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FDIC Gets Tough With Failed Banks
Former top executives and board directors of failed banks are being pressured to settle fraud allegations soon or fight them in court. The Federal Deposit Insurance Corp. has authorized filing lawsuits that would seek to recover more than $2 billion from some 80 or so former bank execs, reports Scott Reckard of the Los Angeles Times. The agency, which is eager to use settlement money to replenish its insurance fund, could end up suing or settling with former execs of about one-quarter of the more than 300 banks that have collapsed since the start of 2008.
So far the FDIC has filed only two civil suits – a July complaint against former IndyMac Bank executives seeking $300 million and a November case against former Heritage Community Bank insiders.
Coming Soon: Bigger Bank Dividends?
The Fed will soon issue guidance allowing some banks to boost their dividend payments to shareholders, Fed Governor Daniel Tarullo said in a speech today. But first, the banks have to detail to the Fed exactly how well prepared they are to face tough economic conditions and remain well capitalized. Banks that received capital injections from the Treasury Department’s bailout program during the crisis were required to halt or cut dividend payments.
Big Banks Blitz Bureaucrats
Big banks and financial services companies shifted some lobbying from Congress to the federal agencies that are writing regulations to carry out the Dodd-Frank law. Third quarter lobbying data showed 723 companies and groups lobbied on the financial reforms that were signed into law in late July, according to the Center for Responsive Politics.
Of that group, 123 companies or groups specifically targeted the Securities and Exchange Commission for lobbying while 93 mentioned the Commodity Futures Trading Commission, according to information submitted on the quarterly disclosure forms. That marks a substantial double-digit increase over the second quarter, the center said.
Reform-watchers can keep an eye on lobbyists’ meetings with financial regulators by checking the following sites every week:
- Federal Reserve
- Federal Deposit Insurance Corp.
- Commodity Futures Trading Commission
- Securities and Exchange Commission
Fed Won’t Wait for Consumer Agency on Money Transfers
One of the first consumer-oriented regulations to spring from the Dodd-Frank law is shaping up to be stricter disclosure rules for Western Union Co., MoneyGram International Inc., and other remittance companies. Bloomberg, citing unidentified sources, says the Fed is already looking at how to force the money transfer companies to tell consumers more about fees and exchange rates. If the Fed doesn’t get the regulation done by July, the Consumer Financial Protection Bureau will take over and finish it.
Reprinted by Permission © 2012, The Center for Public Integrity®. All Rights Reserved.
