Hannah Lang

Zions Bancorp. CEO Harris Simmons says the Secured Overnight Financing Rate is more suited for derivative traders than regional banks as a replacement for Libor. His bank this week became the largest to say it would use the alternative developed by the American Financial Exchange.

The Department of Housing and Urban Development will revive a 2013 rule that makes lenders liable for practices that were unintentionally discriminatory as well as 2015 guidelines for how local jurisdictions comply with the Fair Housing Act.

The central bank should consider using a tool requiring higher capital amounts when times are good rather than offering temporary regulatory relief in a downturn, said Boston Fed President Eric Rosengren.

The Financial Stability Oversight Council has struggled to find its footing since its creation in Dodd-Frank. The Treasury secretary has signaled a more aggressive role for the panel, including reviving its authority to target nonbank behemoths.

One official at the bureau said this fall could be an “unusual point in history” for the mortgage market as delinquent borrowers exit forbearance plans. The agency proposed new steps for servicers to help consumers stay in their homes.

Treasury Secretary Janet Yellen conducted her first meeting as chair of the Financial Stability Oversight Council and set the stage for a potential recalibration of the panel's role after it was weakened in the Trump administration.

The agency announced it was rescinding seven policy statements issued last year meant to help companies combat fallout from COVID-19 but that the bureau's current chief said came at the expense of consumers.

Although the Federal Housing Administration's insurance fund is "well above" its legal minimum, HUD Secretary Marcia Fudge said the mortgage agency has no plans to cut prices.

The heads of the Federal Reserve and Treasury are urging passage of legislation that would replace Libor with the Secured Overnight Financing Rate in certain contracts. That would spare banks litigation over trillions of dollars of contracts when Libor expires in 2023.

For banks that pass this year’s stress tests, the Federal Reserve said it will eliminate the restrictions on dividends and share buybacks while subjecting those institutions instead to the stress capital buffer.

Top officials at the U.S. central bank and Treasury Secretary Janet Yellen reaffirmed their commitment to understand how extreme weather events affect financial institutions and the economy as a whole. Many Republicans, however, worry the Federal Reserve’s new climate focus strays too far from its traditional function.

The decision is seen as a setback for the banking industry, which had been pushing for an extension, and a win for Democrats, who have argued that a pandemic is no time for banks to be shedding capital.

The legislation easily passed the House in 2019 but was never considered in the Senate. Observers see a more promising path forward this time.

The Federal Reserve will determine within days whether to extend the easing of the supplementary leverage ratio for big banks past March 31, Chairman Jerome Powell says. And it's a couple of weeks away from announcing whether there will be limits on second-quarter dividends and buybacks, he says.

In its final days, the Trump administration imposed limits on Fannie Mae and Freddie Mac’s holdings of mortgages with loan-to-value ratios above 90% and certain other characteristics. Critics say the changes were unnecessary and disproportionately penalize borrowers of color.

Nonbanks had worried the end of the Paycheck Protection Program Liquidity Facility would hurt their ability to lend to small businesses. On Monday, the Federal Reserve announced the facility would be extended for three months.

The industry wants regulators to extend a temporary measure making it easier to satisfy the supplementary leverage ratio. But Democrats’ control of the White House and Congress has given a bigger platform to those who say banks have had enough relief.

As government debt swells, the outer limits of what the U.S. can safely borrow are becoming less and less clear.

Sens. Elizabeth Warren and Sherrod Brown urged regulators not to give in to industry requests to extend a temporary policy easing compliance with the supplementary leverage ratio.

The mortgage giants were authorized to give just over $1 billion combined to the National Housing Trust Fund and the Capital Magnet Fund this year, the highest contribution ever. The amount reflects refinancing growth in 2020.