News Clips – Tuesday, June 14, 2011
June 14, 2011 Leave a comment
| Ben Lawsky discusses Gov. Andrew Cuomo’s new Financial Services Department Posted on June 14, 2011 by admin |
| To head the new Department of Financial Services, Gov. Andrew Cuomo tapped one of his closest advisors, Ben Lawsky, his chief of staff and a prosecutor who worked on Cuomo’s mortgage securities fraud cases during his term as attorney general. Lawsky, a New York native, will continue his position as Cuomo’s chief of staff until the new agency becomes operational in October. He spoke with The Capitol about lessons New York learned during the financial crisis and why he’s not the scourge of Wall Street. What follows is an edited transcript. Ben Lawsky discusses Gov. Andrew Cuomo’s new financial services department . |
| Posted in Ben Lawsky , Department of Financial Services (DFS) | Comments Off |
| DOE Audit to Determine Whether Regs Were leaked to Wall Street Posted on June 14, 2011 by admin The Department of Education (DOE) will perform an audit to determine whether employees provided information to Wall Street investors who were looking to gain an edge in trading on for-profit colleges. Kathleen Tighe, the department’s inspector general, will explore whether investors were tipped off in advance about the regulations drafted on the for-profit education industry. She said the matter could be referred to the Securities and Exchange Commission. Audit to determine whether college reg was leaked to Wall Street – The Hill’s On The Money . Posted in Financial Regulation , Insider Trading , SEC , Student Loans | Comments Off |
| Subcommittee Hearing Today “Does the Dodd-Frank Act End Too Big to Fail?” Posted on June 14, 2011 by admin Read the Hearing Prep Memo: http://politi.co/kky7xL Lubben Testimony: “What to Do When Financial Institutions Fail” – This morning I’m off to Washington to give the House Financial Services Subcommittee on Financial Institutions my thoughts on Dodd-Frank’s Orderly Liquidation Authority….What I’d like to do in this column is think about the answer to a question I’m bound to get: What, precisely would you do with regard to financial institutions in distress?…I think there are two key parts of the liquidation authority that need to remain. First, you need extreme speed…The court should be able to authorize the sale of the debtor to either a real purchaser or a bridge bank or other government backed entity on something like 12 hours notice. Second, I think you need, at least, a government entity to backstop the debtor-in-possession financing. Moreover, since I’m not sanguine about the ability of private financing to come together with sufficient speed, in a sufficient size, I think we have to be realistic about this: Government financing is going to occur in most cases, for at least the beginning of the case. What I might change from the orderly liquidation authority is what happens two weeks or a month into the case… What to Do When Financial Institutions Fail – NYTimes.com . Posted in Bank Closings , Orderly Liquidation Authority , Too Big To Fail | Comments Off |
| Visa Proposed a Deal with Sen. Manchin on Interchange Fees Posted on June 14, 2011 by admin A letter sent by Visa chief executive Joseph W. Saunders to Sen. Joe Manchin (D-W.Va.) last week outlining a proposed deal under which Visa promised to lower debit card interchange fees for small businesses with $10 million or less in total sales by 35 percent following passage of the Tester amendment delaying bigger reductions in debit card fees. … Manchin voted for Tester but it still failed to overcome a filibuster. Letter: http://politi.co/lSa7dA Posted in Consumer Protection , Credit Cards , Durbin Amendment , Interchange Fees | Comments Off |
| Issa wants more evidence before granting servicer subpoenas Posted on June 14, 2011 by admin Rep. Darrell Issa (R-Calif.) asked Rep. Elijah Cummings (D-Md.) last week to present “a clear case” before he issues a subpoena to mortgage servicers under investigation for possible mishandled foreclosures. Cummings, a ranking member of the House Committee on Oversight and Government Reform, opened his investigation in February. In May, he sent a letter to Issa, chairman of the committee, formerly requesting to subpoena servicers that refused his requests for information. Issa wants more evidence before granting servicer subpoenas « HousingWire . Posted in Foreclosure , Mortgage Industry , Mortgage Loan Servicers | Comments Off |
| Goldman Took Intern With Link to L.I.A. Posted on June 14, 2011 by admin Goldman Took Intern With Link to L.I.A. The brother of the Libyan Investment Authority’s former deputy head was working as a paid intern for Goldman Sachs at the same time the bank was losing the sovereign wealth fund’s money, The Financial Times has discovered. FINANCIAL TIMES Posted in Bank Regulation (domestic) , Bank Regulation (Foreign) | Comments Off |
| U.S. Senate Computer Networks Infiltrated Posted on June 14, 2011 by admin A group of U.S. and European hackers said today it had accessed a U.S. Senate computer server and backed up the boast by posting computer files obtained in the attack on the Internet. LulzSec, a hacker activist group made up of former members of the hacker organization Anonymous, said it had also broken into the networks of Bethesda Softworks and released sign-ons and passwords of users of a pornography website. The actions follow more than two weeks worth of cyber attacks by the group, which also include hacking the computer networks of PBS, the television network Fox, and the Atlanta chapter of a U.S. Federal Bureau of Investigation affiliate called InfraGuard. “We don’t like the U.S. government very much,” the hackers said in a release that accompanied technical data from senate.gov, the U.S. Senate website, which cyber security experts said confirmed they had hacked the server. U.S. Senate Computer Networks Infiltrated by Domestic, European Activists – Bloomberg . Posted in Cyber Security | Comments Off |
| Vienna museum told to return Nazi-looted art Posted on June 14, 2011 by admin VIENNA — An art commission charged with returning Nazi-plundered works has recommended a Vienna museum hand over five drawings by Schiele to the descendants of their Jewish owner, it was reported Monday. The drawings by Austrian painter Egon Schiele (1890-1918) belonged to Viennese man Karl Maylander, who was deported to a Polish labour camp in 1941, according to culture ministry documents. The works including “Maedchen mit Sonnenbrille” (Girl with Sunglasses) are held by the Albertina museum which has been asked to return them to Maylander’s family, the Standard newspaper reported online. The dealer knew Schiele who produced his portrait a year before the influential artist’s death. In November the art commission, set up by the Ministry of Culture, recommended that Vienna’s Leopold Museum return several of its Schiele works to Maylander’s relatives. It has yet to follow the ruling. A law adopted in 1998 paved the way for the return of about 10,000 works stolen during the Third Reich, during which Austria was annexed in 1938. AFP: Vienna museum told to return Nazi-looted art . Posted in Holocaust Claims , Looted Art | Comments Off |
| Two Dodd Frank Problems Posted on June 14, 2011 by admin Two Dodd-Frank Problems: the Effective Date and the Definitions Contingency Planning in the Absence of a Regulatory Structure 061311TwoDoddFrankProblems.pdf (application/pdf Object) . Posted in Derivatives , Dodd-Frank | Comments Off |
| Op-Ed | Nearly a Year After Dodd-Frank – NYTimes.com Posted on June 14, 2011 by admin Without strong leaders at the top of the nation’s financial regulatory agencies, the Dodd-Frank financial reform doesn’t have a chance. Whether it is protecting consumers against abusive lending, reforming the mortgage market or reining in too-big-to-fail banks, all require tough and experienced regulators. Nearly a Year After Dodd-Frank – NYTimes.com . Posted in Bank Regulation (domestic) , CFPB , Dodd-Frank | Comments Off |
| The Big Foreclosure Mess, Made Worse by Politics Posted on June 14, 2011 by admin In a sweet form of payback, a couple in Collier County, Florida, this week foreclosed on a local branch of Bank of America. Sheriff’s deputies and lawyers appeared at the bank and told the branch manager that if he didn’t pay the couple’s legal fees — as ordered months ago by a court in a wrongful-foreclosure case — they would seize the branch’s furniture and other assets. With TV cameras on the scene, the bank finally paid. That was the ultimate man-bites-dog story. The financial services industry typically doesn’t have to worry much about anyone interrupting its foreclosure binge. We can expect roughly a million foreclosures a year for the next few years. That’s a lot of furniture on the sidewalk. The Big Foreclosure Mess, Made Worse by Politics: Jonathan Alter – Bloomberg . Posted in Bank Regulation (domestic) , Foreclosure , Mortgage Industry , Mortgage Loan Servicers | Comments Off |
| BofA Hindered Foreclosure Review, U.S. Says Posted on June 14, 2011 by admin Bank of America Corp., the largest U.S. lender, “significantly hindered” a federal review of its foreclosures on loans insured by the Federal Housing Administration, the U.S. said. The bank was slow in providing data and offered incomplete information, according to the U.S. Department of Housing and Urban Development inspector general’s office, which conducted the review. The bank cooperated with the office, Dan Frahm, a company spokesman, said…The declaration, dated June 1 and obtained yesterday by Bloomberg News, was filed as an exhibit in a lawsuit by the state of Arizona against the Charlotte, North Carolina-based bank. Arizona, which is seeking to interview former Bank of America employees, accuses the bank of misleading homeowners who were seeking mortgage modifications. BofA Hindered Foreclosure Review, U.S. Says – Bloomberg . Posted in Foreclosure , Lawsuit , Mortgage Industry , Mortgage Modifications | Comments Off |
| Did SocGen Bet Against Its Own Share Price? Posted on June 14, 2011 by admin Thanks to leaks to The Financial Times regarding Libya’s sovereign wealth fund, we now know that large financial institutions sold the Libyans numerous financial derivatives. I find it more interesting to learn what was sold by one French bank. What was Société Générale, the large French bank, doing? Was it betting against its own stock? Was it spreading rumors that it was a takeover target? That is what The Financial Times seems to be saying. Here’s the tale: Did SocGen Bet Against Its Own Share Price? – NYTimes.com . Posted in Bank Fraud , Bank Regulation (Foreign) , Derivatives | Comments Off |
| Debt Collectors Ask to Be Paid a Little Respect – NYTimes.com Posted on June 14, 2011 by admin Debt collectors as human beings? It could be their toughest commission yet. These are boom times for collection agencies, which have been swamped with work as many Americans gorged on debt and then struggled to repay it. But the industry has come under fire for pushing too hard. Last year, 140,036 complaints were filed against debt collectors, a 17 percent increase over the previous year, according to the Federal Trade Commission. The complaints told of menacing late-night phone calls and threats of jail time or confiscating a house. In one instance a jury awarded a Texas man $1.5 million after a debt collector left voicemail messages using vulgarities and racial slurs. Those are the exceptions, the industry’s trade association says. Debt Collectors Ask to Be Paid a Little Respect – NYTimes.com . Posted in Budget Planners , Consumer Protection , Debt Collection , Personal Finance | Comments Off |
| Supreme Court Limits Securities Fraud Suits Posted on June 14, 2011 by admin The 5-to-4 decision split along ideological lines. Justice Clarence Thomas, writing for the majority, said that only the fund itself could be held liable for violating a Securities and Exchange Commission rule that makes it unlawful for “any person, directly or indirectly” to “make any untrue statement of material fact” in connection with buying or selling securities. As is typical in the mutual fund industry, the fund and its adviser were closely linked. A public company, the Janus Capital Group, created the fund, Janus Investment Fund. The fund then hired Janus Capital Management, a wholly owned subsidiary of the company, to handle investment, management and administrative services. Supreme Court Limits Securities Fraud Suits – NYTimes.com . Posted in Financial Regulation , SEC | Comments Off |
| Thieves Found Citigroup Site an Easy Entry Posted on June 14, 2011 by admin Using the Citigroup customer Web site as a gateway to bypass traditional safeguards and impersonate actual credit card holders, a team of sophisticated thieves cracked into the bank’s vast reservoir of personal financial data, until they were detected in a routine check in early May. That allowed them to capture the names, account numbers, e-mail addresses and transaction histories of more than 200,000 Citi customers, security experts said, revealing for the first time details of one of the most brazen bank hacking attacks in recent years. The case illustrates the threat posed by the rising demand for private financial information from the world of foreign hackers. Thieves Found Citigroup Site an Easy Entry – NYTimes.com . Posted in ATM Safety , Bank Regulation (Foreign) , Consumer Protection , Cyber Security , Identity Theft | Comments Off |
| China Raises Banks’ Reserve Ratios Posted on June 14, 2011 by admin China stepped up its campaign to combat rising inflation and damp the sizzling pace of economic growth Tuesday by further restricting lending at the nation’s banks after government data showed inflation remained persistently high in May. The central bank increased the so-called reserve requirement ratio, which dictates the amount of cash that banks must set aside, by 0.50 percentage point, effectively reducing the amount they can lend. The ratio has been raised six times this year alone and now stands at 21.5 percent for the biggest lenders. China Raises Banks’ Reserve Ratios After Inflation Stays High in May – NYTimes.com . Posted in Bank Regulation (Foreign) , Capital Requirements | Comments Off |
| Two Views on the Value of Tough Bank Rules Posted on June 14, 2011 by admin Nearly three years after the collapse of Lehman Brothers, the prevailing wisdom is that we need tighter regulations to avoid another crisis. It’s a popular view, one that this column has long supported. After all, if we don’t adopt tougher standards now, then when? I called Mr. Dimon, in part, to challenge his view. But I was somewhat taken aback by his response, which was far more nuanced than his seeming diatribe to the Fed chairman. “My point wasn’t that we shouldn’t regulate the industry,” he said. “But we should think twice about how exactly we’re doing it and the cumulative impact of the changes if the main goal is to help create jobs.” The more restrictions put on banks, he said, the less lending and financing of businesses that will take place. To him, it’s simple arithmetic. Two Views on the Value of Tough Bank Rules – NYTimes.com . Posted in Bank Bail-Outs , Bank Regulation (domestic) , Dodd-Frank , Financial Regulation | Comments Off |
| Cuomo Proposes State Health Exchange Posted on June 14, 2011 by admin Gov. Cuomo today unveiled a program bill to create a state Health Benefit Exchange to comply with the federal heatlh care law. Under the plan, New York would operate its own exchange, rather than have the federal government operate one for the state. Here’s the release: Cuomo Proposes State Health Exchange | New York Daily News . Posted in Insurance Industry , State Health Exchange | Comments Off |
| FBAR: New Focus on Business Owners’ Foreign Accounts Posted on June 14, 2011 by admin A recently amended federal rule issued by the Financial Crimes Enforcement Network, a division of the U.S. Treasury, has immigrant small business owners scrambling to learn a new acronym: FBAR. The Report of Foreign Bank and Financial Accounts mandates that U.S.citizens, U.S.residents, business partnerships, trusts, and corporations disclose financial interest or signatory authority in any foreign financial accounts that exceed $10,000. Although FBAR requirements have been around for decades, revisions published in February and heightened enforcement are prompting immigrant entrepreneurs to take the rules more seriously. New Focus on Business Owners’ Foreign Accounts – BusinessWeek . Posted in Financial Regulation , FinCEN | Comments Off |
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