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FDIC Tells Banks to Exercise Care When Processing Payments Related to "High-Risk" Activities

On September 27th, the FDIC issued a Financial Institution Letter entitled “Supervisory Approach to Payment Processing Relationships with Merchant Customers That Engage in Higher-Risk Activities.” The purpose of the FIL was to clarify that financial institutions may continue to process payments for such high-risk customers, directly or indirectly but they should ensure proper risk assessment and due diligence to minimize the risk of fraud or other illegal activities that could negatively impact the institution.

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Maine Bankers Association Meets at Bretton Woods

This year, the 120th Annual Convention of the Maine Bankers Association was held at the Mt. Washington Hotel.  Spectacular weekend and great conference, and Verrill Dana was pleased to be a sponsor.  The keynote speaker was Steve Gilliland, author of “Enjoy the Ride.”  Foreshadowing his speech about enjoying the trip – not just the destination, I was so moved by the view that I pulled over to take this picture from the side of the road.  Thanks again to Pam Green and MBA for putting on another great convention!



FDIC Issues Summer 2013 Consumer Newsletter

The FDIC recently announced the Summer 2013 issue of FDIC Consumer News.  The newsletter covers a range of topics, including:

  • 15 “quick tips” to help seniors confronting a range of financial issues, including reverse mortgages and avoiding fraudulent schemes
  • Wire transfer fraud, including scams related to transferring funds to strangers in foreign countries
  • Adjustable Rate Mortgages, and advice for borrowers comparing ARMs to traditional mortgage loans
  • Health Savings Accounts, and tips for consumers
  • Student loans, and advice to borrowers having trouble repaying them

A copy of the newsletter can be found here.  A press release announcing the newletter was issued on September 9th.


Mortgage Foreclosures Down for Maine-Chartered Financial Institutions

According to the Maine Bureau of Financial Institutions, foreclosure activity among state-chartered lenders in Maine is down as compared to last year, but still above pre-recession levels. 

On September 3, 2013, the Bureau issued its Second Quarter Foreclosure Report which tracks foreclosure data from the 31 state chartered banks and credit unions for which the Bureau has information.  According to the Report, there are 60,000 first-lien mortgages held by these institutions, of which 0.51% were in the foreclosure process.  For the Second Quarter, there were 70 loans in the foreclosure process, down from 84 loans a year ago (a 16.7% reduction).

The Bureau also reported a decline in early delinquencies, but an increase in more “serious” delinquencies (more than 90 days past due).  However, according to Superintendent Lloyd LaFountain III, “[F]oreclosure activity, while remaining above pre-recession levels, does not pose a threat to the stability of Maine’s state-chartered financial institutions.”


Optional Template Issued for Holding Companies to File Resolution Plans

On August 29, 2013, the FDIC and Federal Reserve Board issued an optional template for certain holding companies to file their “resolution plans,” which are detailed descriptions of how a covered institution plans to deal with financial stress that threatens the viability of the institution.

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