News Clips – Friday, October 21, 2011

Housing Market May Get Fed Aid – WSJ.com Posted on October 21, 2011  by admin

Federal Reserve officials are starting to build a case for a new program of buying mortgage-backed securities to boost the ailing economy, though they appear unlikely to move swiftly. The idea would be to target any new efforts by the central bank at the parts of the economy that are most severely impeding a recovery—the housing and mortgage markets—by working to push down mortgage rates. Lower mortgage rates, in turn, could encourage more home buying and mortgage-refinancing, and help the economy by freeing up cash for consumers to spend on other goods and services. Mortgage rates are already very low, but some Fed officials believe they might be pushed lower. Moreover, Fed officials believe their past purchase programs helped to lift stock markets, by driving investors from low-risk investments toward riskier investments.  Housing Market May Get Fed Aid – WSJ.com .

Posted in Fed (The Federal Reserve) , Mortgage Industry  | Comments Off

Analysis: Banks keen on stock buybacks, regulators wary | Reuters Posted on October 20, 2011  by admin   U.S. bank executives are eager to buy back their stocks at depressed prices, but regulators appear to be reining them in, showing a clear disagreement over how risky the financial world is today and how much banks need to conserve capital. Analysis: Banks keen on stock buybacks, regulators wary | Reuters . Posted in Capital Requirements  | Comments Off

BNY Mellon loses motion to get Countrywide lawsuit moved to state court « HousingWire Posted on October 20, 2011  by admin   A federal district judge has denied The Bank of New York Mellon motion to move a lawsuit filed by Countrywide RMBS investors out of federal court and back into state court. The case was originally filed by investors in soured Countrywide mortgage-backed securities who were trying to block a proposed $8.5 billion settlement between The Bank of New York Mellon, the trustee overseeing the securitized loans, and the loans’ originator, Countrywide (Bank of America).  BNY Mellon loses motion to get Countrywide lawsuit moved to state court « HousingWire . Posted in Asset/Mortgage Backed Securities , Mortgage Industry  | Comments Off

Bankers’ Objections to Volcker Rule Fail on the Merits: View – Businessweek Posted on October 20, 2011  by admin   Big U.S. banks have found a lot not to like in the Volcker rule. We agree that regulations shouldn’t be unduly burdensome. But we see no good reason to share banks’ objections on this one.  Bankers’ Objections to Volcker Rule Fail on the Merits: View – Businessweek . Posted in Volcker Rule  | Comments Off

BofA, Wells Fargo, JPMorgan Sued by ATM User Over Fees – Bloomberg Posted on October 20, 2011  by admin   Bank of America Corp., Wells Fargo & Co.  and JPMorgan Chase & Co. were sued for allegedly colluding to fix the fees paid by consumers for access to automated teller machines. The antitrust suit, brought in federal court in Washington by an ATM user and made public today, also names Visa Inc. and MasterCard Inc. , the world’s biggest payment networks, as defendants. It’s the third lawsuit filed in Washington in the past week alleging price-fixing of ATM fees and surcharges.  BofA, Wells Fargo, JPMorgan Sued by ATM User Over Fees – Bloomberg . Posted in Bank Products, Fees & Accounts , Consumer Protection  | Comments Off

Humphrey takes on senior scams at $3 billion and counting | Reuters Posted on October 20, 2011  by admin   Federal financial regulators on Wednesday created a new Office of Older Americans to focus on the financial abuses they say cost seniors some $3 billion a year. The Consumer Financial Protection Bureau named Hubert H. “Skip” Humphrey III, who is on the board of the AARP, to direct the office and focus on such issues as reverse mortgages and retiree bankruptcies. The CFPB, created by the Dodd-Frank financial reform legislation, is still awaiting the Senate-stalled confirmation of Richard Cordray, nominated to be its director. Humphrey takes on senior scams at $3 billion and counting | Reuters . Posted in Consumer Protection , Reverse Mortgages , Scams, Schemes & Frauds , Seniors  | Comments Off

GAO: Executives’ seats on Fed boards as firms benefit give appearance of conflict – The Washington Post Posted on October 20, 2011  by admin   Top executives from Goldman Sachs, J.P. Morgan Chase, General Electric and other firms sat on the boards of regional Federal Reserve banks while their firms benefited from the central bank’s policies during the financial crisis, creating an appearance of a conflict of interest, a federal watchdog said Wednesday. At least 18 board members of the Fed’s regional banks were affiliated with companies that tapped emergency Fed programs during the financial crisis, according to the Government Accountability Office. But though there was an appearance of a conflict, the watchdog found that none of these firms received special treatment.  GAO: Executives’ seats on Fed boards as firms benefit give appearance of conflict – The Washington Post . Posted in Fed (The Federal Reserve)  | Comments Off

Citigroup to pay $285 million to settle fraud case | Reuters Posted on October 20, 2011  by admin   Citigroup Inc will pay $285 million to settle charges that it defrauded investors who bought toxic housing-related debt that the bank bet would fail, the U.S. Securities and Exchange Commission said on Wednesday. The SEC said the bank’s Citigroup Global Markets unit misled investors about a $1 billion collateralized debt obligation by failing to reveal it had “significant influence” over the selection of $500 million of underlying assets, and that it took a short position against those assets. It said one experienced CDO trader called the portfolio “possibly the best short EVER!” while an experienced collateral manager said “the portfolio is horrible.”  Citigroup to pay $285 million to settle fraud case | Reuters . Posted in Asset/Mortgage Backed Securities  | Comments Off

California reportedly subpoenas BofA over toxic securities – latimes.com Posted on October 20, 2011  by admin   Investigators with the state attorney general’s office have subpoenaed Bank of America Corp. in connection with the sale and marketing of troubled mortgage-backed securities to California investors, according to a person familiar with the probe. The state is trying to determine whether the bank and its Countrywide Financial subsidiary sold investments backed by risky mortgages to institutional and private investors in California under false pretenses, according to the person, who was not authorized to speak publicly and requested confidentiality. The subpoenas, which were served Tuesday, come as talks continue for a broad foreclosure settlement by a coalition of state attorneys general and federal agencies. California walked away from those discussions with major banks more than two weeks ago, saying what the banks were offering was not enough and the state would pursue its own investigations.  California reportedly subpoenas BofA over toxic securities – latimes.com . Posted in Foreclosure & Mortgage Mods  | Comments Off

NY Attempting End to Health Insurers’ Rate Secrecy — LifeHealthPro Posted on October 19, 2011  by Ins News   The New York Department of Financial Services (DFS) intends to make public all previously approved health insurance rate applications filed with the department, attempting to abolish a policy shielding the applications. http://www.lifehealthpro.com/2011/10/17/ny-attempting-end-to-health-insurers-rate-secrecy Posted in Benjamin Lawsky , Department of Financial Services (DFS) , Health Care Reform , Insurance Industry , Uncategorized  | Comments Off

Dodd Frank may still apply to captives – Captive Review Posted on October 19, 2011  by Ins News   Jim McIntyre of the Vermont Captive Insurance Association (VCIA) has published a whitepaper stating that the broadness of definitions by Dodd Frank’s Non-admitted and Reinsurance Reform Act (NRRA) raises questions about the Act’s impact on captive insurance. http://www.captivereview.com/news/1699072/-dodd-frank-may-still-apply-to-captives-.thtml?utm_source=captive-review&utm_medium=newsletter&utm_campaign=captive-review Posted in Dodd-Frank , Insurance Industry , Insurance Regulation , Uncategorized  | Comments Off

Regional Feds Urged to Avoid Conflicts of Interest – NYTimes.com Posted on October 19, 2011  by admin   Regional Federal Reserve banks’ heavy reliance on directors linked to the financial industry can suggest conflicts of interest and the process of excluding officials from certain decisions should be clearer, a congressional study released on Wednesday found.  Regional Feds Urged to Avoid Conflicts of Interest – NYTimes.com . Posted in Fed (The Federal Reserve)  | Comments Off

Foreclosure deal near as banks win more immunity | Reuters Posted on October 19, 2011  by admin   Talks between U.S. states and top banks over mortgage abuses are nearing agreement on a major sticking point that has bogged down settlement negotiations for more than a year. A deal could be reached by the end of the month, according to three people familiar with the talks.  Foreclosure deal near as banks win more immunity | Reuters . Posted in Foreclosure & Mortgage Mods  | Comments Off

Life Insurers See an Opening in Commercial Mortgages – NYTimes.com Posted on October 19, 2011  by admin   Life Insurers Dive into Commercial Mortgages Investment banks, which typically dominate commercial mortgage lending, are sitting on the sidelines, as the weak economy takes its toll, The New York Times writes. That’s left life insurance companies to pick up the slack, underwriting $15.7 billion in new commercial mortgages in the second quarter, the largest volume on record. “Life insurance companies are pretty much the only game in town,” Lawrence J. Longua, a clinical associate professor at the Schack Institute of Real Estate at New York University, told the Times. Insurers See an Opening in Commercial Mortgages – NYTimes.com . Posted in Insurance Industry , Mortgage Industry  | Comments Off

Scotrecard: Countries fail to enforce Basel reforms – FT.com Posted on October 19, 2011  by admin   Six of the 27 countries that set global banking regulations still have not fully implemented the Basel II reforms agreed in 2004, and only 11 of the 27 have drafted rules to enact the tougher Basel III standards that are supposed to replace them. The scorecard issued on Tuesday by the Basel Committee on Banking Supervision, which writes the rules, raises serious questions about whether some of the world’s financial centres are paying lip-service to global efforts to make banks safer and prevent a repeat of the financial crisis. Both the US and China are among the countries that are in the process of implementing Basel II.  Countries fail to enforce Basel reforms – FT.com . Posted in Basel (I, II, III) , Capital Requirements  | Comments Off

State attorneys general push for Cordray to lead federal consumer agency – The Washington Post Posted on October 19, 2011  by admin   The National Association of Attorneys General on Tuesday sent a letter  to Senate leaders calling nominee Richard Cord­ray “brilliant and balanced.” Cordray was an attorney general in Ohio known for his aggressive pursuit of foreclosure fraud before joining the Consumer Financial Protection Bureau (CFPB) as head of enforcement in January. This summer, Obama picked him to lead the fledgling agency, and he now awaits Senate confirmation. via State attorneys general push for Cordray to lead federal consumer agency – The Washington Post . Posted in CFPB  | Comments Off

Dismantling the Myths Around Wall Street Reform – Day 2: A Look at U.S. Competitiveness Posted on October 19, 2011  by admin   Latest blog post from Deputy Treasury Secretary Neal S. Wolin pushes back against the idea that the law puts U.S. banks at a competitive disadvantage: “The United States moved first, enacting comprehensive financial reform last summer, and consistent with their international commitments, other major financial systems are now putting their legal and regulatory frameworks in place…”Strong U.S. leadership has been key to the important progress the world has made in the G-20 and other international fora… At the G-20 Finance Ministers meeting last week, we agreed to enhanced prudential standards for large, systemically important financial institutions, along with a new G-20 framework to resolve these firms without widespread disruption and cost to taxpayers.” Dismantling the Myths Around Wall Street Reform – Day 2: A Look at U.S. Competitiveness . Posted in Dodd-Frank , Fed (The Federal Reserve)  | Comments Off

Jon Huntsman: ‘Too Big to Fail’ Is Simply Too Big – WSJ.com Posted on October 19, 2011  by admin   Is Dodd-Frank an appropriate regulatory response to the 2007 financial crisis? Tragically, no. That legislation ignores the government’s pervasive role in causing the crisis, assures future transfers from taxpayers to bankers by institutionalizing a government backstop for “too big to fail” firms, and imposes massive new regulations and unreasonable compliance costs on smaller banks. As a result, lending to small businesses from small banks suffers. Jon Huntsman: ‘Too Big to Fail’ Is Simply Too Big – WSJ.com . Posted in Too Big To Fail  | Comments Off

Community Bankers Speak Out On the Impact of Dodd-Frank Regulations | House Committee on Financial Services Posted on October 18, 2011  by admin   From House Financial Services GOP blog: “One community banker from Illinois said, “The Dodd-Frank Act will add an additional, enormous burden, has stimulated an environment of uncertainty, and has added new risks that will inevitably translate into fewer loans to small businesses.” While community banks did not cause the crisis, they have to comply with the 2,300 page Dodd-Frank Act. Michael Martin, CEO of Lordsburg’s Western Bank, said “We’re small business people. We have to understand and comply with the regulations just like Wells Fargo. We don’t have 70 attorneys on staff to figure it out.” While Republicans continuously warned of the disproportionate impact these regulations would have on ‘too small to save’ community banks, Democrats relied on illusionary exemptions in the bill. Make no mistake about it: community banks are being placed at a disadvantage due to the 400 new regulations stemming from the Dodd-Frank Act.” On The Record: Community Bankers Speak Out On the Impact of Dodd-Frank Regulations | House Committee on Financial Services . Posted in Community Banks , Congress & Committees , Dodd-Frank  | Comments Off

Fed approves final rule on big banks’ living wills | Reuters Posted on October 18, 2011  by admin   The Federal Reserve announced on Monday that it had approved a final rule on the blueprints large banks will have to submit to U.S. regulators showing how they can be dismantled in the event of failure. The rule was written jointly with the Federal Deposit Insurance Corp, which approved it on September 13. Both agencies had to approve the regulation for it to become effective. Under the rule, the largest U.S. banks will have to submit a plan, known as a “living will,” by the middle of next year.  Fed approves final rule on big banks’ living wills | Reuters . Posted in Living Wills (Banks)  | Comments Off