The Changing Liquidity Landscape
Emerging liquidity problems are particularly troublesome for insured institutions that rely on liability and off-balance sheet sources of liquidity. The authors profile the liquidity structure of a typical community bank and the problems that can arise from different asset and liability liquidity sources. This article evaluates how a bank's liquidity position can be adversely affected by a deteriorating financial condition and discusses best practices for developing an effective liquidity contingency plan.
Reverse Mortgages: What Consumers and Lenders Should Know
As the U.S. population continues to age and life expectancies lengthen, more people will be living longer in retirement and undoubtedly will need other sources of income. As a result, the demand for reverse mortgages is expected to increase. This article describes features of reverse mortgages, identifies consumer concerns, and provides an overview of potential safety-and-soundness and consumer compliance risks that should be addressed as part of a reverse mortgage loan program.
From the Examiner's Desk: Unfair and Deceptive Acts and Practices: Recent FDIC Experience
The existence of Unfair and Deceptive Acts and Practices (UDAPs) is not always obvious, which makes compliance and compliance supervision particularly challenging. Each violation determination is based on a careful consideration of the specific facts of each case. This article reviews and analyzes examples of UDAP issues that were the subject of the FDIC's examination-consultation process during a recent 18-month period. It also shares the methodology used by FDIC staff as they perform the sometimes difficult compliance analyses required under Section 5 of the Federal Trade Commission Act.
Accounting News: Accounting for Business Combinations
Banks must adopt a new approach to the evaluation of and accounting for mergers and acquisitions under a revised standard issued by the Financial Accounting Standards Board in December 2007. This article describes key changes that will affect accounting for business combinations by banks and examiners occurring in fiscal years beginning on or after December 15, 2008.
Supervisory Insights is published by the Division of Supervision and Consumer Protection of the Federal Deposit Insurance Corporation to promote sound principles and best practices for bank supervision.
Sheila C. Bair
Sandra L. Thompson
Director, Division of Supervision and Consumer Protection
Journal Executive Board
George E. French, Deputy Director and Executive Editor
Christopher J. Spoth, Senior Deputy Director
Doreen Eberley, Acting Deputy Director
Daniel E. Frye, Acting Deputy Director
Robert W. Mooney, Deputy Director
Thomas J. Dujenski, Regional Director
Stan R. Ivie, Regional Director
John M. Lane, Acting Regional Director
James D. LaPierre, Regional Director
M. Anthony Lowe, Regional Director
Mark S. Schmidt, Regional Director
Kim E. Lowry Managing Editor
Donna J. Bell Financial Writer
Todd G. Eich Financial Writer
Supervisory Insights is available online by visiting the FDIC's Web site at www.fdic.gov. To provide comments or suggestions for future articles, to request permission to reprint individual articles, or to request print copies, send an e-mail to SupervisoryJournal@fdic.gov.
The views expressed in Supervisory Insights are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. In particular, articles should not be construed as definitive regulatory or supervisory guidance. Some of the information used in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the Federal Deposit Insurance Corporation.