Elizabeth Warren was appointed to build the Consumer Financial Protection Bureau (CFPB). This new agency will be the first federal agency charged with protecting consumers from the predatory practices of banks, lenders, and other financial institutions, so it’s appropriate that it won’t be put together by someone with a profits-first Wall Street mentality.
Warren has already made it clear that she is not a fan of the “gotcha” approach to banking. In an interview this week, she suggested that credit card agreements could be shortened to two pages, and be made simple enough that ordinary consumers can do cost comparisons between them. Currently, most credit card agreements are about 5,000 words in length.
The NCUA tonight put three corporate credit unions into receivership. Members United Corporate Federal Credit Union, Southwest Corporate Federal Credit Union, and Constitution Corporate Federal Credit Union owned so many problematic mortgage-backed securities that they no longer had a significant level of operating capital. The two largest corporate credit unions were put into receivership last year. With tonight’s action, the NCUA controls two thirds of the corporate credit union market.
Corporate credit unions provide banking-like services to credit unions. Their financial difficulties, though, resulted from securities transactions, mostly involving mortgage-backed securities.
A bank failure tonight on each coast:
- Haven Trust Bank Florida, with $133 million in deposits and two locations on the northeast coast of Florida. Florida-based First Southern Bank is taking over the deposits and purchasing the assets.
- North County Bank, with four locations north of Seattle and $276 million in deposits. Another local bank, Whidbey Island Bank, is taking over the deposits and purchasing the assets.