Law and regulation

More than a century ago, the nation's leading bankers applied their considerable political leverage to creating a central bank that would act as their backstop in times of crisis. In so doing, they institutionalized "too big to fail," created a "reckless co-dependency" and a Fed-first mantra within the banks that gives ordinary borrowers short shrift in times of financial stress. So says Nomi Prins, author of All the Presidents' Bankers.

There's drama to come as regulators finalize a proposal requiring banks to self-assess their track records on diversity.

The Federal Deposit Insurance Corp. is projecting a nearly 8% decline in deposit insurance assessments this year with improvement in the indicators that determine institutions’ rates.

Members of the House Financial Services Committee grilled chief lawyers from the banking agencies on Tuesday, airing a wide range of grievances, including some related to a temporary Volcker Rule exemption and a Department of Justice crackdown on the payday loan industry.

The nationwide trade group for community banks is asking the Department of Justice to suspend its push to keep questionable merchants out of the mainstream payments system, arguing it is impacting community banks' competitiveness.

The eight largest financial institutions will have to raise roughly $68 billion over the next several years to meet a tough new leverage ratio finalized by regulators on Tuesday.

Cozy relations between bankers and presidents have faced plenty of criticism over the decades. But they've also proven to be a vital asset during crises and enabled the U.S. to emerge as-and remain-a financial superpower. So says Nomi Prins, author of All the Presidents' Bankers.

On its surface, the initial plan for a central bank looked like a fair deal for a country as geographically spread out as the United States. What did not receive publicity was the way in which it was structured to provide an easy supply of money to the nation's biggest banks.

Stepped-up scrutiny of Internet payday lenders, online pharmacies and other merchants that regulators and law enforcement view warily is forcing the payments industry to adapt.

The Consumer Financial Protection Bureau Monday announced a partnership with libraries and other federal regulators to provide librarians with unbiased financial literacy education materials.

Barney Frank, Maxine Waters and nine other Democrats urged financial regulators in 2010 to consider Certus' charter as a way to create a large minority-run bank headed by managers of "unquestioned character." That bank's big problems since suggest that, at minimum, the vote of confidence was misguided.

The Federal Reserve's retail payments office announced Monday that it "fully supports" the most recent push within the banking industry to speed up electronic payments.

Regulators announced Monday they would extend the conformance period by two years under the Volcker Rule for banks with legacy collateralized loan obligations, but at least one lawmaker is already saying the agencies should do more.

The National Association of Realtors estimates that the Federal Housing Administration's 1.35% annual premium stopped at least 125,000 renters from buying a home last year.

The Consumer Financial Protection Bureau is facing mounting problems over racial disparities in its hiring and performance evaluation practices, which have drawn criticism and Congressional scrutiny. American Banker reporters discuss what's next for the CFPB and its critics, and what Director Richard Cordray could do to improve his agency's situation.

The payday loan business — loathed by some, misunderstood in others' eyes — stands on the verge of its biggest shake-up ever.

After slogging through several quarters of high expenses and shrinking profits, some lenders are now selling mortgage servicing rights to raise cash to cover payroll and expenses, industry sources say.

Leading bankers and presidents have been tied together over the decades by more than money and power. From the days of Theodore Roosevelt and J.P. Morgan on, blood ties have played a role, too. So says Nomi Prins, whose new book, All the Presidents' Bankers, profiles the close and complex relations at the top of American finance and politics.

Regulators cannot seem to understand that the changes effected by technological advances and modern risk management techniques have evolved banking practices and banking institutions into a new profession.

Last year, IdentityMind Global's banking partners began asking the anti-fraud and risk management provider to build an anti-money laundering system for the Bitcoin startups among the bank's clients. IdentityMind Global has now completed development on this AML technology.