Friday, March 4, 2016

This Week in Bank Failures

The FIFA investigation is slowly getting around to the banks involved in processing the bribery transactions. Credit Suisse is known to have been questioned, and now Citibank has been subpoenaed by U.S. officials investigating FIFA corruption. At least half a dozen other U.S.-based banks would have to have been involved in money movements. The existence of a subpoena should not be taken as an indication that a bank is a target of an investigation. Confidentiality laws in banking mean that a subpoena is required for a bank to disclose customer transactions. Investigators would need banking records to prove that illicit payments took place. The bank itself would be culpable only if it participated in covering up or disguising transactions. Of course, recent history has its share of stories of bank officials advising criminals on how to disguise their activities, so it would not be a shock if that happened in connection with FIFA too.

The NCUA liquidated one credit union tonight. Education Associations Federal Credit Union had 600 members in and around Washington, DC. The NCUA will send letters to members.