BankThink

Why does Harp 2.0 continue the incrementalism that marred the first incarnation of the refi program and many of the housing policies the president has put forth?

Receiving Wide Coverage ...MF Money Still Gone, Congress Still Piqued: A congressional hearing today offers up JPMorgan's view of the MF Global meltdown, with a deputy counsel for the bank describing JPM's haggling over the source of the transferred funds. Diane Genova is expected to testify that, after JPM noticed that it was being paid with $200 million in customer funds, "it would be prudent and appropriate to ask MF Global to confirm that these transfers had been made in compliance" given that the company was tanking. Evidently the response was so convincing, Genova's prepared remarks say, that JPMorgan "reached out to Mr. Corzine to explain J.P. Morgan's understanding of how the London overdrafts had been covered," and to request confirmation that everything was on the up and up. When the letter was not returned signed, JPM called MF Global's deputy general counsel, Dennis Klejna, who assured that the funds were tranferred from excess money in company accounts and the leeter went unsigned because it was too broad. Meanwhile, it looks like some MF Global employees were aware of a stated shortfall in customer accounts well before the company's collapse. But key officials say they were assured it was just an accounting mishap. Wall Street Journal, New York Times

The bank's plan to convert troubled loans to rentals will benefit all concerned. A special unit for servicing toxic assets can help, if run wisely. Principal reductions could seriously backfire.

It's time for our nation's leaders to get serious about job creation. Our economy is beginning to inch its way forward toward recovery, but the only way forward to real prosperity for all is through small businesses.

Receiving Wide Coverage ...Jobs Slow, Rates Low, Get Used to It: Chairman Ben Bernanke indicated the Fed must continue its easy-money policies, notwithstanding the strong employment gains of recent months. “Further significant improvements in the unemployment rate will probably require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies,” he said, dashing speculation that the Fed might start tightening monetary policy as soon as next year. Wall Street Journal, Financial Times, New York Times, Washington Post

The other morning I was at the counter of the local UPS store notarizing a document when I was shocked by a comment by a woman standing nearby. This nationwide franchise provides post office boxes, packing, shipping, copying and many other individual and business-related services through 4,700 convenient small corner or mini-mall stores. My head snapped as she told the clerk, "I would like to make a deposit." At first I thought she was making a deposit for a purchase or on a bill or perhaps depositing a package of goods for shipping.

The 2009 Card Act required lenders to "consider" customers' "ability to pay" before granting credit on cards.

Receiving Wide Coverage ...Backdoor Bailout? The campaign to make Fannie Mae and Freddie Mac write down principal balances is a stealth attempt to bail out the big banks. So says Federal Housing Finance Agency acting director Edward DeMarco in an interview with the FT. That’s because the megabanks are holding large quantities of second mortgages, which are supposed to be wiped out before the first mortgages held by Fannie and Freddie take any hit. Writing down the first mortgage on an underwater home without touching the second would restore the latter asset’s value, transferring wealth from Fannie and Freddie (and hence the U.S. taxpayer) to the banks, DeMarco tells the FT. Gretchen Morgenson makes the same argument in her Sunday Times column. Financial Times, New York Times.

Credit Unions must disclose CAMEL ratings.

Credit Unions gathered at the Governmental Affairs Conference to ask for relief from the MBL cap.