the word nationalized. i would say they resolved them. they did an fdic take-over and liquidated the banks and made them bankruptcy. they took the toxic assets out of the balance sheets of banks and created asset management companies just like we had the resolution trust corporation after the s and ls in the 1980, the job is recoversome value and sell the assets and get rid of them. they launched three cleaned-up banks, new balance sheets, new management, new owners. of course, the old owners were wiped out as part of the deal. the government never wanted to run the credit system. so the word "nationalization" was misunderstood. it was an fdic resolution process. have banks not incumbered by bad loans or litigation around those loans. that's stuffed into the asset management company, which does its best to recover value for you. but the main point in terms of what fred was emphasizing earlier is they came out of this with a totally different approach to the financial system. much tougher regulator approach. not 1500 pages i would probably write on that se

they taken responsible action and the fdic forced them to do things that i think are irresponsible. my time expired. i would ask you to go back to the regulators at the fdic and occ and ask them to please not encourage our community banks to do things that actually hurt borrowing and hurt our economy. thank you. >> the gentleman from california is now recognized for five minutes. >> thank you, mr. chairman. i want to commend you on everything you've done to keep short and long interest rates as low as possible. we face a difficult circumstance. the fed is doing more than any other agency of government to try to get us out of it. i'll have a question for the record for you on the voelker rule and applying it to international situations. and my first question is about the society for worldwide interbank financial telecommunications, swift. i'm the lead democrat here in the house on a bill designed to in effect expel iran from swift. do you agree that allowing iranian access to twist undermines u.s. national security objectives and our objectives in preventing money laundering and the f

included in that list are even deposits in local banks or credit unions up to the fdic insured limit and that is what has promised to the announcement of this program. supervisor avalos: thank you. >> thank you, supervisor. supervisor kim: thank you for your leadership and questions. i have a question for the treasure. we talked about this upcoming rfp and this concept of extra credit points for answering questions that we're interested in. i am wondering in terms of the top three responsibilities, there is a balance. we want to see some of these social goals that can be achieved but at the same time i am interested in making sure the city has a sound partner that we're working with in terms of our transactions they provide the service we need in order to track our ins and outs and transactions we have to make sure our funding is secured, to make sure we are learning the best return we can in our savings accounts. how do you see this fitting in? first i would want to make sure the city had the strong financial footing in this endeavor. can you speak about how you perceive this extra c

i'm now a member, as you said, of the fdic board. have i great colleagues on that board. they've been working with me to get up to speed on these issues. i happen to be fortunate because the deputy director of the bureau, who's been up here to testify, is a banking expert. and both investment banking and commercial banking and he's working with me on these issues, so we will -- we will address them as they come. but these are fascinating and important issues, not just to this country but to the world. importantish ushs not just to this country but to the world and we want to make sure that our banking system is strong. i know you want, that we want that as well money. >> mr. cordray, do you know of any financial institutions that you can recall that have been well capitalized, well managed, well regulated and has failed? >> i think that only happens, senator, when there is some extreme dislocation at large. >> that would be very unusual, would it not? >> i would say the great depression and the recession of '07/'08. that may have happened to some banks that did not deserve

the mail. they started going out on friday. checks for cds started to go out today. mailed from texas, fdic told me the checks should northbound hands this week. now, posting a calculator that will explain how much money you have in that bank. if you have other questions let me know bit. >> that is a frightening feeling. >> thank you. >> and let's go back now, this is several families and we are at the scene. karina? >> right. we're actually in city hall in san jose. the fire started and you can see that there is smoke in downtown san jose. there are 200 east dana right now this, apartment fire was burning. smoke is still very heavy. we had flames that were shooting through the roof. three units of the complex are damaged and destroyed. up to 20-25 people, displaced. red cross going to be offering assistance because of the magnitude of the fire. and we have several fire departments on scene here from mountain view fire, we have santa clara fire engines here as well as sunnyvale fire. and there is several families displaced at this point. not only has the apartment complex been affected but

i will be charged a late charge of $20 on one. >> reporter: the fdic is assuring the former customers of america that they will get their money back as long as it's under $250,000. but as far as the debit cards not work and the bounced checks, these customers are on their own. reporting from walnut creek. >>> how do you know if your bank is in trouble? on the consumer watch we see an easy way to get a report card on your bank. >> reporter: just because your money is in a bank doesn't mean it's safe. the federal deposit insurance corporation, or fdic, is the government agency that insureds deposits up to $250,000. they don't provide a list of problem banks. so the only way to keep tabs on your bank is to check the numbers. now, one place to look is the investigative reporting workshop website. it's a non-profit news organization that tracks the health of banks. in this case we searched home savings of america. now, the first number you want to look for is its total troubled assets. home savings has $51 million in bad loans that are unpaid or 90 days late. the next warning sign. capital

mentioned community investment, looking at making investments up to 200 to thousand dollars insured by the fdic to perhaps financial institutions are credit unions. can you tell us further about that? >> we are excited about the announcement of this program. as with any individual like ourselves, we also enjoy a fdic insurance on any deposits we make in local banks or credit unions as guaranteed by the u.s. government. as i said, our goal is to keep the city's money safe. that means guaranteeing the full faith and credit of the u.s. federal government. it provides that same guarantee and therefore would meet our criteria for investing. right now, the federally insured deposit limit is $250,000 annually. we will make deposits of $240,000 because we need to allow room for the interest earnings as well. with that amount of money, we have announced -- we would be happy to receive their application and make the liquidity available to them. supervisor avalos: after receiving the budget analysts report, if the city just says that we have this investment will live like to do with you, i am not sure tha

as for their lifesavings the fdic is covering all insured accounts, simply put any money a person had in an interest bearing account, checks, savings or cd covered up to $250,000 that is an over simplification. the fdic spokesman is handing out paperwork to customers and to help make it easier we put a link on our website. you can go to abc7news.com click on see it on tv you will find a link that he should help you navigate where you go now and how you go about getting your money back. the checks have apparently left texas this morning. katie marzullo, abc7 news. >>> president obama is calling on governors to invest more resorts in education. the president made his pitch today at the white house as part of the winter meeting of the national governors' association. mr. obama says many states are cutting too deeply into education funding to balance budgets. he sympathized with their situation but says the country's future depends on educating america's youth. >> the president: nothing more clearly signals what you value as a state than decisions on where to invest. budgets are about cho

i serve on the fdic board with them. yes, we will. >> the area is too big to fail, very important to a lot of us and i hope to you. during the consideration of the dodd-frank act it voted down an amendment which would have limited the size of banks. under the amendment no bank would have been able to hold more than 10% of the deposits. it would ensure that a failure of a single institution would not bring down the entire system. i supported the amendment. do you support limiting the size of banks and if not, what steps are you going to take to make sure that banks are not too big to fail? >> senator, my understanding of our authority at the consumer bureau is that we do not have authority over issues. >> we to not have authority to limit the size of banks. we don't have the authority to set the rates or the price of financial products. >> you are on the bureau? >> yes. >> but you are on the fsoc. >> i am. >> now that's a consideration of too big to fail. you do have some, by cause of your other placement of where you serv

as for their lifesavings the fdic is covering all insured accounts, simply put any money a person had in an interest bearing account, checks, savings or cd covered up to $250,000 that is an over simplification. the fdic spokesman is handing out paperwork to customers and to help make it easier we put a link on our website. you can go to abc7news.com click on see it on tv you will find a link that he should help you navigate where you go now and how you go about getting your money back. the checks have apparently left texas this morning. katie marzullo, abc7 news. >>> president obama is calling on governors to invest more resorts in education. the president made his pitch today at the white house as part of the winter meeting of the national governors' association. mr. obama says many states are cutting too deeply into education funding to balance budgets. he sympathized with their situation but says the country's future depends on educating america's youth. >> the president: nothing more clearly signals what you value as a state than decisions on where to invest. budgets are about cho

. >> they will receive a check from the fdic hopefully latter part of this week to reimburse them. >> reporter: no consulation for howard who faces weeks of red tape. >> i have five checks in the mail that are going to bounce and i'm waiting for them to come back. i will be charged a late charge of $20 on one i know. >> reporter: the fdic is assuring the former customers that they will get their money back as long as it's under $250,000. but as far as the debit cards not working and the bounced checks, these customers are on their own. reporting from walnut creek, cbs 5. >> and how healthy is your bank? log on to cpsf.com and click on links and numbers. >>> a key part of america's cup race is changing location. the raising team bases once slated to be built at piers 30 and 32 will now be at pier 80 in the dog patch neighborhood. san francisco mayor ed lee says negotiations to refurbish piers 30 through 32 lasted through the weekend, but in the end it was in the best interest of the event to call off that part of the deal. oracle racing already has operations in storage at pier 80. the

marty is the acting chairman of the fdic. >> mary thompson, thank you very much. only about eight minutes to go to the close in europe. ftse has been down. we'll see how it closes today. [ tom ] we invented the turbine business right here in schenectady. without the stuff that we make here, you wouldn't be able to walk in your house and flip on your lights. [ brad ] at ge we build turbines that power the world. they go into power plants which take some form of energy, harness it, and turn it into more efficient electricity. [ ron ] when i was a kid i wanted to work with my hands, that was my thing. i really enjoy building turbines. it's nice to know that what you're building is gonna do something for the world. when people think of ge, they typically don't think about beer. a lot of people may not realize that the power needed to keep their budweiser cold and even to make their beer comes from turbines made right here. wait, so you guys make the beer? no, we make the power that makes the beer. so without you there'd be no bud?

the word nationalized. that is a swedish word we did not like to use here. they did an fdic-type takeover and liquidated the bank. they made them bankrupt in a government-managed process. they took the toxic assets, the bad loans off the balance sheets of those banks, traded asset management companies -- just like we had the revolution trust co., the jobless to recover value over three, five years, sell the assets, get rid of them. they launched three clean up banks, new balance sheets, new management, new owners. the old owners were wiped out as part of the deal, and privatize them. the government ever won at or around the credit system -- the government never wanted to run the credit system. it was an fdic-type resolution process that went pretty well. you end up with banks that are not encumbered by bad loans or by litigation around those loans. at that all good stuff into the asset management co., which recovers value. the main point, in terms of what they were emphasizing earlier, they came out of this with a totally different approach to the financial system, much . fo

immediately implementing community investment program are we will actually offer to make investments of the fdic limit into any of the local banks or financial institutions. that limit is right now at $250,000, so we will invest up to the amount with any other bank or credit union or other fdic insured institutions. that covers our county pool description. i like to talk for a minute about the other banking responsibilities we handle in the office. supervisor chu: i had intended to have supervisor avalos share some opening comments. this is a good stopping point. we will come back to you quickly. supervisor avalos: thank you for being here, i want to thank you for your work on responsible investing. looking also at the rfp, including responsible investments. we worked on that together as well as with the california reinvestment coalition. the will leverage the local dollar's into local economies, support small businesses, communities, how we can foster greater community development and it seems like you're focused on that as well. it is important, especially in these times that we don't have the

the head of the tva, the head of the fdic, the head of the irs? it's the president. so now you have all of these new executive agencies under the control and appointment power of the presidency. enormously expanding the reach of the presidency over particularly the business life, but generally the life of the nation in a way that simply had never before been the case. yeah, there was some regulations before that. but never the kind of detailed regulation. particularly of business and finance that had been instituted under the new deal. and that at least nominally was under the control of the presidency. on the other hand, there's a downside to this enormous growth of the government and federal agency. what's the downside for the president? >> doesn't it put him at more risk for scandal in >> certainly that. there's even a bigger kind of problem here for the president. >> a lot more expected of him? >> a lot more expected, and? >> a lot of red tape now. >> yeah, and the government becomes much, much more difficult to manage. you know, when you've got a small governmen

>> well, that and even more importantly, or equally importantly, since the fdic came into existence at approximately a similar time where the government was guaranteeing deposits so that people didn't lose if a bank got into trouble -- people didn't lose their lifetime savings. my father lost his lifetime savings during the depression. and it was quite a family event. and if he had ever known i worked in a bank he would have died yet again. but not only did they want to keep the banks from the business for reasons of not risking the money. they didn't want them to use the guarantee that the government provided for those deposits to leverage their position. because, you know, if you have a deposit base that's guaranteed by the government, it sure puts you at a great advantage in terms of going into the market and playing around. >> the government's going to pick up your losses, right? >> yeah. and you don't have a funding problem. >> that was what the fdi -- >> because you have guaranteed deposits. >> that was federal deposit insurance corporation was designed to protect my -- >> that's

the fdic insurance is not enough. >> the council voted to look for a more socially minded bank. the mechanics reminded them of the record. >> we did not do the sub prime lending. we don't have the mortgage issues the other banks have on the residential side. we don't have foreclosures. and we didn't take the tarp funds. the city will respect that. >> tonight puts the wheels in motion to meet a bank that meets their financial and political needs. reporting in berkeley, alan wang, abc7 news. >>> speaking of financial needs, the state controller said that california is running out of catch again. he predicts the state's coffers will be empty by march 1st and recommends borrowing $3.3 billion until april when tax revenues start rolling in. >>> no cash problems for wall street. they just closed out the best january in 15 years. the dow jones industrial average climbed 3.4% to kick off the year, even though the index was down. the biggest stock star of the month was cupertino's apple computer, currently the most available company in america. >>> well, there is a light at the end of th

every opportunity in which i've had to question witnesses from the otc, the treasury department, the fdic, they've all done the same thing. they have those advisory committees, and yet the growth and regulations continue and the sense by community bankers that they're not understood still prevails. so, don't want to discourage you from doing that, but please at least from my perspective understand that that's probably not sufficient. it will depend upon your attitude and approach. and then in that regard, before you respond, our small lenders, community banks, credit unions, they need clarity. not only for their own sake but in my view, the ability to grow the economy. i do think there is a lot of lee luck tans on the part of many small businessmen and women to make diss because they don't know what is next coming from washington, d.c. in regard to the rules. the phrases around are understood, unfair, deceptive. the legislation that created your position has to bankers to us a new word called abusive. and my request of you is that before you find something to be an abusive action by any f

. >> i discussed this point in a speech i gave a couple weeks ago at the fdic and i made essentially the same point, which is the net interest margin has two parts. the difference between deposit rates and safe rates, but also the difference between safe rates and loan rates. and on loans is having a healthy economy so the short-return costs of low rates should be worth it if we can get the economy moving again. >> chairman, if i may, a bit broader question or perhaps more of a 30,000-foot question. you have many, many times including here today pointed out how important it is to have federal policy that reflects the impending prices that we face in terms of managing the debt and how that weighs on economic growth. do you ever feel as though you're talking past your administration and congress, that, you know, we're talking past each other? how can we make your message resonate? people like me are very sympathetic to it, obviously. >> well, i -- these criticisms are easy for me to make. i don't have to deal with the politics. and i know they're very, very difficult. it's always hard t

into the same sort of salary structure that applies to the financial regulators like the occ, and the fdic and the fcc and caps the salaries at $275,000 a year. so in response to something that i think that the american people found to be very outrageous, and sort of moves the compensation packages of these two agencies into more of what's in line with some of the other financial regulatory institutions in this country. >> but as you well know, some would argue that salary is necessary to keep and maintain some of of the executives whether it is their pay or their bonuses. >> right. i think that's -- i understand that, and i think that by and large a lot of the people who serve in government agencies do so because they are very interested and believe in public service. it seems at least that $270,000 salary would be sufficient incentive for people who are real interested in public service and wants to turn an institution around and be part of solving a big problem. there are a lot of people who have done well in the private economy who would be very interested in, so i don't think it will

a spokesperson for the fdic met for customers outside and fielded questions right there on the sidewalkhe latest victim of the housing bust. czechs have already been cut and are in the mail to customers. the nearby u.s. bank will take over social security direct deposits for seniors. >>mark: we will be right back of the kron4 news. here is a live look outside as we're finally getting it little sunlight. we're waiting for the son to come up. a cold morning in the north bay. ♪ ♪ hit the road, jack ♪ and don't you come back no more ♪ ♪ no more, no more, no more ♪ hit the road, jack ♪ and don't you come back no more ♪ [ male announcer ] want your weeds to hit the road? hit 'em with roundup extended control. one application kills weeds and puts down a barrier to stop new ones for up to four months. roundup extended control spray once. stop weeds for months. roundup extended control it's like so crunchy. it has crunchy stuff all over it. i can't get over how crunchy it is. it's like chicken and crunchy stuff got married and it's amazing! what they mean is, it's french's french fried onions in

i think if you look at it across all the programs, the feds, the fdic's, even with the cost in the gse, alongside t.a.r.p., most independent forecasters think the overall cost of this will be very small, a tiny fraction, for example, of what the country paid to resolve a much smaller crisis, the s & l crisis, which cost us 3.5% of gdp. >> all right. thanks very much. >> senator kerry? >> excuse me. senator cardin. >> thank you, mr. chairman. first, secretary geithner, let me thank you. thank you for your presentation, thank you for your service. i agree we need to have a balanced approach, whether it's dealing with our budget deficit as the administration's budget deals with revenues and spending which we have to do both. it also deals with deficit reduction but recognizing that we're in a recovery and that we need to make investments in education, job training, and infrastructure, which i agree with. i want to concentrate if i might on the middle class, how important it is to grow the middle class. i look at the numbers and see a shrinking middle class and wonder where consumers are g

the fdic who does he pick? a republican. the guy who orchestrated the bailouts for hank pahlsson. you pick him? because mitch mcconnell suggested. mitch mcconnell is the guy who said his primary objection is to make sure you lose. the guy he picked before who suggested him? mitch mcconnell. the guy before him? an independent. you are a democratic president. he angered the republicans by picking richard, oh my god, mitch, are you going to be okay? let me give you a couple more republicans. when are you going to fight? when are you going to fight? it doesn't look like you are ever going to do it. and if you go into an election this way and every time romney challenges you, you step on the gas and get the hell out of here, that's the way a loser looses elections. "young turks." only one who thinks an amendment to the constitution may be in order. that's next on "the war room." >>> those are some of the super pacs of course running in this campaign. and they have done some serious damage especially to newt gingrich. and will president obama encourage people to donate to his super pac?

especially the fdic and the fed, which i fought the hardest with. >> i could not more wholeheartedlyport in what you're attempting to do. we're looking for many others to push this. the point of dodd-frank and putting the federal reserve in control as a mystery tour master as a way to run the banking system without a vote again, which the point of dodd-frank, not dealing with the too big to fail issue is a stunning evidence of the failure. wonderful journalism on your part. keep beating the drum and beat it loud and hard. vern mckinley, a century of bailouts. thanks to the mega panel. we cover the banks in chapter two of "greedy bastards." also you can check out greedybastar greedybastards.com where we connect the dots. and we no longer work together with a western-style financing model of development. we work together with an eastern-financing model of speculation and extraction. coming up here, the real halftime show at this year's super bowl. shazi: seven years ago, i had this idea. to make baby food the way moms would. happybaby strives to make the best organic baby food. in a bu

and this bank was hurt and the fdic wasn't able to find another bank to buy it. >>. >> we just openedere a month ago. everything including a living trust. >> they ensure money is save and guaranteed by the government. unless there is over 250,000s ndz an interest-bearing akt, however. >> they'd have $300,000 just in their name. $50,000 is not what we'd be sending you a check for. >> good news is that they sent out checks to most today. >> and a scheme to defraud san francisco public utilities commission proven costly for a local hardware store. the district attorney announced it had been ordered to pay restitution and fines. the store pleaded guilty in this case. an employee falsified invoices and the case forced p.u.c. to change how supplies are purchased. >> we is a centralized process for buying materials and supplies so that the crew can't just buy and approve it. central warehouse takes care of those thing autos san francisco p.u.c. has now traded staff to identify false purchase ordered. >> at 6:30 tonight a local sex offender caught on camera violating his parole. it might not

compensation of fannie mae and freddie mac and make it more consistent with other regulators like the fdicnd take any bonuses and prevent those from being awarded and use it to pay down the national debt. >> greta: what about good judgment. the man, authorizing director that authorized the payment. just use good judgment? >> it would. that is why people were so outraged. they saw at a time when freddie and fannie were losing. this posted losses in the last 16 quarters. they came to the congress for federal infusion in the multiple billions of dollars. the base compensation for ceo fannie mae was $5 million which is 14 times what the president of the united states makes. i hope we can get a vote. >> greta: it's bipartisan? >> so far. >> greta: both sides of the aisle are on this? >> that is correct. there is an amendment on this that senator mccain that we're voting on this week that would ban bonuses into the future. but this legislation is still, i hope, is something we can get done in the near future. we'll look for an opportunity. if we can't get a straight up and down vote. >> greta: a

>> the fdic is insuring customer accounts up to $250,000 and more as they were in a noninterest bearing akt. many now have to deal with merchants receiving automatic payment that's may be a problem. and home savings is being resolved. >> san francisco district attorney announced that a hardware store swril to pay 51,000s ndz connection with a scheme to defraud the public utilities commission. one employee was charged with falsifying purchasing records so six employees could buy personal items. and several workers plead guilty in this case. >> it's beginning to look like winter in the sierra. finally. after months of mostly dry conditions snow returned and there is a live look now and there are an area under a winter weather advisory until 7:00 tonight. that means chains are required along all major sierra passes and you can see why. take a look at the conditions there. the caltrans camera shows some drivers pulling off the road. a second storm is expected to dump a foot of snow. >> it's feeling like winter here, there are cold temperatures in the morning. >> yes. we've got rain coming u

the fdic has finalized rules for managing the failure of a large firm. the consumer financial protection bureau with its new director is up and running. and providing better disclosure for consumers. we're deploying new authority and greater enforcement resources on a more coordinated basis to go after fraud and abuse. and the majority of the new safeguards for the derivatives markets have now been proposed. and the financial system itself is getting stronger and safer. much of the excess risk taking and careless and damaging financial practices that caused so much damage to the american economy have been forced out of the financial system. these gains, though, will erode over time, if we're not able to put these full reforms into place. now, these are tough reforms, and we have forced a necessary and fundamental restructuring of the financial system. yet even with these changes, these tough reforms, and even with the remaining damage, we can still see caused by the financial crisis, our financial system -- and this is very important -- our financial sys