Regulatory Issues

2009 Regulatory Issues

Mark-to-Market Accounting Principles: Inflexible accounting policies have contributed directly to the current financial crisis by requiring long-term assets to be marked to the market’s current going rate – otherwise known as mark-to-market.
New Regulation Z Rules: In July of 2009 the Federal Reserve Board adopted a final rule aimed to protect consumers from deceptive practices regarding home mortgage loans by restricting certain mortgage practices. The new rules go into effect October 1st, 2009.
Public Private Investment Program (PPIP): On March 27th, 2009 the Treasury Department announced the creation of the Public Private Investment Program (PPIP) which attempts to jumpstart the private secondary market for residential loans and mortgage backed securities. The PPIP consists of two smaller programs – the Legacy Loan Program and the Legacy Securities Program. The programs will use $75 - $100 billion of TARP funds and capital from private investors to generate $500 billion to purchase troubled assets, with the potential to expand to $1 trillion over time.
Regulatory Stress Tests: On Feb 25th, the Federal government implemented a stress test on our country’s 19 largest banks, testing whether these banks will still be able to lend to customers and help our economy if we encounter huge, unlikely losses due to extreme economic conditions.

FDIC Insurance Fund Replenishment: The FDIC has passed a final rule mandating able banks prepay three years of FDIC insurance premiums to help replenish the fund.