Deposits

Backers say a bill to limit asset growth instead of restricting brokered funds addresses concerns about expanding balance sheets at troubled banks. But skeptics worry it would open the door to greater risk.

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 Office of the Comptroller of the Currency will use year-end 2019 asset totals in its calculating its next assessment, saying national banks "should not be penalized" for adding emergency loans to their books during the pandemic.

On Mar. 31, 2020. Dollars in thousands.

Consumers are parking their funds at financial institutions as lending slows and interest rates remain near zero, making it difficult for credit unions to deploy these deposits.

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A record amount of funds have flowed into banks since the coronavirus hit, but a low-rate environment and tepid loan demand are complicating efforts to put that money to work.

The legislation would aim to address concerns that the current policy is outdated by establishing a new regime to limit asset growth for banks that are not well-capitalized.

The industry was well positioned in terms of net worth before the pandemic and recession, but some institutions could run into issues with sluggish earnings and a surge in deposits.

Industry figures have begun to speak out in support of demonstrations in the wake of the deaths of George Floyd and other African Americans, and new data is expected to show how the coronavirus impacted balance sheets.

Past is not prologue, and a successful strategy for becoming a top-performing bank in 2020 is very different from what it might have been just six months ago.

Even after the Fed eased some limitations in April to promote emergency lending, the bank has had to make some “tough choices” to heed the $1.95 trillion growth ceiling set by regulators in the aftermath of its phony-accounts scandal.

The economic contraction caused by the coronavirus pandemic has been worse than the Wall Street firm had modeled two months ago, its president John Waldron said Wednesday.

The bank is trying to recover millions of dollars in returned deposits. It also has a $14 million loan to the company that allegedly conducted the scheme.

Recent tweaks to Reg D have blurred the line between checking and savings accounts, opening up the possibility for new innovation in those products.

Bracing for a prolonged economic slowdown, many community bankers say they are considering a number of belt-tightening measures, including freezing salaries and delaying investments in technology and product development, according to a survey by Promontory Interfinancial Group.

Congress authorized the Federal Deposit Insurance Corp. to intervene if the pandemic caused a liquidity scare, but nearly two months later deposits are through the roof and the agency has not acted on the expanded authority.

The Federal Reserve also said in a supervisory report released Friday that it would conduct stress tests this quarter as planned, taking into account sudden deterioration in the economy brought on by the coronavirus pandemic.

Banks that relied on loan growth to outperform peers in 2019 will need to focus more on core deposits and expense control this year. Check out our annual ranking of the top 200 publicly traded community banks.

On Dec. 31, 2019. Dollars in thousands.