Law and regulation

Guidance released by regulators meant to clarify the impact of the Volcker Rule on small institutions was quickly rejected by banks.

Although Ocwen Financial agreed to pay more than $2 billion to settle allegations it mishandled foreclosures and mortgages for thousands of borrowers, it could have been even worse for the country's largest nonbank servicer.

In the space of just a few hours, regulators issued -- and banks condemned -- guidance meant to clarify the impact of the Volcker Rule on small institutions.

A hike in guarantee fees could encourage banks to retain loans they might have otherwise sold to Fannie or Freddie, but observers are skeptical that it will accomplish its true mission of jump-starting the market for private-label mortgage securitizations.

Regulators raised more concerns on Thursday that some institutions might take heightened risk by seeking profits from locking into longer-term fixed yields and diving into complicated growth markets such as oil, gas and leveraged lending.

A bipartisan group of lawmakers is urging regulators to reconsider a provision in the recently finalized Volcker rule that they warn could harm community banks that own trust-preferred securities.

Many small banks are well managed and provide value to their customers and investors. The more profound question for the economy is what effect the little guys have on the stability and efficiency of the U.S. financial system.

In her final column for American Banker, Editor-at-Large Barbara Rehm says there is no denying the system is safer than it was in 2007, and while further changes may be needed, it makes sense to "take a breather."

Barbara A. Rehm, the former editor-in-chief turned columnist for American Banker, is leaving the paper to join Promontory Financial Group.

The Consumer Financial Protection Bureau issued a consumer advisory report on Wednesday which is provoking concerns that the agency may be inadvertently encouraging borrowers to challenge their lenders in court after new mortgage rules go into effect in the new year.

Federal Reserve Board Chairman Ben Bernanke said regulators have made progress over the last year, but more reforms need to be made in order to keep the financial system safe.

The Independent Community Bankers of America and the American Association of Bank Directors warned regulators that the Volcker Rule will force banks to lower capital to dangerously low levels.

The $1.1 billion-asset company said in a regulatory filing Thursday that it sold bank and insurance trust-preferred collateralized debt obligations that cost about $8.3 million -- at an $850,000 loss.

Ellen Richey has become the new chief legal officer at Visa, where she will be responsible for legal functions as well as oversight of the card network's compliance and audit teams.

CLO managers have long lobbied against proposed rules requiring them to keep "skin in the game" of these deals, arguing that such a requirement would increase the cost of financing for U.S. companies.

BankUnited in Miami Lakes, Fla., has sold two batches of securities in order to comply with the Volcker Rule.

The Federal Housing Finance Agency has fallen behind in its examinations of Fannie Mae and Freddie Mac because it simply does not have enough examiners to properly monitor the government-sponsored enterprises, according to new report from the agency's watchdog.

A consumer advisory issued by the Consumer Financial Protection Bureau on Wednesday is stoking fears that the agency may be inadvertently encouraging borrowers to challenge their lenders in court after new mortgage rules go into effect next month.

During his final press conference as chairman, Fed Chairman Ben Bernanke cited progress made over the past twelve months, but left the door open to further changes.

WASHINGTON -- The Federal Reserve on Wednesday agreed to softly pare back its asset purchases by $10 billion, taking the first step in unwinding its controversial bond buying program.