Law and regulation

The city of Richmond, Calif., is pushing forward with its plan to rescue underwater homeowners by buying their mortgages, and is leaving open the possibility of using eminent-domain to acquire loans that banks will not sell.

Ten Federal Housing Administration lenders could be facing hefty penalties from the government following an investigation into their underwriting practices, according to the Department of Housing and Urban Development's inspector general.

Some mortgage experts are criticizing a recent rule change by the Federal Housing Administration that would allow borrowers who lost their homes to foreclosure or a short sale to qualify for a new mortgage in as little as a year.

Knee-jerk regulations passed in crisis moments can do more harm than good, but all regulation is a static framework applied to an ongoing, dynamic market. The tensions created are inevitable.

Regional lenders including Fifth Third Bancorp and BB&T Corp. are rooting for the Federal Reserve to let interest rates rise, a move that could help their results more than at some of the biggest Wall Street firms.

WASHINGTON — Senate Banking Committee Chairman Tim Johnson, D-S.D., and Elizabeth Warren, D-Mass., are urging the Federal Housing Administration to change an employment eligibility requirement for borrowers looking to modify their mortgages.

The Justice Department has entered talks with federal agencies and banking regulators to clear the way for marijuana dispensaries to obtain banking services, a top U.S. official said.

Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, said Tuesday that she is preparing to unveil an alternative housing finance reform proposal to rival more conservative legislation backed by many House Republicans.

The Federal Deposit Insurance Corp. resisted big-bank pressure to overhaul a rule, issued Tuesday, that clarified that U.S. bank deposits held in a foreign branch do not receive FDIC insurance, even if they can be withdrawn in the U.S.

The 12 Federal Reserve district banks warned of mounting threats to the U.S. payment system such as fraud, and called for streamlining transactions from the point of payment to the point of receipt.

Fannie Mae and Freddie Mac should be increasing the availability of loans to the most underserved segment of the market: the small rental properties across the country that are naturally affordable.

Remittances from the West are a lifeline for many people in the developing world, but anti-money laundering compliance requirements have made it hard for banks and money transmitters to service this market. Ellen Zimiles of Navigant Consulting discusses the delicate balance between regulatory and law enforcement concerns, on the one hand, and business and humanitarian goals on the other.

The most notable quotes from American Banker stories of the previous week. Readers are encouraged to add their own observations in the Comments fields at the bottom of each slide.

Electronic payment companies design, build and operate costly networks that provide secure payment transactions to merchants. Such providers incur significant costs for the services they provide and deserve to charge a market-based rate to their customers.

The House Majority Leader's failure to include mortgage finance reform in his legislative agenda for the fall has sparked more questions about whether Rep. Jeb Hensarling, Patrick McHenry and others can advance his legislation to the floor this year.

The Federal Home Loan Bank system, which has been hurt by successive quarters of low demand for advances, saw its strongest advances growth in nearly six years in the second quarter as banks began to see depositors exit.

The Federal Home Loan Bank of Chicago announced Monday it plans to issue mortgage-backed securities guaranteed by the Government National Mortgage Association, or Ginnie Mae.

JPMorgan Chase said it would stop accepting commissions from Assurant under a settlement reached Friday. The two firms have also agreed to pay up to $300 million to resolve allegations that they overbilled homeowners.

Buttercoin wanted to be a Bitcoin exchange, but after being discouraged or outright rejected by over 76 financial institutions, it chose a different path.

California’s legislature has voted to reform a money-transmission law that has come under fire for stymying payments innovation.