SEATTLE - (04/11/05) -- The Federal Home Loan Bank ofSeattle revealed last week it was sitting on $260 million ofunrealized losses on its hedging portfolio at the end of lastwyear, raising speculation that the bank may be merged into one ofthe 11 other regional FHLBs. If the losses are realized it wouldwipe out 13% of the Seattle bank's $2 billion in capital, which isalready operating under a supervisory agreement with its federalregulator, the Federal Housing Finance Board. In its disclosurelast week the Seattle bank said it will earn minimal net income andpossible lose money over the next "few years." The revelations comeat a time when Congress is debating a new regulatory scheme for theFHLBs, along with the Fannie Mae and Freddie Mac, the two majorplayers in the secondary mortgage market. The Seattle bank is ownedby its 375 financial institution members, including 79 creditunions.
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Backed by tech billionaires, the crypto-focused digital startup bank's timely application reflects the current administration's openness to new tech-driven banking models — and raises concerns about regulatory impartiality, considering its backers' political ties.
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The application follows on the heels of Circle and Wise, as crypto and payment companies seek crypto custody approval and direct access to the Federal Reserve payment system.
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The credit union regulator, responding to a recent executive order, has established strict new standards for prosecuting financial crimes. Regulators are now supposed to make criminal referrals only in cases where putative defendants appear to have known they were breaking the law.
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Three bank trade associations recommended phasing out paper checks to reduce government payment fraud in a joint statement submitted to the U.S. Treasury.
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Baton Rouge-based Investar Holding Corp. has agreed to pay $84 million for Wichita Falls Bancshares, which operates five branches in the Dallas-Fort Worth Metroplex.
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A federal judge in New York has rejected Huawei's effort to toss charges alleging bank fraud, sanctions violations and trade secrets theft.
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