Week In Review - by Mark Sievewright Posted by AVCU on 10:34 AM

U.S. Bank Failures Top 100 - The failure of the following 7 banks on Friday took the number of year-to-date bank failures to 103:

 

• Crescent Bank and Trust Company, Jasper, Georgia* ($1 billion  in assets).
• Sterling Bank, Lantana, Florida* ($407 million in assets).
• Home Valley Bank, Cave Junction, Oregon* ($251 million in  assets).
• SouthwestUSA Bank, Las Vegas, Nevada* ($214 million in assets). 
• Williamsburg First National Bank, Kingstree, South Carolina* ($139  million in assets).
• Community Security Bank, New Prague, Minnesota* ($108 million  in assets).
• Thunder Bank, Sylvan Grove, Kansas* ($32 million in assets). 

President Obama Signs Financial Reform Bill - On Wednesday (July 21), President Obama signed into law the  Dodd-Frank Wall Street Reform and Consumer Protection Act. The more than  2,300-page law will establish a system to monitor and prevent risk,  give the government new powers to unwind large, systemically important  institutions, and create an independent consumer protection bureau  within the Federal Reserve Board.

 

Amex and Capital One See Positive Trends - Both American Express and Capital One last week reported significant  improvements in delinquencies and charge-offs citing signs of  improvements in the credit card industry. Amex's net income rose more  than 200% from a year earlier, to $1.02 billion. Its net charge-off rate  for U.S. cards fell to 6.2%, from 10% a year earlier. The company's  30-day-plus delinquency rate for U.S. cards fell to 2.7% from 4.4%. As a  result, its provision for U.S. card losses declined 56%, to $519  million. Capital One noted similar trends in its domestic card business  during the second quarter. The company's net income for domestic cards  rose 189% year over year, to $483 million. Its net charge-off rate rose  to 9.5%, up from 9.2% in the year-earlier quarter but down from 10.5% in  the previous quarter. Its 30-day-plus delinquency rate fell to 4.8%,  from 5.3% in the previous quarter, but was flat with a year ago.

 

Bernanke Proposes GSE fixes - In testimony before the House Financial Services Committee last week,  Federal Reserve Board Chairman, Ben Bernanke, said that U.S. housing  policy - with its reliance on Fannie Mae and Freddie Mac - is "not  sustainable." Mr. Bernanke said it was crucial to find a solution to the  problems of the troubled mortgage giants, which were placed into  conservatorship in September 2008. Bernanke suggested two ways the Obama  administration could unwind the government's commitment to both  companies: break up the privatized entities or transform them into  government utilities, similar to Ginnie Mae.

 

Small Business Lending Fund Clears Hurdle - The Senate voted late Thursday to stop debate on an amendment that  would create a $30 billion small business lending fund. The measure will  almost certainly be added back to a bill seeking to provide tax relief  to small businesses and expand Small Business Administration guarantees.  A final vote on the amendment and the overall bill is expected next  week. Republicans fought hard to stop the amendment from passing  cloture, arguing the fund, which would allow community banks to access  capital to boost lending to small businesses, was a second Troubled  Asset Relief Program (TARP).

 

Homebuilder Confidence in U.S. Falls to One-Year Low - Builders in the U.S. turned more pessimistic in July than forecast, a  sign the expiration of a government tax credit will depress home  construction. The National Association of Home Builders/Wells Fargo  confidence index dropped to 14 this month, the lowest level since April  2009, from 16 in June. Readings lower than 50 mean more respondents said  conditions were poor.