“Avoid any diet that discourages the use of hot fudge.” - Don Kardong

Who among us knows what all is in our new health care law? We’re not even sure how many members of Congress actually read the bill before casting their ayes and nays. If they had, would they really have approved the bill’s requirement that chain restaurants must post calorie counts along with providing information on how many calories a person should consume per day? We know, all this attention to calorie counting and eating vegetables is the federal government’s attempt at fighting that mortal enemy, obesity. Calorie-counting is well and good, but will it work? All it takes is to look around to see it’s going to be a long, slow slog to turn the land of opportunity into the land of the svelte. The next thing you know, we’ll be taxing our extra pounds to solve the nation’s debt problem.

The Conference of State Bank Supervisors Nominating Committee announces the following recommendations for CSBS officers for 2010/2011:

·         Chairman: Iowa Superintendent of Banking Thomas B. Gronstal. (chairman-elect automatically becomes chairman)

·         Chairman-Elect: Louisiana Commissioner of Financial Institutions John P. Ducrest

·         Vice Chairman: Massachusetts Commissioner of Banks Steven L. Antonakes

·         Secretary: Tennessee Commissioner of Financial Institutions Greg Gonzales

·         Treasurer: California Commissioner of Financial Institutions William (Bill) Haraf (second year of a two-year term)

·         Immediate Past Chairman: North Carolina Commissioner of Banks Joseph A. Smith Jr.

As provided for in the CSBS bylaws, any member wishing to make additional nominations must do so 10 business days before the annual business meeting. This year’s meeting will be on May 18 in Boston.

The FDIC Board of Directors approved interim rules to extend the Transaction Account Guarantee program to Dec. 31, 2010, and to give the agency the ability to extend the program to the end of 2011 without additional rulemaking if economic conditions warrant the extension. Under the TAG program, customers of participating insured depository institutions are provided full coverage on transaction accounts. The program was due to expire on June 30, 2010. FDIC Chairman Shelia Bair said the need for the program reflects “the continuing legacy of too-big-to-fail and the different liquidity pressures our community banks experience as a result.”

CSBS President and CEO Neil Milner recently wrote FDIC asking the agency to extend the program and praised the action. “Extending the TAG Program will do much to assure consumers and small businesses of the strength of community and regional banks, thereby further contributing to the national economic recovery,” Milner said. More Information

About 80 percent of the industry participates in the TAG program. Under the interim rules, participating institutions may opt out effective July 1, 2010. The current rates will remain unchanged under the interim rules. However, FDIC will require TAG assessment reporting be based on average daily account balances. The interim rules have a 30-day comment period. More Information

Senate Majority Leader Harry Reid (D-Nev.) told reporters at a news conference on Thursday that the financial regulatory reform bill will be scheduled for floor debate next week. "It's time we start legislating," Reid said. Senate Republicans continued to demand further negotiations on the bill, titled The Restoring American Financial Stability Act of 2010. The bill had been approved by the Senate Banking Committee on March 22 on a partisan vote of 13-10.

The legislation addresses the too-big-to-fail problem, create systemic risk oversight, put in place mechanisms for resolving systemically important firms and improve regulatory oversight in such areas as  derivatives, hedge funds and consumer rating agencies. For consumer protection, the bill would create a new independent office within the Federal Reserve with the authority to write rules for all banks and nonbanks and to examine banks and credit unions with assets of more than $10 billion and all mortgage-related businesses and large non-bank financial companies. For non-consumer protection regulation, the bill would give FDIC the authority to regulate state banks and thrifts of all sizes and bank holding companies of state banks with assets of less than $50 billion. The Office of Thrift Supervision and the thrift charter would be eliminated. The Office the Comptroller of the Currency would regulate national banks and federal thrifts of all sizes and the holding companies of national banks and federal thrifts with assets of less than $50 billion. The Federal Reserve would regulate bank and thrift holding companies with assets of more than $50 billion.

The Conference of State Bank Supervisors is focusing on seven concerns in the bill relating to (1) state-federal coordination; (2) role of the Federal Reserve System; (3) exam fee "parity;" (4) lending limits; (5) deposit cap loophole; (6) consumer protection; and (7) balance on federal preemption. CSBS published more detailed information about these issues in the April 2 issue of its weekly newsletter. More Information

FDIC was named receiver of 45 banks in the fourth quarter of 2009, and resolving the failures decreased the Deposit Insurance Fund by $12.6 billion to a negative $20.9 billion, according to a report by FDIC’s chief financial officer. The negative balance is caused by the FDIC setting aside funds for potential failures. As of year-end 2009, the deposit insurance fund held over $67 billion in cash and U.S. Treasury obligations. The decrease reflected a $17.8 billion increase in the provision for insurance losses, which was partially offset by a $3.1 billion increase in assessment revenue. The fund was bolstered by the inflow of $45.5 billion in cash and cash equivalents, primarily due to the collection of prepaid assessments. The combined assets of the 45 institutions that failed during the quarter were approximately $64.9 billion with a total estimated loss of $10 billion. The corporate cash outlay during the fourth quarter for these failures was $7.8 billion. FDIC entered into loss-share agreements with the acquiring institutions for 34 of these banks, and expects to pay out $6.4 billion over the length of the agreements, the report said. More Information

Eight federal regulators released an online program to help financial institutions develop and print customized versions of the agencies’ model privacy notice. The system -- Online Form Builder -- may be downloaded from each of the agencies’ Web sites. If used properly, the online program will enable financial institutions to produce a privacy notice that will meet the “safe harbor” provisions of the Gramm-Leach-Bliley Act. Instructions for the system guide an institution to select the version of the model form that fits its practices, such as whether the institution provides an opt-out for consumers. The model  form was developed jointly by the Federal Reserve, FDIC, the Commodity Futures Trading Commission, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Securities and Exchange Commission. More Information

The Office of the Comptroller of the Currency closed Beach First National Bank, Myrtle Beach, S.C., on Friday bringing the total for the year to 42. FDIC entered into a purchase agreement with the Bank of North Carolina, Thomasville, N.C., to assume all of the deposits and assets of the failed bank. Beach First National Bank had approximately $585.1 million in assets and $516 million in deposits. FDIC and Bank of North Carolina entered into a loss-share transaction on $497.9 million of Beach First National Bank's assets. More Information

Federal Reserve: The Federal Reserve Board on Monday announced the appointment of William B. English as director of the Division of Monetary Affairs, effective July 23, 2010. English, who has served as deputy director of the division since February 2008, succeeds Brian F. Madigan, who has been appointed senior adviser to the Fed Board. Madigan plans to retire later this year. As director, English will advise the chairman, Fed board members and the FOMC on the conduct of monetary policy, including open market operations and the discount window. He began his career at the Fed in 1992 as an economist and was appointed to the board’s staff in 2001. He holds a B.A. in economics and mathematics from Yale University and a Ph.D. in economics from Massachusetts Institute of Technology.More Information

FTC: The Federal Trade Commission charged a payday loan operation with illegally trying to garnish borrowers’ wages and using other illegal debt-collection practices. FTC alleged that the operators, doing business as Ecash and GeteCash, offered loans of up to $1,000 to be repaid from a borrower’s upcoming paycheck. They required online loan applicants to check a box indicating their agreement with loan terms. These terms included an inconspicuous statement consumers often did not see that said their wages would be garnished to cover delinquent loan payments. The statement allegedly attempted to circumvent federal requirements, including a debtor’s right to revoke a garnishment agreement. More Information

April 19 - The Senate Finance Committee will hold a hearing the President’s proposed fee on financial institutions regarding TARP. - 10 a.m., 215 Dirksen Senate Office Building.

April 20 - The House Financial Services Capital Markets Subcommittee will hold a hearing on corporate governance and shareholder empowerment. - 10 a.m., 2128 Rayburn House Office Building.

April 20 - The House Financial Services Housing and Community Development Subcommittee will hold a hearing on the National Flood Insurance Program. - 2 p.m., 2128 Rayburn House Office Building.

April 20-21 – The Conference of State Bank Supervisors hosts its District IV meeting at the Hampton Inn & Suites Oklahoma City – Bricktown. 

April 22 - The Senate Commerce Committee has scheduled a hearing on the debt settlement industry. - 2:30 p.m., 253 Russell Senate Office Building.

April 23 - The American Enterprise Institute will hold a forum titled "Digital Money: Trends and Policy Challenges." - 9:30–11:30 a.m., AEI Conference Center, 1150 17th Street, N.W., Washington, D.C.

“We need legislative changes so that government regulators aren't performing like fire departments—arriving only after the damage has been done. Financial authorities need to be more like police departments: detecting, deterring and preventing fraud, abuse and manipulation in critically important markets. When the next Bernie Madoff scandal happens—and it will—we shouldn't be coming in with fire hoses to water down charred remains; we should be there on the front end with sophisticated law-enforcement tools at our disposal and stop the damage beforehand.” - Commodity Futures Trading Commission Bart Chilton, writing in a letter to the editor in Monday's Wall Street Journal.