Jeff Horwitz

Regulators and academics are starting to look at low volatility as an integral part of the buildup toward financial meltdowns.

Promontory's connections and expertise turned the consultant into a private sector regulatory proxy. But those same strengths put the firm in the crosshairs after its role in the failed foreclosure review process and controversial work for MF Global and Standard Chartered.

Following allegations that the FHFA killed a Fannie Mae plan that would have saved homeowners and taxpayers hundreds of millions of dollars, the ranking member of the House Finance Committee has asked the regulator to explain its decision.

The FHFA abruptly killed a Fannie Mae plan earlier this month that promised to save the GSE hundreds of millions of dollars in force-placed insurance premiums. Critics see industry pressure as the culprit.

A plan by Fannie Mae to slash premiums for replacement homeowners insurance has been killed by the Federal Housing Finance Agency, according to people informed of the agency's decision.

Tougher on banks than on debt buyers, the FTC found banks and other creditors bear responsibility for selling consumer debts with scant documentation. Possibly erroneous records are a "significant" concern.

EverBank and OneWest appear set to do what regulators and the largest mortgage servicers concluded was impractical: Finish the independent foreclosure reviews.

Federal regulators have hinted they'd like to toughen the rules governing the way banks collect delinquent consumer debt. Making them stick would likely prove challenging.

The Bureau's rules add incrementally to a previous mandate in the mortgage servicing settlement, but leave other regulators to sort out the controversy over the insurance for troubled homeowners.

Bank of America laid more of its mortgage demons to rest, and reported strong earnings from global banking and wealth management.

State and federal authorities are taking a hard look at how banks collect consumer debts. A multi-billion dollar market may be remade through tighter rules or enforcement actions.

A "simplified" foreclosure review settlement is in borrowers' best interests, even though details remain sketchy, officials from the Office of the Comptroller of the Currency argued Monday.

A deal between regulators and 10 major mortgage banks will end a troubled foreclosure review process. However, the latest plan faces troubles of its own.

The American Bankers Association is asking Fannie Mae's regulator to halt a plan to slash the prices the housing giant and troubled borrowers pay for property insurance, citing a "lack of transparency and the absence of public input."

Regulators apparently agree with widespread criticism that the vast foreclosure review process went off the rails.

Wells Fargo won a partial victory in its appeal of an order to reimburse $203 million of overdraft charges. It can order debit transactions how it wants, but consumers still have a case that they were misled, an appeals court ruled.

The Consumer Financial Protection Bureau is finishing a redesign of its headquarters featuring an open floor plan — a sharp departure from the labyrinthine layout of the previous tenant, the OTS.

Receiving Wide Coverage ...UBS Fined in Libor Probe: An irony of the Libor probe is that it's looking nearly as choreographed and negotiated as the long-running rate manipulation that preceded it. Early this morning UBS and Swiss regulators announced the bank had agreed to a $1.5 billion settlement, and arrests of people connected with the Swiss bank are expected today, according to anonymous sources. RBS is next in line to settle, these same sources say. As for that $1.5 billion UBS fine: despite rolling over early in the international probe, the bank played a central role in the manipulation, anonymous investigators believe. A Japanese subsidiary stepped up to take a single fraud conviction, though that doesn't seem to risk bringing UBS down Arthur Andersen style.

Receiving Wide Coverage ...Facebook IPO Settlement: Morgan Stanley's paying $5 million to settle a Massachusetts probe of how it handled the Facebook IPO. According to a Journal story crosschecked between the state's attorney general's office and people "familiar with the matter," star tech analyst Michael Grimes wrote a script with detailed, non-public information for Facebook's CFO to share with investors. Then, in what might seem a cynical approach to dealing with Morgan Stanley's supposed Chinese walls, Grimes walked down the hall so that he was out of earshot when the CFO read it. "I took extra precaution to do that, and sat on the floor," Grimes later said, according to the Massachusetts order. The two takeaways from this one are: that Morgan Stanley's actions do appear to run against post-Spitzer prohibitions of selective disclosures and analysts in bed with bankers, and that nobody seems to care enough to do anything serious about it. Financial Times, New York Times

QBE's concession, made amid scrutiny of its relationship with major banks, would save investors and homeowners in the state $98 million a year. Part of that money would come from reducing the commissions it pays to banks.