Thousands of small U.S. banks are feeling a financial pinch from the government's efforts to punish executives and directors of banks that collapsed during the height of the financial crisis, the Wall Street Journal reported today. Insurance premiums that cover directors and officers are rising sharply as the Federal Deposit Insurance Corp., seeking to replenish funds paid out to depositors of collapsed banks, accelerates its legal pursuit of officials from failed community lenders. The FDIC's efforts have brought the agency hundreds of millions of dollars in legal settlements, well short of the billions in losses from bank failures, but that is cutting into banks' bottom line when many still are struggling.
