Deposit insurance

Treasury Secretary Janet Yellen's latest remarks reaffirming the government's willingness to shore up uninsured deposits at troubled banks seem to have calmed markets, but sooner or later regulators are going to have to articulate an official policy.

Depositors' trust in their banks — and banks' trust in their customers — is the cornerstone of finance. The demise of Silvergate, Silicon Valley and Signature has demonstrated how fragile that trust can be, and how difficult it will be for regulators and bankers to win it back.

Regulators covered Silicon Valley Bank and Signature Bank customers' money, and will need to replenish the Deposit Insurance Fund with higher assessments. But smaller banks don't want to pay for larger banks' mistakes.

Banks lowered their loss provisions at the end of 2020, a sign they feel better about this year than last year, according to data from the FDIC. But loan balances fell for the second straight quarter and the annual loan growth rate was the lowest in seven years.

Todd Harper, chairman of the National Credit Union Administration, said new assessments are likely needed because of an influx of deposits, but industry groups and other board members say the agency should wait to see if the reserve ratio recovers on its own.

Figure Technologies would only accept uninsured deposits, so it would not be subject to Fed or FDIC oversight. A major concern for banks is that the effort could open the door to incursions by bigger tech companies.

If the deal is approved, the $6.4 million-asset credit union would drop its federal share insurance upon joining Towpath Credit Union.

The company is best known for its reciprocal deposit program, but it’s finding new ways to serve banks without competing for their customers.

A historic influx of deposits has brought the National Credit Union Share Insurance Fund’s equity ratio close to the point where premiums would be required, but the regulator’s plan is intended to boost it.

Congress should pass legislation that would allow Home Loan banks to backstop deposits by local governments at commercial banks and lower the cost of bond financing, two mayors argue.

Two board members for the credit union regulator spoke during a NAFCU event, highlighting liquidity issues, plans for new departments at the agency and more.

The agency’s insurance fund dipped below its statutory minimum last quarter thanks to the rapid rise in deposits, but officials say it should bounce back without a hike in premiums.

The plan would encourage more risk-taking by big banks, which would put the industry and taxpayers in harm’s way, write former CFPB Director Richard Cordray and Camden Fine, onetime head of the Independent Community Bankers of America.

A pandemic-driven surge in bank deposits helped drive the agency's insurance reserves below their statutory minimum.

The $18.8 billion in net income was 70% less than a year earlier as the uncertain economic picture and new accounting rules drove a sharp rise in provisions for future losses.

Peoples Bank in Arkansas once used brokered deposits to fund more loans to underserved borrowers. It could do so again if Congress loosens restrictions, says CEO Mary Fowler.

The panel later this month will vote on the nomination of Judy Shelton, whose views on certain policy issues have met with skepticism from both Democrats and Republicans.

Small banks have long led the campaign against industrial loan companies, arguing they can be used to violate the separation of banking and commerce. But now the industry’s heavyweights are also taking a hard line in response to an FDIC proposal that would give tech companies a smoother path into the lending business.

Congress and the FDIC are considering easing limits on banks' holdings of such deposits, a move that could inadvertently lead to more expensive failures.

The investment firm is the latest nonbank to try to enter banking through a Utah-based ILC.