Volume 9, Issue 1 The Banker’s Advocate March 31, 2012


By Richard S. Plotkin Editor The total balance of non- interest-bearing transaction accounts of more than $250,000 on the books of FDIC-insured financial institutions with main of- fices in Arkansas represents


Views differ on deposit coverage Hot Topic


ration of these deposits, as a separate account cate- gory, is scheduled to end at year end.


more than half of these banks’ most liquid assets. The unlimited insurance


coverage by the Federal Deposit Insurance Corpo-


In response to the sched- uled expiration of the unlimited insurance of these deposits, the two trade organizations for the


Gas lease effects scrutinized


Potential conflicts with mortgages among issues raised


By Richard S. Plotkin Editor The potential impact of


natural gas leases on real estate mortgages, a subject of public dialogue and me- dia coverage in the North- east, warrants the attention of Arkansas bankers with real estate loans in the Fa- yetteville Shale.


A series of articles in The New York Times has been examining, in part, issues arising from natural gas drilling leases on mort- gaged property, particularly in the Marcellus Shale For- mation in New York and Pennsylvania, where inten- sive drilling activity is rela- tively new. “More generally, bankers


are concerned because many leases allow drillers to operate in ways that vio- late rules in landowners’ mortgages,” Ian Urbina,


Wikimedia Commons/Ruhrfisch/Permission granted under GNU Free Documentation License


TALL TECHNOLOGY: A tower for drilling horizontally for natural gas in the Marcellus Shale Formation operates along Pennsylvania Route 118 in the northeastern part of the state. This photograph was taken in November 2009.


the series author, writes in an article published by the Times on October 19, 2011. “These rules also require homeowners to get permis- sion from their mortgage banker before they sign a lease – a fact that most landowners do not know.”


Some banks have be-


come reluctant to secure loans with a mortgage on property leased for gas drill-


See LEASES, Page 7


 Survey on mitigating risk of leases, Page 10.


Candace Franks


Supervision too dynamic to quantify I question the conclusion


of a recently published study that state bank super- visors are significantly more lenient than federal regulators.


The study, “Inconsistent Regulators: Evidence From Banking,” was con- ducted for the National Bureau of Economic Re- search by two economists at the Federal Reserve banks of New York and


See VIEW, Page 6


banking industry are taking different approaches. Unlimited coverage of


noninterest-bearing trans- action accounts is provided under Section 343 of the Dodd-Frank Wall Street


See HOT TOPIC, Page 4 The Commissioner’s View


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