Need to Know News
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FDIC Reports to Stakeholders
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The latest FDIC Letter to Stakeholders highlights the agency’s activities during the first quarter of 2008. Despite economic problems, the report says, the Deposit Insurance Fund remained financially strong with 99 percent of FDIC-insured institutions well-capitalized at year-end 2007.
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NCUA Proposes CUSO Changes
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The National Credit Union Administration has proposed changing its credit union service organization (CUSO) rules. The change would add two new categories of permissible activities — credit card loan origination and payroll processing services.
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Fed Changes Prices for Clearing Checks
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Reflecting the increased use of Check 21 to clear checks, the Federal Reserve Banks have modified the pricing on their paper forward collection and return item services as well as select Payor Bank Services. In addition, paper products and deposit deadlines that have little or no volume will be eliminated.
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The Government Accountability Office has released a major report on Health Savings Accounts (HSAs). The GAO examined who participated in the plans and the pattern of contributions and withdrawals.
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OCC Publication Features Rental Housing
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The Spring issue of the OCC’s Community Developments newsletter features articles on the preservation of affordable rental housing. The article focuses on specific activities of national banks, nonprofits, and local governments.
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FinCEN Releases Report on Real Estate Fraud
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The Financial Crimes Enforcement Network (FinCEN) released a report entitled Suspected Money Laundering in the Residential Real Estate Industry: An Assessment Based Upon Suspicious Activity Report Filing Analysis. The report identifies several transaction types that may be perpetrated by individuals or groups seeking to launder funds via residential property transactions.
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Hotline Bill Passes House
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The “Financial Consumer Hotline Act of 2007”, which would establish a single, toll-free telephone number for consumers to call if they have a problem with their bank and want to speak to the bank’s federal regulator, was passed by the U.S. House of Representatives. The bill was introduced because a number of agencies regulate banks, which can make it difficult for consumers to figure out who they should contact with complaints.
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A Closer Look — News Analysis
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In an economy that runs on credit, businesses and households are finding it more costly and difficult to fill up the tank, according to the Federal Reserve’s latest survey of senior loan officers.
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Legislation that would provide $300 billion in federally insured loans to help at-risk homeowners avoid foreclosure is expected to pass the House this week with bipartisan support, but could face more opposition in the Senate.
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Federal bank, thrift, and credit union regulators have issued sweeping rule changes to the Federal Trade Commission Act that would make it a lot harder for credit card issuers to raise interest rates arbitrarily and conceal high penalty fees.
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A bold plan introduced by Federal Deposit Insurance Corporation Chairman Sheila Bair aims to save over a million at-risk borrowers from foreclosure with direct loans from the U.S. Treasury Department.
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Did You Know?
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$200,700: National Median Price for Existing Homes
$217,400: Median Home Price One Year Earlier
7.7 Percent: Decline in Home Prices
18.8 Percent: One-Year Decline in Home Sales — Northeast
22.3 Percent: One-Year Decline in Home Sales — West
20.0 Percent: One-Year Decline in Home Sales — South
15.9 Percent: One-Year Decline in Home Sales — Midwest
Where Prices Did NOT Decline: Des Moines, IA; Durham, NC; Austin, TX
Source: National Association of Realtors
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Sheshunoff Blogs
Kenneth A. Guenther, Former President of ICBA Last week was another busy one. As anticipated, the Federal Reserve’s (Fed’s) Federal Open Market Committee (FOMC) reduced the federal funds rate another 25 basis points to 2 percent — last September it was at 5.25 percent. Two Federal Reserve Bank presidents dissented, opting for no further Fed action at this time. Fortunately Chairman Bernanke, unanimously supported by the other Federal Reserve Board governors, prevailed. On the legislative front, House Financial Services Committee Chairman Barney Frank told attendees at an Independent Community Bankers of America (ICBA) meeting in Washington on April 29 that he was optimistic a major housing bill addressing the still burgeoning foreclosure ...
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It caught the eye. The April 23 front-page headline of the highly respected British newspaper Financial Times (FT) read, “Regulator Fears Wave of Bank Failures.” The story was written after an interview with Comptroller of the Currency John Dugan. There also was an inside article on the related issue of rising default rates on credit card, automobile, and commercial real estate loans. Comptroller Dugan’s new PR offensive had kicked off a week earlier on April 16, when he devoted his entire speech at Washington’s Exchequer Club to the “increasing delinquencies and losses we’re seeing on commercial real estate loans, especially in CRE related to residential housing,” singling out community banks. The front page FT story reported that “Mr. Dugan said he did not expect failures to rise as high as during the late 1980s and nearly 1990...
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from Sheshunoff Management Services
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Despite dynamic economic changes in the third quarter of 2007, pricing for banks remained generally strong in the period, and the number of announced transactions, both quarterly and year-to-date, is consistent with last year. Bank pricing is experiencing some downward pressure, but came in above or approximately equal to year-to-date medians for three of five commonly reported metrics, including price to earnings of 24.1x, higher than the nine-month ratio of 23.9x. Price to book and price to tangible book were off from prior quarters on slightly lower equity levels, but year-to-date data is in line with the prior three years. The transactions announced to date were struck prior to the events of the third quarter.
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