The federal government makes the vast majority of student loans these days, but banks like Wells Fargo and JPMorgan Chase still do a decent bit of business in private loans. They could be set for more scrutiny from regulators, if a bulletin from the Federal Reserve, FDIC and OCC is any indication.
The one-pager tells financial institutions to take extra care with student loan customers who are having a hard time paying back the loans. It also says bank examiners will give them a little lee-way when taking a look at loan books for soundness if they're giving help to troubled grads.
Hint, hint: "Prudent workout arrangements are consistent with safe-and-sound lending practices and are generally in the long-term best interest of both the financial institution and the borrower."
Student loans have been in the news quite a bit lately as Congress negotiates what to do with interest rates on federal loans. The standard rate doubled to 6.8 percent earlier this month. The Senate has passed a bill to bring them back down.
PARK STERLING POSTS RECORD RESULTS: The Charlotte bank earned $3.5 million for shareholders, up 10 percent. The record, execs say, comes from operating earnings, which exclude merger expenses.
PARK STERLING'S FIRST CASH DIVIDEND COMING: Because of those results, the bank's board has approved a cash dividend for the first time in the bank's history. Two cents per share for holders as of Aug. 6. The bank hopes to make quarterly dividends.
TREASURER CLOSER TO GETTING HER BILL: After years of advocating for it, state treasurer Janet Cowell put out a statement praising the state Senate for passing a bill giving her office more flexibility to invest where she sees fit. Before, state law had capped at a low percentage the amount that could be put in alternative investments. Opponents worry about pension funds being put in risky investments. From Cowell's statement: "The risk in its most fundamental sense is for our fund to not be able to pay out promised pensions over the long-term. This legislation improves our ability to protect and grow the pension fund while keeping its long-term cost to the taxpayers at a reasonable level."
WELLS PULLING OUT OF MORTGAGE VENTURES: Wells Fargo mortgage bankers in Charlotte could have their jobs affected by the bank's decision to get out of its joint ventures in the home loan business, citing regulatory pressure. The bank had partnered with mortgage origination companies it co-owned, like HomeServices Lending in Huntersville. That firm, by the way, is becoming wholly owned by Berkshire Hathaway.
The move isn't completely out of the blue. Wells Fargo had already ended its business with independent mortgage brokers, choosing to instead originate in-house. That decision last summer was spurred by a mortgage discrimination settlement the bank said stemmed from loans made by brokers.
CMCU HITS $300MM IN DEPOSITS: Charlotte Metro Credit Union said Thursday that it ended the last quarter above $300 million in deposits for the first time. Executives cite its marketing pushes as well as an emphasis on service. They said they've tweaked their hiring to focus more on personal service.
The credit union has been touting a lot of success lately, in memberships and business loans as well, tracing some of its recent popularity to the surge in anti-bank sentiment of a a year or so ago. CMCU says its membership has grown 5 percent (or 1,800) in the first half of this year.
FIFTH THIRD BANKER JOINS MOTORSPORTS BOARD: Commercial banker Lee Fite will serve on the North Carolina Motorsports Association board of directors, the bank says. NASCAR racing has been quite an area of interest for the Cincinnati bank of late. It sponsors the No. 17 car and has also built up a commercial lending team around the industry here in Charlotte.
FRONTIER INKS A DEAL: Charlotte private equity firm Frontier Capital has made an investment in recruiting and consulting firm WilsonHCG, Frontier says.
NEW BOFA ATMS COMING THIS FALL: Bank of America will be introducing its new "teller assist" ATMs here in Charlotte in the fourth quarter. They feature a video screen that lets you talk to a teller sitting in a call center in Delaware or Florida. These ATMs are already in place in Atlanta and Boston.
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SAC CAPITAL INDICTED: The long-awaited charges were announced, The New York Times reports, likely meaning the end of the hedge-fund juggernaut. Investigators say they have evidence of rampant insider trading.
WALL STREET JOB CUTS TO COME: Analyst Meredith Whitney tells Bloomberg that Wall Street's largest layoffs could still be in the offing. Though profits are at record highs, revenue is only just now starting to grow. Companies have been leaning on expense cuts to get by. Says Whitney: “It’s no fun, it’s painful but you have to downsize dramatically, get more efficient on every single line of business.”
NASDAQ HACKED: U.S. prosecutors announced charges against a eastern European hacking ring that got access to, among many other companies, the Nasdaq exchange, The New York Times reports. Announces Pheet Bharara: "“As today’s allegations make clear, cybercriminals are determined to prey not only on individual bank accounts, but on the financial system itself."
DEMS WANT YELLEN: By all accounts, it's a two-person race to become the next Fed chairman. . Larry Summers may be the front-runner, but Senate Democrats are composing a letter in advocacy of Janet Yellen, Bloomberg reports.
IN OTHER FRONT PAGE NEWS: Panthers are in training camp in South Carolina ... The Salisbury man who led an investment scam will go to prison for 10 years. ... Abortion bill goes to McCrory.
MORE LEAKS AT SOUTHPARK MALL: You'll remember the roof collapse last year. The downpour Wednesday night has opened up a few more leaks.