A Cashier’s Check May Not Be Good As Gold

Here is the latest from the FDIC..

Agencies Issue Interim Final Rule for Mortgage Loans Modified Under the Making Home Affordable Program

The federal bank and thrift regulatory agencies today invited public comment on an interim final rule that provides that mortgage loans modified under the U.S. Department of the Treasury’s Making Home Affordable Program (MHAP) will retain the risk weight applicable before modification.

On March 4, 2009, the Treasury announced guidelines under the MHAP to promote sustainable loan modifications for homeowners at risk of losing their homes to foreclosure. The interim final rule would provide a common interagency capital treatment for mortgage loans modified under MHAP. For example, mortgage loans risk weighted at 50 percent prior to modification would continue to be risk weighted at 50 percent after modification provided they continue to meet other applicable criteria.

The interim final rule, by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of Thrift Supervision, will take effect upon publication in the Federal Register, which is expected shortly. Public comments must be submitted within 30 days after publication in the Federal Register.

The Federal Register notice is attached.

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Attachment
Risk-Based Capital Guidelines; Capital Adequacy Guidelines; Capital Maintenance; Capital —Residential Mortgage Loans Modified Pursuant to the Making Home Affordable Program – PDF (PDF Help)

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 FDIC Report Reviews Events and Lessons of 2008

The Federal Deposit Insurance Corporation (FDIC) is the federal agency that insures the money you have deposited in a US bank, in the event that bank should fail.  They are proud to point out that not a dollar of deposits has been lost to an account owner since this agency was established.  It is funded by insurance premiums paid by the banks.  It is important to note that this agency does not cover all deposits in all types of financial institutions.

The FDIC regularly sends out updates on topics as diverse as changes in the insurance premiums to warnings about counterfeit cashiers checks to recent bank failures.  Some are very interesting and some are pretty mundane, but we may differ on which is which.  So…as we receive these updates, we will be posting them on the blog for your information.

Following is a notice about and link to an interesting report recently issued by the FDIC.

Press Release

FDIC Report Reviews Events and Lessons of 2008

The Summer 2009 issue of Supervisory Insights, released today, documents some of the major financial events of a tumultuous 2008 and highlights areas of current and future supervisory emphasis, including key regulatory developments and the ongoing technological evolution of bank products.

“Looking back, 2008 was a year that will reshape and define the financial services industry,” said Sandra L. Thompson, Director, Division of Supervision and Consumer Protection. “Based on the events of last year, supervisors can discern areas that will frame the future supervisory agenda – in the areas of both safety and soundness and compliance.”

“A Year in Bank Supervision: 2008 and a Few of Its Lessons” chronicles a year in which financial institution credit risk and liquidity stresses came to the fore, triggering an array of emergency financial support programs and reassessments of financial regulation. This article concludes with observations on how these events may influence the future focus of bank supervision.

This issue of Supervisory Insights also previews new requirements included in amendments to Regulation Z (Truth-in-Lending) and the Home Ownership and Equity Protection Act, which will take effect later this year. “Changes to Regulation Z Afford Increased Consumer Protections” identifies useful implications of these new requirements for examiners and bankers.

More banks are offering Remote Deposit Capture (RDC) as an alternative to processing check deposits and, although RDC offers substantial benefits, this technology is not without risks. “Remote Deposit Capture: A Primer” describes the growing popularity of this product, identifies the risks, and provides an overview of appropriate risk-mitigation strategies.

Supervisory Insights provides a forum for discussing how bank regulation and policy are put into practice in the field, sharing best practices, and communicating about the emerging issues that bank supervisors face. The journal is available on the FDIC’s Web site at http://www.fdic.gov/regulations/examinations/supervisory/insights/index.html. Suggestions for future topics and requests for permission to reprint articles should be e-mailed to supervisoryjournal@fdic.gov. Requests for print copies should be e-mailed to publicinfo@fdic.gov.

If you have comments or questions about the FDIC’s report, share them here.  We  all learn more when we share our experiences.