Monday Morning Cup of Coffee

A look at stories across HousingWire’s weekend desk…with more coverage to come on bigger issues: The Group of 20 nations (G-20) did not agree on a global tax on banks that would have placed the cost of worldwide bailouts on the financial industry, according to a report from Bloomberg. Instead, the G-20 settled for a set of common guidelines. This means countries such as Canada, China and Brazil that did not suffer as severe a financial downturn as others can spare their banks from taxation. The G-20 is made up of finance ministers and central bank governors from 19 countries including the European Union. Proponents of the global tax wanted to keep financial institutions from seeking refuge in other countries from that do impose such taxes. As US lawmakers continue their push toward financial reform this week, former Federal Reserve economist Robert Bliss, now a professor at Wake Forest University Schools of Business, said such sweeping change could have serious and unintended consequences. “This is very ambitious and hugely complicated legislation that is being done very fast," Bliss said. "Some of the changes are positive, but others could create bigger problems than the ones they are trying to solve." The House and Senate will try to reach a compromise between financial reform bills passed by the House in December 2009 and the Senate a few weeks ago. Lawmakers have set a goal of reaching a compromise before the July 4 recess. The joint committee will try to reach agreement on issues such as the regulation of the derivatives market and the creation of a new consumer protection agency. "The financial crisis of 2008 has passed, and now we're talking about a response to it," Bliss said. "But the consequences will continue to play out well into the future." Erin Toll resigned as the director of the Colorado Division of Real Estate to become a real estate agent with Perry & Co, according to a joint press release from Toll and the Colorado Department of Regulatory Agencies (DORA). The division oversees real estate and mortgage brokers in the state. Toll was allegedly suspended by DORA in March after launching an investigation of state Sen. Ted Harvey and his company American Home Funding. DORA denied the investigation. John Peace resigned from the board of directors at CoreLogic (CLGX), a provider of consumer, financial and property data, a week after the company was spun off by mortgage service provider First American Financial (FAF) and just days after CoreLogic expanded its data-set coverage to 3,100 counties. Peace joined the board in 2009 and is currently chairman of Standard Chartered, a banking and financial services firm, and Experian, another information services company. He is also chairman of the luxury retailer Burberry Group. "John, along with lead director D. Van Skilling, worked with us to establish the Experian partnership which began in 1997. The primary assets from that venture today constitute the heart of our CoreLogic data and analytics group," said Parker Kennedy, executive chairman, CoreLogic. Regulators closed three banks on Friday. The closures are expected to cost the Federal Deposit Insurance Corp. (FDIC) Deposit Insurance Fund (DIF) $313.6m total. There have been 80 bank failures so far in 2010, compared to 37 over the same amount of time in 2009. The Office of Thrift Supervision closed TierOne Bank in Lincoln, Neb. Great Western Bank will assume all $2.8bn in deposits and will purchase essentially all $2.2bn in assets. The FDIC estimates a $297.8m hit to the DIF. The Office of the Comptroller of the Currency closed First National Bank in Rosedale, Miss. The Jefferson Bank will assume the $63.5 in total deposits and essentially all of the $60.4m in assets. The FDIC estimates the closing will cost the DIF $12.6m. The Illinois Department of Financial Professional Regulation closed Arcola Homestead Savings Bank in Arcola, Ill. The FDIC was unable to find another financial institution to take over operations, and will mail checks to the retail depositors today. The FDIC transferred insured funds in checking and NOW accounts to the Arcola branch of First Mid-Illinois Bank & Trust. As of March 31, 2010, Arcola Homestead Savings Bank had $17m in total assets and $18.1m in total deposits. There did not appear to be any uninsured funds at closing. The FDIC estimates a $3.2m cost to the DIF. Write to Jon Prior. Disclosure: the author holds no relevant investment positions.


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