Audits Seen Possible in Reform's 'Sunshine'
WASHINGTON - Federal Reserve Board Governor Edward M. Gramlich raised the possibility Thursday that rules enforcing the so-called sunshine provisions of the new financial reform law might require financial institutions and community groups to submit audited financial statements."Supposing it were true, the way the regulations were written, that parties [to Community Reinvestment Act agreements] just had to submit an audited financial statement. How burdensome would this be?" Mr. Gramlich asked bankers and community group representatives at a meeting of the Fed's Consumer Advisory Council.
"The burden is going to be enormous for less-sophisticated nonprofits that don't have the money to conduct audits," said Marta Ramos, CRA officer at Banco Popular de Puerto Rico.
Anne S. Li, executive director of the New Jersey Community Loan Fund, suggested using the 990 tax forms that tax-exempt organizations already file "as a good alternative to an audit."
But representatives of larger community groups that already do audits were less concerned. "Such a rule would not be burdensome," said Jeremy Nowak, chief executive officer of the Reinvestment Fund of Philadelphia.
The rules, which will require banks and community groups to disclose detailed information about CRA agreements, are expected in the coming weeks.
Basel Proposal Feedback Won't Be Released
WASHINGTON - Comment letters are due today on the Basel Committee for Banking Supervision's proposal to update the 1988 capital accord, but people interested in reading the feedback may be out of luck.The committee will not release copies of the comment letters. U.S. banks had the option of routing their responses through the Federal Reserve Board, and a spokesman said the Fed will not release them either. Daniele Nouy, the committee's secretary general, wrote in response to a request for the comment letters, "We do not circulate the individual comments received on the new Capital Accord. If we publish something, on top of the new revised document taking comments into account, it will be a summary of the comments received."
Deposit Insurance Reform Meetings Set
WASHINGTON - The government plans to hold three, two-day meetings with bankers to discuss federal deposit insurance reform.Federal Deposit Insurance Corp. Chairman Donna Tanoue first raised the issue March 7, saying possible changes include increasing coverage to $200,000 per account. The meetings are to begin in Minneapolis May 31-June 1, resume in Dallas June 7-8, and conclude in Kansas City, Mo., June 28-29. Bankers can register for the meetings by calling 202-663-5326.
OTS Grants Charter to Investor Group
WASHINGTON - The Office of Thrift Supervision has approved an application from a group of investors, including the Kansas City Life Insurance Co. of Missouri, several trust funds, and two private companies, to organize a federal savings bank to be known as Generations Bank.- Michele Heller and Rob Garver