Law and regulation

Sen. David Vitter, R-La., a member of the Senate Banking Committee, announced Tuesday that he will run for governor of Louisiana in 2015.

The Federal Reserve Bank of Cleveland has reset its governance boards for the year, including naming Fifth Third Bancorp (FITB) Chief Executive Kevin Kabat as a director.

Charmian Uy, the U.S. Treasury's chief investment officer for the Trouble Asset Relief Program, details the government's strategy to exit a program that she believes "will be judged favorably over time."

Several more banks have disclosed financial hits because they hold securities that regulators declined to exempt from the Volcker Rule. Many of the bankers are upset because they are taking impairment charges on performing securities.

This is 2014, not 2008. The problem is not subprime mortgage lenders, but a pendulum of federal regulation that has swung to such an extreme that worthy, qualified borrowers are being turned away.

Governor Andrew Cuomo and Attorney General Eric Schneiderman agreed to split the first $163 million of New York's $613 million share of a settlement with JPMorgan Chase (JPM) over mortgage bond sales, according to their offices.

Regulators should create a risk management quality rating that may be used in examinations and deposit insurance pricing. Banks should build capabilities that comprehensively assess the quality of their risk management processes tied to strategic business goals.

On Friday the Office of the Comptroller of the Currency closed the $61.7 million-asset DuPage National Bank in West Chicago, Ill. Its failure is expected to cost the Deposit Insurance Fund $1.6 million.

The Office of the Comptroller of the Currency took action against bank technology providers BSERV and Fundtech in December, ordering the companies to ensure that their services effectively monitor risk.

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The Buffalo, N.Y., company still has some goodwill from analysts based on its reputation as a skilled bank buyer, but it has become the poster child for the risks associated with M&A in a tough regulatory environment.

Judges for an appeals court appeared sympathetic Friday to the Federal Reserve Board's defense of its rule capping interchange fees on debit cards, fueling hopes by bankers that the agency will beat back a legal challenge.

A recap of the informed opinions (and the discussions they generated) this week on BankThink.

Webster Financial (WBS) in Waterbury, Conn., reported lower fourth-quarter profit after taking a big charge tied to the Volcker Rule.

In his last speech as Federal Reserve Board chairman, Ben Bernanke said the central bank's steps to support wholesale funding markets were "as important, if not more important" than other actions taken during the crisis.

Reps. John Delaney, D-Md., John Carney, D-Del., and Jim Himes, D-Conn., unveiled the outlines of a new housing finance reform plan on Thursday that would provide an explicit government backstop for the market, while requiring increased private sector participation.

Regulators' attempt to carve out an exemption for small banks from a key part of the Volcker Rule satisfied most institutions that feared getting swallowed up in the Dodd-Frank Act provision, but left others still vulnerable to the regulation and facing significant losses.

It is easy to see the stress tests as an annoying distraction to banks. However, if banks embrace them, these tests can be a useful arrow in the risk management quiver.

The Office of the Comptroller of the Currency proposed official guidelines describing its "heightened expectations" for how large banks and thrifts control risk.

The Federal Reserve Board took too long to issue a plan to limit banks' physical commodities activities, several Senate Democrats said on Wednesday.