WASHINGTON - (11/17/05) -- While they struggle to providefunding for an estimated 216,000 homes covered by the NationalFlood Insurance Program, lawmakers are still unsure about a muchlarger problem rendered by Hurricane Katrina--as many as 300,000more properties that were not insured for flood damage. A proposalfloated by Mississippi's congressional delegation to allow thoseuninsured homeowners to buy coverage through the NFIP retroactivelyappears to be dead because lawmakers don't want to set theprecedent of allowing retroactive coverage. Mississippi Sen. ThadCochran floated a new proposal this week to expand the CommunityDevelopment Block Grant program to award grants to uninsuredproperty owners whose homes were destroyed by hurricane flooding.The price if Congress fails to come to agreement is that thousandsof credit unions, banks and other lenders may get stuck holdingbillions of dollars in worthless loans. The cost will besignificant--as much as $50 billion, according to someexperts.
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The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
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The first-quarter increase involved commercial real estate loans, including some problematic multifamily loans and an office credit, but none of the criticized loans were to consumers, officials at the Dallas company say. Further CRE deterioration is anticipated.
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The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
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The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
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Charge-offs and nonperforming loans rose at the Georgia bank in the first quarter. But it blamed the problem on one large client and said the matter has been resolved.
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Amid healthy first-quarter loan growth and improving credit quality, Discover Financial Services slashed its profits by $800 million to offset remediation costs from a 16-year period when it overcharged certain merchants.
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