BankThink

Receiving Wide Coverage ...More Mortgage Woes for B of A? Bank of America has disclosed that the Justice Department intends to file civil charges against the bank over claims it mishandled "one or two jumbo prime securitizations." The Securities and Exchange Commission is also weighing civil charges related to how B of A brokerage house Merrill Lynch handled its securities and the New York Attorney General's office is recommending action against Merrill Lynch over residential mortgage-backed securities. The Journal calls the disclosures "the latest sign that banks' battle to contain the high cost of the financial crisis continues to escalate, despite a five-year slog of lawsuits, losses and profit-sapping regulations." New York Times, Financial Times

A symbiotic relationship between security and revenue may sound too good to be true, but it's not. ISOs and acquirers can succeed by creating opportunities that pair enhanced PCI compliance tools with new revenue streams.

Thanks to enhanced regulatory expectations, directors and managers have more new responsibilities than they might realize.

Banks have typically deployed mobile banking as an addendum to online banking, from both a technology and staffing perspective, with consequences to the customer experience.

Receiving Wide Coverage ...Sideswiped: A federal judge has overturned the Federal Reserve's rule on debit card swipe fee caps, effectively stating that the central bank had set the caps too high. In the decision, the judge said the Fed's rule, which caps fees charged to merchants whenever a customer uses a debit card at 21-cents a transaction, "runs completely afoul of the text, design and purpose" of the Durbin amendment, the Dodd-Frank provision that called for the fee limits in the first place. "The decision likely will force the Fed to slash the fees, further crimping a once-lucrative business for banks and card giants," the Journal notes. But changes won't be immediate. The judge plans to give the Fed some time to develop new rules (the exact length to be determined at a later date, though he did say the process should take "months, not years") and the central bank may appeal the ruling. No word yet on whether or not it will. A spokeswoman for the Fed told a few news outlets that the central bank is reviewing the judge's decision. The Washington Post cites Guggenheim Partners' prediction that "the current fees will remain in place through 2014 or even longer." The decision is the latest instance in which a legal ruling has caused delays for regulators trying to enforce provisions of Dodd-Frank, but it is a bit unique. "Courts have struck down other aspects of the financial overhaul, but in ways that favor banks," the Times notes. "The fight over debit card fees pits the powerful industries of retailing and banking against each other."

The proposal has calculations that would address deficiencies, but also tries to balance risk sensitivity with not making the derivatives counterparty charges overly complex.

"An Alternative Plan to Fix TBTF: Lay Big Banks' Subsidy Bare" (July 25), on Professor Cornelius Hurley's plan to account for implicit government subsidies, is an important contribution to the conversation on how to end Too Big to Fail.

Relief bills are gaining momentum in Congress, leading many community bankers' to believe their regulatory burdens will ease by yearend.

Federal regulators issued proposed guidance to help mid-tier banks comply with stress test requirements this October.

People tend to remain loyal to bankers and banks they know, like and trust. Whether or not we fit that description is entirely up to us.