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New House members poised for banking panel seats

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WASHINGTON (5/30/08)--After winning recent special elections, several new members of Congress may take seats on the House Financial Services Committee. According to Congressional Quarterly, the House Democratic Steering and Policy Committee recommended Financial Services assignments for these most recent election victors:
* Jackie Speier (D-Calif.) won the seat formerly held by Tom Lantos (D-Calif.), who died of cancer on Feb. 11; * Don Cazayoux (D-La.) won the seat formerly held by Republican Richard Baker, who resigned in February to join a hedge fund trade association; and * Travis W. Childers (D-Miss.) won the seat formerly held by Republican Roger Wicker, who was appointed to the Senate in December.
Earlier this year, U.S. Reps. Bill Foster (D-Ill.) and André Carson (D-Ind.) were appointed to the House Financial Services Committee. The changes could occur after Congress returns from the Memorial Day recess. That’s when the full Democratic Caucus will vote on the nominations, reports Congressional Quarterly

Inside Washington (05/29/2008)

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* WASHINGTON (5/30/08)--It’s important to foster relationships with government-insured depository institutions with the means to provide the underserved with the opportunity to save, borrow, invest and build solid credit files, National Credit Union Administration (NCUA) Vice Chairman Rodney Hood said at a general forum this week. The forum was organized by the Boston and Worcester Alliances for Economic Inclusion (AEI) at Brandeis University. Hood applauded Dan Egan, president of the Massachusetts Credit Union League, and Ann Clancy, league senior vice president and general counsel, for their attendance and participation with AEI. Hood discussed the danger of predatory lending and said credit unions are working to combat the problem. He also emphasized the NCUA’s Office of Small Credit Union Initiatives, which offers assistance through community development initiatives, grants and loans at 1% interest, student internships and volunteer income tax assistance. Hood recognized the partnerships credit unions are creating with Operation Hope, the Federal Home Loan Banks, the Department of Housing and Urban Development, the Department of Treasury’s Community Development Financial Institutions fund and the Internal Revenue Service ...

Real estate loans hobble bank profits

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WASHINGTON (5/30/08)--Troubled real estate loans reduced commercial bank and thrift net income to $19.3 billion in the first quarter of 2008--down from the $35.6 billion the industry earned in the first quarter of 2007. The Federal Deposit Insurance Corp. (FDIC) yesterday cited higher provisions for loan losses as the primary reason for the drop in industry profits. The size of the earnings decline was attributed mainly to a few large institutions, but more than half of all insured institutions reported lower net income in the first quarter. The FDIC said bank and thrift noncurrent loans still are rising sharply. Loans 90 days or more past due increased by $26 billion (or 24%) to $136 billion during the first quarter. That followed a $27 billion increase in the fourth quarter of 2007. The FDIC said real estate loans comprised almost 90% of the increase in noncurrent loans during the first quarter, but noncurrent levels increased in all major loan categories. At the end of the first quarter, 1.7% of the industry's loans and leases were noncurrent. By comparison, credit unions have shown a special capability to make solid loans. While the National Credit Union Administration shows net charge-offs rose to 0.67% in first-quarter 2008 from 0.50% in fourth-quarter 2007, credit union charge-offs still are lower than banks'. Banks' net charge-offs reached a five-year high of 0.99% in first-quarter 2008, up from 0.83% in fourth-quarter 2007, reports the Federal Deposit Insurance Corp. FDIC Chairman Sheila C. Bair said the banks and thrifts being closely monitored “are those with high levels of exposure to subprime and nontraditional mortgages, with concentrations of construction loans in overbuilt markets, and institutions that get a large share of their revenues from market-related activities, such as from securities trading."