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Associated Press | A new document shows three of the Federal
Reserve’s 12 regional banks made a push last month to bump up the
interest rate banks pay the Fed for emergency loans.
The regional banks were in Kansas City, St. Louis and Dallas. They
wanted to boost the discount rate to 1 percent from 0.75 percent. The
rate doesn’t directly affect borrowing costs for Americans.
McClatchy-Tribune Newspapers | First-quarter profits tripled for the nation’s banking industry as big
banks recovered their footing, the government reported Thursday.
But the news was not all good for the industry. Troubles at smaller
lenders swelled the number of problem banks to nearly 10 percent of all
institutions, according to the report by the Federal Deposit Insurance
Corp. The agency said that 775 institutions — most of them community
banks — were on its list of troubled banks as of March 31, up from 702
at year-end.
A trader in the S&P 500 futures pit at the CME Group. Executives from the CME Group and other exchanges were set Thursday morning to appear before a U.S. Senate Banking subcommittee. (AP Photo/M. Spencer Green)
Reuters | U.S. exchanges defended the high-speed trading firms they say keep
markets liquid and functioning, with one suggesting incentives to
encourage their participation at stressful times such as the mysterious
May 6 market plunge.
Executives from Nasdaq OMX Group Inc, CME Group Inc and NYSE Euronext
were set Thursday morning to appear before a U.S. Senate Banking
subcommittee, the second time since the severe market plunge that they
will have faced lawmakers looking for answers.
Dow Jones Newswires | U.S. Rep. Spencer Bachus (R-Ala.), the top Republican on the House Financial Services Committee, is calling for an investigation into the private-sector recapitalization of Chicago community lender ShoreBankCorp, Fox Business Network’s Charles Gasparino reported Wednesday.
The company was said to have reached its goal of raising $125 million from private sources, mostly U.S. investment banks, The Wall Street Journal reports, citing people familiar with the situation. Bachus is asking why Wall Street took an interest in ShoreBank and is drafting a letter to President Barack Obama about the matter, Gasparino says.
From The Wall Street Journal | The Federal Deposit Insurance Corp. has inherited hundreds of potentially worthless bonds from failed lending institutions, and this number appears to be growing. The FDIC (and, by extension, the U.S. taxpayer) owns more than 250 collateralized debt obligations that were purchased by small institutions that later failed.
Get the full story: wsj.com.
By Becky Yerak | ShoreBank,
the ailing South Side lender, is nearing completion of its capital
raise to remain independent, according to sources familiar with the
negotiations. It has received about $135 million in commitments from private sources — about $10 million more than it was seeking.
By Becky Yerak | Harris Bank and Chicago-based Northern Trust Corp. have tentatively
agreed to participate in a possible financial bailout of teetering South
Side lender ShoreBank.
“Northern Trust has been a long-time supporter of ShoreBank and its
important role serving traditionally underserved communities,” said a
statement from the Chicago area’s biggest locally headquartered bank.
“We support its recapitalization and have committed several million
dollars to assist with this effort.” It didn’t say exactly how many
millions it was willing to kick in.
By Mary Ellen Podmolik | The Obama administration reported Monday that its efforts to keep
delinquent borrowers in their homes had met with mixed results, and that
these numbers are likely to get worse before they get better.
The administration said permanent modifications of delinquent mortgages
rose to almost 300,000 nationally in April, a 13 percent improvement
over March. But new data from the Treasury Department showed that as of
last month, almost one of every four homeowners who received a trial
loan modification fell out of the program.
By Becky Yerak | A
troubled Northbrook-based bank that was founded in 2006 by a former
Federal Reserve Bank of Chicago official has lined up at least $10
million in capital, a person familiar with the matter said.
In
late 2009 CenTrust Bank, which has assets of $119.8 million, was
ordered by regulators to maintain certain capital levels. It has now
struck a deal with a group that include Warson Capital in St. Louis for
at least a $10 million. The new investment entity is called Commercial
Bancshares Inc.
Associated Press | Consumers struggling to pay their bills in
the first few months of the year got an immediate benefit from credit
card reforms. Late credit card payments fell sharply in the first
quarter, and at least part of the drop can be attributed to the law
that kicked in Feb. 22 curbing interest rate hikes and various fees.
The rate of borrowers who fell 90 days or more behind on their cards
dropped to 1.11 percent for the first quarter, down from 1.32 percent
in the 2009 period, according to credit reporting agency TransUnion.
The delinquency rate was also down from the fourth-quarter of 2009,
when it stood at 1.21 percent.
By Becky Yerak | Midwest Bank, a $3.2 billion-asset lender that was among the first community banks to receive federal bailout funds, was seized by U.S. banking regulators Friday after failing to raise the capital it needed to stay independent.
Its assets, deposits and branches will be taken over by Akron, Ohio-based FirstMerit. The failure of Midwest Bank, which is part of publicly traded Midwest Banc Holdings of Melrose Park, is expected to cost the Federal Deposit Insurance Corp., which is financed by insurance premiums paid by banks, $216.4 million.
It’s the 11th Illinois bank failure in 2010; in 2009, the state saw 21 banks collapse. On Thursday the Tribune reported that FirstMerit was the frontrunner in the bidding.
Goldman Sachs CEO Lloyd Blankfein, center, listens as President Barack Obama addresses the Business Council in Washington, May 4, 2010. (AP Photo/Susan Walsh)
Tribune staff report | Troubled Chicago lender ShoreBank has received recent interest from Wall Street giant Goldman Sachs for several reasons.
The Tribune reported Wednesday that ShoreBank has generated little interest among strategic buyers, according to banking industry insiders, but it is counting on an infusion of about $75 million in capital from the U.S. Treasury. First, it must line up more than $120 million in capital from various banks. As the Tribune reported, existing investors such as Chase and Bank of America, as well as charitable foundations, are weighing additional investments in ShoreBank.
But Goldman Sachs is a more recent sign-on — the bank agreed to commit about $20 million to ShoreBank.
From Fox Business News | Fox Business Network reporter Charlie Gasparino says troubled Chicago lender ShoreBank is short about $25 million of the
$125 million they need to avoid an FDIC takeover, but that there is political
pressure being applied that might help ShoreBank.
Get the full story: foxbusiness.com.
Dow Jones Newswires | Federal Reserve Bank of Chicago President
Charles Evans said Friday he’s confident the central bank will act to
keep inflation under control, although he also said he doesn’t expect
to see much in the way of price pressures, suggesting no urgency in
tightening policy.
“Policy is, appropriately, very accommodative,” Evans said, although
“eventually, we will have to return to a more normal stance.” The
official explained the decision to move away from the current zero
percent interest rate stance “will be based on careful monitoring of
business activity and an alert eye out for signs of changes in the
inflation outlook.”
Dow Jones Newswires-Wall Street Journal | The Senate, voting
64-33, moved to curtail the “swipe fees” that financial companies
impose on debit transactions, underscoring the increasingly populist
tint of pending legislation that would overhaul regulation of the
financial-services sector.
Under the amendment offered by Sen. Dick Durbin to businesses by
financial firms on debit cards, and empower merchants to offer
discounts to customers if they pay with cash, check or a debit card.
