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Legislation to opt out of a 43-year-old federal law allowing FDIC-insured state banks to “export” interest on interstate loans to the same extent as their national bank counterparts is...
In July, the U.S. Senate introduced a plan to offset new highway spending by reducing the dividend that the Federal Reserve pays to member banks. While it is still unclear exactly where this idea originated, an anonymous Democratic staffer recently referred to the dividend as “an unnecessary and wasteful subsidy.”[1] It now appears that the dividend reduction will go forward even if it offsets outlays other than highway spending.
The former senator inserted a provision into last year's defense spending bill requiring the Fed to disclose master account applications and outcomes. In a recent lawsuit filing, the central bank said the addendum bolstered its powers.
Bank fundamentals do not look likely to get better any time soon, yet the Fed seems determined to make matters worse.
Subprime lending, the practice of extending credit to borrowers with low incomes or poor, incomplete, or nonexistent credit histories. Subprime mortgage loans, the most common form of subprime lending, are characterized by higher interest rates and more-stringent requirements to compensate lenders for the higher credit risk involved. By providing credit to individuals who would normally be denied it in the standard (prime) mortgage market, subprime lending allows a larger number of households to create wealth over time through home ownership. Subprime lending in the United States was not poss...