Dodd-Frank News Center

FCIC Announces Details and Witnesses for Next Public Hearing

This story appeared in Bank Digest.

The FCIC has announced its witness list and more details for its next public hearing, titled “Too Big to Fail: Expectations and Impact of Extraordinary Government Intervention and the role of Systemic Risk in the Financial Crisis.” The hearing is scheduled for Sept. 1 and 2, 2010. Topics of discussion scheduled for the first day are Wachovia Corporation and Lehman Brothers. Witnesses scheduled for the second day are Federal Reserve Board Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila C. Bair.

FDIC Holds First in Series of Financial Reform Roundtables

This story appeared in Bank Digest .

As part of the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the FDIC announced a series of roundtable discussions with external parties. The first discussion, scheduled for Aug. 31, 2010, focuses on the new resolution authority provided in the Dodd-Frank Act for the largest financial firms. Government officials, industry executives, academics and investors will discuss the framework of the resolution process, the treatment of creditors and the creation of living wills.

NCUA Discusses Mid-Year Call Report Results

This story appeared in Bank Digest

According to the NCUA's second-quarter Call Reports from America's 7,445 federally insured credit unions, credit union membership increased to 90.5 million during the second quarter; however, after credit union deposits (shares) grew at a nearly 11 percent annual rate during the first quarter, share growth slowed to 0.6 percent during the second quarter. Unsecured credit cards led loan growth at 1.7 percent. Real estate loans rose 0.4 percent, boosted in part by a 10.8 percent increase in mortgage modifications as credit unions worked to make members' homes more affordable. Used vehicle loans picked up, but new vehicle loans slowed--a sign that members are turning to less expensive cars. Aggregate delinquency and charge-off ratios inched lower in the second quarter. “However,” NCUA Chairman Debbie Matz pointed out, “credit unions in many areas continue to experience greater loan losses--particularly in states struggling with high unemployment, declining real estate values, and failing businesses.” The number of members filing for bankruptcy doubled during the second quarter. By year-end 2010, bankruptcies are on pace to exceed the total for 2009.

Bank Sector Gaining Strength, Bair Says

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter, Aug. 31, 2010.

The banking sector is gaining strength, Federal Deposit Insurance Corp. Chairman Sheila Bair said Aug. 31, 2010, noting that earnings have grown and most asset quality indicators are “moving in the right direction.”

The FDIC announced that, in the second quarter, FDIC-insured commercial banks and savings institutions posted an aggregate profit of $21.6 billion, up $26 billion from the same period a year earlier and the highest quarterly earnings seen since the third quarter of 2007.

FCIC Schedules Field Hearings

 This story appeared in Bank Digest.

The Financial Crisis Inquiry Commission has announced that it will hold field hearings in four communities around the country significantly affected by the financial crisis. The hearings—organized and directed by Commissioners in those regions—will afford the FCIC the opportunity to hear testimony from people on the ground about the causes and effects of the financial and economic crisis in their communities. A full list of entities and witnesses to appear as well as additional hearing details will be announced closer to each hearing.

FDIC to Hold Forum on Resolution Authority

 This story appeared in Bank Digest.

The Federal Deposit Insurance Corp. has released its agenda for a forum to be held on Aug. 31, 2010, to discuss views on the implementation of the new resolution authority provided by Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among the items to be discussed are: overview of the new resolution framework; the treatment of creditors; and the use of living wills for financial institutions.

SEC-CFTC Roundtable Illuminates Major Issues in Implementing Derivatives Provisions of Dodd-Frank

This story appeared in Jim Hamilton's World of Securities Regulation.

An SEC-CFTC roundtable on implementing the derivatives provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act discussed the very important and difficult issues of access to derivatives clearing organizations, clearinghouses, and security-based and non-security based swap execution facilities. There are also significant governance, risk management, and conflict of interest issues surrounding the clearing of OTC derivatives. Dodd-Frank mandates that the SEC and CFTC adopt regulations implementing the derivative provisions of Title VII. The roundtable was co-chaired by Robert Cook, SEC Director of Trading and Markets and Adadna Radhakrishnan, CFTC Director of Clearing and Intermediary Oversight. The roundtable was also composed of SEC and CFTC staffers, industry representative and former Federal Reserve Board Governor Randy Kroszner.

Volcker Board Proposes Changes in Taxation of Investment Funds as Part of Reforming Federal Tax Code

This story appeared in Jim Hamilton's World of Securities Regulation.

A report issued by the Volcker Tax Advisory Board proposes the reform of mutual fund and carried interest taxation within the scope of a broad simplification of how the Internal Revenue Code taxes capital gains. The report comes against the backdrop of pending but stalled legislation that would reform the carried interest taxation of hedge fund and other asset managers. The Board is chaired by former Fed Chair Paul Volcker and includes former SEC Chair William Donaldson. The Volcker Board, officially the President’s Economic Recovery Advisory Board, has a mandate to simplify and reform the federal tax code.

Conservator Reports on the GSEs' Financial Condition

 This story appeared in Bank Digest.

The Federal Housing Finance Agency has released its first Conservator's Report on the Enterprises' Financial Condition which provides an overview of key aspects of the financial condition of Fannie Mae and Freddie Mac (the Enterprises) during conservatorship. The report will be released on a quarterly basis following the filing of the Enterprises' financial results with the Securities and Exchange Commission and includes information on: Enterprise presence in the mortgage market; credit quality of Enterprise mortgage purchases; sources of Enterprise losses and capital reductions; and Enterprise loss mitigation activity. "FHFA initiated the Conservator's Report to enhance public understanding of Fannie Mae's and Freddie Mac's financial performance and condition leading up to and during conservatorship," said FHFA Acting Director Edward J. DeMarco.

Fed to Sponsor Neighborhood Stabilization Summit

This story appeared in Bank Digest.

The Federal Reserve System will sponsor a national summit on September 1 and 2 to discuss methods and resources for encouraging neighborhood stabilization in the aftermath of the U.S. home mortgage foreclosure crisis. According to a press release, forum will showcase findings from Federal Reserve research and policy efforts, including the release of the publication REO and Vacant Properties: Strategies for Neighborhood Stabilization. The summit and its accompanying publication build upon a series of Federal Reserve System actions to address the foreclosure crisis on a national and community level. These actions range from facilitating foreclosure counseling to providing research and data analysis of estate owned (REO) property trends. The Reserve Banks will carry forward this work by offering technical assistance and expertise to local nonprofit organizations and governments.