TCF Bank 2006 Annual Report Download - page 27

in 2007. This one-time historical assessment credit was
established to benefit banks that had funded the deposit
insurance funds prior to December 31,1996. This one-time
historical assessment credit is based upon TCF Bank’s insured
deposits as of December 31, 1996. The FDIC has estimated
TCF Bank’s one-time historical assessment credit at $9.6 mil-
lion, which can be used to offset future FDIC insurance pre-
miums. This one-time historical assessment credit may be
transferred to another insured institution with FDIC approval.
In addition to risk-based deposit insurance assessments,
additional assessments may be imposed by Financing
Corporation,a separate U.S. government agency affiliated
with the FDIC, on insured deposits to pay for the interest
cost of Financing Corporation bonds. Financing Corporation
assessment rates for 2006 ranged from $.0124 to $.0132
per $100 of deposits. Financing Corporation assessments
of $1.1 million each year for 2006, 2005 and 2004 were
paid by TCF Bank and are included in other expense. Financing
Corporation assessments and collections were largely
unaffected by the FDIC Act.
In addition, the FDIC is authorized to terminate a
depository institution’s deposit insurance if it finds that
the institution is being operated in an unsafe and unsound
manner or has violated any rule, regulation, order or condi-
tion administered by the institution’s regulatory authorities.
Any such termination of deposit insurance would likely
have a material adverse effect on TCF, the severity of which
would depend on the amount of deposits affected by such
a termination.
Under federal law, deposits and certain claims for admin-
istrative expenses and employee compensation against an
insured depository institution are afforded a priority over
other general unsecured claims against such an institution,
including federal funds and letters of credit, in the liquida-
tion or other resolution of such an institution by any receiver
appointed by regulatory authorities. Such priority creditors
would include the FDIC.
Examinations and Regulatory Sanctions TCF is sub-
ject to periodic examination by the FRB, OCC and the FDIC.
Bank regulatory authorities may impose a number of
restrictions or new requirements on institutions found to
be operating in an unsafe or unsound manner, including
but not limited to growth limitations, dividend restrictions,
individual increased regulatory capital requirements,
increased loan, lease and real estate loss reserve require-
ments, increased supervisory assessments, activity limita-
tions or other restrictions that could have an adverse effect
on such institutions, their holding companies or holders
of their debt and equity securities. Various enforcement
remedies, including civil money penalties, may be assessed
against an institution or an institution’s directors, officers,
employees, agents or independent contractors.
To the extent not subject to preemption by the OCC,
subsidiaries of TCF may also be subject to state and/or
self-regulatory organization licensing, regulation and
examination requirements in connection with certain insur-
ance and securities brokerage activities.
National Bank Investment Limitations Permissible
investments by national banks are limited by the National
Bank Act, as amended, and by rules of the OCC. Non-tradi-
tional bank activities permitted by the Gramm-Leach-Bliley
Act will subject a bank to additional regulatory limitations
or requirements, including a required regulatory capital
deduction and application of transactions with affiliates
limitations in connection with such activities.
Laws and Regulations TCF is subject to a wide array of
other laws and regulations, including, but not limited to,
usury laws, USA Patriot and Bank Secrecy Acts, the CRA and
related regulations, the Equal Credit Opportunity Act and
Regulation B, Regulation D reserve requirements, Electronic
Funds Transfer Act and Regulation E, the Truth-in-Lending
Act and Regulation Z, the Real Estate Settlement Procedures
Act and Regulation X, the Expedited Funds Availability
Act and Regulation CC, and the Truth-in-Savings Act and
Regulation DD. TCF is also subject to laws and regulations
that may impose liability on lenders and owners for clean-
up costs and other costs stemming from hazardous waste
located on property securing real estate loans.
Taxation
Federal Taxation The statute of limitations on TCF’s
consolidated Federal income tax return is closed through
2002.
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2006 Form10-K