Frank seeks prepayment from industry for failures

11/2/2009 | Bloomberg

Rep. Barney Frank has changed the bill he is sponsoring on bank failures to force the banking industry to make payment for these failures before they happen. The Obama administration wanted the law to impose payment on all banks for failures, but only after they go bust. Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, said that Frank's proposal would impose a heavy burden at a time when banks were trying to come back from the difficulties in the recession. "It will expose the industry to an undefined expense at a time we are rebuilding the deposit insurance fund and the economy," Talbott pointed out. "A pre-funded assessment would take the total tab to hundreds of millions of dollars per institution."

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