News Clips – Friday, June 10, 2011
June 11, 2011 Leave a comment
| Senate Health Insurance Exchange Legislation Establishes Blueprint For Future Of Health Insurance In New York | Mentions DFS Posted on June 10, 2011 by admin |
| Chair of the Senate Standing Committee on Insurance Senator James L. Seward (R, Oneonta) and Chair of the Senate Standing Committee on Health Senator Kemp Hannon (R, Garden City) joined today to announce legislation (S.5652) has been filed in the senate that will establish a blueprint for the development and implementation of the Health Insurance Exchange in New York State, mandated by the federal Affordable Care Act (ACA)…Specifically the legislation (S.5652) would: Establish the New York Health Benefit Exchange as a new public authority with an 11 member governing board of directors; Establish regional advisory committees across the state to provide expertise and recommendations; Ensure that no general fund monies will be used to finance the exchange ; Provides that the exchange will not supersede the authority of either the superintendent of the Department of Financial Services or the Commissioner of Health. Requires the exchange to study various policy issues and submit a report to the legislature by December 31, 2011. Senate Health Insurance Exchange Legislation Establishes Blueprint For Future Of Health Insurance In New York | NewsLI.com . |
| Posted in Department of Financial Services (DFS) , Health Care Reform , Health Insurance Exchange , Insurance Industry | Comments Off |
| Curry Seen as Nominee for OCC Posted on June 10, 2011 by admin The Obama administration, moving to fill vacancies at several financial regulatory agencies, is considering nominating Thomas J. Curry to head the Office of the Comptroller of the Currency, which oversees most of the nation’s large banks, according to several people with knowledge of the deliberations. Mr. Curry, a lawyer who served as state banking commissioner in Massachusetts, now sits on the board of the Federal Deposit Insurance Corporation. Curry Seen as Nominee for Comptroller of Currency – NYTimes.com . Posted in FDIC , Financial Regulation , OCC | Comments Off |
| Foreclosure Accord is ’Closer,’ Should Include Monitor, Iowa’s Miller Says Posted on June 10, 2011 by admin Iowa Attorney General Tom Miller, the leader of a 50-state probe of foreclosure practices, said a settlement is “closer” and that state and federal officials want a monitor to ensure that banks keep their promises…Miller said it’s “likely” that principal reduction would be part of the agreement…State and federal officials are also working with government mortgage companies Fannie Mae and Freddie Mac on the settlement, he said. Any deal that sets servicing standards will affect Fannie and Freddie as investors in mortgage-backed securities, though their support for the deal isn’t necessary, Miller said. Foreclosure Accord is ’Closer,’ Should Include Monitor, Iowa’s Miller Says – Bloomberg . Posted in Fannie Mae/Freddy Mac , Foreclosure , Mortgage Backed Securities , Mortgage Industry , Mortgage Loan Servicers , Mortgage Modifications | Comments Off |
| Need for Global Insurance Standards Driven by Financial Crisis, Solvency II Posted on June 10, 2011 by admin While the European Union is primarily focused on the approach of the Solvency II regulations in 2013, there are two additional regulatory bodies who are also considering some new rules that will affect not only the EU, but also the global insurance industry. The International Financial Reporting Standards (IFRS) board is in the process of reworking its accounting standards. The International Association of Insurance Supervisors (IAIS) is in discussions on new global regulations for its members. Matthew Elderfield, Deputy Governor of Central Bank of Ireland, whose office is responsible for overseeing and implementing Ireland’s insurance regulations, mainly focused on Solvency II in his presentation at the European Insurance Form in Dublin. But he also stressed the importance of the IAIS in developing a global regulatory framework. Need for Global Insurance Standards Driven by Financial Crisis, Solvency II . Posted in Financial Regulation , Insurance Regulation (Global) | Comments Off |
| US Insurers Ask White House For Separate Timeline On Global Rules Posted on June 10, 2011 by admin U.S. insurers this week asked the White House to back a delay in global rules that would mandate new regulations and oversight for the industry’s biggest companies. The Financial Stability Board, an international committee coordinating the overhaul of global financial regulation, is working to determine which companies are so-called globally systemically important financial institutions. A proposal could come this summer. In a letter to President Barack Obama dated June 6 and released publicly Thursday, the insurers said the global insurance and reinsurance industry should be de-linked from the Financial Stability Board’s timeline for designating such firms … The insurers cited sharp differences between banking and insurance business models, and said a separate timeline would allow the Financial Stability Board to better understand the industry. US Insurers Ask White House For Separate Timeline On Global Rules . Posted in Bank Regulation (domestic) , FSB – Financial Stability Board , Insurance Industry , Insurance Regulation | Comments Off |
| New Russian A.T.M.’s Are Built to Detect Lies Posted on June 10, 2011 by admin MOSCOW — Russia’s biggest retail bank is testing a machine that the old K.G.B. might have loved, an A.T.M. with a built-in lie detector intended to prevent consumer credit fraud. Consumers with no previous relationship with the bank could talk to the machine to apply for a credit card, with no human intervention required on the bank’s end. The machine scans a passport, records fingerprints and takes a three-dimensional scan for facial recognition. And it uses voice-analysis software to help assess whether the person is truthfully answering questions that include “Are you employed?” and “At this moment, do you have any other outstanding loans?” The voice-analysis system was developed by the Speech Technology Center, a company whose other big clients include the Federal Security Service — the Russian domestic intelligence agency descended from the Soviet K.G.B. New Russian A.T.M.’s Are Built to Detect Lies – NYTimes.com . Posted in ATM Safety , Bank Fraud , Consumer Protection , Credit Cards | Comments Off |
| Massad turns out the lights on TARP Posted on June 10, 2011 by admin Timothy Massad has what might be one of the most unenviable tasks in Washington: winding down the Troubled Asset Relief Program (TARP), which cemented “bailout” as a pejorative and drove incumbents from office. But Massad, who has served as Treasury’s acting assistant secretary for financial stability since last September, said the backlash to TARP isn’t evident in his daily interactions. Massad turns out the lights on TARP – TheHill.com . Posted in Bank Bail-Outs , TARP , Treasury Department | Comments Off |
| Citi Data Theft Points Up a Nagging Bank Security Problem Posted on June 10, 2011 by admin Citigroup’s revelation that hackers stole personal information from more than 200,000 credit card holders makes it one of the largest direct attacks on a major bank. Even more striking is that similar data breaches have been occurring for years — and the financial industry has failed to prevent them. Details remain scarce, but the disclosure of the Citigroup breach on Thursday quickly turned into a debate on whether the banks and major credit card companies had invested enough money to safeguard the personal information of their customers. Citi Data Theft Points Up a Nagging Problem – NYTimes.com . Posted in Bank Regulation (domestic) , Consumer Protection , Credit Cards , Cyber Security , Identity Theft | Comments Off |
| FHFA Issues Directives to GSEs to Make Foreclosures Less Painful for Borrowers | Mortgage News | Daily National and State Headlines Posted on June 10, 2011 by admin The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to establish consistent mortgage loan servicing and delinquency management requirements. Consistent with the directive, this announcement communicates to Fannie Mae servicers clear and consistent expectations regarding the maximum allowable time frame to complete the foreclosure process, and standardized requirements for determining compensatory fees for mortgage loans that are held in Fannie Mae’s portfolio or that are part of an MBS pool that has the special servicing option or a shared-risk MBS pool for which Fannie Mae markets the acquired property. With this announcement, Fannie Mae has updated the maximum number of allowable days within which routine foreclosure proceedings are to be completed in each jurisdiction as provided in the Servicing Guide, Part VIII, Section 104.08: Allowable Time Frames for Completing Foreclosure, and in Foreclosure Time Frames on eFannieMae.com. FHFA Issues Directives to GSEs to Make Foreclosures Less Painful for Borrowers | Mortgage News | Daily National and State Headlines . Posted in Fannie Mae/Freddy Mac , Foreclosure , Mortgage Backed Securities , Mortgage Industry , Mortgage Loan Servicers | Comments Off |
| Fee-blocked mortgage servicers may still get HAMP money Posted on June 10, 2011 by admin Three penalized mortgage servicers may still get Home Affordable Modification Program fees, withheld from the Treasury Department, if the companies make necessary corrections in a timely manner. The Treasury released its first quarter HAMP compliance review of the top-10 mortgage servicers Thursday. The government will withhold HAMP payments due to Bank of America , Wells Fargo and JPMorgan Chase because of poor performance. Ocwen Financial scored similar poor results, but the Treasury said it will not withhold fees because the company acquired a large servicing portfolio from HomEq during the review period. Fee-blocked mortgage servicers may still get HAMP money « HousingWire . Posted in HAMP , Mortgage Loan Servicers | Comments Off |
| Geithner: More Regulatory Arbitrage Fears Posted on June 10, 2011 by admin Treasury Secretary Tim Geithner this week warned of the danger of other nations not adopting Dodd-Frank style reforms, especially on derivatives trading. Now CFTC Commissioner Bart Chilton has done the same in comments to the High Frequency Trading World conference in Amsterdam: “[T]rading could migrate to any jurisdiction that does not adopt equivalent protections to those of the U.S. and E.U. I’m concerned about regulatory arbitrage and about lax regulation.” Read the full remarks, including Chilton’s description of high frequency traders as “Cheetahs”: http://politi.co/iF020Z Posted in Bank Regulation (domestic) , Bank Regulation (Foreign) , Derivatives , Financial Regulation | Comments Off |
| State & Political News | June 9, 2011 Posted on June 10, 2011 by admin Despite some weaknesses, N.Y. ethics bill set for adoption The state Legislature next week is set to approve Cuomo’s bill to overhaul the state’s ethics laws. While the bill would greatly expand disclosure of lawmakers’ income and business dealings, it would also give their appointees to a new commission the power to quash ethics investigations. http://www.theithacajournal.com/article/20110609/NEWS10/106090429/Despite-some-weaknesses-N-Y-ethics-bill-set-adoption?odyssey=tab%7Ctopnews%7Ctext%7CFRONTPAGE No specific job titles exempt from layoffs No specific job titles are exempt yet from a plan to lay off 9,800 NYS workers, and everyone from state troopers and prison guards to nurses could be getting pink slips in the coming weeks, Cuomo administration officials said. A first wave of reductions will kick in July 15. http://www.buffalonews.com/city/article449308.ece Unions Blast Layoff Plan The Public Employees Federation, which represents 56,000 professional, scientific and technical employees, said in a statement that it is “appalled” at what the governor is doing. The union, which is the state’s second largest, has been waiting for a response from the governor’s negotiators on a proposal…The Civil Service Employees Association, the state’s largest union, has been negotiating in good faith and trying to find alternatives to layoffs, said Danny Donohue, union president. The news that the governor’s administration is preparing for layoffs is not helping the process, he said. http://www.pressconnects.com/article/20110609/NEWS01/106090401/Cuomo-moving-forward-state-layoffs?odyssey=tab|topnews|text|FRONTPAGE Layoff Prep Begins, But Data training On “bumping” notices Hasn’t Begun It’s one of the more unpleasant steps involved in state layoffs: distribution of green and blue cards to those whose jobs are being targeted….As the first wave of a new series of layoffs nears, the state plans to digitize the cards…”The process is the same: Instead of using a hard copy, it will be in a computer,” Department of Civil Service spokeswoman Lori Chapko said But in what could be one of many complications on the road to job cuts, the people handling the data haven’t been trained yet. According to a bulletin in an obscure corner of the state Civil Service website, training on how to use the new Electronic Reemployment Card System is set to start this month in Albany, with more sessions in other parts of the state. http://www.timesunion.com/local/article/State-Civil-Service-workers-lack-training-to-1418084.php DiNapoli submits plan to reform campaign finance law for comptroller’s race A new bill would overhaul the state’s campaign finance laws for candidates seeking the state comptroller’s office, enforcing strict spending limits and capping contributions. The legislation was unveiled today by current Comptroller Thomas DiNapoi,…If passed, those running for comptroller would be subject to a spending limit …the next time the statewide office is up for grabs. http://polhudson.lohudblogs.com/2011/06/09/dinapoli-submits-plan-to-reform-campaign-finance-law-for-comptrollers-race/ Top Court rules officials improperly bypassed lowest bidder New York’s top court ruled Thursday that awarding municipal contracts for services such as trash hauling to anyone but the lowest qualified bidder is illegal, and raises questions of favoritism or even fraud. Two judges disagreed, arguing the strict interpretation by the majority will hamstring local officials who end up with shoddy public works from lowballing bidders. http://www.timesunion.com/news/article/Top-court-trashes-town-vote-to-pick-costly-waste-1418078.php Trove of FOIL-ed Governor’s E-Mails Draws Press to Alaska On Friday, more than 24,000 pages of e-mails Ms. Palin sent as governor, mostly using private accounts, are to be released in response to public records requests first made in 2008. After all the delay…the relevance of the e-mails and what they might reveal is unclear. But that has not diminished many efforts to obtain them, or the challenge of digesting what an official in charge of their release suggested in an interview would be “six boxes now, not five” of hard-copy documents. http://www.nytimes.com/2011/06/10/us/10palin.html?_r=1&ref=politics Politician Safety Bill Advances in Albany (WSJ) Lawmakers in Albany say they’re tired of being treated as punching bags. One is taking those concerns literally. State Sen. Eric Adams, a Democrat from Brooklyn, wants to adjust the penal code so that sentences for assaulting elected officials are harsher than for attacking regular civilians. He’s proposing to establish the felony offense of assaulting an elected official. Those convicted of such a crime would face up to 5½ years—more than double the maximum term normally handed down. http://professional.wsj.com/article/SB10001424052702304259304576376001997079940.html?mg=reno-wsj Posted in Uncategorized | Comments Off |
| Goldman Fined $10 Million Over ‘Trading Huddles’ – NYTimes.com Posted on June 9, 2011 by admin Stock research has long been considered a big money loser on Wall Street. It costs millions to produce and most investors are unwilling to pay hard cash for it. But in 2006 Goldman Sachs came up with a plan to leverage its equity research, funneling short-term stock tips to its biggest trading clients. On Thursday Massachusetts regulators fined Goldman Sachs $10 million for this practice, calling it “a dishonest and unethical violation” of the state’s securities act. “We verified that there was a preference of some customers at the expense of others,” William Galvin, the state’s chief financial regulator, said in an interview. Goldman Fined $10 Million Over ‘Trading Huddles’ – NYTimes.com . Posted in Bank Regulation (domestic) , Financial Regulation , FinRA | Comments Off |
| Bing Takes Cuomo Appointment | Mentions DFS Posted on June 9, 2011 by admin Assemblyman Jonathan Bing made a lot of enemies in the labor movement when he authored a bill that would have gotten rid of last in first out. He made so many enemies that his re-election to his seat was very much in doubt… But now thanks to Gov. Andrew Cuomo Bing has a new gig–special deputy superintendent of the New York Liquidation Bureau…Bing put out this statement to supporters this morning: “Dear Friends: This morning, Governor Andrew Cuomo announced my appointment as the Special Deputy Superintendent of the New York State Liquidation Bureau (NYLB). Receiving no taxpayer funding, the NYLB is a unique, 100-year old entity which protects the policyholders and creditors of insurance companies that have been declared impaired or insolvent. I also look forward to playing a role in the development of the new Department of Financial Services that was created in the recently passed State budget…” Gotham Gazette – The Wonkster » Blog Archive » Bing Takes Cuomo Appointment . Posted in Department of Financial Services (DFS) | Comments Off |
| Citi Says Credit Card Customers’ Data Was Hacked Posted on June 9, 2011 by admin Citigroup acknowledged on Thursday that unidentified hackers had breached its security and gained access to the data of hundreds of thousands of its credit card customers in North America. Citi Says Credit Card Customers’ Data Was Hacked – NYTimes.com . Posted in Consumer Protection , Credit Cards , Cyber Security , Identity Theft | Comments Off |
| Op-Ed Mortgage Market Must Be Balanced Posted on June 9, 2011 by admin Regulators and financiers could be focused on the wrong mortgage market. They are right that healthy American home lending hinges on the private sector’s ability to finance all or most of it, rather than relying on government-run Fannie Mae and Freddie Mac or their equivalents. But architects of the postcrisis home loan market may be assuming it needs to be larger than it really does. It could be scarcely half as big as the current $10.5 trillion and therefore much easier to finance. Mortgage Market Must Be Balanced – Reuters Breakingviews – NYTimes.com . Posted in Fannie Mae/Freddy Mac , Financial Regulation , Mortgage Industry | Comments Off |
| S.E.C. Stops Would-Be Buyers of Pabst Beer Posted on June 9, 2011 by admin S.E.C. Stops Would-Be Buyers of Pabst Beer A plan to raise money through crowdsourcing online to buy the maker of Pabst Blue Ribbon fizzed out after the S.E.C. declared that it violated securities laws… According to the S.E.C., Mr. Migliozzi, 45, and Mr. Flatow, 41, created a Web site, BuyaBeerCompany.com, in November 2009. The idea was to raise the money needed to buy Pabst by collecting pledges via their Web site, Facebook and Twitter through a process called crowdsourcing. S.E.C. Stops Would-Be Buyers of Pabst Beer – NYTimes.com . Posted in Financial Regulation , SEC | Comments Off |
| Bank Said No? Shadow Banking Fills a Void in Lending Posted on June 9, 2011 by admin With traditional lenders still avoiding risky borrowers in the wake of the financial crisis, hedge funds and other opportunistic investors are stepping into the void. They are going after midsize businesses that cannot easily raise money in the bond markets like their bigger brethren…These middle-market companies, which generate $6 trillion in revenue a year and employ 32 million people in the United States, are borrowing billions of dollars from the hedge funds for product development, strategic acquisitions and even day-to-day operations like payroll and utilities. But the lending force also poses a significant risk to the companies and the broader economy, given the unregulated nature of this shadow banking system. Bank Said No? Hedge Funds Fill a Void in Lending – NYTimes.com . Posted in Shadow Banking | Comments Off |
| Policy Makers Split Over Size of Bank Capital – WSJ.com Posted on June 9, 2011 by admin The Financial Stability Board, an international committee coordinating the overhaul of global financial regulation, met in Frankfurt on Wednesday to continue addressing the issue as it tries to gain agreement ahead of a meeting this fall of the Group of 20 industrialized and developing economies. In a speech last week, Fed Governor Daniel Tarullo suggested institutions could be ordered to hold capital ranging from 8.4% to 14% of assets, adjusted for the amount of risk they pose. People familiar with the discussions say the Fed is likely to support a buffer of about 10%—or another 3% on top of the 7% agreed to last year by global policy makers in Basel, Switzerland. Banks would have to boost their capital reserves using common equity, a stricter form of capital than many want to use because it dilutes the shares outstanding. Policy Makers Split Over Size of Bank Capital – WSJ.com . Posted in Bank Regulation (domestic) , Bank Regulation (Foreign) , Basel II | Basel III , Capital Requirements | Comments Off |
| Federal fees halted to 3 mortgage servicers Posted on June 9, 2011 by admin Bank of America, J.P. Morgan Chase and Wells Fargo need to make “substantial improvements” to collect fees through the Making Home Affordable Program, which helps struggling borrowers by lowering their monthly mortgage payments. The companies failed to meet basic program requirements, such as properly contacting borrowers, the official said. The details are scheduled to be released Thursday in a report that will assess the performance of the 10 largest participating servicers. Through the initiative, servicers can collect at least $1,000 for each loan they permanently modify. The payment is meant to entice servicers to participate in the voluntary program, which has doled out $560 million in payments since its launch in March 2009. The three targeted servicers — which received $24 million in payments last month — will not receive payments for permanent modifications reported from June onward until they address their weaknesses. No estimates are available yet for how much will be withheld. Federal fees halted to 3 mortgage servicers – The Washington Post . Posted in Financial Crisis , Foreclosure , HAMP , Mortgage Industry , Mortgage Loan Servicers , Mortgage Modifications | Comments Off |
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