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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.

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.

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.

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 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.

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.

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.

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.

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 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%

“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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