, Sterling Bank in Spokane, Wash., pursued the $6 million it loaned to Bank of Clark County and another $1.14 million for regulatory fees from the loss (American Banker Dec. 6). Sterling filed a lawsuit against the bank's directors and officers in Superior Court for the State of Washington in May 2009. The FDIC has since intervened in the case, claiming it is owed $19 million from Bank of Clark County's directors and officers. The case has been moved to the U.S. District Court for the Eastern District of Washington. Both the FDIC and Sterling claim that Bank of Clark County's directors and officers breached their fiduciary responsibility and were negligent …
  • WASHINGTON (12/7/11)--The Commodity Futures Trading Commission (CFTC) issued final rules Monday making it more difficult to segregate customer funds from a derivatives firm's trading activities. The final rule was issued in the midst of ongoing efforts to resolve customer claims in the MF Global Inc. failure (American Banker Dec. 6). MF Global, already decimated by bad debts on European sovereign debt, declared bankruptcy Oct. 31 after an estimated $1 billion in funds from its customer accounts was reported missing. The CFTC had previously proposed restrictions on how firms can use segregated funds. But commission officials have called for stiffer regulations while investigating whether MF Global improperly raided customer accounts to fund its operations. The Commodity Exchange Act allows customer funds to be used for a list of certain investments. The CFTC previously had provided exemptions from that list, including the ability to invest money from customer accounts in highly rated sovereign debt instruments. Those exemptions are limited under the new rule …
  • WASHINGTON (12/7/11)--The U.S. Treasury Department announced the release of seven years of data provided by Community Development Financial Institutions (CDFIs) through a data collection system known as the Community Investment Impact System (CIIS).  The report, for fiscal years 2004 through 2010, contains Institution Level Report (ILR) data on 534 CDFIs that have reported to CIIS. In general, the report covers CDFI information on overall assets, loans, investments, sources and cost of capital, financing of day-to-day activities, staffing and impact in their communities. A previous data release in 2007 consisted of ILR data on 223 CDFIs in fiscal year 2003, 236 in fiscal year 2004, and 173 in fiscal year 2005. CDFI Fund Director Donna Gambrell said, "This comprehensive data release will be a valuable tool for researchers, academics, and the CDFI industry, and I believe it presents evidence of the tangible and lasting impact of CDFI investments in low-income communities. The CDFIs that submitted CIIS data for this report originated $10.9 billion in loans and investments from 2004 to 2010" …


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