BankThink

The $22.5 billion Structured Agency Credit Risk transaction serves its purpose, but shows how much more work and thinking needs to be done to redesign the housing finance system.

The feature presents a win-win scenario for banks and their customers as well as an opportunity for mobile-centric financial startups that can serve as the catalyst for widespread adoption.

Receiving Wide Coverage ...Fabulous Fab Continued: On a summer Monday when many Wall Streeters and journalists alike are pondering the sand between their toes, enough personnel remain on duty to produce a hefty dose of news on Goldman Sachs (GS) and its former trader, Fabrice "Fabulous Fab" Tourre. This morning's installments include one from the Wall Street Journal concluding that Tourre and his former employer have been inextricably linked for a while longer by a federal jury's decision last Thursday to find Tourre guilty in a civil case of aiding and abetting Goldman in duping investors. That case involved the now infamous Abacus 2007-AC1 subprime mortgage investment deal. One reason Wall Street firms have been so insistent over the years on "neither admitting nor denying" wrongdoing during settlement negotiations with the government is that fessing up provides smoking-gun evidence to those greedy class action and securities lawyers looking to file suits on the feds' coattails. (Goldman itself agreed in 2010 to a record $550 million civil settlement over Abacus but got off without admitting anyone had even jaywalked.) In Tourre's case, a victory might have helped Goldman prevail in other Abacus-related lawsuits, but now it must await a decision by its former trader over whether to appeal the verdict, the Journal says. Meanwhile, the firm intends to continue covering his hefty legal bills, the paper adds, citing "people familiar with the matter." Bloomberg characterizes the Securities and Exchange Commission's victory over Tourre in the civil trial as a "shot in the arm" that will help the agency "turn the page on years of criticism that it isn't holding Wall Street to account." The win also adds heft to pledges by newly installed SEC Chairman Mary Jo White to reinvigorate the agency, seek more onerous settlements in some cases, go to trial if necessary--and push Congress for a 27% larger budget. "The SEC needed at least one scalp from the financial crisis, or they were going to face a lot of heat from Congress," Adam Pritchard, a former SEC attorney who teaches law at the University of Michigan, told Bloomberg. However Congress reacts, certain hard-to-please members of the public may be more in sympathy with Naked Capitalism's Monday morning take: CEOs doing the perp walk was what the public wanted to see. Instead, six years later, we have one young guy at Goldman who will disgorge some income and be barred from working in the industry (for how long yet to be determined). This is so far short of what needed to happen that it's pathetic to see the SEC high-fiving over its win." Wall Street Journal, Bloomberg

Think your credit union occasionally creates some internal barriers to growth? Listen to this story from CEO Frank Corcoran.

Kevin Kirksey, the valuation and risk analytics manager at ALM Financial Advisors, explains how to more accurately analyze the value of loan portfolios.

Ed Miller, senior director of operations at Symitar, details the five factors to consider when it comes to outsourcing.

U.S. District Judge Ellen Segal Huvelle dismissed a Texas community bank's case against the 2010 Dodd-Frank Act, stating that the financial institution, as well as the 11 states and two conservative groups backing the case have no legal ability to challenge the reform law.

A recap of the informed opinions (and the discussions they generated) on BankThink this week.

House Republicans raised concerns that the Consumer Financial Protection Bureau's former deputy director, Raj Date, and several other staffers left their positions at the CFPB in order to profit from rules they had helped create.

This is a work of fiction. Any resemblance to real merchants, bankers, lobbyists, or politicians, living or dead, is purely coincidental.