Receiving Wide Coverage ...

Here a Probe, There a Probe: Two more banks have joined the ranks of financial institutions under investigation this summer for questionable behavior. According to the Journal, a federal grand jury is looking into the very close ties Regions Financial may have had with executive recruiting firm Fiderion Group LLC and its CEO James Norton III. Prosecutors have asked the bank to turn over information on "any gifts, trips or vacations" Fiderion may have funded. They have also asked for information regarding any loans Regions may have made to the firm or to Norton. The paper, which reviewed documents and spoke to people close to the inquiry, says the grand jury's investigation doesn't necessarily indicate wrongdoing, and the target of the probe isn't clear. It had been previously reported that Fiderion paid the tab for Regions executives at annual golfing getaways from 2002 to 2008, but Norton said he believed these outings complied with the bank's rules on vendor relationships.

We're not sure what Regions' handbook says about taking gifts from clients, but federal law prohibits bank staff from accepting anything of value meant to influence business decisions. The Journal notes the bank lent Fiderion $1.9 million in 2009. Regions did not comment on the investigation.

Separately, the FT reports Royal Bank of Scotland is being investigated by both the Federal Reserve and the Justice Department regarding possible illegal dealings with Iran. During an internal review, RBS discovered it had fallen short of tighter sanctions the U.S. instituted back in 2008 regarding transactions with Iran. The bank disclosed these shortcomings to U.S. and U.K. regulators. The internal review also led to the departure of a senior risk manager. RBS did not comment directly about the subsequent probe by regulators, but did refer the paper to its half-year report, which cites "investigation costs, remediation required or liability incurred could have a material adverse effect" on the bank's assets.

While some details of the case undoubtedly sound familiar, the FT makes a point of saying RBS isn't under investigation by Benjamin Lawsky, "the New York state regulator who snubbed other supervisors by pressing ahead with the recent regulatory order and settlement" against Standard Chartered. Supporters of Lawsky may want to read the Washington Post instead. The paper has a piece on how state regulators have stepped up their efforts post-financial crisis, which highlights Lawsky's $340 million StanChart settlement.

Incidentally, anyone looking to review the StanChart settlement or any of the other bank probes that preceded these latest ones may want to check out ProPublica, which has a scorecard for this summer's bank scandals on its website.

Wall Street Journal

The Federal Housing Finance Agency may be against principal reductions, but they do support short sales. The regulator is introducing new measures that will make it easier for homeowners to sell their houses for less than their mortgage balance. This includes a plan to extend help to cash-strapped homeowners who have yet to miss a mortgage payment.

India's central bank is examining the anti-money-laundering systems in place at HSBC and Standard Chartered.

New York Times

Laurence Grafstein, a "veteran deal maker," has been named UBS' co-head of mergers and acquisitions in the Americas.

This op-ed on banking regulation from Mohamed El-Erian, chief executive of Pimco, suggests all the breaking news of banking scandals indicates "regulators are getting better at countering shortfalls in banking activities." However, he contends all these efforts are disjointed and says "better international coordination" and "a major interagency effort, pushed by both the administration and Congress" is needed to avoid future mistakes. We're not sure exactly what El-Erian has in mind, but this does sound, at least a little bit, like the Consumer Financial Protection Bureau on steroids.

Elsewhere ...

Speaking of the CFPB, according to CNNMoney, the conservative foundation Judicial Watch is calling out the agency for overspending. Some of the budgetary items the foundation unearthed include a $465,000 allocation for sign language translation services and $4,500 worth of Banking Law Fundamentals classes at George Washington University. The foundation also criticizes the salaries some of the higher-ranking officials (excluding director Richard Cordray) are making. The agency maintains it has used only $54,000 worth of sign language translation services thus far this year. If you want to get an idea of how polarizing the CFPB remains, all you need to do is quickly scan the comments section of the CNNMoney story. While some commenters were quick to call these spending habits "another example of Obama administration lawlessness," others were eager to jump to the CFPB's defense. "I'm no fan of government bureaucracy or of the Obama administration, but this seems like small potatoes," another commenter posted.

 

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