Policy & Regulation

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.

Following a shift of its Treasury services function to another Federal Reserve bank, the Federal Reserve Bank of Cleveland has eliminated all but a handful of job at its Pittsburgh branch and is selling its 80-year-old building in that city's downtown.