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Bank Regulator Mixed Messages?

August 16, 2011

Authors

Robert Klingler

Bank Regulator Mixed Messages?

August 16, 2011

by: Robert Klingler

On August 16, 2011, the Financial Institutions and Consumer Credit subcommittee of the House Committee on Financial Services held a field hearing in Newnan, Georgia, with a stated topic of “Potential Mixed Messages: Is Guidance from Washington Being Implemented by Federal Bank Examiners?”

Representatives Shelley Moore Capito, Spencer Bachus, Lynn A. Westmoreland and David Scott each heard testimony from panels of federal banking regulators and Georgian bankers about the condition of banking in Georgia, including the effect that federal banking regulations, guidance, policies and actions have had on community banks.  Copies of the written testimony submitted, including that of

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Federal Bank Regulators Release New Guidance for Management of Interest Rate Risk

January 25, 2010

Authors

Michael Shumaker

Federal Bank Regulators Release New Guidance for Management of Interest Rate Risk

January 25, 2010

by: Michael Shumaker

On January 7, 2010, the Federal Financial Institutions Examination Council (FFIEC), a collection of federal regulators of financial institutions, issued an advisory on interest rate risk management. This advisory, which was issued as part of an effort to supplement and clarify existing interest rate risk (IRR) guidance provided by individual federal regulators, indicates that federal regulators will have increased expectations during future examinations of a financial institution’s management, modeling, stress testing and documentation of IRR.

In light of the current economic environment in which financial institutions are experiencing downward pressure on capital and earnings, FFIEC has grown concerned with

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FDIC Issues Final Statement of Policy on Investor Qualifications for Failed Bank Acquisitions

September 23, 2009

Authors

Bryan Cave Leighton Paisner

FDIC Issues Final Statement of Policy on Investor Qualifications for Failed Bank Acquisitions

September 23, 2009

by: Bryan Cave Leighton Paisner

Background

On July 2, 2009, the Board of Directors of the Federal Deposit Insurance Corporation (“FDIC”) issued for public comment a proposed Statement of Policy that sets forth the qualifications for private equity investors in failed bank acquisitions (the “Proposed Policy”).  The FDIC established a 30-day comment period and sought public comment on nine topics:

A New Capital Injection Program?

February 6, 2009

Authors

Robert Klingler

A New Capital Injection Program?

February 6, 2009

by: Robert Klingler

On February 6, 2009, the Wall Street Journal ran a story indicating that the Treasury Department is shifting away from a “bad bank” concept and towards a second round of capital injections.  This second round of capital injections, according to the Wall Street Journal, would carry stricter terms than the current TARP Capital Purchase program and would be targeted towards weaker banks.

Instead of buying preferred shares, as it did before, the government is discussing taking convertible preferred stakes that automatically convert into common shares in seven years.

To get money, banks would likely have to pay a higher

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Interest Rate and Brokered Deposit Restrictions

January 28, 2009

Authors

Robert Klingler

Interest Rate and Brokered Deposit Restrictions

January 28, 2009

by: Robert Klingler

On January 27, 2009, the FDIC proposed to amend its regulation relating to interest rate restrictions on institutions that are less than well capitalized.  The proposed regulation would tie the interest rate caps to published national interest rates and eliminate the concept of local deposit market areas.

Section 29 of the Federal Deposit Insurance Act places statutory limitations on the ability of any insured depository institution that is not well capitalized to accept funds obtained by or through any deposit broker.  Because of the statutory definition of a deposit broker, these limitations also limit the interest rates which may

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FDIC and Open Bank Assistance

January 12, 2009

Authors

Robert Klingler

FDIC and Open Bank Assistance

January 12, 2009

by: Robert Klingler

On January 2, 2009, the Wall Street Journal ran a story on the possibility of the FDIC agreeing to assume future losses on the troubled assets of a failed institutions.  The FDIC has used versions of the loss-sharing model several times last year, but with the exception of the initial attempt to rescue Wachovia, only as part of the receivership of a failed institution.

“It is something that we plan on doing in the future where it’s appropriate,” says Herb Held, assistant director in the FDIC’s division of resolutions and receiverships. “I think it’s a good deal for everybody:

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FDIC Expands Bidder List for Troubled Institutions

November 26, 2008

Authors

Bryan Cave Leighton Paisner

FDIC Expands Bidder List for Troubled Institutions

November 26, 2008

by: Bryan Cave Leighton Paisner

On November 26, 2008, the FDIC issued a press release outlining a new plan to allow parties that do not have a bank charter to bid on failing institutions.  We will keep you up to date as additional details emerge on this new plan.  Below is the complete text of the FDIC’s press release.

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Additional Guidance on Troubled Bank Eligibility

October 24, 2008

Authors

Robert Klingler

Additional Guidance on Troubled Bank Eligibility

October 24, 2008

by: Robert Klingler

FDIC Chairman Sheila Bair has informed the Florida Bankers Association that higher CAMELS rated banks can apply for the Treasury Capital Program, but it will subject those banks to further regulatory scrutiny.

Another regulator with a federal banking agency informed the Florida Bankers Association as follows:

CAMELS ratings are not the sole determinant and each situation will be looked at individually. Based on what we know thus far, we think many 3-rated banks will meet the standards as long as there are no mounting deficiencies that suggest future prospects are poor or that additional downgrades are likely. Further, it is possible that

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