The US Federal Reserve just fined Orrstown Bank for selling mortgages without flood insurance on the underlying property. This sloppiness probably happened because Orrstown's residential loans jumped ~35% in the course of 1 year ($503e6 in 2006 from $373e6 in 2005, for a point of contrast, PSECU did 12%).

According to their latest SEC quarterly filing, Orrstown still holds those mortgages. Let's just hope that they didn't also screw up the valuation of the underlying houseowner's financial stability.

What sources do you use to find out about these things? In more general terms, how do you monitor the institutions that hold your money? -- David W