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THE LATEST ORIGINATION 2012 Starts with Collapse of Nine New Banks TWO MIDWESTERN FINANCIAL INSTITUTIONS WERE SHUTTERED IN EARLY FEBRUARY, ELEVATING THE NATIONAL TALLY. Illinois, raising the national tally for failures to nine for 2012. Shelbyville, Indiana-based SCB S Bank fell dark with about $182.6 million in total assets and $171.6 million in total deposits. The Office of the Comptroller of the Currency (OCC) closed the institution and appointed the FDIC to carry out responsibilities as receiver. Muncie, Indiana-based First Merchants Bank sopped up $117 million in loans and $136 million in deposits from SCB. It also acquired four branches set to reopen in the near future. "We're excited to be in Shelby County," Michael Rechin, president and CEO of First Merchants Bank, said in a statement. The OCC also closed Charter National Bank and Trust in Hoffman Estates, Illinois. The bank went under with $93.9 million in total assets and $89.5 million in total deposits, which Hoffman Estates Community Bank, a branch of Barrington Bank & Trust Company, assumed in an agreement. The acquiring institution also rebranded two branches from Charter National. The total cost to the FDIC's De- posit Insurance Fund: $51.3 million. The new failures raise the national tally so far to nine, following 92 in 2011 and 157 in 2010. A recent report by Invictus Consulting Group found that as many as 758 FDIC-insured banks sustain significant capital risks and may fail this year. The consultancy attributed the risk for failure to systemic prob- lems and a still-anemic financial recovery. Kamal Mustafa, chairman and CEO for Invictus, said in a statement that "what makes this situation even more dire is that the demise of any of these banks would adversely affect their local communities, especially smaller businesspeople and those seeking to buy or improve their homes." tate and federal regulators closed banks in Indiana and Nonbank Lenders, Originators A financial fraud task force cleared a final rule that requires nonbank mortgage lenders and originators to report suspicious activity related to mortgage fraud. The Financial Crimes Enforcement Network (FinCEN) said that originators and lenders will need to report any sus- pected fraudulent activity to the organization on an annual and quarterly basis. "Today FinCEN is closing a regulatory gap by requiring non-bank mortgage lenders and originators to develop anti-money laundering programs and file suspicious activity reports with FinCEN," James Freis, FinCEN director, said in a statement. He called the reports "a criti- cal source of information to law enforcement and regulatory agencies in their investigation and prosecution of mortgage fraud and a wide range of other financial crimes." The new rule reflects the scope of authority undertaken by the Obama administration as it pur- sues mortgage and financial fraud. Called On to Report Fraud New regulations will now require nontraditional loan professionals to provide greater oversight for suspicious activity. FinCEN gave credit to the new Financial Fraud Enforcement Task Force and Residential Mortgage- Backed Securities Working Group, both initiatives launched by the Obama administration in recent months. The new rule will take effect two months after appearing in the Federal Register. Established by the administra- tion in 2009, the network collabo- rates with more than 20 federal agencies and 94 U.S. state attorneys general to pursue criminal and civil enforcement against financial fraud. THE M REPORT | 39 ORIGINATION SERVICING ANALYTICS SECONDARY MARKET