Law and regulation

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.

A Virginia lawmaker is urging his colleagues in Richmond to consider creating a state-owned bank that would use deposits from residents and state agencies to lend to local businesses and stimulate economic growth.

Zil Bareisis knows all too well why the British government is considering a ban on credit card surcharges that shock consumers purchasing tickets or products online.

The Consumer Financial Protection Bureau hit the ground running in 2011, despite being hobbled by the lack of a permanent director, and enjoyed support from the industry for most of its early initiatives. That isn't likely to last next year, when observers expect it will take on a handful of controversial agenda items and begin using its enforcement powers.

Add NorthEast Community Bank in White Plains, N.Y., to the growing list of federally chartered thrifts converting to state charters.

Banks are starting to take a closer look at the Foreign Account Tax Compliance Act, though its rules do not take effect until 2013.

Banks are starting to take a closer look at the Foreign Account Tax Compliance Act, though its rules do not take effect until 2013. And even though FATCA is focused on companies based outside the U.S., its effects may gradually influence domestic financial institutions.

With the failure rate expected to decline next year, the FDIC is getting the chance to focus on other priorities, including finishing implementation of Dodd-Frank and ensuring it is ready for the next crisis.

President Obama announced Tuesday that he intends to nominate Jerome H. Powell and Jeremy Stein to the two vacancies on the Federal Reserve Board.

President Barack Obama will announce Tuesday that he plans to nominate a Harvard University finance professor and a former private-equity executive to fill the two vacancies on the seven-member Federal Reserve Board, a White House official said.

The Federal Home Loan Bank of Chicago has received the go-ahead from its regulator to begin repurchasing stock from its member banks.

The Federal Reserve Bank of Atlanta has ordered First St. Charles Bancshares Inc. in Boutte, La., to use whatever resources necessary to ensure that its bank subsidiary, First National Bank USA, remains well capitalized.

How wide should credit card lenders open the gates to borrowers after slamming them shut during the recession when losses soared? It depends on their analytics.