White House Considering New Stimulus Measures
Sources indicate that White House officials have begun considering new measures to stimulate the economy, including an extension of the expired research and development tax credit and new infrastructure spending. However, Democratic Congressional leaders have expressed concern to the White House regarding the difficulties they anticipate in passing even a small stimulus bill, particularly given the success of “Tea Party” Republican candidates in primaries over the August recess. The White House denied a story last week indicating that they are strongly considering a payroll tax holiday geared at getting businesses to start hiring new workers. It remains to be seen what, if any, stimulus measures could get passed by Congress in the current political environment. But with the Congressional midterm elections fast approaching, the push is growing for the White House to take action.
Bernanke Defends Fed’s Role in Financial Crisis
On Wednesday, during testimony before the Financial Crisis Inquiry Commission, Federal Reserve Chairman Ben Bernanke defended the Fed’s policies during the financial crisis in 2008, expressing confidence that the bailout averted a much greater crisis for the U.S. economy. Bernanke also defended the Fed’s involvement in the collapse of Lehman Brothers in September 2008, stating that the Fed did everything within its legal authority to avoid the company’s collapse. With regard to how the Fed’s role will change in the aftermath of the newly enacted Dodd-Frank Wall Street Reform bill, Bernanke said the Fed will have a more active role in managing systemic risk in the economy in order to prevent another collapse such as Lehman’s from happening again.
August Jobs Report Shows Rising Unemployment
On Friday, the Department of Labor released its August jobs report showing the economy lost another 54,000 jobs overall last month, mostly because of the loss of temporary Census Bureau jobs. The report also showed that the unemployment rate rose to 9.6 percent from 9.5 percent. Overall, the government lost 121,000 jobs in August. State and local governments, many of them grappling with severe budget deficits, cut 10,000 jobs, and another 114,000 temporary Census positions came to an end. The total number of unemployed people rose to 14.86 million in August from 14.59 million in July.
More Information
If you have any questions regarding any of these issues, please contact:
Matt Jessee, Policy Advisor
matt.jessee@bryancave.com
(314) 259-2463
Kip Wainscott, Associate Attorney
kip.wainscott@bryancave.com
(202) 508-6172
The federal banking regulators recently took their first official Dodd-Frank rulemaking step, inviting public comments in advance of proposed rulemaking on the use of credit ratings in the formulation of risk-based capital standards. The reality is that years of such rulemaking and interpretation by regulators will determine the true impact of the law.
More important to community banks, the FDIC announced the establishment of a department—the Division of Depositor and Consumer Protection (DCP) —that will soon become a household name for smaller insured state nonmember banks. This unit will be dedicated to the enforcement of consumer protection rules promulgated by the new Consumer Financial Protection Bureau (CFPB) as to banks exempt from that agency’s oversight.
The New Community Bank “Regulator”—FDIC’s DCP
On August 10, 2010, the FDIC Board created two new offices specifically for the purpose of implementing Dodd-Frank: the Office of Complex Financial Institutions (CFI) and Division of Depositor and Consumer Protection (DCP). The first will be the FDIC vehicle for carrying out the agency’s role in overseeing systemic and large bank holding company and non-bank financial firms. The DCP, on the other hand, is in a sense a community bank regulator. According to the FDIC, this body will be charged with enforcing consumer protection rules promulgated by the CFPB as against banks outside its purview: those with $10 billion or less in total assets. In the words of Chairman Bair:
Our depositor protection and compliance examination and enforcement responsibilities are integral to our unique responsibilities as deposit insurer and supervisor of thousands of community banks. The creation of this new division emphasizes the importance we place on these responsibilities and is directly responsive to Congress’s intent in the new legislation. DCP will also complement the activities of the new Consumer Financial Protection Bureau that is being established within the Federal Reserve. The FDIC supports the CFPB, and we are committed to doing our part in carrying out the consumer responsibilities Congress has entrusted to us.
In a ruling issued July 29, 2010, a Georgia federal court handed a significant victory to Bryan Cave client Atlantic Southern Bank in a trademark suit with broad implications for the bank. Plaintiff Atlantic National Bank had asserted exclusive rights to the term “Atlantic” for banking in Southeast Georgia and claimed that Atlantic Southern’s local operations using “Sapelo Southern Bank, a Division of Atlantic Southern Bank” infringed and diluted its federal, state and common law marks.
The dispute between the banks arose in 2006 when Atlantic Southern announced it was expanding into Southeast Georgia. Atlantic National had been operating in Southeast Georgia since 1998 using its name with a blue and gold flag logo. Atlantic Southern had operated in central Georgia since 2001 and adopted the Atlantic Southern Bank name and a blue, grey, red and white rectangular logo when it expanded its operations to the Georgia coast and into Northeast Florida.
Atlantic National claimed it had the exclusive right to use “Atlantic” in connection with banking services in Southeast Georgia and demanded that Atlantic Southern not use the term “Atlantic” for its operations there. In hopes of avoiding litigation, Atlantic Southern adopted the trade name Sapelo Southern Bank for its branches in Southeast Georgia. In order to comply with state and federal requirements regarding the disclosure of a bank’s identity, Atlantic Southern also included the disclaimer “A Division of Atlantic Southern Bank” on signs, legal documents and other materials.
After two-years worth of correspondence between the banks’ attorneys, Atlantic National filed its lawsuit in late 2008. Atlantic National asserted seven different claims, including trademark infringement under Georgia and federal law, unfair competition, and trademark dilution, and seeking an injunction, damages and attorney’s fees. Atlantic Southern denied these claims and counterclaimed for declaratory relief that neither its use of the Sapelo trade name and disclaimer nor its use of the Atlantic Southern name infringed or diluted any Atlantic National trademark. Atlantic Southern also sought its attorney’s fees. After seven months of discovery in the case, both banks asked the court for summary judgment.