News
"In remarks made Thursday to the Senate Banking Committee, Federal Reserve Chair Jerome Powell said, 'he expects some U.S. banks to fail in the coming months because of declining values and defaults in their commercial real estate loan portfolios.'
According to reporting by multiple outlets, including The Hill, Powell indicated that 'the risk is tied to small and midsized banks, and there is no systemic risk to the banking sector posed by the potential collapse of major institutions.'"
"The banking industry has shown resilience after a period of liquidity stress in early 2023. Full-year net income remained high, overall asset quality metrics were favorable, and the industry's liquidity was stable.
While the banking industry reported a modest decline of 2.3 percent in full-year net income, 2023 earnings of $257 billion remained well above the levels reported before the pandemic. The industry's net operating revenue crossed the $1 trillion mark for the first time in QBP history, and the full-year net interest margin was 3.30 percent, the highest reported margin since 2019. Nevertheless, these positive top-line results were offset by higher noninterest expense, provision expense, and realized losses on securities."
"A federal judge in Texas has ruled that the U.S. Minority Business Development Agency, founded during the Nixon administration, must avail itself to disadvantaged entrepreneurs of all races and ethnicities, including whites.
The summary judgment rendered on Tuesday by U.S. District Judge Mark Pittman, appointed in 2019 by then-President Donald Trump, was the latest in a recent series of federal court decisions rolling back decades of affirmative action programs aimed at remedying racial discrimination."
"Jana Dalton used the same bank for 40 years, depositing checks and withdrawing cash from the account she first opened at age 16. Now, she's switching banks.
PNC Financial Services Group, the sixth largest U.S. lender, bought her hometown bank. Two years ago, it closed Dalton's original branch and has since shut down three nearby locations. Her newest local branch, 9 miles away, sometimes turns her away when she doesn't sign up for an appointment online.
'There's too many bells and whistles and we just need to back up and go back to customer service,' said the golf-course operator in Miamisburg, Ohio. Her new local bank, Farmers & Merchants Bank, has $291 million in assets compared with PNC's $562 billion."
"In early March 2023, three banks failed in just a few days. These banks—Silicon Valley Bank, Signature Bank, and First Republic—were among the biggest banks to fail in U.S. history. The SVB demise triggered the largest single-day bank run in U.S. history and led to aggressive action by the Federal Reserve, FDIC, Treasury Department, and others to prevent spillovers to the rest of the U.S. banking system. One year later, what lessons can be drawn? What changes should regulators and bankers make to reduce the chances of a repeat? And what did the March 2023 incident demonstrate about the adequacy of current approaches to resolving failing banks?
On March 5, the Brookings Institution's Hutchins Center on Fiscal & Monetary Policy and Center on Regulation and Markets (CRM) reflected on these questions, beginning with a panel on shortcomings of bank supervision, the lender of last resort function, and bank risk management practices that exacerbated the March 2023 crisis and how best to address them. A conversation followed with Rep. Patrick McHenry (R-NC), chair of the House Financial Services Committee. The final panel focused on the weaknesses of the current approach to resolving bank failures that were exposed in March 2023 and how to remedy them. This event is a part of CRM's Series on Financial Markets and Regulation."
"In recent years, special purpose credit programs (SPCPs) have grown in popularity as a way for policymakers to allow lenders to offer credit to borrowers of protected classes. These programs can be people based or place based, offering special purpose credit to individual borrowers or to areas where many of them live, respectively. When implemented effectively, SPCPs can build wealth, reduce housing segregation, and help close the racial homeownership gap.
But how can lenders ensure that SPCPs help the households who need it most? In partnership with the National Fair Housing Alliance, the Urban Institute created this resource to help lenders document the need for SPCPs. This tool will help lenders with the first steps of the process outlined by guidance from the Consumer Financial Protection Bureau (CFPB), particularly assessing the need for an SPCP through a broad market analysis.
This tool offers current and historical market-specific data to make the case for SPCPs serving households of color; an interactive Excel file based on market-specific data to assess place-based versus people-based options that can be useful to program design, targeting, and goal setting; and documentation supporting the written plan."
"The Consumer Financial Protection Bureau has finalized its proposal to cut credit card late fees to $8 from $32, part of a wide-ranging effort by the administration to crack down on unfair fees ahead of President Biden's State of the Union address later this week.
On Tuesday, the CFPB will release a final rule that is expected to save consumers $10 billion a year in credit card late fees.
'Late fees have gotten out of control,' said CFPB Director Rohit Chopra on the White House call Monday with reporters to announce the final rule to reduce credit card late fees."
"The Small Business Administration on Thursday launched an improved version of its Lender Match platform that's now mobile-friendly as the agency continues its work in expanding access to capital.
First launched in 2015, Lender Match is the SBA's free online tool that helps small businesses tap into new capital sources by matching founders with roughly 1,000 potential lenders. The revamped Lender Match program now features a mobile-first interface, which the SBA says should help boost access and usability of the tool. It's a step above the tool's prior iteration, which had no formal platform, and instead functioned more like an online form."
"Today, the Biden-Harris Administration announced the indefinite extension of the Federal Housing Administration (FHA) and Federal Financing Bank (FFB) Risk-Sharing program (FFB Risk-Sharing) as part of a fact sheet on actions to boost housing supply and lower housing costs. The National Association of Affordable Housing Lenders (NAAHL) strongly supports the Administration's action to indefinitely extend FFB Risk-Sharing program.
'The FFB Risk-Sharing program is a proven lever to boost the construction and preservation of affordable multifamily rental housing, which we have a national shortage of,' said Sarah Brundage, President and CEO of NAAHL. 'We commend the Administration for indefinitely extending FFB Risk-Sharing which signals to housing finance agencies the stability of this program and to fully utilize it.'"
"Lawmakers averted a partial government shutdown after the Senate on Thursday cleared a two-step continuing resolution to allow final appropriations work to wrap up in the coming weeks.
The Senate voted 77-13 to send the short-term spending measure to President Joe Biden's desk. The House earlier Thursday passed the bill (HR 7463) on a 320-99 vote under the suspension of the rules, which requires a two-thirds majority of lawmakers present and voting. . .
The vote will set up a first tranche of full-year spending bills that the House is expected to vote on next Wednesday: the Agriculture, Commerce-Justice-Science, Energy-Water, Interior-Environment, Military Construction-VA and Transportation-HUD measures. Enactment of the bills will fund those agencies through Sept. 30. . .
The second batch of bills will be considered by the March 22 deadline to avoid a partial government shutdown, lawmakers have said. That package includes the Defense, Financial Services (CDBA note: Including the CDFI Fund), Legislative Branch, Homeland Security, Labor-HHS-Education and State-Foreign Operations measures."