Tag Archives: institutions

State Regulators Take Over BankEast of Knoxville

News release from state Department of Financial Institutions:
NASHVILLE – The Tennessee Department of Financial Institutions (“Department”) took possession of BankEast, Knoxville, Tennessee at 6:00 p.m. EST on January 27, 2012. The Department has appointed the Federal Deposit Insurance Corporation (“FDIC”) as Receiver of the Bank effective upon the Department taking possession of BankEast.
The Department took possession of BankEast due to BankEast’s impaired capital, unsound condition and the bank’s inability to continue normal operations.
Through an agreement with the FDIC, all deposit accounts of BankEast have been transferred to U. S. Bank National Association and will be available immediately. Depositors of BankEast will automatically become depositors of U. S. Bank National Association. Depositors will be able to access their accounts at the former main office and branch locations of BankEast during regular business hours. Customers of both banks should continue to use their existing branches until U. S. Bank National Association can fully integrate the deposit records of BankEast. Additionally, the former depositors of BankEast can continue to access their accounts through automated teller machine transactions, checks and debit transactions.
Since all deposits transferred to U. S. Bank National Association there will be no loss exposure to former customers of BankEast. The FDIC has established a website and a toll-free phone number to answer questions from depositors, creditors and other interested parties regarding the receivership of BankEast. Please refer to the FDIC’s website at http://www.fdic.gov/bank/individual/failed/bankeast.html for further information regarding the details of the transaction. The toll-free number is 1-800-517-1839. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; on Monday from 8 a.m. to 8 p.m., EST; and thereafter from 9:00 a.m. to 5:00 p.m., EST.
The Department’s Commissioner, Greg Gonzales, reminds depositors that deposits for all Tennessee banks are insured by the FDIC up to $250,000. Special rules are in place for accounts held in trust status and joint accounts that may further expand deposit insurance coverage. Additional information on FDIC Deposit Insurance may be found at www.fdic.gov.

Stewart Bill Targets TARP Takers

State Rep. Mike Stewart has filed legislation that would prohibit state-level political contributions by large financial institutions that received federal bailout funds and loosen some rules on filing lawsuits against them in Tennessee courts.
The Nashville Democrat said the “Main Street Recovery and Wall Street Accountability Act of 2012” targets “too-big-to-fail” institutions — those that received federal aid through the Troubled Asset Relief Program and have assets of more than $100 billion. That would include corporations such as Citigroup and Bank of America, but not smaller banks, he said at a news conference last week atop the Legislative Plaza with “Occupy Nashville” protesters encamped behind him.
While oversight of such mammoth financial institutions is primarily a federal matter, he said, there are things that state legislatures can do and his bill is a starting point. The measure — HB2224 — also calls for a study committee to consider other possibilities, including whether Wall Street executives could be prosecuted in state courts for actions impacting Tennessee investments and whether the state could impose new regulations on such institutions.
Stewart said TARP allowed the “too-big-to-fail” banks to “socialize the risk” from their bad investment practices and, at the same time, “privatize the profits.”
The ban on political donations by such companies, through political action committees or directly as allowed by state law, is appropriate, he said. Otherwise, he said, the institutions will effectively “take bailout money and use it to influence the political system.”
The bill also extends the period that Tennesseans can file lawsuits for recovery of funds lost through the institutions’ actions rather than have them cut off by the “statute of limitations.” The institutions financial maneuvering were so complicated that extra time is needed to figure them out and file lawsuits, he said.
“Banks shouldn’t be allowed to hide behind the complexity of these financial transactions,” he said.
Stewart said he is hopeful that some Republicans will join him in pushing the legislation, since TARP meant that they are “not working in the free market system” that many Republicans support.
“Thanks to citizen protests like the Occupy Wall Street movement, people are focused on the continuing threat to our economy posted by financial institutions that are so large that they can reap profits from risky investments when things go well, yet expect to be bailed out again and again by the taxpayers whenever things go poorly,” Stewart said