REGULATORS
Agencies Issue Final
Appraisal and Evaluation Guidelines
The federal financial
regulatory agencies yesterday issued final supervisory
guidelines on sound practices for real estate appraisals and
evaluations. The guidelines, which were first proposed in
November 2008 and replace ones issued in 1994, explain the
agencies’ minimum regulatory standards for appraisals. They
incorporate recent supervisory issuances on appraisal practices;
address advancements in information technology used in
collateral valuation practices; and clarify standards for the
industry’s appropriate use of analytical methods and
technological tools in developing evaluations.
The guidelines emphasize that institutions are responsible for
selecting appraisers and people performing evaluations based on
their competence, experience, and knowledge of the market and
the property being valued. Institutions should demonstrate the
independence of their processes for obtaining property values,
and adopt standards for appropriate communications and
information-sharing with appraisers and people performing
evaluations, according to the guidelines.
Read more.
Read the final guidelines.
For more information, contact ABA's
Rod Alba.
CONGRESS
House Passes Middle-Class
Tax Cut Bill
The House yesterday passed, by
a largely symbolic 234-188 vote, a bill that would extend the
2001 and 2003 middle-class tax cuts scheduled to expire at the
end of the year. The legislation would permanently extend
current income tax rates for individuals making less than
$200,000 and families making less than $250,000. It also would,
among other things, increase limits on Section 179
small-business expensing; permanently extend both the child tax
credit and the earned income tax credit; and extend for two
years alternative minimum tax relief.
Meanwhile, Senate Finance Committee Chairman Max Baucus
(D-Mont.) unveiled similar legislation, although it is not
expected to garner enough votes from Republican senators to
overcome procedural hurdles. The bill, in addition to extending
the middle-class tax cuts, would renew for two years a host of
tax breaks for businesses that expired at the end of last year,
including the research and development tax credit and
depreciation tax breaks for retail property. The legislation
also would permanently set estate tax rates at 45 percent, with
the first $3.5 million of property exempt from tax, and it would
repeal the Form 1099 reporting provision included in the health
care bill passed earlier this year.
Negotiations on a bill that can clear both houses continue. For
more information, contact ABA's
Larry Seyfried.
CONGRESS
House Passes Bill to Give
‘Full’ Coverage to IOLTAs
The House this week passed by
voice vote a bill (H.R. 6398) -- introduced by Rep. Lloyd
Doggett (D-Texas) -- that would continue “full” FDIC protection
for Interest on Lawyers Trust Accounts -- or IOLTAs. The
legislation still must be passed by the Senate, where its
prospects are unclear.
The unlimited deposit insurance coverage on noninterest-bearing
transaction accounts -- mandated by the Dodd-Frank Act -- that
begins on Dec. 31, 2010, and ends Dec. 31, 2012, replaces the
unlimited coverage under the Transaction Account Guarantee
Program. But the new program, unlike the TAGP, will not provide
such unlimited coverage for IOLTAs. Without legislation, IOLTAs’
coverage will be limited to $250,000 -- the general coverage for
FDIC insurance -- starting Jan. 1, 2011.
AGRICULTURAL LENDING
Sen. Landrieu Urges Passage
of Bill to Suspend FSA Borrower Term Limits
Sen. Mary Landrieu (D-La.)
recently urged Senate Agriculture Committee leaders to pass a
bipartisan ABA-supported bill (S. 3221) that would suspend
borrower term limits for the Agriculture Department’s Farm
Service Agency guaranteed loan program.
Borrowers participating in the FSA guaranteed farm loan program
are subject to term limits that would make them ineligible for
guaranteed loans after a certain period of years. The 2008 Farm
Bill suspended those term limits through the end of 2010, but
without legislation they will resume on Jan. 1, 2011, “and pull
the legs right out from under our farmers at an … uncertain and
trying time,” Landrieu said in a letter.
“Without passage of this legislation before the end of this
year, more than 4,200 farmers and ranchers would be forced out
of the FSA guaranteed farm loan program, jeopardizing their
ability to secure financing for their farm operation,” she said,
noting that the Congressional Budget Office has scored the bill
at “zero cost.”
Read the letter.
For more information, contact ABA's
Seaver Sowers.
CONGRESS
Congress Passes Stopgap
Funding Bill
The Senate last night passed a
continuing resolution that will fund the federal government
through Dec. 18 at fiscal year 2010 levels for most programs.
The House approved the resolution yesterday. The previous
continuing resolution was set to expire tonight at midnight.
BANKER HONORS
American Banker Honors Four
Bank Executives
U.S. Bancorp CEO and former ABA
board member Richard Davis was named American Banker’s Banker of
the Year, the newspaper announced yesterday. Davis was honored
for “running a strong offense while remaining a diligent steward
of the conservative credit culture and efficient operating model
that has long defined U.S. Bancorp,” the publication said.
The newspaper also named three "community bankers of the year":
-
George Gleason, CEO of Bank of the Ozarks, Little Rock, Ark.,
with $2.9 billion in assets, "for finding opportunities that
few others did, and capitalizing on them to generate record
profits that positioned Bank of the Ozarks for growth during
the downturn."
-
Glenn Gray, CEO of Sunwest Bank, Tustin, Calif., with $645.2
million in assets, for "Sunwest’s strong performance over the
past year [when the average return on equity for its peers has
been in negative territory]."
-
John Ikard, CEO of FirstBank, a $10.4 billion-asset community
bank holding company based in Denver, because "FirstBank is
one of the best-performing banking companies in the country,
and it managed to sidestep many of the problems that unraveled
so many banks in recent years." Ikard currently serves on
ABA’s board of directors.
Former Federal Reserve Chairman Paul Volcker also was honored
with a lifetime achievement award, and Elizabeth Warren won
"Innovator of the Year."
Read more about each award
recipient.
CONGRESS
House Votes to Censure Rep.
Rangel
The House yesterday voted
333-79 to censure Rep. Charles Rangel (D-N.Y.) for violations of
tax and fundraising rules. Censure is the most severe form of
punishment short of expulsion from Congress, and Rangel is the
first lawmaker to be censured in nearly three decades. After the
vote, Speaker Nancy Pelosi (D-Calif.) read a short statement
decrying Rangel’s conduct as he stood on the House floor. The
congressman then apologized to his colleagues for his behavior,
but called the censure a political vote.
ECONOMY
Pending Home Sales Surge in
October
The Pending Home Sales Index
rose 10.4 percent to 89.3 in October, the largest monthly gain
on record, the National Association of Realtors said yesterday.
“It is welcoming to see a solid double-digit percentage gain,
but activity needs to improve further to reach healthy,
sustainable levels,” NAR Chief Economist Lawrence Yun said. “The
housing market clearly is in a recovery phase and will be uneven
at times, but the improving job market and consequential boost
to household formation will help the recovery process going into
2011.”
Read more.
RATES
Mortgage Rates Rise
The average interest rate on
30-year, fixed-rate mortgages rose to 4.46 percent last week
from 4.40 percent the previous week, Freddie Mac reported. A
year ago, rates for 30-year mortgages averaged 4.71 percent.
BANK STOCKS
Bank Indexes for Thursday,
Dec. 2
ABA NASDAQ Community Bank
Index: 149.47; Change: + 1.93%
ABQI Index (actively traded community banks): 1,093. 56; Change:
+ 2.17%
KBW Large Bank Index: 47.63; Change: + 3.88%
ON THE LIGHTER SIDE
“A man was arrested
on Black Friday at a Walmart in Palm Beach, Fla., carrying a
gun, two knives and a grenade. Residents of Palm Beach were
stunned and said, ‘We have a Walmart here?’” -- Jay Leno
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