GREECE’S FINANCIAL/BANKING CRISES BEAR NO RELATIONSHIP
TO PUERTO RICO AND ITS BANKING SYSTEM
At OCFI we have received several queries by citizens who, after learning of Puerto Rico’s call to investors to renegotiate its debts and the current constraints placed by the Greek Government on access to bank deposits related to the Greek default on payments due to the International Monetary Fund (IMF), want to know if such a situation (lack of access to bank deposits) is possible in Puerto Rico.
The definite answer is NO. To explain, allow me to give a background on Greece’s situation and how it differs from Puerto Rico’s.
Re accreditation to the OCFI by CSBS
- On June 15th and 16th the OFFICE OF THE COMMISSIONER OF FINANCIAL INSTITUTIONS (OCFI) received the visit of the accreditation team of the CONFERENCE OF STATE BANK SUPERVISORS (CSBS) of Washington, DC. During the visit, the CSBS team reviewed our Depository Institutions Examination Area processes for re-accreditation purposes.
- CSBS was created in 1902 and organizes state banking regulators in all 50 states, DC, Guam, Puerto Rico, and the US Virgin Islands.
- The vision and mission of CSBS is to be the recognized leader in advancing the quality and effectiveness of regulation and supervision of state banking and financial services. CSBS supports the leadership role of state banking supervisors in advancing the state banking system and state financial regulations, benefiting the public by ensuring safety and soundness, promoting economic growth and consumer protection, and fostering innovative state regulation and supervision of the financial services industry.
- We are pleased to inform that CSBS found that the OCFI complies with its criteria for re-accreditation for an additional 5 year period.
- It is noteworthy that, with regards to working papers and reports of examination, the CSBS team concluded that the OCFI’s results are achieved by less than 1% of accredited entities.
TO DORAL BANK CLIENTS
Given that Doral Bank is an open institution, the OCFI does not comment on recent media coverage alerting of a possible closing of Doral Bank. Due to numerous calls to our Agency, below you will find the most frequent questions asked and our responses to the same:
- Is it true that Doral Bank will be closed by Regulators as soon as next Friday, February 27th?
- Doral Bank is an open institution and the OCFI, as a Regulator will not comment on any Bank that is in operations.
- But, if it does close, how will my accounts with that Bank be affected?
- All FDIC insured banks, as is Doral, has all its deposits insured, per account category, per depositor, up to $250,000. In addition to the information presented in our web page, you can access the link to the FDIC site www.fdic.gov to obtain general information on how the FDIC Insurance works. You can also go directly to www.fdic.gov/edie to calculate how your deposits are covered.
- I receive my monthly Social Security payment as well my pension, among others, directly credited to my account. How can I access my money if the Bank closes?
- The access to your funds should not be affected upon the closing of a Bank. The FDIC and the OCFI will ensure that a depositor is always protected and the access to his account is never compromised. Also, checks issued and in transit will be processed as usual.
- It is mentioned that the Bank may file for Bankruptcy. How is that different from a Regulatory intervention and how would that affect me?
- Banks cannot file for Bankruptcy. People may be confused due to instances where a Holding Company of a Bank files for Bankruptcy but, in such instances, such proceedings have no effect on the insured subsidiary bank.
- I went to a Doral branch and it had a sign that read “CLOSED”. What should I do? What is the implication?
- Banks can close any particular branch for a number of reasons, something as serious as a hold-up or as simple as fixing something that is a threat to clients. There is absolutely no implications that should be derived from such a situation. Just go to the next branch most convenient for you.
- What happens when a Bank is closed by Regulators and the following day I need to make transactions in that Bank?
- In such cases, the FDIC, as Receiver appointed by the OCFI, has two options: either it sells the institution to another insured bank, in which case you will be able to transact any operation next business day without any problem or, not having a successor bank, the FDIC will continue to operate, on an interim basis, the Bank and you may still carry on your normal transactions except that no credit (loans) will be processed. The FDIC will continue to operate the Bank until such time as the Bank is liquidated (depositors paid/loans collected) or until the Bank is sold to an insured bank, which will continue to provide the usual services.
We hope these questions and answers are helpful and that any concerns are properly addressed. Please feel free to contact our office at 787-723-3131.
TO ALL UBS CLIENTS THAT BELIEVE THEY HAVE SUFFERED LOSSES IN PUERTO RICO CLOSED-END MUTUAL FUNDS
After OCFI announced that it had reached a Settlement Agreement (the “Agreement”) with UBS Financial Services Incorporated of Puerto Rico (“UBS”) on October 9, 2014, many UBS customers have called our offices claiming to have suffered losses and meeting the same criteria as those compensated under the Agreement.
We must clarify that UBS customers to be compensated under the Agreement were part of a sample selection by OCFI of customers that had a conservative investment profile, with low equity, senior citizen status, and a relatively high investment in closed-end funds relative to their total liquid assets. It is possible that some UBS customers with the referenced characteristics were not included by OCFI in the list of individuals to be compensated by UBS. It must be understood that OCFI worked with a sample and not the totality of customers as OCFI has limited resources and could not possibly analyze each and every single account.
Under Section 3 (c) of the Agreement, UBS agreed that, within a period of six months, it would expand OCFI’s sample, based on the same profile used by OCFI, in order to determine if any other UBS customer required additional action and restitution.
Having reached this Agreement, OCFI has closed this case and can not make any additional claims on behalf of any other affected UBS customer. As stipulated in UBS’customer agreement, any claim must be submitted to arbitration through the Financial Industry Regulatory Authority (“FINRA”).
Any UBS customer who understands that he or she has suffered a loss attributable to UBS should contact FINRA at: (301)-590-6500, (561)443-8000, or (212)-858-4200 or write to:
1735 K St.
Washington, DC 20006
UBS SETTLEMENT WITH OCIF
HOW TO AVOID YOUR HOMES' FORECLOSURE:
Know your rights
By: Lic. Rafael Blanco Latorre
Commisioner of Financial Institutions of Puerto Rico
Residential foreclosures in Puerto Rico have been rising every year since 2008. In 2008, 2,357 family dwellings were foreclosed, while in 2013, the figure reached 4,207 units. At present, 18,288 units are in process of foreclosure while 14,240 mortgage loans 90 days in arrears inch closer to the foreclosure process.
Residential mortgages pose a serious social problem for our island and a threat to the main source of savings of its residents.
A residence is not only a vital necessity for our families, it represents a life-long sacrifice and the principal form of savings for Puerto Rico’s households. Home refinancing has made possible education for dependents as well as a source of repayment for accumulated debts. By far, a home represents the principal financial asset of Puerto Rico families.