Leach to Unveil Thrift Fund Rescue Bill
WASHINGTON - Early this week, House Banking Committee Chairman Jim Leach will unveil legislation designed to rescue the thrift insurance fund, roll back select bank regulations, and create a new uninsured wholesale financial institution charter.
The committee approved a fix for the Savings Association Insurance Fund on July 29, but the industry has been waiting to see details on the two other pieces of Rep. Leach's bill.
Rep. Leach worked through the bill section by section last week, making final calls on what to include and what to leave out.
While the controversial legislation faces a tight schedule - lawmakers return today but will work for only about a month - the House calendar is relatively clear, a committee aide said Friday.
"Leach's primary interest is in getting a bill passed," he said. "If we can put together something with broad support, it can pass."
- Barbara A. Rehm Banks Can Use Own Market Risk Models in '97
WASHINGTON - Banks can begin using internal models Jan. 1 to set the capital needed to back market risks, federal regulators announced last week.
The new capital rules are not mandatory until Jan. 1, 1998, but banks may voluntarily adopt them a year early. The rule, published in the Aug. 29 Federal Register, was approved by each of the agencies last month.
Regulators are requiring bank models to accurately calculate how much an institution could lose from the equivalent of a 10-day drop in the value of its securities portfolio.
The rule affects the 15 institutions that earn $1 billion from or devote 10% of their assets and liabilities to securities trading. Under the rule, each of these banks will have to set aside as much as an additional $200 million in reserves.
- Olaf de Senerpont Domis ABA Asks Top Court to Kill Ban on Retirement CD
WASHINGTON - The Supreme Court should overturn an appeals court ruling that allowed a state regulator to bar banks from selling the "retirement CD," the American Bankers Association said Friday.
Writing in support of American Deposit Corp. and Blackfeet National Bank, the ABA asked the Supreme Court to hear the banks' Aug. 1 appeal.
In May, the U.S. Court of Appeals for the Seventh Circuit said Illinois regulators could prohibit banks from selling the retirement CD because it is a fixed-rate annuity, an insurance product subject to state regulation.
ABA deputy general counsel Michael F. Crotty said the seventh circuit's ruling contradicts earlier Supreme Court decisions. "The Supreme Court has said annuities are not insurance products," he said.
The ABA also asked the Supreme Court to provide a standard for state regulation of bank insurance sales as part of its ruling.
- Bill McConnell