Less stress: The Federal Reserve announced a set of proposals that would make it easier for big banks to pass annual stress tests, but would increase capital requirements for some of the biggest and most complex banks. Capital requirements for the eight largest banks deemed systemically important would stay the same or “in a few cases, increase,” while big banks below that tier that don’t do business abroad, would see their required capital levels stay the same or be reduced slightly. Big banks would need to meet 14 capital-related requirements under the proposals, down from the current 24. Wall Street Journal, Financial Times, American Banker
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In a string of enforcement actions issued Thursday, the Federal Reserve barred one former banker from the industry for misappropriating confidential supervisory information and fined three others for misappropriating internal bank records.
“A stubborn standoff” threatens passage of the bipartisan bank regulation reform bill that was passed by the Senate last month. The man in the middle is Rep. Jeb Hensarling, R-Texas, the chairman of the House Financial Services Committee, who “has so far been unwilling to sign off on the Senate bill unless it includes a list of about 30 bipartisan House bills he wants to add.”
Wall Street Journal
To the Hill: Mick Mulvaney, the acting head of the Consumer Financial Protection Bureau, said the agency’s enforcement division would continue to police lending discrimination. “This will make enforcement and supervision more efficient, effective and accountable,” Mulvaney said in his prepared remarks for his congressional testimony Wednesday and Thursday, which he will use to “outline his strategies for overhauling the bureau and his regulatory agenda for the coming months.”
It's a stretch: A growing number of homebuyers are spending more of their income on mortgage payments, “the latest sign that rising prices are making homeownership more difficult for a broad swath of potential buyers.” Borrowers spending more than 45% of their incomes on mortgage and other debt payments accounted for about 20% of new loans made in the second half of 2017, the highest percentage since the housing crisis and nearly triple the percentage made in 2016 and the first half of last year, according to CoreLogic.
Not interested: New Jersey Gov. Phil Murphy’s idea of to start a state-owned bank gets a harsh reception from one critic. “An inescapable defect of a bank owned by the state of New Jersey and its municipalities is that there will be no wall to protect prudent financial management from political and social-policy considerations,” reader Ryan Graham writes in a letter to the editor. “Add New Jersey’s record of corruption to political and social tinkering with bank management and New Jersey’s taxpayer guarantors — fuggedaboutit.”
Financial Times
Counting down: Valdis Dombrovskis, the European Commission’s top financial services official, is warning that time is running out on a project to fortify the euro area’s banking system. Individual countries have been debating the details of a plan to guarantee bank deposits across the area and other issues.
New York Times
No more guns: Bank of America said it will stop lending to firearms manufacturers that make military-style guns for civilian use. The move is “the latest example of Wall Street wading into the divisive gun control debate after Citigroup’s announcement last month that it would require business customers to restrict certain types of firearms sales.”
Washington Post
Winning: The finance industry will be the biggest long-term winner from last year’s tax reform law, thanks to the law's “dramatic reduction of the corporate tax rate,” according to a report by Ernst & Young to be released this week.
Quotable
“Our regulatory measures are most effective when they are as simple and transparent as possible, and this proposal significantly simplifies our capital regime while maintaining its strength.” — Federal Reserve Vice Chair for Supervision Randal Quarles.
Lake Shore Bancorp in Western New York has reached a "standstill agreement" with the Stilwell Group, which has promised not to force a merger or sale in the next three years.
Swiss banking giant UBS Group received federal approval from the Office of the Comptroller of the Currency to convert its $1.6 trillion-asset UBS Bank USA from a Utah-chartered industrial bank to a national charter.
Early industry reaction to the Federal Reserve's Basel III proposals points to potential capital relief for banks, though stakeholders say the complexity of the changes makes their overall impact unclear.
Financial institutions that delay or fail to take this leap risk losing customers and revenue, said speakers at the inaugural On-Chain Executive Summit.
CISA and Microsoft urge organizations to secure endpoint management systems as threat actors increasingly seek to disrupt operations with wiper malware.
Piermont Bank hired Dennis Day for a new executive role focused on payments; the American Bankers Association announced the global expansion of its widely used Fraud Contact Directory; MC Bankshares moved one step closer to finalizing its sale to an investor group; and more in this week's banking news roundup.
