BankThink

"Despite widespread fears by lenders that a 800-page rule released Thursday by the Consumer Financial Protection Bureau would end mortgage lending as we know it, the final regulation appeared to be significantly less onerous than many expected," writes American Banker's Rachel Witkowski.

The CFPB's final Qualified Mortgage rule exacerbates our dependence on the GSEs and FHA, potentially harms a large swath of potential borrowers and severely handicaps the market’s ability to effectively serve customers.

Receiving Wide Coverage ...Amex Swings the Ax: The tectonic shifts that are reshaping finance struck American Express (AXP) late Thursday when it released its fourth quarter earnings ahead of schedule, along with the bombshell that it's planning to eliminate 5,400 jobs, or 8.5% of its staff. The Wall Street Journal describes the job cuts as Amex's biggest retrenchment in a decade. Most of the reductions will involve the New York-based company's (sorry, Mayor Bloomberg) travel business, which Chief Executive Kenneth Chenault said "is being fundamentally reinvented as a result of the digital revolution." The company will take $895 million in fourth-quarter charges to cover severance pay, the cost of revamping a membership-reward program and a slew of customer refunds linked to the regulatory settlement involving card practices that allegedly violated a range of consumer protection laws. All told, Amex took a $95 million charge that it said in a statement "deals with fees, interest and bonus rewards as well as an incremental expense related to the consent orders entered into with regulators last October." Thursday's plan is the fourth round of big job cuts at Amex since 2001, which together have eliminated more than 18,000 positions, the Journal reports. It's also the latest in a wave of financial-industry job cuts announced in recent weeks, including reductions at Citigroup (NYSE:C) and Morgan Stanley (MS). American Express's focus on affluent borrowers has enabled it to bounce back from the financial crisis more quickly than many peers, the Journal notes, but it has nevertheless seen demand suffer as consumers deleverage. Amex's customer card spending, its biggest revenue driver, climbed 8% in the fourth quarter, while card write-offs stood at 2%, the lowest rate among big card issuers, says Bloomberg News. "Against the backdrop of an uneven economic recovery, these restructuring initiatives are designed to make American Express more nimble, more efficient and more effective in using our resources to drive growth," Chenault said in the statement. Wall Street Journal, Bloomberg News, Financial Times, American Banker

There must be a concerted effort to open the way to successful homeownership to more Americans. This should include encouraging shorter-term mortgages so low down payment borrowers build equity faster.

More than two billion people worldwide do not have a bank account, but do have a mobile phone, making the device a direct conduit to an underserved demographic.

Patent trolls generally prefer to avoid any decision on the merits at all costs, as an adverse ruling may damage their ability to file future cases. With that in mind, smaller institutions should feel comfortable drawing a line in the sand for a fair settlement.

Receiving Wide Coverage ...Qualified Mortgage Rules: Several news outlets (American Banker included) are out with a breakdown of what is in the Consumer Financial Protection Bureau's new mortgage standards, ahead of its press conference on the subject later today. Key points of the rules include prohibitions from offering mortgages with deceptive teaser rates or ones that require no documentation from borrowers, restrictions from charging borrowers excessive upfront points and fees and a somewhat unexpected safe harbor legal protection for prime qualified mortgage loans. Notably, to meet the much-anticipated QM standard, in most cases, borrowers' total debt payments can't exceed 43% of their pretax income. No minimum down payment has been set. Strict documentation of a borrower's ability to repay a loan must be maintained if a lender is to take advantage of the safe harbor.

Too often, branch employees simply manage a transaction, when they should be focused on engaging or educating the customer to make a lasting impression.

Foreign banks operating within the U.S. will be penalized despite a change made by regulators to provide more time to comply with pending swap restrictions.

Giving regulators more levers to pull and buttons to push with respect to the financial system only creates a false sense of security. The new regulatory powers come with few meaningful accountability checks.