Receiving Wide Coverage ...
The Home Stretch? Today is the deadline (extended from Friday) for states to sign on to the nationwide robo-signing settlement, and that is one of the few things the papers seem to agree on. The Times says California attorney general Kamala Harris is back at the table. Her state’s “participation would result in having more money available for many other states, including an estimated $500 million in additional money for Florida,” the paper says. But the Journal says the negotiators have offered Harris “a commitment that a certain portion of the deal's benefits go to California,” and suggests that other AGs, including Florida’s Pam Bondi, may balk precisely at this carve-out.
The FT says the deal’s principal reductions alone now could total $40 billion, while the Times and the Journal still use the familiar $25 billion figure for the maximum size of the entire settlement, which would include cash payments to people who lost their homes as well as principal reductions for those struggling to keep theirs. The FT plays up the potential backlash from third-party mortgage investors, since the settlement would give banks credit for writing down loans they service but don’t own. But according to the Journal, “negotiators believe banks will focus on cutting balances on loans they own, both because they would receive more credit … and because of limitations in their contracts with investors who bought mortgage-backed securities.” Wall Street Journal, Financial Times, New York Times
Citi in China: Citigroup will become the first western bank to issue credit cards in its own name on the mainland, the papers report. It and HSBC already have back-end support deals in place with Chinese issuers. Wall Street Journal, Financial Times
Wall Street Journal
President Obama nominated Jeremiah Norton, a JPMorgan banker and former Bush administration official, to the FDIC’s board.
The Swift network is under pressure to cut off Iran’s central bank and other Iranian entities that have been sanctioned by the U.S. and the E.U. Last week the Senate Banking Committee passed a bill that would punish the financial-messaging system’s directors and owners for allowing the Iranian banks to stay on the network. It’s part of the broader effort to press Iran’s government to abandon pursuit of nuclear weapons (which the country insists it isn’t pursuing). Exclusion from Swift would render Iranian banks “virtually incapable of conducting electronic financial transactions,” the Journal says. The administration has taken other steps to use the payments system as a foreign-policy weapon against Iran; for an interesting critique of this strategy, read the last BankThink column by our favorite curmudgeon.
“Julius Baer, Switzerland's largest private bank, said it expects to pay a fine as a result of a U.S. campaign to track down Americans with assets hidden overseas.”
Charles Schwab — the man, not the company named after him — argues in an op-ed that the Fed’s zero interest rate policy is hurting the economy.
The sector of the S&P 500 index made up of financial companies “has begun trading above the book value of its assets for the first time since July in a sign of a turn in investor sentiment towards banks.”
New York Times
Gretchen Morgenson had two separate stories in the Sunday Times profiling individuals who have been fighting the big banks. One focused on a “mortgage sleuth” who back in 2003 warned Fannie Mae (to little avail) that its loan servicers were cutting corners in the foreclosure process. The other piece was about an investor who won a securities arbitration case against Bank of America over a collateralized loan obligation that went kablooie.
An op-ed on the privacy issues raised by online data aggregation warns, “If guitar players or divorcing couples are more likely to renege on their credit-card bills, then the fact that you’ve looked at guitar ads or sent an e-mail to a divorce lawyer might cause a data aggregator to classify you as less credit-worthy.” Wait, does that mean Sir Paul McCartney would be a bad credit risk?