New Rules News

A top Federal Reserve official said yesterday that locally owned banks do a better job of serving communities and small businesses, but they are threatened by federal policies that favor their big competitors.

In testimony before a U.S. House of Representatives subcommittee, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City and the Fed's longest-serving policy-maker, said that community banks as a whole have held up better than megabanks over the course of the recession, but warned, "The more lasting threat to their survival concerns whether this model will continue to be placed at a competitive disadvantage to larger banks." More

The credit crisis may have crimped commercial wind turbine installations, but the economic stimulus cash grants in lieu of tax credits have given new life to community wind projects.  More

Fannie Mae and Freddie Mac have told federal regulators and plan to release additional guidance indicating that the senior lien status of PACE liens is not acceptable.  This declaration comes despite recent articles highlighting the minimal impact of PACE liens on the lenders' balance sheets, White House and DOE support for the program, and the 23 states who have enabled Property Assessed Clean Energy Financing. More

One of the more menacing amendments circling the financial reform bill is a proposal by Senator Tom Carper (D-DE) that would bar states from enforcing consumer protection laws against national banks and would make it easier for banks to claim immunity from state laws they don't like.

This dangerous measure has some legs. The big bank lobby has described it as their "number one" priority. It has support from conservative Democrats and Republicans. The Washington Post editorialized in favor of it today. Although the White House opposes Carper's amendment, Senator Dodd seems lukewarm at best on the question of state authority and has refused to rule out including a version of Carper in his "manager's amendment," a package of negotiated changes to the bill that Senators who want financial reform to pass have little choice but to accept.

Here's why Carper's amendment would be a disaster... More

Newly released data from the U.S. Department of Transportation show that the average American household is driving less than it did in 2001. But, while the number of miles logged going to work, social events, and other activities declined over the last decade, the number of miles families drive for shopping each year continued climb.

But the good news is that the growth in the number of miles Americans log for shopping has slowed substantially from the rapid increases of the 1990s, and there are signs that neighborhood businesses may be making a comeback. More

Across the country, independent business groups that have been urging people to "buy local" are now making "bank local" an increasingly prominent part of their message, bringing new grassroots visibility and organizational infrastructure to the Move Your Money movement.

"The message that big banks don't have our interest at heart and small, local banks do is really resonating," said Joe Grafton, executive director of Somerville Local First, a two-year-old coalition of independent businesses in Somerville, Massachusetts.  More

A legislative proposal in Connecticut would cut their existing renewable portfolio standard nearly in half but prioritize in-state generation.  Backers of the rollback say that renewable energy is mainly bought from outside the state to meet the current standard. The change in the RPS boosts financing tools for in-state power as part of the plan.  One interesting quote, "we want projects, not simply percentages." More

Hanging in the balance of the financial reform debate is an issue that has received far less attention than the Consumer Financial Protection Agency, but is at least as important and probably more so: whether Congress will restore the authority of states to oversee national banks.

If you don't believe me, then take it from U.S. Bancorp CEO Richard Davis, who chairs the powerful big bank lobbying group, the Financial Services Roundtable. In an interview with the Minneapolis Star Tribune editorial board two weeks ago, Davis revealed that the industry's "number one concern" about financial reform is not the CFPA, but rather the power of states to regulate the activities of national banks.

"If we had one thing to fight for, it would be to protect [federal] preemption [of state law]," Davis said. More

Not one to let a good crisis go to waste, Bank of America managed, in the dark days of 2008, to parlay its own insolvency and near collapse into attaining something it had long dreamed of: federal approval to bypass a national law that says that no bank may acquire another bank if it would end up holding more than 10 percent of the country's deposits.

Now, at long last, a new Senate proposal calls for reinstating strict size caps.  It would mean disassembling at least five big banks.

More

Those who wonder whether public anger at big banks and the Move Your Money sentiment sweeping the country is substantial enough to impact these giants need only look at the banks' own marketing over the last few weeks to see the proof.

In a spate of new advertisements and PR maneuvers, the nation's largest banks are working hard to win us back. They are, in effect, standing on our doorstep, flowers in hand, trying to convince us they've changed.

They're using words like "local" and "community," because they know quite well that there's a rival for our affections. A recent Zogby poll found that nearly one in ten Americans had moved at least some of their business to small banks or credit unions. More