BankThink

It seems a tide is turning: Few policymakers believe mortgage servicers will ever meaningfully modify home loans. Or so one could conclude from this Reuters story, which cites an unnamed Obama administration source saying the government is considering offering aid directly to delinquent borrowers.

Putting together a ranking of top-performing banks sure isn´t as easy as it used to be.

There will be plenty of bustle on the Hill this week as the early August date for Congress´ summer recess advances. Legislators are holding on, for the most part, to ambitious regulatory restructuring plans, and hearings on financial regulatory issues will abound. Treasury Secretary Timothy Geithner, meanwhile will be overseas-thus safe, for a week, from Congressional scrutiny.

The recent rash of high-profile data compromises serves as a reminder that today's fraud perpetrators are sophisticated, relentless and ever-evolving. Unfortunately, when it comes to fraud prevention, too many CUs take a set-it-and-forget-it approach that doesn't match the evolution of contemporary fraud.

The following article, part of CU Journal's July 13 Bonus Content, is an extended version of the way it appeared in print.

I'm beginning to think all this talk of a national brand campaign for credit unions has it backward. If it happens, it isn't going to come from the top-down, it's going to come from the bottom up. And a lot of folks won't be happy.

Over the past week or two a new regulatory proposal laid out in the op-ed pages of The Guardian has gathered steam, and we thought it was time to share it with BankThink´s readers. The idea is to make bank mismanagement a criminal offense, something similar to negligent homicide. If a bank founders, its upper management can be investigated for recklessness.

Reports are coming in about a new campaign bank lobbyists are considering to fight the establishment of an independent consumer protection agency: One idea that´s on the table, according to the Washington Post, is for a series of TV ads modeled after the "Harry and Louise" spots that aired during Clinton administration´s health care reform effort. Harry and Louise were everymen, a middle class couple lamenting the loss of their good private healthcare plans for coverage "designed by government bureaucrats." The thrust of this new campaign would be that a consumer protection regulator would stifle innovation and generally deprive consumers of more choices.

A Forbes.com article published today looks at the circumstances under which struggling mortgage borrowers are deciding to voluntarily stop making their monthly payments in order to secure loan modifications banks are otherwise not willing to perform. Experts in the article say it´s a "last-resort" sort of move and that only the desperate should try it, but that those who do have gotten good results. A bank analyst, meanwhile explains that banks don´t want to grant loan mods to people unless they are "mortally wounded;" otherwise the whole thing would just get "too expensive." So borrowers are essentially choosing to ruin their credit and lock in a loan mod rather than waiting to default out of necessity. Is this a twisted form of market efficiency at work?

This week, Congress is back in session and the financial regulatory committees will be hard at work on a system overhaul. Thrown into the mix is a new set of rules governing private equity investments in failed banks, put out to comment by the Federal Deposit Insurance Corp.