Regulators have seized seven banks in Illinois with a unit of Bank of Montreal assuming the assets and liabilities of the largest institution, and marking the second time in as many weeks that a Canadian bank has made headway into the U.S. market via this country’s bank failures. U.S. bank collapses, fueled by faltering real estate loans, is up to 57 this year.
Regulators seized 8 banks this week – a high number even by credit crisis standards – with an overall total of $6.25 billion in assets and $5.1 billion in deposits. The actions by the Federal Deposit Insurance Corp. takes this year’s total of bank failures to 50, on pace to break last year’s total of 140 collapses, a nearly two-decade high.
Washington Mutual’s primary regulator, the Office of Thrift Supervision, prevented the Federal Deposit Insurance Corp. from properly examining the troubled loan files of the Seattle-based thrift before it became the largest bank failure in U.S. history, according to testimony today during a Senate hearing. Testimony by FDIC Chairman Sheila Bair and John M. Reich, the OTS director at the time, offers a glimpse at a lack of interagency cooperation among banking regulators in the prelude to WaMu’s downfall.
Federal regulators have seized a bank based in Myrtle Beach, South Carolina which had invested in coastal real estate development, the first to be taken over from that state since 1999 and bringing this year’s total bank failures to 42. Beach First was hit with failing real estate-backed loans from investments in upscale condominium and other projects along the coastal community.
As four banks were shut down this week bringing this year’s total failures to 41, the Federal Deposit Insurance Corp. is considering extending a program that may reduce the credit and liquidity challenges facing smaller, community banks. FDIC Chairman Sheila Bair told a gathering of community bankers on March 19 that the regulator is considering extending the Transaction Account Guarantee (TAG) Program beyond its current deadline of June 30, 2010. TAG was enacted in 2008 as one of the measures to shore up confidence among U.S. depositors in banks of all sizes.
The Federal Deposit Insurance Corp. reported the failure of 7 more banks this week, bringing this year’s total to 37, representing a pace that will easily surpass last year’s total of 140 bank collapses. Through the end of March last year, 21 banks had failed.
Crippling loan losses propelled by a still peaking commercial real estate crisis prompted the FDIC to act against banks in Alabama, Georgia, Minnesota, Ohio and Utah.
The chief of the Federal Deposit Insurance Corp., the agency that protects Americans’ bank accounts, today warned of possible “backdoor bailouts” that are written into the current draft of the Senate’s financial oversight reform bill.
FDIC Chairman Sheila Bair, an outspoken critic of the government’s bailout of the biggest banks, referred to the reform’s potential loophole in a prepared speech before the annual meeting of the Independent Community Bankers of America today in Orlando.
Propelled by a still unfolding commercial real estate loan crisis, bank failures this year are on pace to surpass last year’s tally of 140, with 26 institutions seized so far this year by the Federal Deposit Insurance Corp. Regulators shut or turned over to other institutions banks in Maryland, Illinois, Florida and Utah this week, pushing the number of U.S. failures to 26 for 2010. FDIC Chairwoman Sheila Bair has said she expects the number of bank failures in 2010 to exceed the 140 closures in 2009. That was the highest number in nearly two decades.
The number of U.S.-insured banking institutions on the government’s “Problem List” jumped more than a quarter percent to 702 at the end of the fourth quarter, compared to the previous quarter, and total assets of these lenders grew 16 percent to $402.8 billion, according to the Federal Deposit Insurance Corp. The FDIC said the quality of bank loans continued to deteriorate during the fourth quarter, although the pace of deterioration slowed for a third consecutive quarter.
Starting April 1, advertisements peddling “free credit reports” will require new disclosures to help consumers avoid confusing offers – which often require customers to spend money on credit monitoring or other products or services, the Federal Trade Commission said today. Consumers may not realize that they are entitled to a “no-strings-attached” free credit report at AnnualCreditReport.com, the FTC said.