Law and regulation

Green Dot Corp. plans to start offering credit lines to its customers, a move that likely foreshadows how new regulations will reshape the prepaid card industry.

American Banker readers share their views on the most pressing banking topics of the week. Comments are excerpted from reader response sections of AmericanBanker.com articles and from social media platforms and the blogosphere.

Two Republican legislators have suggested that affordable housing funding should be put on hold until Congress finally decides what to do about Fannie and Freddie. But why give Congress another six years to fiddle around with housing finance while the poor and homeless face a declining level of government housing assistance?

The Federal Reserve Board is seeking public comment on a proposal that would exempt banks with less than $1 billion in total assets from certain debt limits, a move favored by community banks.

The ability of Somali-Americans to send cash home to their relatives is again in peril after a California bank decided to stop facilitating the money transfers, according to a foreign aid organization that has been monitoring the situation.

No matter how the European payments landscape looks after the European Commission's new version of the Payment Services Directive takes effect, merchants can almost certainly expect lower rates for accepting card transactions.

Federal Reserve officials suggested that anonymous payments and the technologies powering digital currencies could inform broader plans for reshaping the U.S. payment system.

In yet another revision of its mortgage rules, the Consumer Financial Protection Bureau proposed making it easier for small and rural lenders to make "qualified mortgages." Industry representatives said the changes are poised to make a big difference.

The Consumer Financial Protection Bureau plans to review loan modifications offered by private student lenders, a business that the agency has said victimized some borrowers with subprime-style debt.

WASHINGTON — The Treasury Department has exceeded its authority by keeping Fannie Mae and Freddie Mac in conservatorship so long and taking all their profits, two legislative experts said Thursday.

Federal regulators announced guidance Thursday that provides principles institutions should consider in setting policies and procedures for originating private student loans with graduated repayment terms.

Banks have made progress cutting their exposure to risky home equity lines of credit, ahead of a key 10-year threshold when billions of dollars of them will reset to higher monthly payments. But there are some prominent exceptions, especially among regional banks.

The Consumer Financial Protection Bureau on Thursday proposed a series of regulatory relief measures for small institutions, especially those in rural areas, to help them provide credit while they try to follow the agency's tough mortgage rules.

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.