Receiving Wide Coverage ...
Stuck in the Middle: Banks are once again caught between a crusading regulator and a frowned-upon fringe of the financial industry. New York Department of Financial Services Superintendent Benjamin Lawsky warned 35 online lenders to stop offering loans that violate the state usury cap, and asked 117 banks to stop these lenders from debiting borrowers' accounts via ACH. "Banks have proven to be even if unintentionally an essential cog in the vicious machinery that these purveyors of predatory loans use to do an end-run around New York law," Lawsky said. According to the Times, JPMorgan Chase "is now reporting lenders that try to make unauthorized withdrawals" to Nacha, the group that oversees the automated clearing house system. (Recall that back in February, Chase was prominently featured in a Times article fingering banks for continuing to automatically debit borrowers' accounts even after the customers asked them to stop.) Not to be outdone by Lawsky, New York's aspiring gov, er, attorney general Eric Schneiderman is investigating the online payday lender Western Sky for violating the state usury law, the Journal reports, citing an anonymous source. For its part, Western Sky gave the papers a heartstring-tugging variation on the usual canned corporate statement: "Western Sky Financial is the largest private employer on the impoverished Cheyenne River Indian Reservation and complies with all applicable laws and business practices." Wall Street Journal, New York Times
HSBC and FHFA: In its first-half report, HSBC warned it may have to pay the Federal Housing Finance Agency $1.6 billion to settle claims that the British bank misrepresented mortgage-backed securities sold to Fannie and Freddie during the bubble years. Wall Street Journal, Financial Times
Wall Street Journal
The FBI "has discovered vulnerabilities in the government's system for preventing market-moving economic reports from leaking to traders before public release." Investigators found "it was possible to subvert the system, which was designed to prevent media companies from sending economic data [such as monthly employment figures] to traders early." Just asking: Why bother with media embargoes for this information anymore? Why not just release it to everyone at the same time, and remove the risk that someone in the media breaks the embargo? Why not just release the information to everyone at the same time, and remove the risk that someone in the media breaks the embargo? The system seems like a relic of the age when investors got all their news and data from wire services on closed-loop terminals you know, before the Web and blogs and Twitter
"Private-equity firms are adding debt to companies they own to fund payouts to themselves at a record pace, as fears mount that the window for these deals will close if interest rates rise."
"Crédit Agricole posts results by accident." At least they were better than expected.
"Regulation pushes banks on to a riskier path." Go figure. In this case, the unintended consequence is that banks in Europe are shrinking cash and liquid assets to boost their leverage ratios. "Depleting cash levels, government bond portfolios and holdings of other easy-to-liquidate assets is a handy shortcut for weaker capitalised banks to reach the ratio faster."
New York Times
"Pay Deferrals for Bankers Are Tougher in Europe," compared to U.S. institutions like JPMorgan, Citi and Goldman.
"Bank Behind Sale of Washington Post to Amazon's Bezos" An investment bank, that is. It's Allen & Co., a boutique firm.
"Obama to insist market provides 30-year mortgages" Preview of a speech the President will deliver in Phoenix today. "Obama is planning to call for a new system, built in part on government backing, that will enable wide access to 30-year mortgages, which are a rarity in other countries. That will require, officials said, some form of government guarantee," even after Fannie and Freddie are laid to rest.