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Inside Washington (12/15/2009)
* WASHINGTON (12/16/09)--During a meeting with the heads of the nation’s largest financial institutions, President Barack Obama expressed that he was frustrated with the banks because while their CEOs have said they support financial reform, their lobbyists have resisted. Obama said that there is a large gap between lobbying activities and what he has heard in the White House. “I urged them to close that gap,” he said (American Banker Dec. 15). Administration officials say banks are not lending enough money--especially when it comes to small businesses. Credit unions could inject more than $10 billion into the economy and create more than 108,000 jobs if their member business lending caps were raised, according to Credit Union National Association President/CEO Dan Mica. Currently credit unions can lend no more than 12.25% of their assets. Regarding Monday’s meeting, Mica said: “The very people who met with the president today are the same people who oppose allowing credit unions to help” (News Now Dec. 15) ... * WASHINGTON (12/16/09)--The board of directors of the Federal Deposit Insurance Corp. (FDIC) approved a $4 billion budget for 2010. It also revised the 2009 budget to $2.6 billion. The 2010 budget is an increase of more than 55% from 2009 because of bank failures. The receivership funding component of the 2010 budget, the vast majority of which is funded by receiverships, will be $2.5 billion, up from $1.3 billion in 2009. This includes funding for the continuing work associated with bank failures that have occurred the past two years. The budget also contains contingency funding for the possible continuation of an elevated number of bank failures in 2010. The 2010 budget increase also is partially attributable to increased supervisory activity related to the rising number of troubled banks which the FDIC oversees. The board also approved an authorized 2010 staffing level of 8,653 employees, up from 7,010 in 2009. Almost all the additional staff will be hired on a temporary basis. They will be hired primarily to assist with bank closings; to perform follow up work related to the management and sale of failed bank assets; and to conduct bank examinations and perform other bank supervisory activities. There were 25 bank failures in 2008 and 133 so far this year ... * WASHINGTON (12/16/09)--The Shadow Financial Regulatory Committee Monday criticized Congress and the Obama administration for not addressing the government-sponsored enterprises as a part of regulatory reform. It also said that curbing compensation packages at large financial firms could actually hurt firms’ value (American Banker Dec. 15). Government subsidies could ruin the value in the firms in which the government has the greatest stakes, the committee said. The committee is a group of independent experts on the financial services industry who meet regularly to study and critique regulatory policies...


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