Financial Services Regulatory News

SOMETIMES you wonder what planet the men who run our major banks live on.

Despite the banks almost bringing the country to its knees by reckless lending, union leaders have informed Holyrood's Economy Committee that bank staff are still being pressed to achieve unrealistic sales targets or face dismissal.

Some bank employees are even having to take out unwanted loans and credit cards to meet their targets.

BUSINESS OPINION: Saving the banks from the consequences of their greed over consumer credit and residential mortgages could well be this autumn's crisis, JOHN McMANUS

Even those borrowers on tracker rates will be lucky to get to the end of the year without facing an increase in rates as the ECB is expected to move in the second half of the year.

Irish households are among the world's most indebted after a decade-long credit spree.

ANALYSIS: President Obama's go-it-alone approach upset the choreography of global co-operation, writes SIMON CARSWELL in Davos, Switzerland

DAVOS 2010 wrapped up yesterday after five days of yet more soul- searching on how to regulate banking and stop the global financial world creating another crisis.

What's different this year is that Davos, with all its aspirations for global agreement, was faced with governments wanting to go it alone.

Jan. 31--Atlanta's downtrodden neighborhoods proved a gold mine for Omni National Bank and its founders, who amassed tens of millions of dollars' worth of mansions, company stock and a private jet after launching an unusual bank that financed renovations of inner-city houses.

Hundreds of homes that should have been improved instead sit vacant and crumbling.

Though most depositors weren't hurt, the bank's demise has cost the Federal Deposit Insurance Corp.'s insurance fund an estimated $289 million and wiped out shareholders who owned about half the company, once valued at about $100 million.

Jan. 31--Bill Schroeder has no trouble picking out the lowest moment in the nine-month ordeal he and his wife, Dawn, experienced as they tried -- and ultimately failed -- to save their home in Lodi.

Hands down, he said, it was the 72 hours he spent in UW Hospital's psychiatric ward on an involuntary hold in November.

An Associated Bank representative helped put him there, Schroeder said, after an ill-advised remark Schroeder, 47, made as the two men talked on the phone about the couple's missed mortgage payments and the growing likelihood that the bank would take the house where the couple had raised two children and lived for the past 17 years.

Jan. 31--Community banks may be fighting for survival on multiple fronts, but a citizens' militia is mustering.

The group's founders, which include uber-blogger Arianna Huffington, filmmaker Eugene Jarecki and political strategist Alexis McGill, targeted the nation's four largest banks as well as two brokerage firms.

Their ire with J.P. Morgan Chase, Citibank, Bank of America and Wells Fargo revolves around the banks' unwillingness to increase lending to consumers despite using taxpayer money through the Troubled Asset Relief Program (TARP) to dig out from financial difficulties in 2009.

Jan. 31--At a time when dozens of Northwest banks are trying to dig themselves out of the mess left by the collapse of the housing bubble, City Bank of Lynnwood is attempting to build itself out.

AutumnWood at BrookTree in Tacoma, a gated development for "active adults age 55 or better," had just seven or eight houses on its 117 lots when City Bank repossessed it last year.

Rather than trying to sell the mostly empty project as is, City Bank hired builders and is gradually filling it in. Eight new homes are now under construction.

Jan. 31--The recent forced sale of an Oregon community bank that had two Tri-City branches comes as federal state regulators also are keeping a close eye on at least two Washington chartered banks with branches in the Tri-Cities.

Columbia River Bank was closed Jan. 22 by the Oregon Department of Consumer and Business Services and the Federal Deposit Insurance Corp. because of inadequate capital and mounting residential loan losses, officials said.

Meanwhile, federal and state regulators have ordered Spokane-based AmericanWest Bank and Sterling Savings Bank to raise more capital and create a plan to reduce their delinquent real estate and construction loans and improve long-term profitability.

Jan. 31--It seems Provident Financial Holdings is turning a corner, with its stock price shooting up 18 percent on Thursday after reporting a $2.5 million profit for the fourth quarter.

But 2010 will be a crucial year for the Riverside-based parent company of Provident Bank.

Depending on how the economy recovers, the bank faces loan losses of $80 million to $124 million over the next two years, according to a December statement detailing the results of applying federal regulatory "stress test" standards.

Jan. 31--PASADENA -- During a recent protest outside his Walnut Street bank headquarters, OneWest CEO Terry Laughlin came down with the bank's head of mortgage services for a little face time with borrowers.

The idea was to "reach out" Laughlin said, and see what he could do or say to help them with their home loans -- which they angrily -- and frequently -- complain have yet to be modified.

As CEO of what was formerly IndyMac, Laughlin is living the realities of a failure he and OneWest had nothing to do with.