FDIC Institutions Report First Loss in More Than Four Years

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This is a totally misleading report. The loss referred to is only due to illegal activity by one of the major banks (FDIC Chairmen Martin Gruenberg didn’t say if it was B of A or JP Morgan) and their 4 Billion Dollar attorney bill. This is a double whammy as not only did they screw borrowers out of a boatload of cash when they were caught they hired a bunch of high priced lawyers and then wrote the legal bill off of their taxes. They pay fewer taxes and, therefore, you pay more.   For a more detailed look at this subject – please read the article below.

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For the first time in more than four years, banks insured by the Federal Deposit Insurance Corporation reported an annual loss, according to the FDIC’s Quarterly Banking Profile released Tuesday.

At $36 million, the net income of FDIC-insured banks in the third quarter is $1.5 million below earnings reported in the third quarter of last year.

The drop in earnings is “mainly attributable to a $4 billion increase in litigation expenses in one institution,” said FDIC Chairman Martin J. Gruenberg during a press conference Tuesday.

“Had it not been for that, the upward trend in earnings would have continued for the industry,” Gruenberg continued.

Gruenberg also pointed out a secondary source of the decline: “a reduction in mortgage lending activity,” which led to a decline in net operating revenue.

Mortgage originations were declined 30 percent from the second quarter, and mortgage sales declined 24 percent.

The FDIC reported a $4 billion decline in quarterly noninterest income from the sale, securitization, and servicing of one- to four-family residential mortgage loans.

To read the complete article – please use the link below.

Report First Loss

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