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Supervisory Insights

Winter 2010 Vol. 7, Issue 2 - Table of Contents

Last Updated: May 25, 2023

Supervisory Insights - Winter 2010 - PDF

Letter from the Director


Trust Preferred Securities and the Capital Strength of Banking Organizations

During 2010, legislators and regulators undertook a number of significant regulatory reforms in response to the financial crisis. One important theme of these reforms is the need for banking organizations to have stronger capital positions to weather periods of economic stress. This paper discusses one component of regulatory capital that was the subject of significant discussion, debate, and reform: trust preferred securities issued by bank holding companies.

Insights from the FDIC's Credit and Consumer Products/Services Survey

The FDIC's Credit and Consumer Products/Services Survey was implemented in late 2009 to augment the collection of more traditional examination information. This Survey targets underwriting practices, new and evolving banking activities and products, local commercial real estate market conditions, funding practices, and consumer compliance issues. The authors summarize areas of particular interest to regulators and bankers from the analysis of recent survey results.

Senior Life Settlements: A Cautionary Tale

Senior life settlements (SLS), also known as death bonds, are increasingly being touted by Wall Street firms and financial advisers as a unique investment option. However, substantial financial risks, aggressive and deceptive sales practices driven by the possibility of high commissions, as well as the potential for fraud have resulted in heightened regulatory and legislative scrutiny of the SLS industry. SLS, in fact, have never received the supervisory approvals required to be deemed permissible bank investments. This article provides an overview of the development of the SLS market and identifies significant risks associated with these transactions to financial institutions, investors, and consumers.

Regular Features

From the Examiner's Desk: Managing Agricultural Credit Concentrations

The agricultural sector has continued to perform well during the recent economic downturn. However, the industry is cyclical and subject to substantial inherent volatility, and adherence to prudent and safe-and-sound banking practices will help ensure farm banks are well positioned to weather any challenges. This article identifies perennial hazards to the agricultural economy and highlights best practices related to agricultural lending and management of agricultural credit concentrations.

Regulatory and Supervisory Roundup

This feature provides an overview of recently released regulations and supervisory guidance.

Supervisory Insights

Supervisory Insights is published by the Division of Supervision and Consumer Protection of the Federal Deposit Insurance Corporation to promote sound principles and best practices for bank supervision.

Sheila C. Bair
Chairman, FDIC

Sandra L. Thompson
Director, Division of Supervision and Consumer Protection

Journal Executive Board

George E. French, Deputy Director and Executive Editor
Christopher J. Spoth, Senior Deputy Director
John H. Corston, Acting Deputy Director
Robert W. Mooney, Deputy Director
Victor J. Valdez, Deputy Director
James C. Watkins, Deputy Director
Thomas J. Dujenski, Regional Director
Doreen R. Eberley, Regional Director
Kristie K. Elmquist, Acting Regional Director
Daniel E. Frye, Acting Regional Director
Stan R. Ivie, Regional Director
James D. LaPierre, Regional Director
M. Anthony Lowe, Regional Director

Journal Staff

Kim E. Lowry
Managing Editor

Todd G. Eich
Financial Writer

J. Michelle Grotts
Financial Writer

Supervisory Insights is available online by visiting the FDIC’s website at To provide comments or suggestions for future articles, request permission to reprint individual articles, or to request print copies, send an e-mail to

The views expressed in Supervisory Insights are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. In particular, articles should not be construed as definitive regulatory or supervisory guidance. Some of the information used in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the Federal Deposit Insurance Corporation.