BankThink

While ICBA supports further study, we hope Congress will come to the conclusion that it should never have been proposed for financial institutions that have no international exposures or are not of a certain size.

The Consumer Financial Protection Bureau and Federal Housing Finance Agency announced plans to create a new mortgage database, more comprehensive and streamlined than existing state and federal ones, to guide policy decisions.

Efforts should clarify recourse risk for originators and underwriters, help realign supply and demand in the housing market and assist homeowners.

Receiving Wide Coverage ...Back to Business: The East Coast continues along its long road to recovery post-Sandy with some subways and airports set to resume (albeit limited) service today in the tri-state area. Also back in business is the New York Stock Exchange, which reopened its doors yesterday amid much criticism that a two-day shutdown signaled insufficient disaster preparedness. Both the Journal and the Times have pretty detailed play-by-plays of how the exchange's first day back went and the news is good. Despite a few "visible glitches" (including some blank monitors related to unreliable data connections) and relatively low staffing levels, "things went very, very smoothly." So smoothly, in fact, that Dealbook deems the exchange as "a small sign of reassurance and resilience" in the storm's aftermath. Activity was "average" with the Dow "closing down 10.75 points at 13096.46," but traders are now readying themselves for several big influential events including Friday's October jobs report and Tuesday's presidential election.

Few legislators will have much appetite for setting bank capital policy, but it would be a gross error to mistake that discretion for lack of interest in what those policies will do to local economies.

The orderly liquidation authority of the Dodd-Frank Act requires a "minimum recovery" for creditors of troubled systemically important financial institutions, i.e. no less then what they would have received in normal bankruptcy proceedings. Rules to implement that standard could reassure the markets, say industry observers.

Bubble-era claims about the various ways that owning a house could make you and your children happier are coming back to life.

Receiving Wide Coverage ...Sandy, Day Three: "Power Outages May Last More Than a Week" along the East Coast, says the Journal. "New York City’s subways could take between 21 days and several months to be restored," reports the website Quartz. But the stock market is reopening today, as critics continue to fault the exchanges for insufficient disaster preparedness. (By the way, if you heard rumors yesterday about the New York Stock Exchange trading floor being flooded or Con Edison shutting down all power in Manhattan, they apparently emanated from the same source and they weren't true. Caveat Twitter.) CNBC's John Carney reports that the New York Fed has stayed open this whole time, and while most staff members have telecommuted, a few key employees slept over at headquarters. (In the vault with all that gold? That would be pretty sweet.) The Times offers a broad survey of how businesses of various kinds have coped with the disaster; the banking industry is represented by JPMorgan Chase, whose headquarters and main trading floors in midtown Manhattan are set to reopen Wednesday, along with "at least 100 hub bank branches in New York, New Jersey and Connecticut that were stocked with extra cash before the storm. … About 25,000 employees worked remotely on Monday, but that figure dropped to 15,000 to 20,000 on Tuesday as lights went out across the region. On a typical day, about 2,000 to 3,000 employees work through the bank’s remote computer system." Another Times story warns that many homeowners in the areas hit by Sandy "are likely to find that their flood insurance policies have lapsed or that they wrongly assumed their homeowners' policy would cover the damage." Although federal flood insurance is a prerequisite for mortgaging a home in a flood zone, "relatively few [lenders] monitor compliance with the requirement when the coverage expires, meaning that some homeowners inevitably allow their policies to lapse." (Just to be clear: They're talking about flood insurance here, not homeowners insurance, which, as American Banker readers know, is quite often subject to forced placement.) The Post has a thumbsucker of a story about how despite all the talk of the "Internet economy," this disaster reminds us how dependent we still are on physical infrastructure like subways, planes, etc. (That’s the Washington Post, by the way; the New York Post does not publish thumbsuckers.)

Press releases continue to repeat Treasury's nonsensical claims about the "profit" the program has produced for taxpayers. But it remains to be seen whether not letting banks go out of business actually benefited anyone.

To guess what might happen once unlimited deposit insurance ends, look at how corporations have handled their cash lately.