All Posts Tagged With: "u s bancorp"
Nine banks went out of business on Friday
Jennifer McClelland | RSS | Sun, Nov 01 2009 | 2 Comments
Friday market the largest amount of United States government take overs in one single day since the beginning of the financial crisis and the almost complete collapse of the financial sector of the United States.
The nine banks (which brings the total to 115 for the number of failed banks in 2009) that were taken over showed that there is a trend in the banking industry that banks are begging to be injured by bad loans that are going south quickly.
Even with these bank failures, these are smaller banks. The largest was still Washington Mutual when it was seized just over a year ago in September 2008.
The banks, which were being held by FBOP Corp, were acquired by U.S. Bancorp to the tune of $18.4 billion in assets as well as $15.4 billion of deposits. U.S. Bancorp has been going around this year purchasing distressed assets.
It is unsettling to know that banks are still failing and will likely continue to fail as more loans begin to mature and become due. There is also an issue that is coming up concerning Option-A mortgages’ rates resetting in the next year. These were a lot like the subprime mortgages that caused so much of the financial crisis. When they reset in the next couple of years, we could actually see a bigger problem than what we saw in the past two years with subprime mortgages and foreclosures.
With foreclosures on the rise and unemployment really not letting up either, the problem with banks is also going to likely get worse before it gets better. I am not sure if there will be more bank takeovers in the next year, but the FDIC was already hurting from all the banks it had to pick up after they failed
Related posts:As more small banks fail, the FDIC is hurting
Tags: washington mutual, bank failures, u s bancorp
More banks are deciding not to take California’s IOUs
Jennifer McClelland | RSS | Mon, Jul 13 2009 | 0 Comments
A couple of weeks ago, California decided that it would start having to borrow money from banks using IOUs; since then, many banks have decided that they will not accept the worthless sheets of paper being issued by the nearly bankrupt state.
Now, thousands of California creditors have been left with one less option for cashing IOUs being issued by the state. U.S. Bancorp, JPMorgan Chase, Wells Fargo, Bank of America and a handful of others have decided that they won’t be accepting the IOUs, if nothing else, simply because they can’t handle the chance of lending so much money and not being paid back due to their already tarnished image due to federal bailouts.
Some banks like those in the California Bankers Association had hoped that not accepting the IOUs would light a fire under the legislators’ bums and get them to close the deficit more quickly rather than simply making it worse.
The state started issuing IOUs at the beginning of July to help save some money and offset the $26.3 billion deficit. Right now, officials are saying that it is too early to say if the businesses and companies that are getting the IOUs are feeling financial pressure.
“The decision by most major banks to not accept IOUs makes them less liquid, makes it more difficult to turn them into cash,” said Tom Dresslar, spokesman for the state treasurer’s office. “It’s logical to conclude that the potential for hardship has increased.”
So far, nearly 130,000 IOUs have been issued to the tune of $436 million. By the end of July, California expects to issue out $2.9 billion worth of the “registered warrants.”
IOUs being offered by a state is a crazy way to handle business in my opinion, but if this is the only way (which I’m sure it is not) to get things done in the state while it is in a financial crisis then it has to be done.
However, I would like to hear from some readers from California to tell me what they think!
Related posts:Taxes in some states have become so bad due to deficits. Is there an end in sight?
Ebay ex-CEO Meg Whitman is going to run for the Governor of California? (Plus, an update to our eBay situation)
Nine banks went out of business on Friday
Tags: bank of america, state treasurer, jpmorgan chase
