BankThink

The lower profits and new fees banks predicted when the swipe fee cap on debit cards was initially proposed never came to fruition. Why believe them now?

Receiving Wide Coverage ...Sued: Well, we know this was coming — The U.S. Justice Department and the Securities and Exchange Commission filed parallel civil lawsuits on Tuesday, alleging Bank of America misled investors about the quality of $850 million in mortgage-backed securities sold in the lead up to the financial crisis. Important to note: the case deals with prime jumbo mortgages that were securitized and sold by B of A, not its much-maligned acquisition Countrywide. The bank plans to fight the charges. Per a spokesperson's statement to various news outlets, "these were prime mortgages sold to sophisticated investors who had ample access to the underlying data and we will demonstrate that." The case represents the latest mortgage-related woes for Bank of America, which, for instance, reached an $8.5 billion settlement with mortgage-backed securities investors in June 2011 that is currently pending approval. But a Dealbook article on the latest action ends with this note: "While the accusations add to the pressure on Bank of America, which has been working to move past the crisis, previous government lawsuits against it that began with much fanfare have lost some of their momentum." Wall Street Journal, Washington Post

Photo-based mobile bill pay can help banks overcome the adoption challenges of traditional online bill pay.

Abby McCloskey, program director of Economic Policy at the American Enterprise Institute, believes what defines a bank as a systemically important financial institution should be reexamined.

The Consumer Financial Protection Bureau posted a blog Monday stating that there are more than 7 million borrowers in default on federal of private student loans.

The promising Senate bill needs to do more to ensure an affordable market for multifamily mortgages, aid historically underserved borrowers and protect struggling homeowners.

Receiving Wide Coverage ...Stuck in the Middle: Banks are once again caught between a crusading regulator and a frowned-upon fringe of the financial industry. New York Department of Financial Services Superintendent Benjamin Lawsky warned 35 online lenders to stop offering loans that violate the state usury cap, and asked 117 banks to stop these lenders from debiting borrowers' accounts via ACH. "Banks have proven to be — even if unintentionally — an essential cog in the vicious machinery that these purveyors of predatory loans use to do an end-run around New York law," Lawsky said. According to the Times, JPMorgan Chase "is now reporting lenders that try to make unauthorized withdrawals" to Nacha, the group that oversees the automated clearing house system. (Recall that back in February, Chase was prominently featured in a Times article fingering banks for continuing to automatically debit borrowers' accounts even after the customers asked them to stop.) Not to be outdone by Lawsky, New York's aspiring gov, er, attorney general Eric Schneiderman is investigating the online payday lender Western Sky for violating the state usury law, the Journal reports, citing an anonymous source. For its part, Western Sky gave the papers a heartstring-tugging variation on the usual canned corporate statement: "Western Sky Financial is the largest private employer on the impoverished Cheyenne River Indian Reservation and complies with all applicable laws and business practices." Wall Street Journal, New York Times

Removing the arbitrary size designation for bank SIFIs would reduce costly regulation for regionals, encourage industrywide competition and concentrate regulators' efforts on firms that actually warrant attention.

According to experts, the ethics questions raised by House lawmakers about Raj Date, the former No. 2 at the Consumer Financial Protection Bureau who left to form his own firm, appear to be based on "faulty information."

To create effective mobile payments products, developers must treat merchants and consumers as separate customer segments that have of inextricably-linked needs.