Sen. Bob Corker says the banking system — especially the largest players in the country — no longer need lawmakers to extend a special Federal Deposit Insurance Corp. program launched in 2008 and renewed two years ago. The focus from D.C. when it comes to banking, he says, is to reform parts of the massive Dodd-Frank bill, which has imposed a series of new regulations that are weighing especially heavily on community banks.
"Some of what we passed in Dodd-Frank makes a great deal of sense, but much of it does not. And it’s time for us to devote energy to fixing and improving the law where there are flaws. If we really want to help community banks, that is where we should focus our energy.
"Giving out limitless deposit insurance is what some people have decided is a consolation prize. That’s too bad. We should fix Dodd-Frank if we want to help our community banks."
Bill Dunkelberg, the chairman of a community bank in New Jersey who is better known as the chief economist of the National Federation of Independent Business, has penned a short note railing against the Barclays LIBOR rate-fixing scandal that led to the resignation of CEO Bob Diamond. Dunkelberg's chief beef is with the power that the world's largest banks have amassed.
Not that smaller banks have no “crooks”, I am sure they do, but those crooks don’t have the leverage of the Diamonds and Corzines, the power in their greed and arrogance to damage millions of people and impair the operation of our financial system, to make bets with billions, trillions of dollars which can go wrong and do.
Monday brought a special kind of relief rally in shares of Tennessee Commerce Bancorp, which more than doubled from their very low base after Friday's FDIC deadline to raise capital came and went without word of new regulatory sanctions. Early morning Tuesday action has them up some more, but it remains to be seen what the bank's near-term future holds: Both bank and FDIC officials declined Monday to comment on the status of the company's capital ratios and conversations they're having.
It appears to be a little bit academic at this point, but Tennessee Commerce Bancorp executives on Wednesday told investors that it has received a formal agreement from the Tennessee Department of Financial Institutions that outlines a host of capital level, asset management and governance steps it must take to right its ship. Many of the terms and remedies prescribed are the same ones called for earlier this year by the Federal Deposit Insurance Corp.
Hedge fund manager Tom Brown disputes one regulator's assertions that the Dodd-Frank bill will benefit community banks. More than anything, he says, the costs of complying with the reforms' stipulations will drive smaller banks into the arms of bigger players.
What will be a minor inconvenience at big banks (who already have bloated compliance departments) becomes a crushing new cost burden at small ones. And he forgets to mention, too, the Durbin Amendment. Small banks are supposed to be exempt from Durbin, of course, but they know they’ll have to price interchange by it anyway if they want merchants to accept their debit cards.
First Advantage Bancorp said Thursday it is applying to change the charter of its main subsidiary, First Federal Savings Bank, to a state-chartered bank. The move, which is expected to take several months, will be accompanied by a name of the 57-year-old subsidiary to First Advantage Bank.
"This is a positive change for our Bank in light of the Dodd-Frank Act which made certain changes that removed most of the benefits of operating under our savings bank charter. We also believe that there are significant advantages to operating as a commercial bank and having a local, Tennessee-based regulator who understands and lives in our market area."