Law and regulation

JPMorgan Chase is the bank most integral to the stability of the global financial system, followed by HSBC and Citigroup, according to a U.S. study.

The Consumer Financial Protection Bureau has filed a lawsuit in federal court against a web of payday lending companies, alleging that they collected money that consumers did not owe and falsely threatened consumers with lawsuits and imprisonment.

Four Oaks Bank & Trust in Four Oaks, N.C., said its May 2011 enforcement action has been replaced with a more lenient agreement that requires it to address governance issues and other matters.

It's been nearly a century since reformers and lenders agreed on 36% as a small-dollar loan ceiling. Inflation has since swelled production costs, and lending under this cap is no longer profitable. The result: fewer options for consumers.

Many online small-business lenders worry that future regulations could stymie innovation in this fast-growing industry. But well-designed requirements would simply ensure that online lenders can offer adequate borrower protections without giving up market share.

Promontory Financial trades on its ability to deal with regulators, so being banned by New York's top financial regulator is a serious problem. A potentially messy court fight may be the only way to protect its cachet.

Banks are seeing stronger consumer demand for credit for a range of products, including residential mortgages, auto loans and credit cards, according to a Federal Reserve Board survey of senior loan officers released Monday.

Federal Reserve Board Gov. Jerome Powell and the top adviser to Treasury Secretary Jack Lew said that, based on the recent autopsy of the October 15, 2014 spike in Treasury yields, there is reason to believe that high-frequency or algorithmic trading may elevate the risk of similar events in the future

The past two weeks have dashed hopes by bankers that the New York Department of Financial Services might take a different approach after the departure of Benjamin Lawsky as its superintendent. In taking actions against Promontory Financial Group and launching a probe into a bank-run instant messaging service, the agency appears poised to carry on Lawsky's legacy.

A high percentage of loans to oil and gas firms are large and syndicated. As a result, more shared loans are becoming problematic for participating lenders.

The CFPB's long-term reputation — and perhaps Dodd-Frank's overall success — may well be judged on whether the bureau moves beyond areas where it was specifically instructed to take action and exercises broader authority granted to it by Congress.

Promontory Financial vowed to take the New York Department of Financial Services to court after it effectively banned the consulting firm from working on regulatory issues for banks the department supervises.

Citigroup is being investigated over its student-loan servicing practices in a probe that the bank said echoes an enforcement action against at least one other institution.

A recap of the informed opinions (and the discussions they generated) on BankThink this week, including whether independent consultants should be criminally liable for misrepresentations in their reports and whether higher rates will help or hurt banks.

An NCUA proposal to make credit unions more competitive commercial lenders is drawing fire from community bankers, who say it invites risky underwriting, unfair competition and a repeat of the thrift crisis.

Firing or cutting the pay of fraudulent or reckless bankers will go a lot further toward restoring the reputation of financial services than any new regulations, according to a reform-minded group of bankers and regulators.

While the Federal Deposit Insurance Corp. has not deviated from a 2013 paper outlining a method for unwinding a giant firm, the agency has appeared to fine-tune its approach in significant ways.

Lawmakers included a measure that will impose new mortgage reporting requirements on banks and servicers as part of a short-term highway funding bill passed this week by both chambers of Congress.

Fourth Corner Credit Union, chartered last year to serve Colorado's legal marijuana industry, has filed lawsuits against the National Credit Union Administration and the Federal Reserve after having its applications rejected for share deposit insurance and access to the Fed system, respectively.

It's not enough for banks to avoid deceptive practices. As the CFPB's latest enforcement action against JPMorgan Chase makes clear, banks are obligated to ensure their systems protect consumers from easily preventable mistakes.