Law and regulation

How to handle hot deposits, when to be more forgiving of delinquent customers, why health care reform could yield new opportunities, what the heck is a transaction genome, and other things for bankers to think about in the new year.

A bipartisan bill that will allow banks to appeal examination findings to an outside arbiter aims to resolve complaints that examiners are being too tough.

The idea that small business spurs job growth is a powerful, if not biblical, force in economic theory and public policy. But what if this bedrock belief about the jobs-creating power of small business and isn't true — or, at the very least, is missing a big part of the story?

"The last duty of a central banker is to tell the public the truth." For more than a decade, this provocative quote credited to Alan Blinder has dogged the Princeton economist and former Federal Reserve vice chairman. There's only one problem: he says it's not his.

Where did debit strategies go wrong, and where will they go next? Maria Aspan reports from the ATM, Debit & Prepaid Forum, an annual event with special resonance this time around.

His methods differ from Occupy Wall Street, but his aim is the same: level the playing field within the U.S. financial system. Why bank analyst Mike Mayo may just be the most determined market idealist on Wall Street.

The past year was a mixed bag for bankers. Some found success in picking up market share, or in finally putting federal bailouts into rear view. Others encountered fresh challenges, from run-ins with regulators to the realities of a still-fragile economic recovery. With the new year sure to bring its own mix of achievements, redemption stories and trouble spots, the editors of American Banker offer 10 bank CEOs worth watching in 2012.

The former chief executive of Butler Bank in Lowell, Mass., has been banned from the banking business and fined $225,000 in connection with the thrift's failure last year.

WASHINGTON — Federal regulators are seeking comment on a proposal that aims to lessen banks' reliance on credit ratings by proposing three methods for assessing risk on firms' trading books.

Has the Consumer Financial Protection Bureau, with over 500 employees and growing like cancer, actually protected any consumers yet? Well, next best thing. It garners headlines nearly daily in lobbying to gain full powers by getting Cordray confirmed. Dodd-Frank says the CFPB must have a confirmed director to fire from all barrels.

Banks are between a rock and a hard place these days in figuring out how to recoup the cost of doing business without sparking a public outcry.

Fearless forecasts for bank regulation and reform in the new year.

The Federal Housing Finance Agency on Thursday said it has directed Fannie Mae and Freddie Mac to implement a congressionally mandated increase in their loan guarantee fees on April 1. The initial rise will be 10 basis points, but additional increases may be coming, said the FHFA's acting director, Edward DeMarco.

If you read through enough material loss reviews prepared by the FDIC's Inspector General — essentially autopsies on failed banks — certain common themes emerge. One of the recurring themes is that many closed banks overconcentrated in commercial real estate and development loans. The rapid decline in property values, reflected by appraisals, then rendered the bank undercapitalized.

Security Federal Corp. in Aiken, S.C.. has reorganized as a bank holding company and its subsidiary, Security Federal Bank, has converted from a federally chartered thrift to a state-regulated commercial bank.

Washington Mutual Inc. will collect $50 million from the government under a settlement approved Thursday ending nearly two decades of litigation arising out of the savings and loan crisis of the late 1980s.

Pinnacle Financial Partners Inc. in Nashville, Tenn., has moved a step closer toward exiting the Troubled Asset Relief Program.

Lawsuits citing Fair Debt Collection Practices Act (FDCPA) violations reached 11,359 this year through Dec. 15, exceeding last year's record of 10,914, according to WebRecon LLC, a Grand Rapids, Mich.-based company that tracks the data from the courts.

Federal regulators seem to be of two minds about the Community Reinvestment Act, a law with an explicit and limited congressional purpose of requiring each banking regulator "to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions."

Regulators were supposed to make progress in implementing the massive Dodd-Frank Act. Instead, we spent the time refighting old battles and witnessing a parade of extremely complicated regulations.