We’ve been showing our favorite rides since we started this website. Well, we just had to add one more to the mix!
Wishing one and all a Happy Holiday season, whether that be a Merry Christmas, a Happy Hanukkah, Happy Quanza or even Festivus. And here’s hoping for a Healthy, Happy & very Prosperous New Year.
It has been more than a year since the passage of the Dodd-Frank legislation banks, both large and small, are counting down the time it will take for all 11 banking regulatory agencies to finish restructuring (or in some cases to start up) their organizations. Writing all of the rules that the legislation calls for is a process that could take years, given slower-than-expected progress. According to a report from the law firm Davis Polk, regulators have already missed the deadlines on 163 rules that the act required them to undertake by a certain date, including 122 in the third quarter of 2011 alone.
On the one hand, Deputy Treasury Secretary Neal Wolin stated that “Wall Street reform helps level the playing field between large banks and small ones, helping to eliminate distortions that previously favored the biggest banks that held the most risk.”
And on the other hand, the American Bankers Association president and CEO Frank Keating asks “When you have 37 employees and 4,000 pages to read and you also have to run a bank — how are you going to do that?”
The day-to-day changes in compliance procedures, exams and even the risk-management methodology forged by major bank regulators already have had a profound impact. There have been reports in the press that even the regulators are unclear on the rules.
It would seem that the ancient oriental curse “May You Live in Interesting Times” has been visited upon Banks. Even the Wall Street Journal is talking about Why It’s No Fun to Be a Banker.
Only time will tell whether which view is more correct. In the meantime, the L-Cam Crew wishes everyone a Safe and Happy Halloween!
Bankers across the United States are in fear that the flood of new paperwork will choke community banks, regulating many out of existence. We talk to bankers on a daily basis. We see the “deer in the headlights” look, when bankers – small community banks and large money center institutions – discuss their strategies for coping with the every rising tide of regulation.
A banker in Nebraska told Frank Keating in the Wall Street Journal that his bank now devotes more work hours to compliance than to lending. Specifically, he has 1.2 employees on compliance for every one employee focused on lending and bringing in business. <Banking in a Time of Over-Regulation – WSJ>
From USA Today Last year, reviewing the bank’s 455 home loan applications created more than two months of work for Alesia Harlan, a compliance officer at City State Bank in Norwalk, Iowa.<Small banks say new mortgage regulations too onerous – USA Today>
La Salle Commercial Appraisal Management has a suggestion for our friends at the bank. Let us help you manage your rules, regulations and compliance procedures. Do what you do best – talking and listening to your customers and let us take care of these pesky issues that are probably interfering with your priorities. Contact us today to get started.
Frustrated by regulators toughening their oversight, Main Street’s chairman, Thomas Depping, announced that the 27-year-old bank will surrender its banking charter and sell its four branches to a nearby bank.
With the backing of Microsoft Corp. co-founder Paul Allen, Mr. Depping is planning to setup a new lending entity that will operate beyond the reach of banking regulators—and the deposit-insurance safety net.
“The regulatory environment makes it very difficult to do what we do,” says Mr. Depping.
“The No. 1 complaint that we hear from community bankers is that they feel that regulators have gone one step too far and are choking off lending,” says Paul Merski, chief economist at the Independent Community Bankers of America, a trade group that represents small banks.
While bankers have long complained about their overseers and the quality of the auditors, the only reasons that financial institutions close are due to acquisition or failure. The decision by Main Street is unusual.
See the article in the Wall Street Journal “Fed Up: A Texas Bank Is Calling It Quits”
We just heard that the City of Chicago has passed an ordinance that redefines the “owner” of vacant properties to include banks and other financial companies. Although mortgage holders and their mortgage servicers have always had a fiduciary duty to protect the value of properties either delinquent or under foreclosure proceedings, it would appear that the City of Chicago is placing Mortgage holder’s and servicers’ feet nearer the fire. This is in response to the impacts from the ongoing foreclosure crisis. Fannie Mae and Freddy Mac say that the ordinance “violates Illinois property rights.” It will be interesting to see how this shakes out and we wonder how many other municipalities will follow suit. We predict that the City of Chicago will hold fast and we hope this keeps ‘pride of ownership’ in the minds of delinquent owners.
Individual State Appraisal Agencies have been tasked under Dodd-Frank to make sure that appraisals reflect the actual value of a property, as well as market conditions and condition of the subject property. Notwithstanding the three C’s of lending: credit, capacity and collateral, appraisals are not an exact science – everything from the physical condition of the property to the choice of which comparables to use (and how to factor in the affects of Foreclosures) are choices that Appraisers make as part of their Duties.
As a result of the Dodd-Frank legislation and promulgation of rules, the relationship between Institutions, Appraisal Management Companies and individual appraisers is increasingly complicated. The question of defining “unprofessional conduct.” is one that is influenced by individual states and individual state regulators. As if we all didn’t need more complications on top of the “economy” and diverging local markets.
The addition of oversight from individual states may be an additional complication for Institutions seeking to stay in compliance and actually make loans!
To discuss how LaSalle Appraisal Management can calm troubled waters and promote better decisions, contact us!
Appraisers are often to be found in their automobiles, traveling from one appraisal to another, while talking on their cellular telephones – hopefully using a hands free headset – about the last appraisal they just completed. And with the seemingly ever increasing cost of gasoline, the guys at LaSalle Commercial Appraisal management have been looking for a new ride…
Rob Landis assures you that the following is not a joke and that this automobile will be sold for approximately $600!
China launches $600 car that will get 258mpg
This $600 car is no toy and is ready to be released in China, next year. Note that the single-seater aero car shows a Volkswagen branding. Evidently Volkswagen did a lot of highly-protected testing of this car in Germany and has not announced until now where the car would make its first appearance.
The car was introduced at the VW stockholders’ meeting as the most economical car in the world. The initial objective of the prototype was to prove that 1 liter of fuel could deliver 100 kilos of travel.
Spartan interior doesn't sacrifice safety
The aero design proved essential to getting the desired result. The body is 3.47 meters long and just 1.25 meters wide, and a little over a meter high. The prototype was made completely of carbon fiber and is not painted, to save weight.
The power plant is a one-cylinder diesel positioned ahead of the rear axle, and combined with an automatic shift, controlled by a knob in the interior. Safety was not compromised, as the impact and roll-over protection is comparable to the GT racing cars.
As seen on the highway...
The Most Economical Car in the World will be on sale next year:
Seen from behind on the highway
For those of you who have been visiting the LaSalle Commercial Appraisal Management website for awhile, you may be surprised to see a new layout! We’ve had our new site in the works for months… and now is the time to reveal our labors. Rest assured, we’re still the same only better.
The new look is a reflection of the times that we and our clients find ourselves in. We’re leaner and – we hope – easier on the eye. Less pretty pictures and more information & commentary you’ll find interesting!
And, of course, we’d appreciate your feedback.
The number of loans that banks have to classify as troubled debt could increase dramatically in a few weeks as a result of new accounting rules issued last month. The new push to reclassify some loans is already hurting some lenders, and the reclassifications are expected to shine a spotlight on the commercial real estate lending practice that has come to be known as “extend and pretend.”
New accounting standards issued by the Financial Accounting Standards Board (FASB) just last month and taking effect for public companies first are expected to result in lenders re-examining their restructured debt and could compel them to reclassify some of it as troubled. Those adjustments will have to be made public in any quarterly and annual reports filed after June 15.
“The devil is in the details” to quote the old saw. The law firm Davis Polk & Wardwell estimates that roughly 62% of the hundreds of rules have yet to be proposed. As Regulators continue to miss deadlines established by Congress, uncertainty is in the air. Quoting Margaret Tahyar, a partner at Davis Polk, “Dodd-Frank is Sarbanes-Oxley on steroids. It’s an exponentially greater volume of regulation. The sheer number of rules still in the pipeline makes it almost inevitable agencies will miss an increasing number of deadlines over the next year.”
The financial services industry is voicing their increasing concerns that “more needs to be done to ease the uncertainty hindering financial institutions and the marketplace”, as they struggle to comply with the Dodd-Frank Act. “We thought that when you set up this Financial Stability Oversight Council that you, as Treasury secretary, were going, essentially, to be the air-traffic controller, and you are not doing that job,” said Tim Ryan, president and CEO of the Securities Industry and Financial Markets Association (SIFMA).
What does this have to do with Financial Institutions already stressed with additional government oversight? Does it mean that more resources will have to be allocated to compliance and regulatory monitoring, and more of a bank’s top talent will be unavailable for productive activities? Not necessarily!
LaSalle Commercial Appraisal Management stands ready to assist banks with solutions and strategies that allow financial institutions to keep their top talent productive. Contact us today to start the dialog!