Law and regulation

Sen. Bob Corker raised concerns Tuesday about whether the Financial Stability Oversight Council could unwind a healthy bank solely due to concerns about whether the institution is "too big to fail."

The House passed a bill by voice vote Tuesday evening that would allow banks to opt out from sending unchanged annual privacy notices to customers, a measure the chamber previously passed during the lame duck session last year.

Lawmakers are looking into removing the roadblock that currently exists in California for mobile-pay startups that either can't afford the compliance costs for state licensing or define themselves as Web-based marketplaces, rather than true money transmitters.

It was very busy in Washington last week, but the item that produced the most news in the banking world wasn't even on the radar. Attorney General Eric Holder was supposed to talk about drones, but he also made a surprising admission with far-reaching consequences.

Rep. Paul Ryan's budget plan, released Tuesday, renews attacks on the Dodd-Frank reform law and government housing policy.

An industry lawyer predicts enforcement actions against banks that allowed automatic withdrawals against their customers' expressed wishes.

Rep. Jeb Hensarling, chairman of the House banking panel, is asking whether the Fed can lawfully transfer funds to the CFPB if the agency is without a director.

Sens. Mark Warner, D-Va., and Bob Corker, R-Tenn., are asking Attorney General Eric Holder to clarify his surprising remarks last week about whether some institutions are too big to prosecute.

Reform efforts could result in a much smaller scope of permissible lending at the FHA, with a renewed focus on its traditional core of low-income customers, higher credit score requirements and increased down payments.

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.

Attorney General Eric Holder's admission that some banks are effectively "too big to jail" continues to reverberate throughout the banking world, spurring a push-back from industry representatives and concern from House Financial Services Chair Jeb Hensarling.

The Comptroller of the Currency wants banks to hold more capital against mortgages in warehouse lending facilities, but small banks complain it could cripple a vital business.

Doug Bergeron will step down from his roles as CEO and a board member at VeriFone, effective March 12, the point of sale terminal maker said today.

Despite Republican claims to the contrary, the Consumer Financial Protection Bureau is accountable to lawmakers and the American public, Director Richard Cordray is expected to tell the Senate Banking Committee on Tuesday.

Florida bank-buyer Bond Street Holdings bulked up on failure deals, took a 19-month break and has returned to M&A with the aim of $5 billion in assets by yearend.

Proponents of breaking up big banks trumpet Attorney General Eric Holder's complaint that some are too large to prosecute. But indicting companies for individual employees' actions would indeed be reckless.

Sens. Sherrod Brown, a liberal from Ohio, and David Vitter, a conservative from Louisiana, are an unlikely pair. But they have forged a working alliance and are committed to raising capital requirements on the biggest banks and reducing their size.

The nonexistence of "too big to fail" is swell news. Now taxpayers can stop worrying about future bailouts, the Federal Reserve can ease monetary policy and the Justice Department can prosecute the banks purportedly "too big to jail."

Community bankers should be more concerned about interest rate risk, mortgage rules and examiner's questions about strategic direction than anything the Consumer Financial Protection Bureau might do, regulators say.

Even if regulators restrict banks' ability to charge overdraft fees, those consumers who value banks that cover their overdrafts will find a way to reward institutions providing the best service.