News Clips – Friday, June 17, 2011
June 17, 2011 Leave a comment
| FDIC’s Spoth: Community Banks Didn’t Cause the Crisis and Should Have Reduced Regulatory Burden Posted on June 17, 2011 by admin |
| The Senate Banking Subcommittee on Financial Institutions and Consumer Protection held a hearing on Wednesday titled “Enhancing Safety and Soundness: Lessons Learned and Opportunities for Continued Improvement.” A number of witnesses delivered testimony on the topic, among them: Michael Foley, Senior Associate Director, Banking Supervision and Regulation Division, FRB; Christopher J. Spoth, Senior Deputy Director, Division of Risk Management Supervision for the FDIC; David Wilson, Deputy Comptroller for Credit and Market Risk, Office of the Comptroller of the Currency (OCC); Salvatore Marranca, chairman, president and CEO of Cattraugus County Bank in Little Valley, N.Y.; and Frank A. Suellentrop, chairman and president of Legacy Bank in Wichita, Kan. The Committee is led by Chairman Tim Johnson (D-SD) and Ranking Member Richard Shelby (R-AL) FDIC’s Spoth: Community Banks Didn’t Cause the Crisis and Should Have Reduced Regulatory Burden | Mortgage News | Daily National and State Headlines . |
| Posted in Community Banks , FDIC , Senate Banking Committee | Comments Off |
| MBIA Hid Losses of Up to $950M From Regulator, Banks Say Posted on June 17, 2011 by admin MBIA Inc. hid potential losses of as much as $950 million on commercial real estate debt as it sought New York regulators’ approval to restructure its insurance business in 2008, banks including Bank of America Corp. and UBS AG claimed in court papers. New York insurance regulators were given an internal presentation that included “manual overrides” of loan data that dropped potential losses from the debt to zero, the banks said in a brief that was filed in redacted form in March and unsealed yesterday in state court in Manhattan. When making its case to the regulators, MBIA, once the world’s biggest bond insurer, deleted parts of a presentation originally given in November 2008 to the company board’s credit risk committee. Those deletions showed that in a “more stressful economic environment” the insurer could have losses from the debt as much as $950 million, according to the court papers. MBIA Hid Potential Losses of Up to $950 Million From Regulator, Banks Say – Bloomberg . Posted in Insurance Department , Insurance Industry , Insurance Regulation | Comments Off |
| Cattaraugus CEO tells Congress of unfair bank regulatory burden Posted on June 17, 2011 by admin Testifying on behalf of the Independent Community Bankers of America, Marranca said the nearly 5,000 members are suffering at the hands of overzealous regulators. “I’ve met with thousands of community bankers from every part of the country in recent years, and I can tell you there is an unmistakable trend toward arbitrary, micromanaged, unreasonably harsh examinations that have the effect of suffocating lending,” he said. Marranca said that very thing is happening at his bank. Based in Little Valley, Cattaraugus County Bank has $175 million in assets and 30 employees. Even so, the small community bank is soon to undergo a compliance exam from the Federal Deposit Insurance Corp., which comes on top of two Community Investment Act reviews, examinations from the Internal Revenue Service and the Federal Home Loan Bank and several other oversight measures. “There seems to me there’s a better way to allocate the resources of an examination,” he said. “And this takes me away from lending and away from my consumers and away from my customers.” Cattaraugus CEO tells Congress of unfair bank regulatory burden – Business – The Buffalo News . Posted in Bank Regulation (domestic) , Community Banks , FDIC | Comments Off |
| Lawmakers Seek Assurances in Regulation of Banking Posted on June 17, 2011 by admin Harmonization has been a top consideration in international talks related to how much capital the biggest banks must maintain and methods for orderly wind-downs of large firms, several officials told the House Financial Services Committee on Thursday at a hearing in Washington. Representative Spencer Bachus, the Alabama Republican who leads the Financial Services Committee, conducted the hearing amid complaints from bankers that American regulations being imposed under the Dodd-Frank act might slow economic recovery from the 2008 financial crisis and drive business overseas. Lawmakers sought assurances that regulators were looking out for United States interests in dealing with their international counterparts. Lawmakers Seek Assurances in Regulation of Banking – NYTimes.com . Posted in Bank Regulation (domestic) , Bank Regulation (Foreign) , Dodd-Frank , House Financial services Committee | Comments Off |
| Basel Said to Weigh 3.5%-Point Fee Based on Bank Size Posted on June 17, 2011 by admin The Basel Committee on Banking Supervision is considering extra capital requirements of as much as 3.5 percentage points that the largest banks may face if they grow bigger, according to two people familiar with the talks. The so-called surcharge would take the form of a boost to capital the banks must hold and would apply to financial institutions whose collapse would harm the global economy. A list of such banks hasn’t been disclosed. Basel Said to Weigh 3.5 Percentage-Point Fee Based on Bank Size – Businessweek . Posted in Bank Regulation (domestic) , Bank Regulation (Foreign) , Basel II | Basel III , Capital Requirements , Too Big To Fail | Comments Off |
| Debit-Card Swipe-Fee Cap ‘Not Traditional,’ Bank Lawyer Argues Posted on June 17, 2011 by admin A planned cap on the debit-card swipe fees charged to merchants by the biggest U.S. banks is “discriminatory,” a lawyer for one of the affected banks told a U.S. appeals court panel. Timothy D. Kelly, a lawyer for TCF National Bank, told the St. Louis-based court yesterday that it should reverse a trial judge’s decision denying the bank’s bid to block the cap while the lender challenges its legality. The provision is scheduled to take effect July 21. Dodd-Frank Debit-Card Swipe-Fee Cap ‘Not Traditional,’ Bank Lawyer Argues – Bloomberg . Posted in Bank Regulation (domestic) , Credit Cards , Dodd-Frank , Durbin Amendment | Comments Off |
| U.K. Government Publishes Draft Financial Regulation Bill Posted on June 17, 2011 by admin U.K. Chancellor of the Exchequer George Osborne published draft legislation that will hand powers to the Bank of England to police Britain’s banks in the biggest regulatory overhaul since 1997. The Financial Regulation Bill, which will now undergo pre- legislative scrutiny, will abolish the Financial Services Authority and transfer most of its responsibilities to the central bank. The bill is scheduled to be put to Parliament formally later this year and approved by legislators in late 2012. It will pave the way for the central bank’s Financial Policy Committee to begin its work of monitoring risk. U.K. Overhaul, Bank Oversight, House Budget, Basel Bank Curbs: Compliance – Bloomberg . Posted in Bank Regulation (Foreign) , FSA | Comments Off |
| McKinseyGate: Affordable Care Act Study Flawed Posted on June 17, 2011 by admin The story so far: McKinsey released the alleged results of a study showing that large numbers of firms will drop health insurance coverage once the Affordable Care Act goes fully into effect. This is very different from the results of other studies, notably the Congressional Budget Office assessment of the act. So when the McKinsey alleged study made headlines, the firm was pressed to explain how the study was conducted. And it has refused to answer. It’s hard to escape the conclusion that the study was embarrassingly bad — maybe it was a skewed sample, maybe the questions were leading, maybe there was no real data at all. Whatever. McKinseyGate – NYTimes.com . Posted in Affordable Care Act , Insurance Industry | Comments Off |
| Citi’s Sale of Consumer Finance Unit Hits Block Posted on June 17, 2011 by admin Potential bidders for CitiFinancial have yet to be convinced that the Citigroup unit and one of the biggest consumer finance companies in the United States is viable as a stand-alone business, people familiar with the matter told The Financial Times…Citigroup is looking to sell the business without taking losses, unlike insurer American International Group Inc, which last year sold its consumer finance business at a loss. Citigroup’s Sale of Consumer Finance Unit Hits Block – Report – NYTimes.com . Posted in Mortgage Industry | Comments Off |
| Capital One to Buy ING’s U.S. Online Banking Unit Posted on June 17, 2011 by admin Capital One Financial agreed on Thursday to buy the ING Group’s online banking unit in the United States for $9 billion in cash and stock, one of its biggest efforts yet to add to offerings beyond credit cards and other consumer lending. Under the terms of the deal, Capital One will pay $6.2 billion in cash and issue $2.8 billion worth of new shares to ING, giving it a 9.9 percent stake. ING will also have the right to name a director on Capital One’s board. Capital One to Buy ING’s U.S. Online Banking Unit – NYTimes.com . Posted in Bank Mergers | Comments Off |
| Fannie Mae: The most devastating scandal in recent history Posted on June 17, 2011 by admin …the most devastating scandal in recent history involved dozens of the most respected members of the Washington establishment…[T]he Fannie Mae scandal is the most important political scandal since Watergate. It helped sink the American economy. It has cost taxpayers about $153 billion, so far. It indicts patterns of behavior that are considered normal and respectable in Washington. The Fannie Mae scandal has gotten relatively little media attention because many of the participants are still powerful, admired and well connected. But Gretchen Morgenson…and the financial analyst Joshua Rosner have rectified that, writing “Reckless Endangerment…” [a book that] exposes the affair in clear and gripping form. The story centers around James Johnson, a Democratic sage with a raft of prestigious connections. Appointed as chief executive of Fannie Mae in 1991, Johnson started an aggressive effort to expand homeownership. Who Is James Johnson? – NYTimes.com . Posted in Fannie Mae/Freddy Mac | Comments Off |
| No consumer chief? No problem. Posted on June 17, 2011 by admin The new Consumer Financial Protection Bureau won’t necessarily be handicapped by President Barack Obama’s delay in naming a director. If the bureau launches on July 21 without a director, Wall Street analysts and attorneys for the financial services industry are bracing for a slew of enforcement actions against major banks. With no director to issue rules and guidance for banks, the bureau most likely will set policy by conducting investigations… The White House finds itself in a bind with liberals and conservatives over who should lead the agency… No consumer chief? No problem – POLITICO.com Print View . Posted in CFPB | Comments Off |
| Madoff Claims Attract Banks – WSJ.com Posted on June 17, 2011 by admin Some of the world’s biggest banks are jumping into a multibillion-dollar market that buys up victims’ claims in the Bernard Madoff Ponzi scheme, including two banks that have been sued in connection with the fraud…People familiar with the claims market said two banks that are being sued by the Madoff trustee, UBS AG and Royal Bank of Scotland, are among those bidding on claims. By defending the suits, the banks are in effect fighting off victims of the fraud, while at the same time seeking to profit from payouts based on other claims. Other banks that have been involved in the market for these claims include Deutsche Bank AG and Goldman Sachs Group Inc., said people familiar with the claims market. Neither has been sued by the Madoff trustee. While perfectly legal, the situation reflects Wall Street’s penchant for finding a way to profit from almost any upheaval. Madoff Claims Attract Banks – WSJ.com . Posted in Bank Regulation (domestic) , Bank Regulation (Foreign) , Lawsuit | Comments Off |
| Rep. Brad Miller (D-NC) Op-Ed | No regulators, no regulation Posted on June 17, 2011 by admin Reforming the financial system required new laws, but laws don’t enforce themselves. Senate Republicans, to please their patrons in the financial services industry and sabotage reforms, are abusing Senate rules and constitutional confirmation powers by blocking the confirmation of regulators to enforce the new laws. No regulators, no regulation. Fully half of the top financial regulator positions are now vacant or soon will be — including that of comptroller of the currency, chairman of the Federal Deposit Insurance Corp., director of the Federal Housing Finance Agency and director of the new Consumer Financial Protection Bureau, the GOP’s new least-favorite federal agency. It is painfully clear that it does not matter whom President Barack Obama nominates. Senate Republicans are likely to oppose anyone because they don’t want anyone — and they don’t want the agencies to do their job. No regulators, no regulation – POLITICO.com Print View . Posted in CFPB , Financial Regulation , Government | Comments Off |
| State & Political News Round-Up | June 17, 2011 Posted on June 17, 2011 by admin Land Bank Bill Amended, Set To Move A bill to give municipalities or intergovernmental cooperatives the right to form land banks is poised for enactment during the end of session crunch. The bill, sponsored by Assemblyman Sam Hoyt and Sen. David Valesky…was recently amended to cap the number of land banks that can be formed. A city, county, or some special cooperative must pass a resolution asking for a land bank What’s a land bank? It’s a planning tool to deal with vacant properties. It’s usually given some form of initial capital, to buy vacant lots (or dilapidated buildings) that blight neighborhoods in Upstate American cities…often owned elsewhere, and poorly maintained… An earlier version of the bill allowed for an unlimited number of entities, but the amendments restrict New York to 10. They must be approved by ESD, and “it’s first come, first served.” http://blog.timesunion.com/capitol/archives/71196/land-bank-bill-amended-set-to-move/ Government Job Losses Trouble Albany Economy The Capital Region has had a greater net loss of jobs than any other metro in the state for six months in a row, according to new data. Each month, the state Department of Labor studies the size of various sectors and compares the change in job counts over a 12-month span. The latest update, released Thursday, covers the time period of May 2010 to May 2011. In that stretch, losses at all levels of government dragged down the Albany-Schenectady-Troy metro area, which covers five counties. http://www.bizjournals.com/albany/news/2011/06/16/govt-job-losses-trouble-albany-economy.html Cuomo Slams Senators Over Rent Impasse: You Betrayed Tenants! Gov. Cuomo slammed state senators…”The Senate’s failure to act (Wednesday) was unacceptable and a betrayal of the 1 million tenants living in rent-protected apartments,” Cuomo said. Cuomo is threatening to keep the Legislature in Albany until a long-term deal to extend and strengthen rent laws is completed, even if it means working through Father’s Day. Lawmakers, meanwhile, reported little progress in talks to reach a long term deal. http://www.nydailynews.com/news/politics/2011/06/17/2011-06-17_as_pols_do_zilch_gov_asks_em__how_could_you_let_rent_regs_expire.html NJ State Employees Swarm Trenton On Benefit Changes Thousands of angry government workers swarmed New Jersey’s Capitol on Thursday and some were briefly arrested, one day after Gov. Chris Christie and legislative leaders agreed to sharply increase the contributions public employees must make into their health insurance and pensions plans. The proposed deal, which has yet to come to a vote in either house, would be a major victory for Mr. Christie, transferring billions of dollars a year in expenses from the government to its employees, and once again curbing the power of the governor’s favorite foil, the public employee unions. http://www.nytimes.com/2011/06/17/nyregion/state-workers-swarm-trenton-to-oppose-health-and-pension-increases.html?ref=nyregion 12 Years On The Job, Weiner Gets Hefty Retirement Benefits. …Weiner walks away with retirement benefits that are far more generous than what most workers with similar pay and length of service could ever hope to match. Members of Congress are covered under the Federal Employee Retirement System, which features a pension-style plan at minimal cost to employees they contribute less than 1% of pay, and contributions bear no relation to the benefits. Weiner, 46, has been a Congressman for 12 years and has a recent salary of $174,000 (standard for both the House and Senate). After leaving office he has a couple of choices. He can begin taking discounted pension payments of about $25,000 a year starting at age 56 or wait until age 62 and collect about $35,000 a year. http://www.smartmoney.com/retirement/planning/why-im-jealous-of-weiner-1308253690928/ Assembly Repeal Of MTA Payroll Tax “A Tough Sled This Year” The measure passed the Senate last night with Democratic senators from the New York City suburbs largely supporting it. The bill would phase in the repeal of the tax next year, and then end completely in 2014. The payroll tax has been criticized for hurting companies in New York City and its suburbs, including Dutchess, Putnam, Rockland and Westchester counties. It was implemented in 2009 to bail out the MTA. http://polhudson.lohudblogs.com/2011/06/16/an-assembly-repeal-of-mta-payroll-tax-a-tough-sled-this-year/ Broadband Support for Upstate Reps. Chris Gibson and Bill Owens succeeded in adding a provision to an agriculture funding bill to support a broadband grant program that would benefit Upstate New York communities. The measure to expand broadband access in rural America passed the House by a vote of 221 to 198. http://blog.timesunion.com/capitol/archives/71178/reps-gibson-owens-show-support-for-broadband-expansion-to-upstate-new-york/ 9/11 memorial museum in New York City may charge $20 admission fee Joe Daniels, the president and CEO of the National September 11 Memorial & Museum, told City Council members at a hearing that once the museum opens in September 2012, it must generate enough income to maintain itself and the memorial. The foundation is searching for other ways to finance the upkeep of the memorial, but Daniels said Thursday that if none can be found visitors would be asked to pay entrance fees comparable to ticket prices at other major museums in New York City, which he said charge about $20. http://www.syracuse.com/news/index.ssf/2011/06/911_memorial_museum_in_new_yor.html Posted in State & Political News Round-Up | Comments Off |
| Mortgage Software Providers Developing Single Point of Contact Platforms Posted on June 16, 2011 by admin Technology providers already released products to help mortgage servicers and borrowers to link through a single point of contact as required by new rules. In May, the Treasury Department set a new requirement under the Home Affordable Modification Program, detailing how mortgage servicers are to establish a single relationship manager that will proactively walk borrowers through the modification process and support them through foreclosure if necessary. Similar requirements came under consent orders signed between major servicers and their federal regulators…The Office of the Comptroller of the Currency delayed the deadline for when servicers are required to submit their plans for complying with the consent orders, and the new HAMP requirements go into effect Sept. 1st. Mortgage software provides single point of contact platforms « HousingWire . Posted in HAMP , Mortgage Industry , Mortgage Loan Servicers , Mortgage Modifications , OCC | Comments Off |
| HFSC Critical Hearing Today on International Financial Reform Posted on June 16, 2011 by admin DRIVING THE DAY – House Financial Services holds a critical hearing at 10:00 a.m. on the international context of financial reform, a hot topic in recent days in light of fears that U.S.-based banks will suffer based on proposed higher capital standards and tighter derivatives trading regulations. … Panelists include Treasury’s Lael Brainard, FDIC Chair Sheila Bair, CFTC Chair Gary Gensler, SEC Chair Mary Schapiro, Fed Governor Daniel Tarullo and Acting Comptroller John Walsh…Industry officials on the second panel include Morgan Stanley’s Stephen O’Connor (representing ISDA), SIFMA’s Timothy Ryan and JPMorgan’s Barry Zubrow…Read Several opening statements for the HFSC hearing here: http://1.usa.gov/ihlf1C Posted in Bank Regulation (domestic) , Bank Regulation (Foreign) , Basel II | Basel III , Capital Requirements , CFTC , Derivatives , FDIC , OCC , SEC , Treasury Department | Comments Off |
| New York Appeals Court Rejects MERS Foreclosure – Daniel Fisher Posted on June 16, 2011 by admin A New York appeals court has thrown out a foreclosure proceeding involving MERS…The case sets a bad precedent for MERS in New York, but may not cause upheaval nationwide. In a 7-page ruling issued Friday, the New York appellate court threw out Bank of New York’s foreclosure suit against Stephen and Frederica Silverberg…Bank of New York is the trustee for the trust containing mortgages, one them presumably the Silverberg’s, that were bundled together and sold to investors as bonds. Unfortunately for the bank, the court ruled that MERS, the bookkeeping entity set up to keep track of those mortgages in land-records offices around the country, couldn’t give BONY the authority to foreclose because it didn’t possess the underlying note, or Silverberg’s promise to pay. New York Appeals Court Rejects MERS Foreclosure – Daniel Fisher – Full Disclosure – Forbes . Posted in Foreclosure , Lawsuit , MERS , Mortgage Backed Securities , Mortgage Industry | Comments Off |
| Lenders Dig In on Capital Requirements – WSJ.com Posted on June 16, 2011 by admin Financial firms are making an aggressive, last-ditch push to ward off stricter capital requirements ahead of an international agreement that could come later this month. Global regulators are close to a deal on how much additional capital large, complex firms that pose risk to the financial system should hold. Agreement on a so-called surcharge may be reached at a June 25 meeting in Basel, Switzerland, according to government officials, as global bank supervisors attempt to strike an agreement ahead of a Group of 20 meeting this fall. Lenders Dig In on Capital Requirements – WSJ.com . Posted in Bank Regulation (domestic) , Bank Regulation (Foreign) , Basel II | Basel III , Capital Requirements | Comments Off |
| Allstate April-May Catastrophe Losses Total $2 Billion Posted on June 16, 2011 by admin Allstate Corp, the largest publicly traded U.S. home and auto insurer, said it lost $2 billion in April and May from severe tornadoes and thunderstorms, nearly equaling its catastrophe losses for all of 2010. The devastating two-month period, taken as one block, now ranks as one of the worst in Allstate’s history, alongside events like the 1994 Northridge earthquake in California and Hurricane Andrew in 1992. In all of 2010, Allstate’s catastrophe losses totaled $2.21 billion. The company, which reported $1.4 billion in pretax losses for April, said on Thursday it lost an additional $600 million from seven events in May. Allstate April-May Catastrophe Losses Total $2 Billion – NYTimes.com . Posted in Insurance Industry | Comments Off |
bdemployees 