FDIC extends TAG program.The FDIC approved an interim rule to extend the Transaction Account Guarantee program to Dec. 31. Under the TAG program, customers are provided full coverage on transaction accounts. About 80 percent of the banks in the country participate in the TAG program. The interim rule gives the FDIC discretion to extend the program to the end of 2011 if it determines that economic conditions warrant such an extension. "It's necessary to extend the TAG program because the lingering effects of the financial crisis that emerged in 2008 in large systemically important banks have now spread to institutions of all sizes," said FDIC Chairman Sheila Bair. "Allowing the TAG program to expire in this environment could cause a number of community banks—already under stress—to experience deposit withdrawals from their large transaction accounts and would risk needless liquidity failures." .Slow improvement seen across economy.Economic activity increased somewhat across the country, with the exception of the St. Louis district, according to the Federal Reserve's latest Beige Book report. "Districts generally reported increases in retail sales and vehicle sales. Tourism spending was up in a number of districts. Reports on the services sector were generally mixed. The Minneapolis District reported a modest increase in consumer spending. Furthermore, agriculture in the district looks promising. Farmers planned to plant 3 percent more soybean acres, 4 percent fewer wheat acres and about the same number of corn acres as last year. Economic activity in the Chicago District improved in March, and contacts indicated that consumer and business confidence were on the rise. Construction, however, remained weak. Price pressures were small on balance. .FCA authorizing FCS institutions to buy loans from FDIC.The Farm Credit Administration adopted a proposed rule permitting Farm Credit System institutions to purchase certain agricultural and cooperative loans from the FDIC. Currently, except for loan participations and for the pooling of loans to sell to the Federal Agricultural Mortgage Corporation, FCA regulations do not permit FCS institutions to purchase whole loans from non-system institutions. All borrowers whose operations are financed by agricultural loans purchased by an FCS institution from the FDIC would be entitled to certain borrower rights applicable to FCS borrowers. In addition, all borrowers who have agricultural or cooperative loans would be offered membership status through a stock membership program developed by the FCS institution.. Fannie Mae survey gauges attitudes about home ownership.The Fannie Mae National Housing Survey revealed that homeowners and renters alike are taking a more cautious approach to homeownership. Nearly a quarter of renters polled say they will buy a home later than once planned. Respondents cited non-financial reasons such as safety (43 percent) and quality of local schools (33 percent) as driving factors in wanting to own a home, ahead of financial considerations. The poll found 60 percent believe that buying a home today is harder than it was for their parents, and 68 percent think it will be even more difficult for their children. Most respondents (88 percent) also believe that walking away from an underwater mortgage is not acceptable, but those who know someone who has defaulted are more than twice as likely to have seriously considered stopping payments on their mortgage.
