Law and regulation

WASHINGTON — Sen. Elizabeth Warren, D-Mass., and Rep. Elijah Cummings, D-Md., are prodding the biggest banks for information about how they will respond to changes to a controversial Dodd-Frank Act swaps provision signed into law last month.

The Basel Committee's revisions to banks' risk disclosure requirements should help investors glean more meaningful information, thereby allowing them to impose market discipline on less creditworthy institutions.

Banks partnering with prepaid card providers face the potential of higher deposit insurance fees and other ramifications from the Federal Deposit Insurance Corp. classifying accounts as "brokered."

Joining the hunt for higher-yielding niche loans, the asset management unit of NewOak Capital has quietly launched a private fund to acquire nonqualified residential mortgages.

The Federal Deposit Insurance Corp. issued a letter Wednesday emphasizing that financial institutions should take a measured approach to banking relationships rather than cutting ties with entire lines of businesses.

Dumping entire categories of clients is a crude and inappropriate reaction to large fines, says Stephen Platt, author of Criminal Capital: How the Finance Industry Facilitates Crime." However, he says, regulators should hold a dialogue with banks and attempt to accommodate businesses that carry high risk but whose services are desperately required, such as remittances to war-torn Somalia.

WASHINGTON — The Basel Committee on Banking Supervision has issued "harmonized templates" for regulators to adopt in order to ensure that banks' risk and capitalization disclosures are comparable and consistent.

The U.S. is investigating whether the Netherlands' Rabobank Groep ignored signs of money laundering by clients at branches of its California banking unit near the Mexican border, according to people with knowledge of the matter.

The government has added further protections to reverse mortgage borrowers' spouses who are not named in the loan agreement, but placed conditions under which they are ineligible for older protections.

Banks partnering with prepaid card providers face the potential of higher deposit insurance fees and other ramifications from the Federal Deposit Insurance Corp. classifying accounts as "brokered."

Aiming to address a nationwide shortage of affordable housing, FHA has launched a risk-sharing pilot program that it hopes will encourage community development lenders to finance the rehabilitation of smaller multifamily apartments.

Arch Capital Group is repurposing a subsidiary to insure mortgages that are headed for private securitizations. Insuring such loans separately from the unit that works with Fannie and Freddie lets Arch offer more favorable terms to lenders.

The federal courts have instated a $25 fee for transferring corporate bankruptcy claims. The decision was met with little fanfare — but it could pave the way to a financial transactions tax.

The Financial Stability Oversight Council's proposed changes to its process for designating nonbanks as systemically important are being widely praised as helpful and responsive, but many stakeholders say that they do not go far enough.

At a hearing Tuesday, GOP lawmakers hammered FHFA Director Mel Watt for four hours over his recent decisions to allow Fannie Mae and Freddie Mac to buy loans with lower downpayments and provide money to two affordable housing trust funds.

Homeowners associations seeking unpaid dues are seizing on a court decision allowing them to foreclose on properties ahead of banks, and the FHFA is litigating to defend Fannie and Freddie mortgages. Private lenders, meanwhile, are trying to keep the problem from spreading to more states.

WASHINGTON — The Consumer Financial Protection Bureau issued a bulletin Tuesday warning financial institutions about entering into agreements with third parties that share or hide information related to regulatory exams.

A spate of recent account closings at churches and charities suggests that Operation Choke Point and other de-risking directives are causing collateral damage to faith-based organizations.

The Federal Reserve System threw its weight behind a host of standards, goals and timelines yesterday that are likely to shape the quest to build a faster U.S. payment system.

In a new detailed report, the Federal Reserve laid out four options for upgrading the creaky U.S. payment system. The study raised questions about how far the Fed can, and should, go to bring about change.