Voters give Republicans more power.Republicans won control of the U.S. House of Representatives and gained seats in the U.S. Senate on Election Day, Nov. 2. Rep. John Boehner (R-Ohio) will replace Rep. Nancy Pelosi (D-Calif.) as Speaker of the House. The House Financial Services Committee is expected to be chaired in the next Congress by Rep. Spencer Bachus (R-Ala.), as Rep. Barney Frank (D-Mass.) now finds himself in the minority party. Although Democrats retained control of the Senate, Sen. Christopher Dodd (D-Conn.), the current chair of the Senate Banking Committee, is retiring. Sen. Tim Johnson (D-S.D.) is expected to become chair of that committee. Both committee chairs have said they want to address the future of the housing GSEs, Fannie Mae and Freddie Mac. Some members of the House of Representatives say they want to relook at portions of the Dodd-Frank Act. .New assessment formulas at FDIC for deposit insurance.In accordance with the Dodd-Frank Act, the FDIC is proposing to change to an asset-based formula for determining premiums from the deposit-based formula which it has used since 1935. Since the new base would be much larger than the current base, the FDIC also is proposing to lower assessment rates, which achieves the FDIC's goal of not significantly altering the total amount of revenue collected from the industry. The FDIC also proposed eliminating risk categories and debt ratings from the assessment calculation for banks with more than $10 billion in assets and would instead use scorecards that would include financial measures that are predictive of long-term performance. "Institutions that pose higher risk would pay higher assessments when they assume those risks rather than when conditions deteriorate," commented FDIC Chair Sheila Bair. .Unlimited insurance approved for some checking accounts.The FDIC voted to provide temporary unlimited coverage for noninterest-bearing transaction accounts. Implementing a section of the Dodd-Frank Act, the new coverage becomes effective Dec. 31, 2010 and will run through 2012. The unlimited insurance only applies to checking accounts that allow for unlimited number of transfers and withdrawals at any time, whether held by a business, individual or other type of depositor. The new insurance coverage is similar to the FDIC's Transaction Account Guarantee program, but differs in the definition of "noninterest-bearing transaction account." TAG includes low-interest NOW accounts and Interest on Lawyer Trust Accounts, but those accounts will not be covered in the new program. .President nominates Smith for regulator post.Joseph A. Smith, the Commissioner of Banks in North Carolina, has been nominated by President Obama to be director of the Federal Housing Finance Agency, the regulatory body which is running Fannie Mae and Freddie Mac. Smith has been commissioner of banks in North Carolina since 2002; prior to that he was legal counsel for Centura Banks, Inc. "During the unfolding mortgage and broader financial crises, Joe was an important and thoughtful voice on the challenges facing mortgage finance and the condition of the banking industry," commented Neil Milner, president/CEO of the Conference of State Bank Supervisors. Smith was CSBS chairman last year.
