Huntington National Bank 2009 Annual Report Download - page 13

Under ARRA, an institution will be sub
j
ect to the followin
g
restrictions and standards throu
g
hout th
e
period in which an
y
obli
g
ation arisin
g
from financial assistance provided under TARP remains outstandin
g:
•L
i
m
i
ts on compensat
i
on
i
ncent
i
ves
f
or r
i
s
k
ta
ki
n
gby
sen
i
or execut
i
ve o
ffi
cers.
• Requ
i
rement o
f
recover
y
o
f
an
y
compensat
i
on pa
id b
ase
d
on
i
naccurate
fi
nanc
i
a
li
n
f
ormat
i
on
.
• Pro
hibi
t
i
on on “Go
ld
en Parac
h
ute Pa
y
ments”
.
• Pro
hibi
t
i
on on compensat
i
on p
l
ans t
h
at wou
ld
encoura
g
e man
i
pu
l
at
i
on o
f
reporte
d
earn
i
n
g
stoen
h
anc
e
t
h
e compensat
i
on o
f
emp
l
o
y
ees
.
•Pu
bli
c
ly
re
gi
stere
d
TARP rec
i
p
i
ents must esta
bli
s
h
a
b
oar
d
compensat
i
on comm
i
ttee compr
i
se
d
ent
i
re
ly
o
fi
n
d
epen
d
ent
di
rectors,
f
or t
h
e purpose o
f
rev
i
ew
i
n
g
emp
l
o
y
ee compensat
i
on p
l
ans
.
• Pro
hibi
t
i
on on
b
onus, retent
i
on awar
d
,or
i
ncent
i
ve compensat
i
on, except
f
or pa
y
ments o
fl
on
g
ter
m
restricted stock
.
• Limitation on luxur
y
expenditures.
• TARP reci
p
ients are re
q
uired to
p
ermit a se
p
arate shareholder vote to a
pp
rove the com
p
ensation o
f
executives, as disclosed
p
ursuant to the SEC’s com
p
ensation disclosure rules.
• The chief executive officer and chief financial officer of each TARP reci
p
ient will be re
q
uired t
o
p
rov
id
eawr
i
tten cert
ifi
cat
i
on o
f
com
pli
ance w
i
t
h
t
h
ese stan
d
ar
d
stot
h
e SEC
.
The fore
g
oin
g
is a summar
y
of requirements included in standards established b
y
the Secretar
y
of th
e
T
reasur
y
.
Homeowner Affordabilit
y
and
S
tabilit
y
Pla
n
On Februar
y
18, 2009, the Homeowner Affordabilit
y
and Stabilit
y
Plan (HASP) was announced b
y
the
President of the United States. HASP is intended to support a recover
y
in the housin
g
market and ensure tha
t
wor
k
ers can cont
i
nue to pa
y
o
ff
t
h
e
i
r mort
g
a
g
es t
h
rou
gh
t
h
e
f
o
ll
ow
i
n
g
e
l
ements
:
• Prov
id
e access to
l
ow-cost re
fi
nanc
i
ng
f
or respons
ibl
e
h
omeowners su
ff
er
i
ng
f
rom
f
a
lli
ng
h
ome pr
i
ces
.
• A $75 billion homeowner stabilit
y
initiative to prevent foreclosure and help responsible families sta
y
in
t
h
e
i
r
h
omes
.
• Support
l
ow mort
g
a
g
e rates
by
stren
g
t
h
en
i
n
g
con
fid
ence
i
n Fann
i
e Mae an
d
Fre
ddi
e Mac
.
The Treasur
y
Department has issued extensive
g
uidance on the scope and mechanics of variou
s
com
p
onents o
f
HASP. We cont
i
nue to mon
i
tor t
h
ese
d
eve
l
o
p
ments an
d
assess t
h
e
i
r
p
otent
i
a
li
m
p
act on ou
r
b
us
i
ness.
O
ther Re
g
ulatory Developments
The Basel Committee on Bankin
g
Supervision’s “Basel II” re
g
ulator
y
capital
g
uidelines ori
g
inall
y
pu
bli
s
h
e
di
n June 2004 an
d
a
d
opte
di
n
fi
na
lf
orm
by
U.S. re
g
u
l
ator
y
a
g
enc
i
es
i
n Novem
b
er 2007 are
d
es
ig
ne
d
to promote
i
mprove
d
r
i
s
k
measurement an
d
mana
g
ement processes an
db
etter a
lig
nm
i
n
i
mum cap
i
ta
l
requirements with risk. The Basel II
g
uidelines became operational in April 2008, but are mandator
y
onl
y
fo
r
“core banks,” i.e., banks with consolidated total assets of
$
250 billion or more. The
y
are thus not applicable t
o
t
h
e Ban
k
,w
hi
c
h
cont
i
nues to operate un
d
er U.S. r
i
s
k
-
b
ase
d
cap
i
ta
lg
u
id
e
li
nes cons
i
stent w
i
t
h
“Base
l
I
”
g
uidelines published in 1988.
Federal re
g
ulators issued for public comment in December 200
6
proposed rules (desi
g
nated as “Basel IA
”
rules) applicable to non-core banks that would have modified the existin
g
U.S. Basel I-based capita
l
f
ramewor
k
.InJu
ly
2008,
h
owever, t
h
ese re
g
u
l
ators
i
ssue
d
,
i
nstea
d
o
f
t
h
e Base
l
1A
p
ro
p
osa
l
s
,
n
ew ru
l
ema
ki
n
g
i
nvo
l
v
i
n
g
a “stan
d
ar
di
ze
df
ramewor
k
”t
h
at wou
ld i
mp
l
ement some o
f
t
h
es
i
mp
l
er approac
h
es
f
or
b
ot
h
cre
di
t
risk and operational risk from the more advanced Basel II framework. Non-core U.S. depositor
y
institutions
5