CRANSTON, R.I. - (12/16/04) -- Joseph Mollicone, who served 10years in jail for embezzling $15 million to trigger the 1991 RISDICcrisis, was returned to prison Wednesday for possibly violating hisparole. Mollicone, who was paroled two years ago, surrendered toauthorities on Tuesday. Mollicone was convicted of stealing $12million from Heritage Loan and Investment Co., which was insured bythe R.I. Share and Indemnity Corp. The embezzlement trigged thefailure of RISDIC and more than two dozen credit unions it insuredand forced the Governor to call a bank holiday. Mollicone fled toSalt Lake City, where he lived under an assumed identity, then heturned himself in two years later to face the embezzlement charges.The ensuing crisis eventually forced private deposit insurers forcredit unions in at least 10 other states to close down.
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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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