Why does FDIC chief say parts of regulatory plan wont fly?”
Colonial BancGroup became the largest bank failure of the year as it was seized and sold Friday. Advertisement Regulators from the Alabama State Banking Department seized the bank at the close of business Friday and turned its assets over to the FDIC. The FDIC, in turn, sold most of what remained of the bank to North Carolina-based BB&T. Andrew Gray of the FDIC said that three banks expressed interest in buying Colonial’s assets. Two of the banks actually bid on Colonial, but Gray said BB&T’s bid was by far the strongest. BB&T assumed all $20 billion of deposits at the bank, according to the FDIC. Colonial’s failure was the first in Alabama since Aug. 21, 1992, when Birmingham Federal Savings Bank failed. It also is the largest of the 74 U.S. banks to fail this year. In all, BB&T purchased $22 billion of Colonial assets, mostly the deposits and 346 branches in Alabama, Florida, Georgia, Nevada and Texas. According to information from Colonial, about 190 of those branches are owned by t
Federal Deposit Insurance Corp. Chairman Sheila Bair is pushing back against key pillars of the Obama administration’s financial overhaul plan, saying they wouldn’t survive in Congress and calling her own alternatives more viable. In an interview with The Associated Press, Bair said Congress won’t approve two major parts of the package: Expanding the Federal Reserve’s authority to regulate the largest financial companies and giving a proposed new consumer protection agency examination and enforcement powers over banks. Such authority now belongs to her agency and other bank regulators. “There’s a lot of resistance from a lot of different quarters to a lot of the things the administration has submitted,” Bair told the AP Thursday. “That is a reality the administration needs to deal with.” Bair said alternatives she has backed would “provide a framework that can actually get through Congress.” Her ideas include empowering a new agency to protect consumers from abusive mortgage and credit
