BIRMINGHAM (ALABAMA) (dpa-AFX) - Regions Financial Corp.'s (RF) board is looking into whether executives delayed public disclosure of loans that were going sour during the financial crisis, the Wall Street Journal reported, citing people familiar with the matter.
According to the Journal, the audit committee of the Birmingham, Alabama-based bank began its investigation after the Federal Reserve expressed concerns about past practices.
Investigators are looking at so-called extend-and-pretend cases, where a bank gives a borrower more time and delays reclassifying a souring loan, as well as at 'troubled-debt restructurings,' where a bank breaks up a nonperforming loan and labels a portion of it as performing, the report said.
Separately, Securities and Exchange Commission probe on Morgan Keegan & Co., Regions' investment-bank unit, on whether it defrauded investors in subprime securities is likely to result in a settlement in which Regions pays about $200 million, the report noted.
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