News Clips – Wednesday, May 4, 2011
May 4, 2011 Leave a comment
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| State & Political News | May 4, 2011 Posted on May 4, 2011 by admin A.M. Roundup: Empire Plan premiums rising Health care premiums for state employees could rise as much as 17.9 percent next year, according to an early estimate from The Empire Plan, one of the major insurance providers for the state. While the increase is only a projection and is subject to negotiation, the steep projected increase sheds light on why the Cuomo administration is intent on getting health insurance concessions in its latest round of labor contracts. The projections for The Empire Plan, the major health insurance offering for state employees, are outlined in a report from the state Civil Service Department to agency benefits administrators. The document, obtained by the Times Union, includes a review of how much was paid out and a projection of 2012 rates, which must be submitted to the state by September. http://www.timesunion.com/local/article/Empire-Plan-cost-balloons-1364492.php Andy’s Capitol idea Gov. Cuomo A No-Show For Legislative Correspondents Show Earth Day measures to limit pollution, expand oversight of DEC Driving + Texting In NY = Busted (Soon) Obama to Visit Ground Zero A National Security Strategy That Doesn’t Focus on Threats |
| Report Finds Credit-Impaired Minorities Have Limited Access to Mortgages | Mortgage News Posted on May 4, 2011 by admin Access to mortgage refinance loans sharply declined in communities of color—and increased substantially in predominantly White neighborhoods, according to a report released by a multistate coalition of groups. The report, “Paying More for the American Dream V,” examines changes in conventional refinance lending between 2008 and 2009 in seven metropolitan areas: Boston; Charlotte, N.C.; Chicago; Cleveland; Los Angeles; New York City; and Rochester, N.Y. It also compares 2009 loan denial rates across neighborhoods. “Paying More for the American Dream V” was published by the the California Reinvestment Coalition, Community Reinvestment Association of North Carolina, Empire Justice Center, Massachusetts Affordable Housing Alliance, Neighborhood Economic Development Advocacy Project, Ohio Fair Lending Coalition and the Woodstock Institute. Report Finds Credit-Impaired Minorities Have Limited Access to Mortgages . Posted in Consumer Protection , mortgage lending/brokering | Comments Off |
| Dodd-Frank: Defund, delay, defang Posted on May 4, 2011 by admin A House Financial Services subcommittee is slated to weigh three measures that would tweak the new Consumer Financial Protection Bureau (CFPB), including one that would eliminate the as-yet unnamed director of the agency in favor of a bipartisan commission. The other two would make it easier for the new Financial Stability Oversight Council to overrule CFPB regulations and postpone when the CFPB can begin work, should a director not be in place when the bureau goes live in July. Not surprisingly, Elizabeth Warren, the president’s CFPB architect and the de facto face of the fledgling agency, has made it clear that she has no interest in those tweaks — or any other current proposed ones, for that matter…the House Agriculture Committee is expected to mark up a bill that would delay, for 18 months, the implementation of new regulations on financial derivatives. OVERNIGHT MONEY: Defund, delay, defang – The Hill’s On The Money . Posted in CFPB , Dodd-Frank | Comments Off |
| China’s ‘Basel’, Carbon Fraud, Dodd-Frank, Swiss-U.K. Tax Deal: Compliance – Bloomberg Posted on May 4, 2011 by admin Bloomberg Round-Up on: China’s ‘Basel’, Dodd-Frank, Swiss-U.K. Tax Deal: Compliance via China’s ‘Basel’, Carbon Fraud, Dodd-Frank, Swiss-U.K. Tax Deal: Compliance – Bloomberg . Posted in Bank Regulation (Foreign) , Bank Regulation (domestic) , Basel II | Basel III | Comments Off |
| FDIC closes pilot CMBS deal Posted on May 4, 2011 by admin The Federal Deposit Insurance Corp. closed a $394.3 million commercial mortgage-backed securitization, the first of its kind. The collateral is drawn from performing commercial and multifamily mortgages from 13 failed banks. The FDIC has structured similar solutions for failed bank assets the regulator assumed during the financial crisis with residential mortgage-backed securitizations, but not involving commercial real estate. The FDIC did similar deals before the credit crisis, but the current deal comes to market in a new regulatory environment. The investors…represented a wide variety of organizations, including banks, insurance companies and money managers, which paid par for the senior certificates, according to the FDIC. FDIC closes pilot CMBS deal « HousingWire . Posted in FDIC , Mortgage Backed Securities | Comments Off |
| China Bank Regulator Issues New Banking Regulations Under Basel III Posted on May 4, 2011 by admin Systemically important financial institutions will have to comply with a minimum capital adequacy ratio of 11.5%, while non-systemically important financial institutions will face a capital adequacy ratio of 10.5%, the China Banking Regulatory Commission said in a statement. Under current regulations, “large” banks are already required to have an 11.5% capital adequacy ratio, while “small and medium-sized” banks must have a capital adequacy ratio of 10.0%, but the banks are not divided according to systematic importance, according to the CBRC statement. The new regulations will begin to be implemented in 2012 and banks will be expected to meet the requirements by 2016, two years ahead of the Basel III schedule, the CBRC said. China Bank Regulator Issues New Banking Regulations Under Basel III . Posted in Bank Regulation (Foreign) , Basel II | Basel III | Comments Off |
| Goldman Probed by U.S. Agencies After Senate Refers Mortgage-Bond Findings Posted on May 4, 2011 by admin U.S. senators formally referred to the Justice Department and the Securities and Exchange Commission an investigative report that found Goldman Sachs Group Inc.misled clients about mortgage-linked securities. Senators Carl Levin of Michigan, the Democratic chairman of the Permanent Subcommittee on Investigations, Tom Coburn of Oklahoma, the senior Republican, signed a letter asking the agencies to examine the panel’s report, Levin said in an interview yesterday. The results of the investigation, made public by the committee April 13, lay much of the blame for the credit crisis on Wall Street banks that earned billions by enticing clients to buy the risky bond deals. “If something comes up that needs to be reviewed by some agency, it gets referred,” said Levin. “That’s the way we do it.” Goldman Probed by U.S. Agencies After Senate Refers Mortgage-Bond Findings – Bloomberg . Posted in Financial Crisis , Mortgage Backed Securities , SEC | Comments Off |
| AIG unit must pay $86.7 million in arbitration ruling Posted on May 4, 2011 by admin A unit of bailed-out insurer American International Group must pay $86.7 million to a U.S.-based unit of a Belgian bank over a dispute involving an investor in life insurance policies, the Wall Street Journal reported. The American Arbitration Association panel, which ordered the payment, ruled 2-1 in favor of Lonsdale LLC, a unit of KBC Group NV, based in Belgium. Its ruling went against AIG’s life insurance unit, Lexington Insurance Co. Both Lexington and Lonsdale alleged breaches of a complex credit-insurance agreement, the paper reported on Tuesday. The arbitrators who ruled in favor of Lonsdale said Lexington failed to prove that policies were originated through a prohibited act or that Lonsdale concealed any material fact. AIG unit must pay $86.7 million in arbitration ruling: report | Reuters . Posted in Bank Regulation (domestic) , Insurance , Lawsuit | Comments Off |
| SEC’s Schapiro taps new deputy chief of staff Posted on May 4, 2011 by admin U.S. Securities and Exchange Commission Chairman Mary Schapiro has tapped SEC insider Jim Burns as her new deputy chief of staff to replace Kayla Gillan, who left the agency on Friday, according to an internal email reviewed by Reuters. As the No. 2 staffer in Schapiro’s office, Burns will be heavily involved in advising the chairman on policy matters and planning the timing for implementing roughly 100 new rules required by the Dodd-Frank Wall Street overhaul law. Burns has already served on the chairman’s staff since March 2010 where he worked as her liaison to the trading and markets division, the unit responsible for writing most of the new rules for the $600 trillion over-the-counter derivatives market. SEC’s Schapiro taps new deputy chief of staff | Reuters . Posted in Bank Regulation (domestic) , SEC | Comments Off |
| The Martin Act | Wall Street’s Sheriff Needs Many More Deputies Posted on May 4, 2011 by admin Three years after the collapse of Countrywide Financial Corp. and Lehman Brothers Holdings Inc. ushered in the hardest recession since the Great Depression, throwing millions of Americans out of their jobs and homes, almost none of the wrongdoers has been held accountable or victims made whole… The same 1921 law that deputized famed Wall Street sheriffs Eliot Spitzer and Andrew Cuomo, the Martin Act, bears substantial responsibility for blocking defrauded investors — particularly New York’s pension funds — from recouping their losses and holding wrongdoers accountable. The Martin Act has succeeded in siccing state law enforcement on financial wrongdoing, particularly during periods when the federal government’s enthusiasm for such work has waned. It’s also come up woefully short in helping investors get their looted money back. The Martin Act’s strength lies in its common-sense understanding of how the securities markets really function. Wall Street’s Sheriff Needs Many More Deputies: Rory Lancman – Bloomberg . Posted in Bank Regulation (domestic) | Comments Off |
| New York Issues Subpoenas to Foreclosure Firm – NYTimes.com Posted on May 4, 2011 by admin Eric T. Schneiderman, the New York attorney general, has issued subpoenas to the state’s largest foreclosure law firm and a related company, indicating that his office has some doubts about the effort by state attorneys general to resolve questionable foreclosure practices among the nation’s top banks. The New York investigation appears to center on two of the state’s foreclosure industry giants: the Steven J. Baum firm, headquartered in Amherst, N.Y., and Pillar Processing, a default servicing firm set up by Mr. Baum that was spun off in 2007. Representing JPMorgan Chase, Wells Fargo and other large banks, the Baum firm has handled an estimated 40 percent of foreclosure cases in the state. Pillar Processing provides extensive services to the firm. New York Issues Subpoenas to Foreclosure Firm – NYTimes.com . Posted in Foreclosure , Lawsuit , Mortgage Modifications , Mortgage Servicers | Comments Off |
| Regional Feds shouldn’t have policy votes: U.S. rep Posted on May 4, 2011 by admin A leading Democratic in the U.S. House of Representatives has renewed efforts to weaken the power of regional Federal Reserve banks, introducing legislation to deprive them of any vote on monetary policy. Representative Barney Frank, the top Democrat on the House committee that oversees the Fed, said his proposal would tackle “one of the greatest anomalies in our democratic system” — allowing regional Fed bank presidents with no direct political accountability to have a say in setting U.S. interest rates. “Although it is extremely useful to have the advice of the representatives of private interests, they should not vote on this extremely important issue of monetary policy,” the Massachusetts lawmaker said in a statement on Tuesday. Regional Feds shouldn’t have policy votes: U.S. rep | Reuters . Posted in Bank Regulation (domestic) , Federal Reserve Board/The Fed | Comments Off |
| No Fantasy in F.D.I.C. Lehman Paper – NYTimes.com Posted on May 4, 2011 by admin Stephen J. Lubben, a professor at Seton Hall Law School, wrote a column for DealBook last week, “The F.D.I.C.’s Lehman Fantasy,” about a paper by the Federal Deposit Insurance Corporation on Lehman Brothers and the new resolution authority in the Dodd-Frank Act. In response to Professor Lubben’s column, Michael H. Krimminger, the general counsel of the F.D.I.C., offers this view: The professor’s column is long on caricature and innuendo, but short on legal or factual reality. A look at the Lehman paper or Title II of Dodd-Frank refutes the caricature he offers. First, the government does not subsidize the F.D.I.C. in a Dodd-Frank resolution — its costs will be administrative expenses as in bankruptcy. (See DFA Sec. 210(b)(1).) None of the Dodd-Frank costs will be borne by taxpayers. Even in its non-Dodd-Frank role, the F.D.I.C. is funded solely by assessments from banks — and has continued to do so throughout this crisis… No Fantasy in F.D.I.C. Lehman Paper – NYTimes.com . Posted in Bank Regulation (domestic) , Dodd-Frank , FDIC | Comments Off |
| U.S. Agencies Probing Goldman Findings After Senate Referral – Bloomberg Posted on May 4, 2011 by admin U.S. senators formally referred to the Justice Department and the Securities and Exchange Commission an investigative report that found Goldman Sachs Group Inc. misled clients about mortgage-linked securities. Senators Carl Levin of Michigan, the Democratic chairman of the Permanent Subcommittee on Investigations, Tom Coburn of Oklahoma, the senior Republican, signed a letter asking the agencies to examine the panel’s report, Levin said in an interview yesterday. The results of the investigation, made public by the committee April 13, lay much of the blame for the credit crisis on Wall Street banks that earned billions by enticing clients to buy the risky bond deals. “If something comes up that needs to be reviewed by some agency, it gets referred,” said Levin. “That’s the way we do it.” The scrutiny is a setback for Goldman Sachs, which hired lawyers, lobbyists and public relations specialists to monitor the two-year Senate probe and tamp down any controversy that arose from the subcommittee’s conclusions. John Hart, Coburn’s spokesman, did not respond to a request for comment. SEC spokesman John Nester declined to comment. U.S. Agencies Probing Goldman Findings After Senate Referral – Bloomberg . Posted in Bank Regulation (domestic) , Financial Crisis , Mortgage Backed Securities , SEC | Comments Off |
| U.S. Regulators Face Budget Pinch as Mandates Widen – NYTimes.com Posted on May 4, 2011 by admin Government regulators on the Wall Street beat have long been outnumbered and outspent by the companies they are supposed to police. But even after receiving budget increases from Congress last month, regulators are still falling behind. The Securities and Exchange Commission and the Commodity Futures Trading Commission are struggling to fill crucial jobs, enforce new rules, upgrade market surveillance technology and pay for travel. On a recent trip to New York to tour a trading floor, a group of employees from the commodities watchdog rode Mega Bus both ways, arriving late to their meeting despite a 5:30 a.m. departure. The bus, which cost $30 a person round trip, saved the agency roughly $1,000 over Amtrak…The money squeeze comes as Wall Street regulators take on added responsibilities in the wake of the financial crisis, including monitoring hedge funds, overseeing the $600 trillion derivatives market and other tasks mandated by the Dodd-Frank law. Their budgets may soon be even tighter, with Republicans looking to cut the regulators’ spending beginning Oct. 1, the start of the government’s fiscal year. Gary Gensler, the chairman of the commodities agency, and Mary L. Schapiro, the head of the S.E.C., will discuss their budgets for the 2012 fiscal year before a Senate committee today. U.S. Regulators Face Budget Pinch as Mandates Widen – NYTimes.com . Posted in Bank Regulation (domestic) , CFTC , SEC | Comments Off |
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