News Clips – Tuesday, July 5, 2011
July 5, 2011 Leave a comment
The PIO is back from vacation leave… news clips are back…
| DFS Mention | Insurance exchange back on track in N.Y. Posted on July 5, 2011 by admin |
| Members of a state-commissioned working group say they are close to completing a draft business plan to revive the New York Insurance Exchange as a Lloyd’s of London-style operation. Working group members met twice last month to draft the plan, which they say will be shopped to potential syndicates and investors as well as insurance regulators and other industry stakeholders to build support for the project. “We’re in a good spot right now,” said James Wrynn, superintendent of the New York Insurance Department. The working group, which Mr. Wrynn commissioned in January 2010, had hoped to complete the business proposal by last fall. But the effort was put on hold after newly elected Gov. Andrew Cuomo announced in February that the state’s Insurance and Banking departments would be merged to form the Department of Financial Services, with Mr. Cuomo’s chief of staff, Benjamin Lawsky, serving as its new superintendent. Insurance exchange back on track in N.Y. | Business Insurance . |
| Posted in Department of Financial Services (DFS) , Insurance Department , New York Insurance Exchange | Comments Off |
| DFS Mention | ‘Death Policy’ Probe Grows – WSJ.com Posted on July 5, 2011 by admin New York Attorney General Eric Schneiderman has issued subpoenas to at least nine leading life insurers in the latest and possibly most potent of probes examining whether the industry has adequately ensured payouts on policies of some deceased customers, according to people familiar with the matter. In addition, New York’s insurance department is sending letters to more than 160 insurers that will push them to run their policyholder rosters through a Social Security death database to determine if any death benefits are overdue and to report back to the state on the results, one of the people said. ‘Death Policy’ Probe Grows – WSJ.com . Posted in Department of Financial Services (DFS) , Insurance Department , Insurance Fraud , Insurance Industry , Insurance Regulation | Comments Off |
| WAMU, Investors Reach $208.5 Million Settlement Posted on July 5, 2011 by admin Washington Mutual Inc., the former owner of the biggest U.S. bank to fail, and its former executives, underwriters and auditor reached a $208.5 million settlement of a class-action lawsuit by investors. The settlement provides for $105 million in payments on behalf of the individual defendants…The lawsuit consolidates more than 20 cases claiming the bank secretly lowered lending standards, artificially inflated home-price appraisals and failed to disclose its deteriorating financial condition when the loans began to fail. Washington Mutual, Investors Reach $208.5 Million Class-Action Settlement – Bloomberg . Posted in Bank Closings , Bank Fraud , Financial Crisis , Lawsuit , Mortgage Industry | Comments Off |
| Bank of America Tells District Judge $500 Million Lehman Order Was ‘Error’ Posted on July 5, 2011 by admin Bank of America Corp. , ordered by a judge to return $500 million in deposits to bankrupt Lehman Brothers Holdings Inc. and pay interest, said “the judgment was error” and should have been in the bank’s favor. U.S. Bankruptcy Judge James Peck signed the judgment in May after a November finding that the biggest U.S. bank took Lehman’s deposits in the 2008 financial crisis to offset unrelated derivative obligations, and must return them. He set interest at 9 percent from November 2008 to December 2010. The judge ignored a “controlling New York statute” when he disregarded covenants in the loan agreement that allowed Bank of America to take the deposits, the bank said in a filing today in U.S. District Court in Manhattan. Bank of America Tells District Judge $500 Million Lehman Order Was ‘Error’ – Bloomberg . Posted in Bank Bail-Outs , Bank Closings , Bank Regulation (domestic) , Lawsuit | Comments Off |
| JPMorgan Chase Loses Court Bid to End Consumers’ HELOC Lawsuits Posted on July 5, 2011 by admin JPMorgan Chase & Co. lost a bid for dismissal of a lawsuit in which consumers accused the second- biggest U.S. bank of wrongly cutting home-equity lines of credit. U.S. District Judge Rebecca Pallmeyer in Chicago today ruled the homeowners could go forward on some of their claims against the lender while dismissing allegations that JPMorgan had engaged in fraudulent practices. “Plaintiffs’ allegations that defendant reduced or suspended their HELOCs without adequate justification are sufficient to state claims for breach of contract under Minnesota, California, Texas and Delaware law,” Pallmeyer said in a 42-page decision…The bank had sought to dismiss the action in its entirety. JPMorgan Chase Loses Court Bid to End Consumers’ Home-Equity Line Lawsuits – Bloomberg . Posted in Lawsuit , Mortgage Industry , Mortgage Loan Servicers | Comments Off |
| Patent Bill Shows Wall Street Has Clout in Washington Posted on July 5, 2011 by admin If there is still any question about how much power Wall Street actually has in Washington, here is some fresh evidence worth examining. In a piece of legislation recently passed by the House and the Senate to revamp patent law, a tiny provision was inserted at the last minute called Section 18. The provision…has only one purpose: to allow the banking industry to skirt paying for certain important patents involving “business methods”…The legislation was initially introduced by Senator Charles E. Schumer, a New York Democrat, with an even narrower view: to protect the interests of his big bank constituents in a dispute with DataTreasury Corporation of Plano, Tex., a company that owns dozens of patents for processing digital copies of checks. Wall Street fought for the bill because it says it has been held hostage by holders of “business method” patents that should never have been granted by the patent office in the first place. Banks like JPMorgan Chase have been fighting DataTreasury over its patents for years. The language in the bill is expansive. Patent Bill Shows Wall Street Has Clout in Washington – NYTimes.com . Posted in Bank Regulation (domestic) , Lobbying | Comments Off |
| Online Security: Tough New Standard Touted by NCUA Posted on July 5, 2011 by admin Beginning next year, NCUA examiners will expect credit unions to be following a tougher new set of guidelines for securing online banking and money transfers. NCUA Chairman Debbie Matz made that promise after the Federal Financial Institutions Examinations Council issued new guidance last week that calls for financial institutions to institute new safeguards against the rising tide of fraud. The FFIEC guidelines were last updated in 2005. A growing series of breaches and hack attacks have since then netted fraudsters around the globe millions of dollars and sparked legal battles over liability between victimized banks and customers. The new guidelines call for recognitions of layered security measures to deal with escalating levels of risk, improved and expanded authentication mechanisms, financial education and other measures to combat online fraud and identity theft. Online Security: Tough New Standard Touted by Matz . Posted in Credit Union , Cyber Security , FFIEC | Comments Off |
| Treasury’s Acting Restructuring Head Takes His Leave Posted on July 5, 2011 by admin Now that Thomas Casarella is leaving the Treasury Department as its acting restructuring chief, he intends to catch up on some light reading. Only it doesn’t involve picking up the latest James Patterson novel. Instead…his final day at the Treasury, his reading list includes such tomes as these: A hefty paper that Thomas Russo, the former Lehman Brothers general counsel, wrote about the aftermath of the financial crisis. A paper from the Harvard Law School professor Morgan Ricks on how to fix money market funds. Memos to President Obama and Treasury Secretary Timothy F. Geithner about the commercial real estate markets. Treasury’s Acting Restructuring Head Takes His Leave – NYTimes.com . Posted in Treasury Department | Comments Off |
| Thomas Curry to Head OCC Posted on July 5, 2011 by admin President Obama announced Friday that he would nominate Thomas J. Curry to lead the Office of the Comptroller of the Currency, which oversees hundreds of national banks, including the giants Bank of America, JPMorgan Chase and Wells Fargo. Mr. Curry, a longtime state banking regulator in Massachusetts, has served for the last seven years as one of the five directors of the FDIC. Mr. Obama also said he would nominate Mary J. Miller as under secretary of the Treasury for domestic finance. She is currently assistant secretary for financial markets. Mr. Curry’s nomination responds to the demands of Senate Democrats that the White House replace the acting head of the comptroller’s office, John G. Walsh, whom they regard as obstructing key aspects of the law passed last year to overhaul financial regulation. Thomas Curry to Head Currency Comptroller’s Office – NYTimes.com . Posted in Bank Regulation (domestic) , FDIC , OCC , Treasury Department | Comments Off |
| Bair Has Been Effective Watchdog at F.D.I.C. Posted on July 5, 2011 by admin The 2008 financial crisis revealed many of the world’s banking regulators to be woefully ineffective. Sheila C. Bair’s five years at the helm of the Federal Deposit Insurance Corporation, which end on Friday, may offer a potential exception. A potted banking regulator’s version of the 1989 self-help book, “The Seven Habits of Highly Effective People,” sums up Ms. Bair’s tenure… Bair Has Been Effective Watchdog at F.D.I.C. – NYTimes.com . Posted in FDIC | Comments Off |
| Banks Easing Terms or Debt on Some Option ARM Loans Posted on July 5, 2011 by admin As millions of Americans struggle in foreclosure with little hope of relief, big banks are going to borrowers who are not even in default and cutting their debt or easing the mortgage terms, sometimes with no questions asked. Two of the nation’s biggest lenders, JPMorgan Chase and Bank of America, are quietly modifying loans for tens of thousands of borrowers who have not asked for help but whom the banks deem to be at special risk. Banks Easing Terms or Debt on Some Option ARM Loans – NYTimes.com . Posted in Foreclosure , Mortgage Modifications | Comments Off |
| Donald Trump squeezes Bank of America Posted on July 5, 2011 by admin This is one foreclosure that won’t go Bank of America’s way. Donald Trump is putting a huge squeeze on the bank as it tries to foreclose on a 24,000-square-foot estate in Virginia. Bank of America owns the house and is trying to sell it for $16 million, The Wall Street Journal reports. Maybe the bank could sell a normal estate for that much, but not in this case. You see, Trump owns the backyard, the front yard and most of the driveway. He doesn’t own the house itself, but he’s willing to take it off the bank’s hands for, oh, $3.6 million. Ah, you gotta love the Donald. Here’s how this nightmare for Bank of America came about… Donald Trump squeezes Bank of America- MSN Money . Posted in Foreclosure | Comments Off |
| As Warren Builds a Consumer Agency, Top Job Remains Empty Posted on July 5, 2011 by admin Only President Obama can decide if Ms. Warren is his choice for director, and for months he has said nothing about it. Mr. Obama has said he has great respect for Ms. Warren and her advocacy for consumers, but he has appeared unwilling to wage a battle with the Senate to actually nominate her to direct the new bureau… People outside the agency who speak often with Ms. Warren say they believe she still wants the job. Ms. Warren declined to be interviewed on the record about the issue. In a statement issued through a spokeswoman, she said: “What matters to me is having a strong consumer agency that works for American families.” As Warren Builds a Consumer Agency, the Top Job Remains Empty – NYTimes.com . Posted in CFPB | Comments Off |
| Big Banks Find Cash Storing Commodities – WSJ.com Posted on July 5, 2011 by admin About 600 miles from Wall Street, Goldman Sachs Group Inc. employees are busy doing deals. But instead of a sleek office tower, they work in a rundown warehouse deep in an industrial section of Detroit. And rather than trading in stocks or bonds, they move metal—lots of metal. Goldman’s warehouse on the banks of the Detroit River is one of more than 100 storage facilities controlled by the giant securities firm around the world. The warehouses are part of Wall Street’s effort to forge a new frontier in the commodities markets: warehousing metal. In the past 18 months, Goldman, J.P. Morgan Chase & Co. and trading firms Glencore International PLC and Trafigura Beheer BV have snapped up warehouse operators, all of them accredited to house metal traded through the London Metal Exchange, or LME…For Wall Street, warehouses are a way to earn extra income, especially as core businesses like trading are suffering. The facilities represent a relatively small but profitable way to bet on commodities markets without actually trading, the firms said. Big Banks Find Cash Storing Commodities – WSJ.com . Posted in Bank Regulation (domestic) , Financial Regulation | Comments Off |
| The Swindler and the Home Loans – A Long Island Case Posted on July 5, 2011 by admin [A] case now winding its way through the courts may help others recover losses from lenders who dealt in risky mortgages and claimed that they had no duty to their customers. The case involves 21 families on Long Island and a convicted swindler named Peter J. Dawson. Mr. Dawson, a self-described financial planner, stole roughly $8 million from his clients, among them elderly parishioners at his church in Uniondale, N.Y. He pleaded guilty in state court in December 2007 and is serving 5 to 15 years in prison. What does this have to do with mortgage lenders? The Swindler and the Home Loans – A Long Island Case – NYTimes.com . Posted in Foreclosure , Foreclosure Scams , Mortgage Industry , Mortgage Loan Servicers , Mortgage Modifications | Comments Off |
| IMF Weighs Shift In Money-Laundering Prevention Efforts Posted on July 5, 2011 by admin The International Monetary Fund is weighing a shift in the methods it uses to combat money laundering and terrorist financing, in an effort to crack down further on illicit financial activity. The new, risk-based approach would start with comprehensive assessments of national programs to prevent money laundering, but later focus on areas identified as most problematic. “We think that following a targeted, risk-focused approach would mean our assessments would be more cost-effective and focused on the issues that matter most for countries,” Jody Myers, assistant general counsel to the IMF, said in a blog post. IMF Weighs Shift In Money-Laundering Prevention Efforts . Posted in Money Laundering | Comments Off |
| China Banks’ Outlook May Be Souring on Loans Posted on July 5, 2011 by admin Chinese banks’ loans to local governments are about 3.5 trillion yuan ($540 billion) more than the national auditor’s estimate, and the industry’s credit outlook could decline, Moody’s Investors Service said. “The Chinese audit agency could be understating banks’ exposure to local governments,” Yvonne Zhang, a Moody’s analyst in Beijing, said in the report today. The “apparent absence of a clear master plan to deal with this issue” is likely to exacerbate problems and lenders may be left to manage a portion of the souring loans on their own, it said. China Banks’ Outlook May Be Souring on Loans – Bloomberg . Posted in Bank Regulation (Foreign) | Comments Off |
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Posted on July 5, 2011 by admin Bills pass both chambers and governor’ scrutiny to make it into law While same sex marriage and property taxes dominated the end of New York’s legislative session, the state Legislature also passed new laws on health care, sexting, gun possession, Fourth of July sparklers and even allowing a tightrope walker to traverse Niagara Falls. These bills passed both the Senate and Assembly and were sent to Gov. Andrew Cuomo for his signature or veto http://www.syracuse.com/news/index.ssf/2011/07/a_swath_of_bills_passed_both_c.html Tax Cap 2% solution no panacea as mandates lurk Cuomo is scheduled to be in Buffalo today for a ceremonial signing of the tax cap law. Teachers union and school district officials point to expenses such as pensions, health care and Medicaid that are not regulated by local governments or school districts. Yet these state mandates fall to local governments and school districts to pay, and they are growing at annual rates far greater than 2 percent. How are schools and communities to cope, they ask, when they don’t have the freedom to control the costs the property tax covers? http://www.buffalonews.com/city/article478024.ece Feds deny aid to northern NY flood victims The Federal Emergency Management Agency has denied Gov. Andrew Cuomo’s request to provide aid to northern New Yorkers affected by April’s floods. The Hudson River and Lake Champlain reached record levels due to a combination of heavy rains and snow melt in April, causing an estimated $36 million in damage to public infrastructure across 23 counties and resulting in a federal disaster declaration. FEMA declared the region eligible for funding to repair damaged public infrastructure. But the Glens Falls Post-Star reports that the agency found damage to private waterfront properties didn’t warrant public financial assistance. The governor has 30 days to appeal FEMA’s decision. Rep. Bill Owens of Plattsburgh urged him to do so. http://www.timesunion.com/news/article/Feds-deny-aid-to-northern-NY-flood-victims-1452123.php Former Gov. Paterson heaps praise on Gov. Cuomo’s achievements The former governor cited Cuomo’s success in delivering an on-time budget that reduced a $10 billion deficit without new taxes or borrowing, passage of a local property tax cap, extension of the rent-regulation laws and passage of a long-expired law making it easier to site power plants. “You’d have to say he pitched a no-hitter for the first session,” Paterson said. “I can’t think of a better start that any other governor got in the first six months.” He noted his own frustration in dealing with a recalcitrant Legislature. http://www.nydailynews.com/news/politics/2011/07/05/2011-07-05_dave_touts_cuomos_success.html Pay Frozen, More New York Judges Leave Bench …across the country — and in New York, more than most places — being a judge has in recent years come with one big negative: the salary. New York judges have not had a raise in 12 years, making the state one of the more extreme examples of a growing pay gap nationally between judges and other professionals, including partners at top law firms, who can earn 10 times the salary of the judge before whom they are arguing a case. Now, for the first time in memory, judges are leaving the bench in relatively large numbers — not to retire, but to return to being practicing lawyers. Turnover in New York has increased rapidly in the last few years: nearly 1 in 10 judges are now leaving annually, a new study shows. http://www.nytimes.com/2011/07/05/nyregion/with-salary-freeze-more-new-york-judges-are-leaving-the-bench.html?ref=nyregion Authorities Budget Office report Here’s the annual report of the Authorities Budget Office which since its inception has kept a close eye on any number of public authorities — those quasi government operations that at times have amounted to a Wild West of government-funded enterprises: http://www.abo.state.ny.us/reports/annualreports/ABO2010AnnualReport.pdf Posted in State & Political News Round-Up | Comments Off |
| Artful banks dodge the truth about how much is really in their accounts Posted on June 24, 2011 by admin The question arises because it’s clear from the recent spate of first-quarter results that one bank’s accounts are not being prepared in the same way as another’s. If you are the finance director of a bank, doing the accounts is as much an art as a science. Investors and accounting experts have recently highlighted what they consider serious flaws in the International Financial Reporting Standards for banks. These are giving cause for concern not just in the area of profitability but also around banks’ capital positions too. Artful banks dodge the truth about how much is really in their accounts – Telegraph . Posted in Bank Regulation (domestic) , Bank Regulation (Foreign) | Comments Off |
| Insurance Department Licensees May Now Obtain Copies Of New And Renewed Licenses Accessing Website Posted on June 24, 2011 by admin The New York State Insurance Department issued the following news release: Superintendent James Wrynn today announced that insurance agents, brokers and other licensees of the New York State Insurance Department are now able to obtain and print copies of new and renewed licenses by accessing a self-service feature on the Insurance Department’s website. Insurance News – Insurance Department Licensees May Now Obtain Copies Of New And Renewed Licenses Accessing Website . Posted in Insurance Department , Insurance Industry , Insurance Regulation , Insurance Regulation (Global) | Comments Off |
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