FDIC May Borrow Billions From Banks

(NEWSER) - Alabama's Colonial Bank has collapsed in the sixth-biggest bank failure in American history, the Wall Street Journal reports. The lender, which had assets of $25 billion and 346 branches in five southern states, was an aggressive mortgage lender in overheated markets like Florida, and its failure will cost the FDIC $2.2 billion. Colonial's branches, deposits and remaining assets have been sold to Rival BB&T, and customers have been told to expect business as usual. More»

Help for George Baileys could win over balky politicians

(NEWSER) - A plan to boost deposit insurance for bank accounts is gaining traction in Washington and could help rescue the rescue package, the Wall Street Journal reports. Community bankers have been pushing hard for a hike from the current $100,000 limit to $250,000. The move, which would also ease fears of consumers and small businesses, may win over wavering politicians looking for something in the package to help Main Street. More»

Boatload of bank failures likely in 2010

(NEWSER) - Banks tightened credit last year at what the Wall Street Journal calls an “epic pace,” recording their biggest full-year decline in loans outstanding in 67 years. The figure comes from a new FDIC report that paints the picture of a banking industry that, apart from a few top-tier players, is in dire straights. The number of banks at risk of failing jumped to 702, a 16-year high. More»

Regulators knew loans were toxic but didn't act

(NEWSER) - "Post-mortems" on banks that failed during the financial crisis are exposing serious misjudgment by state and federal regulators. Inspectors-general are finding at bank after bank that regulators were aware that risky and potentially toxic loans were being made while the economy was booming, but failed to take action, the New York Times reports. More»

Regulator wants cash upfront through 2013 to avoid emergency credit line

(NEWSER) - The FDIC is set to ask banks to prepay three years of fees to replenish its coffers after a wave of bank failures, estimated to cost as much as $100 billion. Banks would be asked to prepay $45 billion of their quarterly assessments, but they wouldn't have to report the hit to their bottom line until the fees would normally be paid. The FDIC projects that its cash needs will outstrip liquid assets early next year. More»