Trustco Bank CEO Robert McCormick says the recent move by federal banking regulators to force the bank to make sweeping internal changes has been good for the Glenville-based bank.
“It was a good wake up,” McCormick said during a Wednesday morning conference call with analysts. “There are systematic changs that we’ll me making with our company.”
Shares of TrustCo Bank NY (Nasdaq: TRST), the holding company of Trustco, fell just 19 cents Wednesday morning to $6.83, less than a 3 percent drop.
On Tuesday, Trustco revealed that it had signed a sweeping agreement with the Comptroller of the Currency, which regulates the bank, which says that the OCC found “unsafe” banking practices at the bank and consumer law violations.
The changes that the OCC is looking for will cost Trustco between $2.5 million to $5 million in added compliance and legal costs. The bank has $10.7 million in earnings during the second quarter of the year.
What 'unsafe banking practices' and what 'consumer laws' were violated? this appears to be more Federal mandates.....$2.5 - $5 million??? YIKES! who pockets that....the Federal government?
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Here's a second article, but it is almost the same as the other one. I wish the paper did more to explain this: http://blog.timesunion.com/business/feds-find-unsafe-banking-practices-at-trustco-bank/67891/ If it is because of new regulations, as the bank seems to be implying, why did the bank have to sign an agreement, wouldn't they automatically start complying with new regs? So confusing.
I don't know either....i'm not in the banking business..... HOWEVER....a few years ago my brother bought a home and used trustco for their mortgage. he said that they were the cheapest but very tough on who is qualified. cause they don't sell their mortgages like most all the other banks do. he said that the loan guy said they are the cheapest because they are a 'privately owned bank' and wasn't mandated like the other banks. Again....I 'personally' know nothing about banking. Again....who do they pay this $5Million to?
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
That's what I heard about the mortgages too, also they didn't require PMI, which is private mortgage insurance, which is supposed to be very expensive.If there are new requlations that are going to cost 2 to 5 million per bank to comply with, I would think that was worthy of national news coverage, instead of being buried in a local article. Did Trustco do something wrong, or is this going to be the case with every bank, that's what I'd like to know. I really can't tell from the articles.
the loan guy said they are the cheapest because they are a 'privately owned bank' and wasn't mandated like the other banks. who do they pay this $5Million to?
All banks have to follow the same state and federal laws. It doesn't matter whether they are publicly traded or "privately owned."
The article very clearly stated that the $2.5 to $5 million was the cost of making internal changes to comply with banking regulations. The money isn't going to the Federal government. The money is being spent to make the internal changes. That could be updating computer systems or other operational procedures.
George Amedore & Christian Klueg for NYS Senate 2016 Pete Vroman for State Assembly 2016[/size][/color]
"For this is what America is all about. It is the uncrossed desert and the unclimbed ridge. It is the star that is not reached and the harvest that is sleeping in the unplowed ground." Lyndon Baines Johnson
Logged
