B. End of Bank RALs
In the past years that are few there has been a wide range of major developments into the RAL industry. The 3 biggest banking institutions in RAL lending – JPMorgan Chase, HSBC and Santa Barbara Bank & Trust – had kept or had been forced from the company by 2010 december. All based in Louisville, Kentucky as a result of these actions, there were only three small, state-chartered banks making RALs in 2011– Republic Bank & Trust, River City Bank and Ohio Valley Bank.
In February 2011, the FDIC notified these banking institutions that the practice of originating RALs without having the advantage of the IRS Debt Indicator had been unsafe and unsound. River City Bank and Ohio Valley Bank accepted the FDIC’s decision, but Republic Bank & Trust chose to fight. Republic appealed the choice to an administrative legislation judge, and sued the FDIC in federal court. In May 2011, the FDIC issued an amended issue that detail by detail widespread appropriate violations in Republic’s RAL system and proposed a $2 million civil penalty. 8