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Dodd-Frank regulators signal increased auto lending scrutiny
Posted Date: Friday, April 25, 2014
Auto lending has joined mortgage lending as a top priority of the federal agencies charged with enforcing the nation’s consumer protection laws in the banking industry following the enactment of the Dodd-Frank Act. That point was made loud and clear by officials from the Consumer Financial Protection Bureau and other federal agencies who spoke at a recent Consumer Bankers Association forum in Washington, D.C.
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Lawmakers amplify QM community bank concerns
Posted Date: Friday, April 11, 2014
U.S. House Republicans say they’re seeing evidence that new regulations are forcing some community institutions out of the mortgage business. They discussed their concerns during an April 8 hearing that examined the impact of regulation on financial institutions and consumers. House Financial Services Committee Chairman Jeb Hensarling, R-Texas, shared a portion of a letter he received from a community banker in his state who said consumer lending has become a “compliance nightmare.”
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Lawmakers float more CFPB-related bills
Posted Date: Tuesday, April 15, 2014
Lawmakers continue to propose bills that would impact the activities of the Consumer Financial Protection Bureau. Democrats proposed measures intended to enhance consumer protections related to credit cards and tax preparation. Other bills recently introduced would require the bureau to establish a small business advisory panel and would place limitations on the agency’s ability to collect information directly from smaller depository institutions.
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CFTC cost-benefit, end-user relief bill clears house committee
Posted Date: Friday, April 18, 2014
The Commodity Futures Trading Commission would be required to beef up its regulatory cost-benefit analysis and alter procedures for issuing so-called “no-action” letters under bipartisan reauthorization legislation recently advanced by the U.S. House Agriculture Committee. The sweeping bill also amends the Commodity Exchange Act to address concerns that the CFTC’s Dodd-Frank swaps rules place too great a burden on commercial end-users. Read on to learn more about the legislation.
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Republicans criticize Fed’s Volcker Rule CLO plan
Posted Date: Friday, April 11, 2014
U.S. House Republicans criticized a Federal Reserve plan aimed at mitigating the Volcker Rule’s impact on institutions that hold certain collateralized loan obligations. The Fed said it would give banks an additional two years, until July 2017, to conform their ownership interests in, and sponsorship of, certain CLOs covered by the Volcker Rule. Read on to learn about the plan and why Republicans said it doesn’t go far enough.
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CFPB remittance rule revisions proposed
Posted Date: Friday, April 18, 2014
The Consumer Financial Protection Bureau proposed revisions to its international remittance transfer rule. The revisions would provide federally insured institutions with additional time to provide exact disclosures in certain cases. The rule also seeks feedback on potential clarifications. For instance, the bureau is seeking comment on the treatment of transfers sent to and from U.S. military installations abroad.
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National Mortgage Database to expand
Posted Date: Tuesday, April 22, 2014
The Federal Housing Finance Agency said it plans to expand the information that will be collected, maintained and stored in the National Mortgage Database, a comprehensive repository of mortgage loan information the agency is developing in partnership with the Consumer Financial Protection Bureau. Read on for the updated list of information the FHFA said it plans to collect.
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Bank of America to pay $772M in latest CFPB credit card action
Posted Date: Friday, April 11, 2014
The Consumer Financial Protection Bureau ordered Bank of America to pay an estimated $727 million in relief to consumers the agency said were harmed by practices related to credit card add-on products. The bank also agreed to pay $45 million in civil penalties to settle the action. The CFPB said the bank engaged in deceptive marketing and illegal billing practices. This is the fifth bureau action pertaining to alleged illegal practices in the credit card add-on market.
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OSHA releases CFPA whistleblower interim final rule
Posted Date: Tuesday, April 8, 2014
The Occupational Safety and Health Administration issued an interim final rule implementing procedures related to Dodd-Frank’s whistleblower protections for those who report violations of the Consumer Financial Protection Act or other provisions of law that are subject to Consumer Financial Protection Bureau jurisdiction. Read on to learn about protected whistleblower activities and OSHA’s process for handling retaliation complaints.
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CFTC weighing Dodd-Frank’s impact on public utilities
Posted Date: Tuesday, April 8, 2014
The Commodity Futures Trading Commission’s interim leader vowed to take additional steps to mitigate the impact of the agency’s swaps rules on public utilities and their customers. Industry participants have argued that the commission’s Dodd-Frank rules limit the ability of public utilities to hedge their risks. Last month, the agency released a so-called “no-action” letter to address the issue. CFTC Acting Chairman Mark Wetjen also recently announced that the agency plans to amend its rules in response to the industry’s concerns. Read on for the details.
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CBA Live coverage: CFPB deputy says exam program is maturing
Posted Date: Monday, April 7, 2014
Banks and nonbanks subject to Consumer Financial Protection Bureau oversight frequently complain that the bureau’s supervision program leaves much to be desired. However, Steve Antonakes, the agency’s second-in-command, says the program continues to grow and mature. Dodd Frank Update was on hand at the Consumer Bankers Association’s CBA Live conference in Washington, D.C., as Antonakes discussed industry concerns related to bureau supervision. Read on for the details.
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Responsible conduct: Some firms wary of self-reporting to CFPB
Posted Date: Tuesday, April 8, 2014
Last year, the Consumer Financial Protection Bureau released a bulletin explaining that firms that self-report violations and engage in other “responsible conduct” may receive favorable treatment when the agency considers potential enforcement actions or civil penalties. CFPB Deputy Director Steven Antonakes highlighted the bulletin’s potential for enhancing regulatory compliance during the Consumer Bankers Association’s recent CBA Live conference in Washington, D.C. However, a former bureau insider says many institutions are fearful of self-reporting to the CFPB. Read on to learn about the responsible conduct bulletin and the self-reporting issue.
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QM solutions: Affiliates and the Bank Holding Company Act
Posted Date: Friday, April 18, 2014
The ability-to-repay/qualified mortgage rule establishes a 3 percent points and fees cap for QMs and provides that any third-party charge retained by the creditor, loan originator or an affiliate of either must be included in points and fees. However, the rule relies on the definition of “affiliate” established under the Bank Holding Company Act, not the Real Estate Settlement Procedures Act definition many firms in affiliated relationships are familiar with. Paul Schieber, a shareholder at Stevens & Lee, says the BHC Act test that is used to determine whether a person or group has control over an entity is somewhat subjective. Read on to learn what he had to say about the issue during a recent October Research, LLC webinar.
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Mortgage rules will restrict credit availability, bankers say
Posted Date: Friday, April 11, 2014
More than 80 percent of banks expect new mortgage regulations to reduce mortgage credit availability, according to survey results released by the American Bankers Association. The ABA’s 21st annual Real Estate Lending Survey revealed that more than one-third of respondents will only make qualified mortgage loans, while another one-third will also make non-qualified mortgage loans, but only to targeted markets or products. Read on to learn what issues topped the list of banker concerns.
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Portion of debated SEC Dodd-Frank rule is unconstitutional, D.C. Circuit says
Posted Date: Friday, April 18, 2014
The U.S. Court of Appeals for the District of Columbia Circuit ruled that a portion of a hotly debated Dodd-Frank rule promulgated by the Securities and Exchange Commission violates the First Amendment. The commission’s “conflict minerals” rule implemented Dodd-Frank provisions that require certain firms to describe whether their products are “conflict free” in relation to the ongoing armed struggle in the region of the Congo. However, the court said the statute interferes with the exercise of the freedom of speech.
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President should consider replacing CFPB director, lawmaker says
Posted Date: Friday, April 11, 2014
The Consumer Financial Protection Bureau continues to face tough questions from lawmakers on both sides of the aisle following reports that agency managers engaged in employee retaliation, as well as racial and gender discrimination. A congressman recently called on President Barack Obama to address the issue or ask Richard Cordray, the agency’s director, to resign. Meanwhile, bureau leaders say they are taking steps to address workplace problems.
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New York regulator brings Dodd-Frank UDAAP suit
Posted Date: Tuesday, April 29, 2014
New York’s superintendent of financial services has become the first state regulator to bring a legal action to enforce Dodd-Frank’s ban on unfair, deceptive and abusive acts or practices. The state’s department of financial services obtained a temporary restraining order in federal court against an auto lender investigators said engaged in a longstanding scheme to steal millions of dollars from vulnerable consumers. This action comes a little more than a month after the Illinois attorney general sued a short-term lender for alleged violations of Dodd-Frank’s ban on abusive practices.
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Commenters fear OCC ‘heightened expectations’ could apply to community, mid-size banks
Posted Date: Tuesday, April 29, 2014
Commenters responding to an Office of the Comptroller of the Currency proposal that would formalize enhanced bank governance and risk management standards for large institutions fear those standards could impact community and mid-size banks. Some commenters were also concerned that the so-called “heightened expectations” standards proposed by the OCC are overly prescriptive and fail to take into account the characteristics of different banks.
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Fed puts brakes on Bank of America’s capital plan
Posted Date: Tuesday, April 29, 2014
The Federal Reserve is requiring Bank of America Corp. to resubmit its capital plan and suspend planned increases in capital distributions after the firm said it incorrectly reported data used in the regulator’s most recent stress tests. On April 28, the firm announced a downward revision to its previously disclosed regulatory capital amounts and ratios due to an incorrect adjustment related to the treatment of certain structured notes assumed when it acquired Merrill Lynch & Co. in 2009.
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QM solutions: How do I protect against ATR liability?
Posted Date: Tuesday, April 29, 2014
The Consumer Financial Protection Bureau’s new ability-to-repay/qualified mortgage rule permits lenders to make non-QM loans, also known as “ATR space” loans. ATR space loans are associated with enhanced liability. Ben Olson, a former top CFPB rule writer who is now with BuckleySandler LLP, described steps lenders are taking as they grapple with the issue of ATR liability.
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NS3 PREVIEW: Protecting yourself, your customers and your office with a compliant escrow office
Posted Date: Tuesday, April 29, 2014
It seems like every time you turn around, you hear about a new threat to your escrow accounts, or another escrow agency owner discovering that their trusted employee has been stealing escrow funds from behind their back. These threats are real and regulators and legislators are standing up and taking notice. In this environment, it’s more critical than ever to make sure you are operating a compliant escrow operation. At the 2014 National Settlement Services Summit (NS3), industry members and a seasoned regulator will provide the tools you need to protect your most valuable asset.
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CFPB fills remaining vacancies on Academic Research Council
Posted Date: Friday, April 25, 2014
The Consumer Financial Protection Bureau has added two new members to its Academic Research Council, an advisory group comprised of scholars who help the CFPB’s Office of Research by offering advice on methodologies, data collection and analytic strategies. The council convened April 25 for its annual meeting. Read on to find out who joined the council.
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CFPB warns of ‘auto-default’ danger with some student loans
Posted Date: Friday, April 25, 2014
Some student loan lenders are demanding immediate full repayment upon the death or bankruptcy of a borrower’s co-signer — even when the loan is current and being paid on time. That’s the finding of a new Consumer Financial Protection Bureau report highlighting complaints of so-called “auto-defaults” in private student lending. Read on to learn how student loan borrowers also face bureaucratic barriers to releasing co-signers from their loans.
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Watch for possible CFPB mortgage rule clarifications soon, attorney says
Posted Date: Friday, April 25, 2014
The Consumer Financial Protection Bureau promised to keep a close eye on the market impact of several new mortgage rules that took effect in January. The bureau also said it would make amendments and clarifications to the rules as appropriate. Richard Andreano, a partner at Ballard Spahr, said it appears the bureau could be poised to propose some mortgage rule clarifications soon.
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Basel Committee finalizes ‘large exposure’ banking standard
Posted Date: Friday, April 25, 2014
The Basel Committee on Banking Supervision has issued its final standard for limiting the maximum possible loss a bank could incur in the event of the sudden default of a counterparty. The international banking committee’s “large exposure” guidelines include a general limit of 25 percent of a bank’s Tier 1 capital. Read on to learn the particulars of the Basel Committee’s new large exposure standard.
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BREAKING NEWS: CFPB unveils eClosing initiative
Posted Date: Wednesday, April 23, 2014
The Consumer Financial Protection Bureau (CFPB) met with the public Wednesday to discuss the mortgage closing process. The agency announced that it will launch a new electronic closing (eClosing) pilot program in order to explore new avenues to make closings less complex for consumers.
“As part of our Know Before You Owe initiative, we are making a commitment to work with the various stakeholders to use technology in order to improve the mortgage closing experience for consumers,” CFPB Director Richard Cordray said in his opening comments. “We strongly believe that electronic closing solutions — known as eClosings — can lead to more knowledgeable consumers and a much better process for everyone involved.”
Developing a more streamlined and efficient closing process is the next phase in the CFPB’s Know Before You Owe initiative that began in May 2011, when the bureau released its initial RESPA/Truth in Lending Act integrated mortgage disclosure prototypes.
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CFPB releases mortgage disclosure guide
Posted Date: Tuesday, April 22, 2014
The Consumer Financial Protection Bureau released a guide to provide instructions for completing the new mortgage disclosure forms that take effect in 2015. The guide also highlights common situations that may arise when completing the forms.
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QM solutions: CFPB examinations
Posted Date: Tuesday, April 22, 2014
The Consumer Financial Protection Bureau has said it does not expect perfection in its initial reviews for ability-to-repay/qualified mortgage rule compliance. So what can industry participants expect when it comes to ATR/QM rule examinations? Read on to learn what Richard Andreano, a partner at Ballard Spahr, had to say about the issue during a recent October Research, LLC webinar.
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SEC proposes rules for security-based swaps participants
Posted Date: Tuesday, April 22, 2014
The Securities and Exchange Commission proposed Dodd-Frank rules for security-based swap dealers and major security-based swap market participants. The proposed rules cover recordkeeping, reporting and notification requirements for these swaps entities and would establish additional recordkeeping requirements for broker-dealers to account for their security-based swap activities. Read on to learn about the rule.
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NS3 PREVIEW: NBA record-holder to share journey from auto mechanic to All-Star
Posted Date: Tuesday, April 22, 2014
At an age when most NBA All-Stars’ time in a garage is spent weighing what Lamborghini or Ferrari to add to their fleet, Mark Eaton was an auto mechanic talking to customers about whether they wanted regular or high-performance motor oil in their Fords and Chevys. However, the 7-foot-4-inch Eaton would go from a mechanic to a 12-year career with the Utah Jazz where he was named the NBA’s Two-Time Defensive Player of the Year and selected to play in the 1989 All-Star Game. Continue reading to see how Mark is bringing his lessons for personal and professional success to the 2014 National Settlement Services Summit (NS3) in June.
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Mortgage closing process focus of upcoming CFPB forum
Posted Date: Friday, April 18, 2014
The mortgage closing process will be the subject of a public forum this week at Consumer Financial Protection Bureau headquarters in Washington, D.C. Dodd Frank Update will provide live coverage from the event. Read on to learn about the bureau’s effort to streamline the closing process.
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Stewart purchases LandSafe Title from Bank of America
Posted Date: Wednesday, April 16, 2014
Stewart has reached an agreement with Bank of America to purchase its LandSafe Title businesses. The purchase of these operations is consistent with Stewart’s strategies to expand Stewart’s mortgage and title operations and enhance the service Stewart offers its mortgage customers.
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Debt relief provider pleads guilty in first-ever CFPB criminal referral
Posted Date: Tuesday, April 15, 2014
The owner of a New York-based debt relief firm is among those who have pleaded guilty to charges that were based on the Consumer Financial Protection Bureau’s first-ever criminal referral. Mission Settlement Agency and its owner, Michael Levitis, pled guilty in federal court in Manhattan to fraud charges in connection with a multimillion-dollar scheme prosecutors said victimized more than 1,200 consumers.
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OCC’s ‘heightened expectations’ not for community banks, comptroller says
Posted Date: Tuesday, April 15, 2014
Earlier this year, the Office of the Comptroller of the Currency released a proposal that would formalize an enhanced set of bank governance and risk management standards that evolved in the wake of the financial crisis. While the agency said these “heightened expectations” are intended to apply to large national banks and federal thrifts, community bankers worry that their firms will be required to comply with the OCC’s guidelines. Comptroller Thomas Curry recently addressed those concerns head-on. Keep reading to find out what he had to say.
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QM solutions: Discount point rate reductions and ‘established industry practices’
Posted Date: Tuesday, April 15, 2014
The Consumer Financial Protection Bureau’s ability-to-repay/qualified mortgage rule provides that up to two “bona fide discount points” may be excluded from the QM points and fees calculation. The rule also provides that these discount points must result in a rate reduction consistent with “established industry practices.” Industry participants have struggled with this requirement. Read on to learn what Richard Andreano, a partner at Ballard Spahr, said about the issue during a recent October Research, LLC webinar.
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Feds adopt enhanced leverage standards for largest banks
Posted Date: Friday, April 11, 2014
Eight of the largest U.S. banks would be required to meet enhanced leverage requirements under rules approved by the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. The agencies said the rule further addresses market perceptions that certain firms are “too big to fail.” The final rule applies to U.S. top-tier bank holding companies with more than $700 billion in consolidated total assets or more than $10 trillion in assets under custody and their insured depository institution subsidiaries. Read on to learn about the rule and its potential impacts.
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SoftPro celebrates 30 years of innovation and service
Posted Date: Wednesday, April 9, 2014
Thirty years ago several North Carolina attorneys were seeking a software solution for preparing their real estate closing documents, so SoftPro developed a first-of-its-kind application that could scale to meet the needs of real estate attorneys as well as title and escrow companies. This year the company celebrates a milestone. Keep reading to learn more.
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SEC ups payout to whistleblower
Posted Date: Tuesday, April 8, 2014
The Securities and Exchange Commission announced that the whistleblower who received the first award under the agency’s new Dodd-Frank whistleblower program will receive an additional $150,000 payout after the commission collected more funds in the case. Meanwhile, two other individuals who filed to receive SEC whistleblower payouts recently had their claims denied. Read on for the details.
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Lawmaker, SEC commissioner seek enhanced FSOC accountability
Posted Date: Tuesday, April 8, 2014
A top U.S. House Republican and a Democrat on the Securities and Exchange Commission are calling for enhanced accountability for a federal panel tasked under the Dodd-Frank Act with identifying and addressing threats to U.S. financial stability. Concerns about the panel — the Financial Stability Oversight Council — come as the FSOC prepares to decide whether to use its Dodd-Frank authority to subject certain asset management industry participants to enhanced prudential standards and supervision. Read on to learn about FSOC transparency legislation proposed by Rep. Scott Garrett, R-N.J.
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Bureau should adopt broad nonbank remittance rule, associations say
Posted Date: Monday, April 7, 2014
Consumer advocates and associations representing depository institutions urged the Consumer Financial Protection Bureau to expand the scope of a rule proposal that seeks to place larger nonbank international money transfer providers under federal oversight. Under the bureau’s proposal, a nonbank would be considered a “larger participant” subject to CFPB oversight if it has at least one million aggregate annual international money transfers. Read on to learn why some groups think that threshold should be lowered.
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CFPB releases compliance guide for mortgage disclosure rule
Posted Date: Monday, April 7, 2014
The Consumer Financial Protection Bureau released a small entity compliance guide to new mortgage disclosure requirements scheduled to take effect in August 2015. The guide provides a summary of the bureau’s mortgage disclosure rule and highlights issues that small creditors, and those who work with them, might find helpful to consider when implementing the rule. Read on for the details.
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Senators propose enhanced protections for debit cards
Posted Date: Monday, April 7, 2014
Two U.S. senators introduced legislation designed to increase consumer protections and reduce liability caps when debit cardholders experience fraud. Sens. Mark Warner, D-Va., and Mark Kirk, R-Ill., introduced the Consumer Debit Card Protection Act of 2014 on April 2. Read on to learn about the bill.
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CFPB urged to improve supervision program efficiency
Posted Date: Monday, April 7, 2014
The Consumer Financial Protection Bureau should take steps to improve the efficiency and effectiveness of its supervisory program, according to a report from the agency’s inspector general. The March 27 report found that the bureau needs to improve its reporting timeliness and reduce the number of examination reports that have not yet been issued. Read on to learn how the CFPB responded to these and other recommendations.
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House Democrats add another bill to GSE reform debate
Posted Date: Tuesday, April 1, 2014
Democrats on the U.S. House Financial Services Committee are the latest to float a comprehensive housing finance reform proposal. The Democrats’ bill, unveiled March 27, would create an explicit government guarantee. The guarantee would be paid for by industry and used to capitalize a catastrophic mortgage insurance fund. The Democrats’ plan differs from previous plans proposed separately by Senate Banking Committee lawmakers and House Financial Services Republicans.
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Judge trims suit challenging CFTC swaps ruling
Posted Date: Tuesday, April 1, 2014
A federal judge in the District of Columbia has thrown out much of a lawsuit challenging the Commodity Futures Trading Commission’s (CFTC) decision to allow the use of “captive” entities in meeting the new reporting requirements for swaps under the Dodd-Frank Act.
However, U.S. District Judge Amy Berman Jackson’s ruling leaves intact a key claim against the commission that such tying arrangements are “anticompetitive” in violation of the Act’s core principles.
The case is DTCC Data Repository v. Commodity Futures Trading Commission.
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New Fed study bolsters case for ‘too-big-to-fail’ reforms
Posted Date: Tuesday, April 1, 2014
Evidence from the bond market supports the theory that “too-big-to-fail” banks are able to borrow at a lower cost because investors believe the federal government will come to their rescue in the event of a financial crisis, according to a new study released by the Federal Reserve Bank of New York. U.S. Senators Sherrod Brown and David Vitter are touting the study in seeking passage of the Terminating Bailouts for Taxpayer Fairness Act, a bill intended to level the playing field for smaller banks.
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Mortgage performance continues upward trend, OCC reports
Posted Date: Tuesday, April 1, 2014
The performance of first-lien mortgages serviced by large national and federal savings banks continued to improve in the fourth quarter of 2013, according to new numbers from the Office of the Comptroller of the Currency. The commission’s latest metrics report found 91.8 percent of mortgages were current and performing at the end of the quarter.
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CBA Live coverage: No rest for the CFPB
Posted Date: Tuesday, April 1, 2014
The Consumer Financial Protection Bureau has been extremely busy since opening its doors in July 2011, and the agency is showing no sign of slowing. Dodd Frank Update was on hand at the Consumer Bankers Association’s CBA Live conference in Washington, D.C., as industry watchers discussed likely CFPB priorities.
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