FDIC DEPOSIT INSURANCE ASSESSMENTS SUMMARY
Starting January 1, 2007 the FDIC has instituted new deposit insurance assessment rates, with the first quarterly payment due June 30, 2007. The insurance payments even for the highest rated institutions are not insignificant, and institutions need to include estimated payments in their financial budgets and business plans.
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FDIC ONE TIME ASSESSMENT CREDIT
An Institution (or its successors) that was in existence on December 31, 1996 and paid a Federal deposit insurance assessment prior to that date are eligible for a one-time assessment credit that can be used to offset future deposit insurance assessments. Final determination of who is a "successor" institution is now being addresed by the FDIC. There is also the ability for institutions to transfer their credits to others via legal agreement.
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ARKANSAS' ACT 42 AMENDS BRANCHING SECTIONS OF THE BANKING CODE
On Tuesday, January 30, 2007 Governor Beebe signed Senate Bill 99, which is now Act 42, amending the branching sections of the Arkansas Banking Code. The changes to the code provide parity between the State and National Bank application processes, and reduce fees for branch-related applications.
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CONCENTRATIONS IN COMMERCIAL REAL ESTATE LENDING; SOUND RISK MANAGEMENT PRACTICES
The FDIC, OCC, and Fed issued Final Guidance on concentrations in commercial real estate ("CRE") lending which became effective December 12, 2006. While not limiting the amount of CRE lending that banks can make, the Agencies will increasingly scrutinize the risk management systems that banks employ as CRE concentration increases.
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