And now that I do, I am not one iota happier. But, before I tell you what I learned, let me backtrack just a bit to tell you how I happened to learn what I learned.
It all started with that DKos post linking to the Los Angeles Times story about the failure of the FDIC to publicize its relationships with fraudsters and malefactors in the banking and mortgage industries.
Since the LA Times story raised more questions than it answered and really just seemed to graze the issue, I thought to look if perhaps another media source had a more detailed approach. So, I Googled "FDIC leniency," and, sure enough, that's a topic with fruitful results, except for the fact that the top hit, having to do with leniency, happens to be a story from 2008 about the difficulty the FDIC discovered in connection with the self-same IndyMac Bank that seems to figure prominently in the report out of California five years later. Of course, back in 2008, the thrust of the effort was to show leniency to homeowners who had been screwed by the banksters and that was proving difficult for the FDIC. How sad! Being lenient is such an unrewarding enterprise!
If you detect sarcasm, you're right.
It doesn't get better.
But, the third story down in Google looked more rewarding. So, I went to see what the American Banker is reporting under the headline, "FDIC orders leniency on audit rules." only to discover that the American Banker wants one to sign up (your vitals for vital information) in order to reveal more than that:
WASHINGTON -- Examiners at the Federal Deposit Insurance Corp. have been instructed to be lenient in enforcing some new accounting rules until banks get used to them.Bless their hearts. Banks need time to get used to accounting rules! Well, OK. So, I decided to go to the source, check in with the FDIC to see for myself the evidence of these instructions. And, I have to admit that I have not yet found them. For all I know, the American Banker may be engaging in wishful thinking. But, frankly, I don't even care. Because what I discovered is so much more interesting.
Again, be patient, just a bit longer. Because I have to explain, and feel entitled to do so, because way back in 1979 I brought the first challenge of a bank's proposal to set up a branch in the suburbs in the state of Florida under the Community Reinvestment Act of 1977. And ever since I lost that challenge (of course), I have been attuned to the CRA and I DID NOT KNOW that since 1995 the FDIC has been doing routine CRA audits of banks on a quarterly basis, as this press release announced on February 28, 2013:
The Federal Deposit Insurance Corporation (FDIC) has issued the public list of institutions that it has scheduled for a Community Reinvestment Act (CRA) examination during the second quarter of 2013. This list is published pursuant to revised CRA regulations published in May 1995 that require each federal bank and thrift regulator to publish a quarterly CRA examination schedule at least 30 days before the beginning of each quarter.The examination schedule is here, sort of. One has to pick the relevant regions. Over fifty banks are scheduled for the Atlanta region.
The examination schedule reflects the effects of an institution’s size and CRA rating on examination frequency. Absent reasonable cause, an institution with $250 million or less in assets and a CRA rating of Satisfactory can be subject to a CRA examination no more frequently than once every 48 months. Absent reasonable cause, an institution with $250 million or less in assets and a CRA rating of Outstanding can be subject to a CRA examination no more frequently than once every 60 months.
The schedule of institutions to be examined April 1, 2013, through June 30, 2013, is based on the best information now available. Examination schedules may change. For example, a regulated financial institution not otherwise scheduled for an examination may be examined in connection with the application for a deposit facility. Alternatively, some institutions may require more time and resources than originally allotted, thus delaying other scheduled examinations. If an institution is rescheduled for a different quarter, that information will be included on a later list.
For eighteen years this auditing has been going on and what did we get for it?
Republicans were right to be irate, you might conclude. But, being in compliance with CRA is meaningless because the CRA orders nothing. It suggests that banks invest where they collect. It may even suggest strongly, but that's it! A good example of why the Cons are always talking about "encouragement." It is a prescription for not doing.
Anyway, that's not the worst of it from where I sit. Because the other thing I discovered, in addition to not finding the leniency instructions is that the FDIC has an active Letters to the Editor/Opinion Editorialprogram, which competes, as I see it, directly with me. Except, I don't have access to the likes of the Financial Times and the American Banker.
I am not going to quibble with his argument because the title says it all. The blame for malfeasance is always somewhere else.
Another report, which is behind the wall, claims that Hoenig wants to do to the big banks what's been done to the community banks.
FDIC's Hoenig Proposes 'Full Scope' Big Bank ExamsRight! Like FDIC CRA exams have really worked to keep banks honest! One suspects a whiff of desperation to salvage the banks' favorite regulator. Anything to stave off that CPB monster put together by the Senator from Massachusetts. Just as the usefulness of ACORN is over, the CRA probably ought to be retired.
FDIC Vice Chairman Thomas Hoenig says large bank reviews are missing key fundamentals and calls for "systematic reviews," similar to what examiners do for community banks.
9:33 AM PT: Thanks for the wreck list. Much appreciated.