2012 Fast Facts Book, Part 2

Note from the Financial Services Roundtable
The new Fast Facts 2012 book contains Fast Facts from January 2012 through July 2012. The book is divided into three main sections: Section 1: Safer and Stronger Section 2: Committed to Communities and Customers Section 3: Economic Impact of Regulation and Legislation For over 100 weeks, the Roundtable has delivered Fast Facts to select opinion leaders in the financial services, legislative, regulatory, and media spheres. Fast Facts provides easy-to-understand, reliable research about current issues facing the financial services industry. All Fast Facts can be found at: www.RoundtableResearch.org. If you have comments about any of the content in Fast Facts, suggestions for future topics, or would like to be added to the distribution list, please contact me at AbbyResearch@fsround.org. Steve Bartlett President and CEO Scott Talbott Senior Vice President of Government Affairs Abby McCloskey Director of Research
Copyright 2012, The Financial Services Roundtable.
Table of Contents
Section 1: Safer and Stronger

Cybersecurity Attacks, Part I: A Growing Threat Cybersecurity Attacks, Part II: Protecting Financial Services Health of the Financial Services Industry, Part I: Fortress Balance Sheets Health of the Financial Services Industry, Part II: Too Big to Fail Reforms Health of the Financial Services Industry, Part III: Benefits of Big Banks Executive Compensation: Say On Pay U.S. Bank Exposure to Europe 5 6 8 10 12 13 14
Section 2: Committed to Communities and Customers

The Financial Literacy Gap Financial Literacy, Government and Industry Working Together Growth of Retirement Accounts and 401(k)s Preventing Financial Exploitation of the Elderly Saving Early for A Secure Retirement Saving For College Small Business Lending 17 18 22 24 27 31 33
Section 3: Impact of Regulation and Legislation

Economic Impact of the Dodd-Frank Act Economic Impact of the Volcker Rule Export-Import Bank Fiscal Cliff Free Checking Declines from Durbin Money Market Fund Reforms Mortgages at Risk from Flood Insurance Lapse Understanding the Stress Tests 35 38 40 42 44 45 47 49
Section 1: Safer and Stronger

Data from the last six months show a financial services industry safer and stronger than it has been in years. Banks have the highest capital levels in history. Insurers have paid out record claims. Loan quality has improved. The number of FDIC problem banks has rapidly decreased. These improvements are the result of industry initiative and financial regulatory reform. Additionally, the industry continues to improve its cybersecurity measures. Protecting the industry and consumers from this rising threat will continue to be a major focus for financial institutions going forward.
Fast Facts: CYBERSECURITY ATTACKS Part 1: A Growing Threat
March 16, 2012 Terrorism remains the FBI's top priority, but in the not too distant future we anticipate that the cyberthreat will pose the No. 1 threat to our country." FBI Director Robert Mueller. FACT: Phishing attacks were up 37% in 2011, year over year. Phishing scams individuals into sharing private information. It often takes the form of a fraudulent email appearing to come from a legitimate business requesting account number verification.
FACT: One in every 300 emails contains phishing elements. FACT: Malware attacks are also on the rise. Malware is a malicious software which embeds on a computer or operating system and steals data or disrupts functioning.
FACT: By the end of 2015, the Aite Group (a Boston-based analytics firm) estimates that there will be 87 million new, unique strains of malware released each year. FACT: Nearly three out of every four new malware strains are designed to sit silently on users computers and steal their information, (called Trojans by those in the industry). FACT: Malware development and distribution is highly organized and controlled by criminal groups that have formalized and implemented business models to automate cybercrime. FACT: Cybersecurity attacks cost businesses over $200 million in 2011 alone. While cyber attacks cost businesses financially, the greatest impact is loss of consumer confidence.
Fast Facts: CYBER ATTACKS Part 2: Protecting Financial Services
March 23, 2012 CONTEXT: While cyber attacks are a growing problem, the financial services industry has incredibly robust cyber protections in place. Over the past decade, the government and financial services industry have formed a strong public-private partnership to defend against such attacks. Cybersecurity measures are coordinated namely through each banks prudential regulator, but a host of other government entities are also involved, as you'll read about below.
FACT: Financial services and government have codified cybersecurity standards for the industry, including: Gramm-Leach-Bliley Act Sarbanes-Oxley Act Fair and Accurate Credit Transactions Act Payment Card Industry (PCI) Data Security Standard FFIEC Information Technology Examination Handbooks
FACT: Financial services institutions are regularly examined to determine their compliance with cybersecurity regulations and standards. FACT: By Presidential directive, all critical sectors are required to share threat intelligence through Information Sharing and Analysis Centers (ISACs). The Financial Services ISAC has been recognized as one of the most effective information sharing entities in operation.
FACT: The Cyber Operations Resiliency Review (CORR), a service through Treasury and the Department of Homeland Security, (piloted through BITS and its members), provides cyber forensic specialists available to review financial networks for malicious activity. FACT: The Department of Homeland Security works to thwart financial cyber attacks by: Sharing cyber intelligence Running a formal security-clearance pilot program for the private sector 6
Responding with help to companies that have been compromised.
FACT: The FBI fights cyber threats with the same seriousness and methods as terrorism threats, by working to cultivate the sources necessary to infiltrate criminal online networks, to collect the intelligences, to prevent the next attack, and to topple the network from inside. FACT: The National Security Agency, through its directive to protect national security information and information systems, works with partners across government and industry to provide security guidance. FACT: Financial services companies actively employ security measures and educate customers about how to be safe. Most of this work is proprietary, but a small number of examples include: Principal Financial deploys anti-virus software in email, Web and application services, as well as on all desktops. Intrusion detection systems monitor network traffic both to and from the Internet. In addition, they have an Information Security Incident Response plan that provides emergency procedures designed to quickly contain any virus. In 2012, U.S. Bank produced videos for the public about online banking security that have had over 10,000 views. Additionally, over the last year, U.S. Bank has taken down 224 fraudulent web sites used by cybercriminals to trick customers into giving them their log-in credentials and/or personally identifiable information. BB&T provides an education center specifically targeted to cybersecurity. The center, Security Central, is located at BBT.com/Security and is an education resource with information about how to stay safe online. The site presents userfriendly information through interactive games, informative podcasts, current security alerts, and more.
Fast Facts: FORTRESS BALANCE SHEETS

Week 1 of 3: Health of the Financial Services Industry
June 22, 2012 Our banks are on a much stronger basis than they were at the time of the last economic crisis, and they have built their capital base and their equity base and worked through a lot of their toxic assets. Presidential Candidate Mitt Romney, CBS Face the Nation, June 17, 2012. FACT: Bank capital is at its highest levels in history, according to new FDIC data. Banks currently hold nearly $1.6 trillion in capital, and the average Tier 1 capital ratio set a new record of 13.28 percent in the first quarter of 2012. [1] FACT: Insurance firms capital and surplus are at all-time highs despite an increase in unexpected expenses from natural disasters in 2011. Moreover, insurance companies had record payments to individuals who suffered from these disasters. FACT: Large banks have increased their business lending, according to FDIC data. Net loans and leases grew by $40 billion during the first quarter for banks with over $10 billion in assets. FACT: Loan quality has improved across all loan categories and all bank sizes. Loan losses declined for a seventh consecutive quarter, and noncurrent loans reached a three-year low, according to the FDIC Quarterly Banking Profile for Q1 2012. FACT: Banks have tripled on-hand liquidity since 2008 to meet unexpected funding needs, according to SNL Financial. In the first quarter of 2012, the on-hand liquidity ratio rose to an all-time high of 23 percent. FACT: Bank failures are at their lowest level in three years, and the number of problem institutions is now at its lowest level since 2008, according to the FDIC. FACT: Net income has returned to pre-crisis levels. FDIC-insured commercial banks and savings institutions reported $35.3 billion in net income for first quarter 2012. This represents a $6.6 billion (22.9 percent) improvement over first quarter 2011 results.
_______________________________ [1] New rules such as Basel III and capital surcharges for systemically important financial firms will increase capital requirements further.
Fast Facts: TOO BIG TO FAIL REFORMS

June 29, 2012 The risk and impact of a financial services institution failing has been significantly reduced through industry improvements and more stringent systemic risk oversight. FACT: Financial services companies considered systemically important have strengthened their balance sheets, improved their capital and liquidity positions, enhanced their internal governance and risk management capabilities, and upgraded their underwriting policies and practices. Many of these improvements occurred immediately after the crisis and before Dodd-Frank. See Fast Facts: FORTRESS BALANCE SHEETS from last week.
FACT: Supervision of large financial services companies has increased dramatically. For example: Capital Plans: Large banks must submit detailed capital plans and stress tests to the Federal Reserve on an annual basis before they can pay out dividends to shareholders or make any other capital distributions. Stress Tests: The Dodd-Frank Act mandates that large banks conduct two rigorous stress tests each year and publicly disclose information about the results. In addition, the Fed conducts its own independent stress test annually. Resolution Plans: Large financial services companies must submit resolution plans to the Federal Deposit Insurance Corporation and Federal Reserve each year. The resolution plans provide extensive information about the companys interconnectedness, exposures, structure, and how to unwind the company should it fail.
FACT: Systemic oversight of the financial services industry is in place for the first time in history. The Financial Stability Oversight Council (FSOC) was created to monitor risk across the entire system, and identify and head-off emerging trends that could be a threat to financial stability. The members of FSOC are heads of the major financial regulatory agencies.[1] FACT: If an insured bank faces a significant problem, the Federal Reserve has proposed rules for an active intervention (early remediation) with the goal of restoring that firm to health and mitigating the risk of potential failure.
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FACT: In the unlikely event that a large financial company actually fails, the Federal Deposit Insurance Corporation has liquidation authority to swiftly isolate and resolve the firm. This reduces the risk of contagion effects on other companies or the economy.
Taxpayers and TBTF According to Section 214 of the Dodd-Frank Act, the cost of the liquidation of a financial institution will be paid from assets of the failed financial institution and an assessment on the remaining large financial services companies not by taxpayers
[1] FSOC is still in its early stages. To be truly effective at reducing systemic risk, FSOC must coordinate with existing regulators and exercise greater transparency with the public.
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Fast Facts: WHY THE ECONOMY NEEDS BIG BANKS

July 13, 2012 Financial services companies of all sizes are critical to the U.S. economy, but large financial services companies have a particularly important role to play. FACT: A study undertaken by The Clearing House concludes that the unique benefits large U.S. banks provide to companies, consumers, and governments total $50 billion to $100 billion annually. FACT: Large banks provide the vast majority of credit in the U.S. economy hospitals, small businesses, and personal expenditures. According to FDIC data, banks with more than $10 billion in assets: Finance 40% of small business loans; Extend 85% of consumer credit, such as credit cards and car loans; and Service 70% of home loans.
FACT: Large financial institutions are uniquely positioned to support global companies, such as Wal-Mart (with $447 billion in revenue) and Apple (with $108 billion in revenue), by providing them access to capital markets, cash management, credit, foreign exchange, risk management products, trade payments, investment products, and other critical financial services. FACT: Large financial institutions drive much of the innovation in the industry such as online banking and mobile banking, have advanced payments and clearing technologies, and are recognized leaders across all industries in cybersecurity. FACT: U.S. banks have grown at a strong rate to support the growing needs of the U.S. economy. Over the past 20 years, U.S. bank assets have grown 237%, mirroring the percentage increases in U.S. exports (243%) and the S&P (292%), according to data from Bloomberg, the Federal Reserve, and U.S. Census. Are our big banks too big? Compared to the rest of the world, Americas big banks are not disproportionately large. The U.S. banking system is the least concentrated of G7 nations. Of the largest 50 banks in the world, only 5 are based in the U.S.
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Fast Facts: SAY ON PAY RESULTS
May 25, 2012 FACT: Say on Pay is a requirement of Section 951 of the Dodd-Frank that enables shareholders to vote on their executives compensation for the previous year. The first say on pay votes took place in 2011. FACT: This year, the executive compensation plans of nearly Roundtable financial services company were approved by shareholders, and the vast majority of plans were approved with 90% or more support. FACT: Since 2008, many changes have been made to executive compensation since 2008 without legislative or regulatory requirements. FACT: In a targeted survey of the Roundtable membership, 100% of member companies reported changing their executive compensation practices since 2008, many before the Dodd-Frank Act was even passed.
Industry changes made to executive compensation Without legislative or regulatory requirement

Instituting maximum payout caps (87% of companies) Having clawback provisions in place (83% of companies) Improving risk management (77% of companies) Introducing new performance metrics (69% of companies ) Restricting stock awards (52% of companies ) Instituting new performance reviews (45% of companies ) Creating stock holding requirements (41% of companies ) Developing new bonus formulas (38% of companies ) Increasing base salary and linked performance to stock (31% of companies)
FACT: In October 2011, the Federal Reserve reviewed executive compensation practices at large U.S. banks and concluded that they had made significant progress toward enhancing their incentive compensation arrangements.
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Fast Facts: US BANK EXPOSURE TO EUROPE
March 2, 2012 FACT: U.S. financial institutions have reduced their exposure to Europes riskiest assets over the last year, according to a report released this week by Hamilton Place Strategies. The report makes the distinction between bank exposures to: (1) European periphery countries, which are experiencing the greatest fiscal problems and pose the most risk to the financial system, and (2) European core countries, which are functioning as monetary safe havens.
FACT: U. S. financial institutions have decreased their exposure to the troubled European periphery: Spain (reduced 34.2%) 14
Greece (reduced 19.7%) Ireland (reduced 8.7%) Portugal (reduced 3.8%) Italy (reduced 3.8%)
FACT: U.S. financial institutions have increased their exposure to European core countries: Switzerland (increased 61.2%) Germany (increased 18%) U.K. (increased 8%)
FACT: On net, U.S. financial institutions have increased their overall exposure to European countries by nearly 10% since the start of 2011, while dramatically reducing exposure to Europes riskiest assets. FACT: Additionally, U.S. banks have the capital levels in history, helping to ensure that they can bear the risk of a European contagion event. At the end of 2011, the U.S. banking industry had an aggregate Tier 1 Common Capital over $1.1 trillion and a Tier 1 Common Capital Ratio of 12.56%. The ratio boasts a 36% increase from its crisis low-point in 2007, and a 51% percent increase from 991, the first period on file.
The full report by Hamilton Place Strategies can be viewed here.

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Section 2: Committed to Communities and Customers

Americans are taking control of their financial futures in 2012, saving record amounts for retirement and college. The industry is currently managing over $17 trillion of retirement savings, and people are increasingly utilizing 401(k)s and IRAs to boost savings. Additionally, instead of just relying on student loans, people are saving for college in 529 plans, investing $170 billion total. Financial services companies continue to sponsor financial literacy programs in tandem with numerous state and federal efforts. 25 states require financial literacy to graduate. Nationally, over 50 financial literacy initiatives are underway.
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Fast Facts: THE FINANCIAL LITERACY GAP
April 6, 2012 The single most important issue for individual Americans to act on today is making better choices about managing money, according a survey of young adults. FACT: 41% of U.S. adults, or more than 92 million people living in America, gave themselves a grade of C, D, or F on their knowledge of personal finance. FACT: According to a 2011 Allstate/Heartland Monitor Poll, 30% of people are not sure how to use insurance to protect themselves from unseen risks.1 FACT: The financial literacy gap is especially acute among young adults. Many young adults report that they dont feel adequately prepared to make good financial choices when it comes to using debt wisely (28%), saving for the future (40%), or investing their money (43%). FACT: Nearly 50% of teens are unsure of how to use a credit card effectively, yet 24% think high school or younger is when they should get their first credit card. FACT: 44% of parents admit to needing more guidance on how to best teach their children the skills necessary to become financially responsible and successful adults. FACT: The U.S. Department of Treasury sponsors a National Financial Capability Challenge for students online. In 2011, 84,372 students took the online test. The national average score was 69%. Interested in knowing how your literacy stacks up? The test is only available for students, but sample questions are attached. Answers will be included in next weeks Fast Facts.
(The next Allstate poll about financial literacy is scheduled to be released on April 9 ).
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Fast Facts: FINANCIAL LITERACY, WORKING TOGETHER
April 13, 2012 The federal government, state government, schools, non-profits, and financial services companies themselves are working together to improve financial literacy in America. FACT: 25 states require personal finance instruction to be incorporated into high school coursework. Four states (Missouri, Tennessee, Utah, Virginia) require a full semester course devoted to personal finance. View state-by-state requirements here.
FACT: As of 2009, over 50 federal financial literacy initiatives were under way, spread widely among many different federal agencies. FACT: Financial service companies offer free financial education such as: The Allstate Foundation o Moving Ahead Through Financial Management: A Financial Education Program to Break the Cycle of Domestic Violence AXA Financial, Inc. o Women's Guide to Retirement and Retirement Planning BB&T Corporation o Learn & Plan Financial Education BBVA Compass o Financial Education Capital One Financial Corporation o MoneyWi$e.org: An adult financial literacy program o Bank It: A financial literacy program for youth and their parents Charles Schwab Corporation, The o Money Matters: Make it Count o Schwab MoneyWise
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CitiGroup Inc. o Financial Education Curriculum City National Corporation o Dollars + Sense Financial Literacy Program First Commonwealth Financial Corporation o Financial Education Genworth Financial o My Money My Future HSBC North America Holdings, Inc. o YourMoneyCounts JPMorgan Chase & Co. o Financial Education Library KeyCorp o Financial Education MasterCard Worldwide o Priceless Pointers o Kids, Cash, Plastic and You The PNC Financial Services Group, Inc. o School Bank Program o HomeBuyer Club First-Time Home Buyer Education Principal Financial Group o Dream Again Planning Center Raymond James Financial, Inc. o o o o o o FDIC Money Smart Bank on St. Pete Program Project Prosper Junior Achievement Teach Children to Save Day annual event HOPE Expo Raymond James sponsors/hosts the HOPE Expo, which includes home buyer and other financial literacy classes. 19
RBC Bank USA o Everyday Financial Advice RBS Americas (Citizens Financial Group, Inc.) o MoneyHelp Regions Financial Corporation o o o o Scholars & Dollars FDIC MoneySmart for Young Adults (Ages 12-20) FDIC MoneySmart for Adults (English) (Spanish) Partner with Freddie Mac to ensure local non-profits have access and are trained on "Credit Smart." o Partner with Cemark to provide "How to do your Banking" in schools throughout Regions' footprint State Farm Insurance Companies o Finances Learning Center o Make It Possible Program TD Bank o WOW! Zone Unum o 20 Ways to Take Advantage of Your Company Benefits Plan U.S. Bancorp o o o o o o o o o o U.S. Bank Credit Wellness Center U.S. Bank Center for Economic Education at Dominican University U.S. Bank Financial Scholars Powered by EverFi Teach Children to Save Get Smart About Credit Junior Achievement FDIC Money Smart FDIC Money Smart for Young Adults FTCs Preventing Identity Theft U.S. Bank of Bearville: Expanding the reach of financial education
Visa Inc. o Practical Money Skills for Life Wells Fargo & Company
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o Hands on Banking / El futuro en tus manos FACT: As part of financial literacy month, the Roundtable has identified at least 34 financial literacy programs are available for free for individual or classroom use. Of these programs, 22 curricula can be completed online, and 6 curricula provide free volunteer tutors.
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Fast Facts: RETIREMENT SECURITY Part 1: Growth of Individual Retirement Accounts and 401(k)s
February 10, 2012 FACT: The financial services industry currently manages more than $17 trillion in retirement assets, which represents 36% of all U.S. household assets. FACT: The U.S. retirement market is projected to grow to nearly $22 trillion by 2016. That represents a 30% increase in retirement savings over four years. FACT: Nearly two-thirds of non-retirees (64%) now look to IRAs and 401(k)s as major funding sources when they retire, according to a recent Gallup poll. Only 26% of nonretirees plan to rely on Social Security. FACT: Of non-retiree investors: 73% have a 401(k) and 62% have an IRA. FACT: Over 90% of people with 401(k) retirement accounts have more money in their accounts than they did at the 2007 market top due to continued contributions and growth in the funds over the last four years, according to the Employee Benefit Research Institute in Washington. FACT: At the end of Q4 2011, the average 401(k) balance was $69,100, up nearly 8% from the end of Q3 2011, according to data from Fidelity Investment accounts. The average employee contribution during 2011 was $5,750, up from $5,680 a year ago, as participants on average continued to save more than 8% of their annual salaries according to Fidelity.
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Quick Question: Whats the difference between an IRA and a 401(k)? An IRA is a private investment funded solely by your own money, while a 401(k) is offered through your place of work and involves your contributions and often contributions from your employer. Learn more on Bankrate.com.
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Fast Facts: PREVENTING FINANCIAL EXPLOITATION OF THE ELDERLY
June 14, 2012 By 2030, seniors will make up over one-sixth of the U.S. population. As our population grows older, it is essential to educate people about how to protect themselves from financial exploitation. FACT: The annual financial loss for victims of elder abuse is around $2.9 billion, which is a 12% increase from 2008, according to a 2011 MetLife study of Elder Financial Abuse. FACT: The elderly are a target for financial abuse because they may be more likely to depend on others for help, have predictable patterns, and have little understanding of modern management of finances. Additionally, they often have accumulated savings. Persons over the age of 50 control over 70% of the nation's wealth, according to one survey. FACT: Men and women of any race, economic level, or health status can become victims of elder financial abuse. Women are twice as likely to become victims Most victims are between the ages of 80 and 89 Most victims live alone and require help with health issues and home maintenance
FACT: The most common perpetrators of financial abuse are family members, who commit nearly 75% of crimes. FACT: Signs of exploitation of the elderly include: unpaid bills, changes in banks or attorneys, changes in spending patterns, missing property, unfamiliar signatures, and a lack of personal amenities. FACT: Many Roundtable member companies are coordinating to protect elderly customers from financial abuse. Examples include: Capital One has partnered with the Consumer Action advocacy group to create MoneyWi$e. MoneyWi$e is a national personal financial education program offering free materials and community-based training opportunities on various topics including elder fraud, identity theft, and money management. In Canada, Capitol One partnered with SeniorBusters to raise awareness about the prevalence of elder abuse and fraud. 24
City National Bank has published various materials regarding elder abuse. Such materials include a facts bulletin regarding the actions and consequences of elder abuse, examples of common identity theft methods, and what to look for when elder financial abuse is suspected. Comerica Bank provides publications on how to be aware of the signs of abuse and how the bank can help. They make an effort to partner with law enforcement to conduct community seminars open to all regarding various fraud topics. They have also created county taskforces to address the issues of elder abuse to provide a response plan for elder abuse and develop a network of contacts for the members. Fifth Third Bank conducts a program which informs and offers protection from elder financial abuse. Fifth Third works regularly to protect assets, prevent losses, and safeguard information through customer interaction. By getting to know their customers, they are able to watch out for unusual activities. They also pay close attention when seniors come into a banking center for service by observing if they have someone with them, noticing if they seem uneasy, and noting if the transaction is unusual in nature. They will then take immediate action to safeguard the customer. First Horizon is kicking off a program to prevent identity theft in their headquarters city of Memphis. In partnership with the Memphis Police Department, County Sheriffs Office, and the District Attorney Generals Office, employees will make presentations at retirement communities and other groups regarding how to protect their finances. These presentations will also be made free to any organization interested in identity theft prevention. Regions Financial is providing communication and instructor led training to all associates focusing on elder financial abuse prevention. By September 30, 2012, every Regions associate will complete training on how to prevent, detect and report elder financial abuse. Regions has a long standing commitment to elder protection efforts. Since 2003, Regions has invested in the Senior Housing Crime Prevention Foundation, a nonprofit whose mission is to protect vulnerable seniors in housing facilities in various locations across our footprint and to provide ongoing crime prevention programs for senior housing residents. The Principal Financial Group has provided grants to support WesleyLife Community Services' Money Management program since 2007. This no-cost program promotes independent living for low to moderate income older adults and persons with disabilities who are at risk of victimization because they cannot manage their own finances. WLCS-Money Management program curriculum was designed by AARP which provides training, evaluation and technical support. Nationally, this program helped 6,000 adults in 2010 with a 98% satisfaction with service rate.
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Wells Fargo has developed training and informational content for distribution. This includes periodic articles which are distributed via internal channels. Additionally, their Regulatory Affairs group has coordinated and hosted regional Elder Financial Abuse Symposiums in various cities around the country. This group will also conduct ongoing meetings with regulars such as FINRA, SEC and State, and is in regular contact with State APS. For additional resources and examples of member programs, visit
http://www.fsround.org/fsr/financial_literacy/financial_literacy_corner.asp.
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Fast Facts: RETIREMENT SECURITY Part 2: Saving for Retirement
February 23, 2012 If theres one main takeaway from America Saves Week, it is this: Start saving early for a secure retirement. Understanding the benefits of saving early could mean thousands of dollars of additional retirement savings. FACT: Compound interest means that interest accrues not only on base payments but also on the interest earned. Over time, compound interest results in exponential growth. Why Every Year Counts If you put $5,000 into a retirement account today, and did nothing with that investment for 35 years, it would grow into $53,383, assuming a 6% growth rate.
Source: Fidelity Investments
FACT: Length of time invested matters more than contributions.
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When is $10,000 Greater than $30,000? Jane, a 25-year old, contributes $1,000 to her IRA for 10 years and then contributes only $1 each year until she reaches 65-years old. Lance, another 25-year old, makes no contributions during those first 10 years, but then contributes $1,000 each year for the next 30 years. Who has more money at retirement, Jane or Lance? Jane (who contributes less money, but started saving earlier) winds up with more retirement savings, assuming a 7% annual growth rate.
Source: Roundtable
FACT: The cost of waiting to save can be significant. Cost of Waiting Based on a $30,000 salary and 6% annual contribution with an assumed 8% average rate of return, one starting to save today will have earned over $331,000 after 30 years. One starting in 5 years from now will have earned an estimated $247,000. The cost of waiting to save even for 5 years can be $84,000.
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FACT: Many Roundtable member companies offer free retirement calculators and many other tools and services to help you start saving early for retirement, including: PNC Financial Services Group offers the Next Step Guide to Retirement. The Next Step Guide assists consumers in building a personalized checklist of action steps to help them achieve their retirement goals. It also offers quick and easy access to robust retirement-related tools including a Retirement Savings Calculator and a Debt & Retirement Analyzer. Allstate provides easy to follow Life Track savings plans to guide your savings throughout each life stage and event. Wells Fargo offers retirement planning by age groups and offers Beyond Today, a retirement site for women with tools by ages and stages, checklists and blogs from nationally-recognized authors. BBVA Compass offers a calculator to help determine your projected shortfall or surplus at retirement. Putnam Investments provides a state-by-state tax rate map and retirementincome tool calculator. State Farm publishes easy-to-understand retirement advice in its Retirement Learning Center and also provides its own savings calculators to help answer many individuals retirement questions. In addition, State Farm agents offer a robust platform of financial literacy and retirement seminars in the communities they serve.
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Principal offers My Principal Edge Milestones. Participants whove used Milestones save an average of 39% more for retirement than those who havent used the tool. That could mean an additional $150,000 at retirement. LPL Financial Retirement Partners has a Retirement Partners tool suite for advisors, which tracks plans success and quickly compares plan fees and design. AXA Equitable offers virtual retirement savings consultations that guide you through a step-by-step process to estimate how long your retirement savings may last. Fidelity Investments helps you determine your retirement readiness in five easy steps. Raymond James offers a free online guide for making the best retirement decisions for your individual situation. ING U.S. offers www.RetireWithING.com, a comprehensive resource that provides retirement saving information and education, along with access to a financial professional. It also offers a number of free planning and savings online tools, including www.INGCompareMe.com which lets you compare yourself New York Life publishes a Security Center resource center where customers can learn about recent threats and best practices to ensure that personal information and finances are protected. Diversified provides participants with their Retirement Outlook, an intuitive measure of retirement readiness that is provided online and via a short and straightforward report. Diversified also provides a number of easy to use calculators to help participants save and invest wisely. Transamerica Retirement Services offers brief videos that are designed to educate individuals on retirement planning. In addition, you are also able to access investment calculators to help you determine how much you will need to save in order to reach your retirement goal. SunTrust publishes a monthly Retirement e-newsletter, integrated with LiveSolid.com, which includes helpful articles, videos, tips and more. BB&T provides retirement tips and solutions on BBT.com called, "Learn & Plan," which is complete with audio podcasts on a host of issues, ranging from estate planning to calculators for budgeting and saving for retirement. Bank of America/Merrill Lynch created Retirement Contact Centers to help simplify the retirement process and handle customer inquiries.
Read about the growth of IRAs & 401(k)s in Fast Facts: RETIREMENT SECURITY, Part 1: http://www.fsround.org/fsr/publications_and_research/fast_facts.asp
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Fast Facts: SAVING FOR COLLEGE
April 27, 2012 FACT: College tuition and fees have increased by 50% (adjusted for inflation) over the last decade. FACT: As a result, saving for college has become a priority for many students and parents. According to a recent Sallie Mae surveys: One-fifth (21%) of parents with children aged 17 or younger rank saving for college as their top savings priority, equivalent to the percentage (22%) who rank saving for retirement as their top saving priority. 96% of college students agree that they have some responsibility to fund their college education.
FACT: The typical American family had an average of $28,102 saved for college education in 2010, according to data from Sallie Mae. [1] This savings was spread across a variety of vehicles, including: 23% in parents retirement accounts 21% held in investments 14% in general savings accounts 12% in 529 College Savings Plans
FACT: An increasingly popular and tax-advantaged way for families and students to save for college is by investing in 529 College Savings Plans. What are 529 College Savings Plans? 529 plans are state-based and allow assets to accumulate and be withdrawn tax-free to pay for qualified college costs. They are managed by state treasurers or outside investment companies. Families can usually choose from a range of investment options. By the end of 2002, all states had such plans in operation.
FACT: The most commonly cited reason given by parents who are saving for college but not using a 529 plan is that they do not have enough information about 529s. For more information about your states 529 plan offerings, a reliable resource is www.savingforcollege.com.
FACT: Over the last decade, assets in 529 plans have multiplied eight-fold. Nearly $170 billion is invested in 529 plans nationwide.
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FACT: The average balance <of all 529 plans> reached an all-time high of $16,959 in July 2011.
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Fast Facts: SMALL BUSINESS LENDING
April 20, 2012 Small business lending is up 14% year-over-year The vast majority of small business owners continue to report credit needs met Small businesses continue to face a tough economic environment
FACT: Small business lending was up 14% in February from a year earlier, according to the Thomson Reuters/PayNet Small Business Lending Index. This is the 19th consecutive double-digit rise. FACT: Approximately $600 billion of small business loans are outstanding, according to FDIC data. The largest 1% of banks manage over 40% of these loans. FACT: The overwhelming majority of small business owners (92%) continue to report that their finance needs are met or they are not interested in borrowing, according to the NFIBs Optimism Index, March 2012. FACT: Only 4% of small business owners report financing as their top business problem, compared to 20% citing taxes and 19% citing unreasonable regulation, according to the NFIBs Optimism Index, March 2012. FACT: Small businesses continue to face a difficult economic environment. The NFIBs Optimism Index from March 2012 showed decreased expectations for the economy improving; sales; and plans to make capital outlays. According to the Thomson Reuters/PayNet Small Business Lending Index, applications for credit by small businesses are at about the same level as they were at the end of the recession in June 2009 sign that many small businesses remain hesitant to borrow.
FACT: Financial services companies are offering their support. The largest banks have pledged $100 billion of additional lending over the next three years. Small business assistance is about much more than lending. The financial services industry offers continuing education, insurance, retirement security, financial planning and many other benefits for millions of small businesses. Company specific examples can be found in the Roundtables report, How the Financial Services Industry is Supporting Small Business.
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Section 3: Regulation and Legislation

The cumulative weight of the Dodd-Frank Act and Basel III will have adverse consequences for the economy and consumers. For example, the Volcker Rule could cost American businesses $315 billion in lost liquidity according to a study by Oliver Wyman. Moreover, the Institute for International Finance projects that the cumulative weight of the Dodd-Frank Act will cost the U.S. economy 2.9 million jobs by 2015. At this critical time in our nations economic recovery, we must preserve those parts of the Dodd-Frank Act that make our system safer and stronger, while re-examining the provisions that needlessly restrict economic growth, limit credit, result in higher costs and reduced access to services for consumers, and make U.S. companies less competitive.
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Fast Facts: ECONOMIC IMPACT OF DODD-FRANK ACT NEW Cost Estimates
March 29, 2012 Over the last six months, dozens of independent studies have estimated the economic impact of the Dodd-Frank Act. A selection of facts from these studies can be found below: The Volker Rule could cost American businesses $315 billion 54% of institutions are looking to re-structure or terminate debit rewards programs due to the Durbin Amendment Annual compliance costs of Dodd-Frank are already over $7 billioneven though only 27% of Dodd-Frank regulatory rules have been completed Lending rates in the U.S. are projected to increase by 4.7% as a result of new rules, or as much as 7% if rules are implemented rapidly
FACT: It is the risk that the Dodd-Frank apparatus will smother financial institutions in so much red tape that innovation is stifled and Americas economy suffers. The Economist, February 2012. FACT: The Volcker Rule will raise energy prices and reduce energy investment, resulting in 200,000 lost jobs. I.H.S. Study, March 2012. o o o o Electricity costs will increase by $5.3 billion per year. Gasoline prices will increase by 4 $2 billion per year Natural gas investment will be reduced by $7.5 billion Two East Coast refineries will close.
FACT: Regulators' estimate that banks will have to spend 6.6 million hours to implement the Volcker rule. Over 1.8 million hours would be required every year in perpetuity. That translates into 3,292 years, or 3,000 bank employees to comply this rule. Frank Keating, President and CEO, American Bankers Association, October, 2011. FACT: The Volker Rule will cost American businesses up to $315 billion, increase borrowing costs by up to $43 billion per year, and dramatically reduce liquidity. Oliver Wyman Study, January 2012. FACT: By 2015, U.S GDP is projected to be 2.7% lower than it would otherwise be <as a result of regulatory reform>, (or 5.2% lower if reform is implemented rapidly). Institute for International Finance, September 6, 2011.
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FACT: By 2015, 2.9 million jobs are projected to have been lost in the U.S., (or 5.8 million jobs if reform is implemented rapidly). Institute for International Finance, September 6, 2011. FACT: By 2015, lending rates in the U.S. are projected to have increased by 4.7%, or even as much as 7% if rules are implemented rapidly. Institute for International Finance, September 6, 2011. FACT: Direct compliance costs have increased to over 240% in that last five years far exceeding the growth of the bank, its loans, investments and deposits. Les Parker, Testimony before the House Subcommittee on Financial Institutions and Consumer Credit, March 14, 2012. FACT: Dodd-Frank is the thing that is most harming the economy right now. Big business can deal with regulatory uncertainty, but it makes small businesses reluctant to take on risk and expand their operations. Todd Zywicki, Mercatus Center, September, 2011. FACT: Dodd-Frank has raised the cost of financial transactions in America and that encourages consolidation because it's the only way you can spread the costs over larger assets. Tom Hoenig, President of the Federal Reserve Bank of Kansas City. September 2011. FACT: It has become more expensive for consumers to use banks <as a result of regulatory reform>. Elizabeth Robertson, Javelin Strategy & Research, September 2011. FACT: <The Dodd-Frank Act> could have a negative effect on the ability of banks to extend trade credit and have a critical impact on our economy. Reginald Imamura, PNC Bank, September 2011. FACT: Annual compliance costs of Dodd-Frank are already over $7 billion for banks even though only 27% of Dodd-Frank regulatory rules have been completed. The projected number of new personnel required to comply with Dodd-Frank is 26,447. American Action Forum, March, 2012. FACT: It took 20 million man hours to build the Panama Canalwe are with 22 million man hours only 1/3 of the way through major legislation. Congressman Neugebauer, February 2012. FACT: Complexity risk - the burden on financial institutions and regulators of complex, cross-cutting and incomprehensible rules may now be the most significant impediment to financial-market recovery and robust economic growth. Karen Petrou, Federal Financial Analytics, Inc, November 2011. FACT: In our view, <the Volcker Rule> would result in a dramatic increase in volatility and reduction in market liquidity that would ultimately cause borrowing costs for all municipal issuers to rise. City Group Global Market Study, January 2012.
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FACT: Consumers and small businesses are impacted in negative ways through the Dodd-Frank Act, such as: higher costs for financial products or limited products or limited credit availability at a higher cost. At some banks, certain types of credit will be completely eliminated and access to credit will be denied. Ignacio Urrabazo, Testimony before the House Subcommittee on Financial Institutions and Consumer Credit, March 14, 2012. FACT: Inflexible loan to value ratios and repayment ability criteria are likely to have the effect of putting home ownership out of reach for many Americans. Cliff McCauley, Testimony before the House Subcommittee on Financial Institutions and Consumer Credit, March 14, 2012.
A Special Look at the Economic Impact of the Durbin Amendment

FACT: 41% of merchants reported they do not intend to pass on lower debit card costs to consumers, when asked about the Durbin Amendment. DFR Survey, September, 2011. FACT: Free checking offers have decreased 30% since 2010. Bankrate Checking Account Survey, 2011. FACT: 54% of institutions report looking to re-structure or terminate rewards programs due to Durbin. Pulse Networks 2011 Debit Issuance Study, June 2011. FACT: Retail prices actually increased 1.7% since the Durbin Amendment. Electronic Payment Coalition, December, 2011. FACT: Bank fees for consumers have increased 21% from 2006, according to a Javelin Strategy & Research study, February 2012. FACT: Elimination of fee incomes through Durbin and limitations of overdraft fees are hurting community banks. These fees are critical to the survival of community banking: it is key that noninterest income helps provide many of our banking products and services for consumers. Ignacio Urrabazo, Testimony before the House Subcommittee on Financial Institutions and Consumer Credit, March 14, 2012. FACT: The Durbin Amendment will cause smaller institutions to cease offering this product to their consumers. Cliff McCauley, Testimony before the House Subcommittee on Financial Institutions and Consumer Credit, March 14, 2012.
View the entire cumulative weight database here: http://www.fsround.org/fsr/publications_and_research/cumulative-weight.asp
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Fast Facts: ECONOMIC IMPACT OF THE VOLCKER RULE
February 17, 2012 Context: The Volcker rule as currently proposed would prohibit U.S. banks from speculative proprietary trading (trading for their own accounts), among other activities. It applies not only to U.S. banks but to any foreign bank with U.S. operations or any foreign branch of a U.S. bank. Comments on the proposed rule were due on February 13, 2012.2 Estimates of the economic impact of the Volcker rule include: Cost American businesses up to $315 billion Increase borrowing costs by up to $43 billion per year Require 6,600,000 hours for implementation Dramatically reduce liquidity Lower investment returns for mutual fund, pension plans, etc. Increase the cost of credit for consumers Put U.S. banking institutions at a competitive disadvantage
FACT: Implementation of the Volcker rule will dramatically reduce liquidity, costing American businesses up to $315 billion in initial costs and increasing borrowing costs by up to $43 billion per year, according to a 2012 Oliver Wyman report. FACT: Regulators' own estimates indicate banks will have to spend nearly 6.6 million hours to implement the Volcker rule, of which more than 1.8 million hours would be required every year in perpetuity. That translates into 3,292 years, or more than 3,000 bank employees whose sole job will be complying with this rule. FACT: No other country has taken up or implemented any form of the Volcker Rule. FACT: Because other member countries of the Basel Committee have not embraced the Volcker rule, its implementation in the United States may lower U.S. bank profits domestically, according to the Congressional Research Service. FACT: The macroeconomic implications <of Volcker> could be considerable.The ability of affected banks to extend credit (in all its forms) would be reduced and regulatory arbitrage would inevitably result in a reconfiguration of financial intermediation, according to the Institute of International Finance.
The Commodity Futures Trading Commissions comment period runs through April 16, 2012.
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FACT: The Volcker Rule will harm global liquidity and international cooperation, according to letters received by the Treasury Department from officials from Canada, Japan, the United Kingdom and the European Banking Federation as reported by Bloomberg. FACT: The reduction of liquidity will not only impact banks. A 2011 Oliver Wyman study highlights how Volcker Rule will negatively impact the economy and everyday consumers, in the following ways: Higher funding and debt costs for U.S. companies Lower returns over time for investors, such as pension and mutual funds Reduced ability of households to build wealth through the securities markets Reduced ability for companies to manage risk Reduced access to credit for small or growing businesses Higher trading costs
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Fast Facts: EXPORT-IMPORT BANK
May 11, 2012 FACT: The U.S. Export-Import Bank (Ex-Im) supports 290,000 American export-related jobs at more than 3,600 companies. FACT: In FY 2011, Ex-Im provided $32.7 billion in direct export financing a 33.8% increase compared to the previous year. FACT: A large portion of Ex-Im transactions are for small businesses. In FY 2011, ExIm authorized $6 billion for small businesses a 19.5% increase compared to the previous year. On average, 85% of Ex-Im Bank transactions are for small businesses. More than 672 small businesses used Ex-Im for the first-time in FY 2011.
FACT: In FY 2011, Ex-Im authorized $7 billion in export-credit insurance, of which small-business insurance authorizations totaled $3.3 billion or 47% of authorizations. FACT: Since 2005, Ex-Im has generated over $3.4 billion above costs and loan reserves for the U.S. Treasury. FACT: Many countries have an Ex-Im Bank in place to subsidize exports. China, for example, has three such institutions. According to the U.S. Ex-Im mission statement, We help to level the playing field for U.S. exporters by matching the financing that other governments provide to their exporters.
What is the Export-Import Bank?

The Export-Import Bank of the United States (Ex-Im) is the official export credit agency of the United States. Ex-Ims mission is to assist in financing the export of U.S. goods and services to international markets. Ex-Im does not compete with private sector lenders but provides export financing products that fill gaps in trade financing. Ex-Im Bank provides working capital guarantees (pre-export financing); export credit insurance; and loan guarantees and direct loans (buyer financing). For more information, view www.exim.gov. FACT: A selection of key industries supported by Ex-Im during FY 2011 includes:
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Environment. $889 million authorized to support over $1.3 billion of U.S. exports of environmentally beneficial goods and services. Energy. $3.2 billion of U.S. export sales financed to oil-field and gas-field exploration, development and production projects, two oil-refinery projects, an ethanol production facility and a natural gas pipeline project. Construction. $1.2 billion approved in support of U.S. construction equipment and services exports to many foreign projects, including $38.5 million for exports used in highway construction in the Dominican Republic. Services. More than $5 billion authorized to support U.S. services exports, including engineering, design, construction, computer software, oil and gas drilling, architecture, transportation services, legal services, training and consulting. Agriculture. $830 million authorized to support U.S. agribusiness exports, including farm equipment, commodities, livestock, foodstuffs, farm equipment, chemicals, supplies and services.
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Fast Facts: THE FISCAL CLIFF
June 8, 2012 FACT: On January 1, 2013, a number of significant tax hikes and budget cuts simultaneously become effective. FACT: The Congressional Budget Office projects that these changes, if not stopped, will push the U.S. economy back into a recession, resulting in a 1.3% contraction of GDP in the first six months of 2013 and a 9.2% unemployment rate by the end of that year. FACT: Federal Reserve Chairman Ben Bernanke has warned that the combination of tax hikes and budget cuts could wreck our economic recovery and trigger a second downturn if Congress fails to act. If no action were to be taken by the fiscal authorities, the size of the fiscal cliff is such that theres absolutely no chance that the Federal Reserve could or would have any ability to offset that effect on the economy. Federal Reserve Chairman Ben Bernanke. April 25, 2012.
FACT: Upcoming budgetary changes include: Debt Ceiling. The current debt ceiling of $16.4 trillion was expected to carry the Treasury Department into early 2013. However, the extension of the payroll tax holiday was not offset so Congress is expected to have to raise the debt ceiling in late 2012. Sequestration Cuts. As a result of the failure of the Super Committee to reach an agreement, the automatic budget cuts of $1.2 trillion, split between defense and nondefense spending will occur immediately in the new year. Personal Tax Rates. Everybodys personal taxes will go up in 2013. The lowest 10% individual income tax bracket will expire, reverting to 15%. The highest 35% individual income tax rate will rise higher to 39.6%. People in between will see a 3% hike in their tax rate, on average. Capital Gains and Dividends Rates. The 0% and 15% tax rates on long-term capital gains will expire at the end of 2012, rising to 10% for lower tax brackets and to 20% for higher tax brackets. The current qualified dividend tax rates of 0% for lower tax brackets and 15% for higher tax brackets will rise to ordinary income tax rates. Estate Taxes. The estate-tax exemption will drop from $5 million to $1 million and the maximum estate tax rate will rise to 55%.
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FACT: If Congress cancels these spending cuts and tax increases before the end of the year, the CBO estimates the economy would grow 4.4% by 2013 and employers would add two million jobs.
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Fast Facts: FREE CHECKING DECLINES FROM DURBIN
June 1, 2012 FACT: Free checking is on the decline. In 2011, less than half of checking accounts (45%) were free of maintenance charges and balance requirements. In 2009, 76% of accounts were free.
FACT: While economic factors contribute to this trend, the entire model of free checking has been turned upside down because of new regulations, according to a Bankrate Checking Account Survey from 2011. The survey cites: Regulation E, which requires banks to get a customer's opt-in before they can charge overdraft fees on debit transactions. The Durbin Amendment, which halves the interchange banks can charge merchants for processing debit cards.
FACT: Overdraft and interchange rules have cost the industry about $12.2 billion annually, translating into 20% higher fees for consumers, according to a Javelin study from February 2012. FACT: On April 24, 2012, Fitch Ratings warned that if regulators tighten restrictions on bank overdraft policies, it could threaten a major source of bank revenue and speed up the end of free checking accounts.
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Fast Facts: MONEY MARKET FUNDS
May 4, 2012 FACT: Money market mutual funds are used extensively by individuals, municipalities, corporations, pension plans, hospitals, and universities. One out of every four Americans (over the age of 18) is invested in money market mutual funds. Over $2.7 trillion is invested in money market mutual funds. Half of all corporate treasurers invest in money market mutual funds.
FACT: An essential feature of money market mutual funds for many investors is the stable net asset value per share (NAV) at $1. If the funds market value rises above $1.0050 or falls below $0.9950, it may result in breaking the buck. In the last 40 years, two funds have broken the buck.
FACT: Money market mutual funds reporting a stable NAV are governed by Rule 2a-7 of the Investment Company Act, which specifies stringent standards for portfolio credit quality, liquidity and diversification. In March 2010, the SEC amended Rule 2a-7 to tighten further the rules credit, maturity, and liquidity standards. The amendments also increase disclosure, requiring funds to disclose on a monthly basis their market-based net asset values and every security held in their portfolio.
FACT: Even though the 2010 amendments to Rule 2a-7 increased the resiliency of money market mutual funds, regulators have been considering additional changes in recent months, such as: Moving from a stable NAV to a floating NAV o A floating NAV would create new tax and accounting burdens for individual investors and for institutions that rely on the products stable $1 NAV. According to a Treasury Strategies survey from April 2012, if the NAV was changed from stable to floating, 79% of corporate users would decrease or discontinue using money market mutual funds. Restricting redemptions o Restrictions on redemptions would prevent investors from accessing their full investment at any given time. If funds were required to institute a 30-
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day holdback of 3% of all redemptions, 90% of corporate users would decrease or discontinue using money market mutual funds. Requiring capital buffers o If funds were required to maintain a loss reserve or capital buffer, 36% of corporate users would decrease or discontinue using money market mutual funds.
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Fast Facts: MORTGAGES AT RISK FROM FLOOD INSURANCE LAPSE
May 18, 2012 FACT: The National Flood Insurance Program (NFIP) was created by Congress in 1968 to provide flood insurance, enforce floodplain management ordinances to reduce future damage, and map out flood zones in the U.S. NFIP currently covers 21,000 communities and 5.6 million property owners across the U.S.
FACT: NFIPs authorization expires on May 31st. To continue serving communities, NFIP must be reauthorized by Congress. NFIP flood insurance cannot be purchased during program lapses, nor can existing policies be renewed.
FACT: Families, home buyers and sellers, builders, realtors and others across the country that rely on NFIP will be harmed if authorization lapses. The National Association of REALTORS estimates that a lapse in authorization jeopardizes an estimated 40,000 mortgage closings per month for individuals purchasing property mapped in a special flood hazard area
FACT: Floods are not just a coastal issue. Flooding is the most common and costly natural disaster to affect every state across the country. The average annual U.S. flood losses in the past 10 years (2001-2010) were more than $2.7 billion. Historic claims data shows the top 3 states contributing the most net revenue to NFIP were on the Gulf, whereas the top 3 with the most NFIP net loss years were in the Midwest.
FACT: Flood damage is reduced by nearly $1 billion a year through communities implementing NFIP floodplain requirements and property owners purchasing of flood insurance. FACT: Over the past 5 years, the average paid flood insurance claim through NFIP was nearly $34,000.
For more policy and claim statistics, visit the National Flood Insurance Program.
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MORE FLOOD FACTS

Provided by the National Flood Insurance Program (NFIP) Floods and flash floods happen in all 50 states. Everyone lives in a flood zone. (For more information, visit our Flood Zones FAQs.) Most homeowners insurance does not cover flood damage. If you live in a Special Flood Hazard Area (SFHA) or high-risk area and have a Federally backed mortgage, your mortgage lender requires you to have flood insurance. (To find your flood risk, fill out the Flood Risk Profile.) Just an inch of water can cause costly damage to your property. Flash floods often bring walls of water 10 to 20 feet high. A car can easily be carried away by just two feet of floodwater. Hurricanes, winter storms and snowmelt are common (but often overlooked) causes of flooding. New land development can increase flood risk, especially if the construction changes natural runoff paths. Federal disaster assistance is usually a loan that must be paid back with interest. For a $50,000 loan at 4% interest, your monthly payment would be around $240 a month ($2,880 a year) for 30 years. Compare that to a $100,000 flood insurance premium, which is about $400 a year ($33 a month). If you live in a moderate-to-low risk area and are eligible for the Preferred Risk Policy, your flood insurance premium may be as low as $129 a year, including coverage for your property's contents. You are eligible to purchase flood insurance as long as your community participates in the National Flood Insurance Program. Check the Community Status Book to see if your community is already an NFIP partner. It takes 30 days after purchase for a policy to take effect, so it's important to buy insurance before the floodwaters start to rise. In a high-risk area, your home is more than twice as likely to be damaged by flood than by fire. Anyone can be financially vulnerable to floods. People outside of high-risk areas file over 20% of NFIP claims and receive one-third of disaster assistance for flooding. The average annual U.S. flood losses in the past 10 years (2001-2010) were more than $2.7 billion. When your community participates in the Community Rating System (CRS), you can qualify for an insurance premium discount of up to 45%. Read more about CRS Ratings. Since 1978, the NFIP has paid over $36.9 billion for flood insurance claims and related costs (as of 12/31/10). Over 5.5 million people currently hold flood insurance policies in more than 21,000 communities across the U.S. 48
Fast Facts: UNDERSTANDING THE STRESS TESTS

March 9, 2012 QUICK SNAPSHOT: Results of the Federal Reserves stress test for the nations largest banks will be released in the next few weeks. It is crucial to understand what the stress test is to accurately evaluate the results. The stress test IS: 1) an evaluation of bank capital under a hypothetical scenario of extreme stress 2) one of the tools for the Federal Reserve to determine a banks capacity to pay dividends and other capital distributions The stress test IS NOT: 1) a forecast or projection for the U.S. economy 2) an indicator of the current solvency of a bank 3) a reflection of a banks actual capital position during a crisis, wherein a bank could choose to take multiple mitigating courses of action
FACT: On January 9, 2012, U.S. banks (with over $50 billion in assets) were required to submit the results of their stress tests to the Federal Reserve. FACT: The stress test scenario was the toughest ever issued by the Federal Reserve testing bank capital against economic conditions far more severe than the 2008 recession: The Scenario: GDP growth drops to negative 8% in Q1 2012. The Dow drops to 5,700 in Q4 2012. The unemployment rate jumps to 13% in 2013. Commercial real estate drops an additional 23% by 2013. Housing prices fall an additional 20% by 2014. Europe goes into a recession and growth in Asia dramatically slows.
FACT: According to data from Moody Analytics, the scenario, if realized, would be catastrophic for nearly everyone: By end of 2012, 4.5 million additional jobs would be lost, compared to Moodys baseline forecast; By mid-2013, national debt will have increased by an additional $1 trillion over the baseline; 49
By the end of 2012, retail sales would be down 10%. In particular, car sales would drop off by 5 million or 33% lower than projected sales.
FACT: Historically, the scenario is highly unlikely: The unemployment rate has not gone over 11% (let alone reach 13%) since the Great Depression. During the financial crisis, the lowest the Dow went was 8113.14, (during the first quarter of 2009). GDP has dropped by 8% or more only two times since 1947: Q4 2008 (-8.9%) and Q1 1958 (-10.4%).
FACT: While results for individual banks are unknown at this time, on aggregate, U.S. banks have the highest capital levels in history. At the end of 2011, the U.S. banking industry had an aggregate Tier 1 Common Capital over $1.1 trillion and a Tier 1 Common Capital Ratio of 12.56%. The ratio is 36% higher than 2007 and a 51% percent higher than 1991, the first period on file.
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About the Roundtable

The Financial Services Roundtable represents 100 of the largest integrated financial services companies providing banking, insurance, and investment products and services to the American consumer. The mission of the Financial Services Roundtable is to protect and promote the economic vitality and integrity of its members and the United States financial system. Roundtable member companies provide fuel for Americas economic engine, accounting directly for $92.7 trillion in managed assets, $1.2 trillion in revenue, and 2.3 million jobs. More information about the Roundtable and its research can be accessed at www.fsround.org.
The Financial Services Roundtable FINANCING AMERICAS ECONOMY 1001 Pennsylvania Avenue, NW Suite 500 South Washington, D.C. 20004 202-289-4322 www.fsround.org
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Note from the Financial Services Roundtable

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Section 1: Safer and Stronger

Section 2: Committed to Communities and Customers

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Section 3: Impact of Regulation and Legislation

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Section 1: Safer and Stronger

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Fast Facts: CYBERSECURITY ATTACKS Part 1: A Growing Threat

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Fast Facts: CYBER ATTACKS Part 2: Protecting Financial Services

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Responding with help to companies that have been compromised.

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Fast Facts: FORTRESS BALANCE SHEETS

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Fast Facts: TOO BIG TO FAIL REFORMS

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Fast Facts: WHY THE ECONOMY NEEDS BIG BANKS

Fast Facts: SAY ON PAY RESULTS

Industry changes made to executive compensation Without legislative or regulatory requirement

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Fast Facts: US BANK EXPOSURE TO EUROPE

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The full report by Hamilton Place Strategies can be viewed here.

Section 2: Committed to Communities and Customers

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Fast Facts: THE FINANCIAL LITERACY GAP

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Fast Facts: FINANCIAL LITERACY, WORKING TOGETHER

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Fast Facts: PREVENTING FINANCIAL EXPLOITATION OF THE ELDERLY

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Fast Facts: RETIREMENT SECURITY Part 2: Saving for Retirement

Source: Fidelity Investments

FACT: Length of time invested matters more than contributions.

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Fast Facts: SAVING FOR COLLEGE

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Fast Facts: SMALL BUSINESS LENDING

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Section 3: Regulation and Legislation

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Fast Facts: ECONOMIC IMPACT OF DODD-FRANK ACT NEW Cost Estimates

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A Special Look at the Economic Impact of the Durbin Amendment

View the entire cumulative weight database here: http://www.fsround.org/fsr/publications_and_research/cumulative-weight.asp

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Fast Facts: ECONOMIC IMPACT OF THE VOLCKER RULE

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