Receiving Wide Coverage ...
BofA Settlement Deadlock: Negotiations between Bank of America and the Justice Department have stalled as the parties attempt to settle a lawsuit over mortgage-backed securities sold by Merrill Lynch, which B of A acquired during the financial crisis, according to the New York Times. The usual anonymice told the paper the Justice Department wants the Charlotte, N.C.-based bank to pay roughly $17 billion to resolve the lawsuit over securities that later soured. Bank of America reportedly offered to settle for about $12 billion. "For the Justice Department the sticking point is both the size of the settlement and the method of doling out the money," the paper reports. "Bank of America wants to earmark a large chunk of the money for various forms of assistance to consumers rather than paying it in the form of a cash penalty, the people said. The Justice Department has also pushed for consumer relief, but also wants the bank to pay more in cash." Bank of America has reportedly argued both that the Justice Department is seeking an excessive penalty and that it would have avoided liability altogether had the government not pressured it to complete its purchase of Merrill Lynch in late 2008. Other news outlets, including Reuters and Bloomberg, are reporting off the Times.
Wall Street Journal
A rule that would allow borrowers to receive a qualified residential mortgage without making a down payment is moving forward after the Securities and Exchange Commission reached a compromise with other regulators. SEC Chair Mary Jo White "recently agreed to essentially adopt the revised mortgage rule without a down payment as long as regulators agree to re-evaluate the rule and ensure it is imposing restraint on the mortgage-backed securities market," according to anonymice.
Two Carolina banks have agreed to merge in what appears to be the largest bank deal so far this year. "The deal between First Citizens Bancshares of Raleigh, N.C., and First Citizens Bancorp of Columbia, S.C., will result in a combined bank with $30.7 billion in assets," the Journal reports.
New York Times
Two bills pending in the House pose a threat to the integrity and efficacy of the Financial Stability Oversight Council, according to a column by corporate governance and business ethics expert Stephen J. Lubben. One bill would prevent the FSOC from designating too-big-to-fail institutions for the next six months a deadline that falls conveniently after the November elections, as Lubben points out. The other bill would allow members of House and Senate committees to participate though not vote in FSOC meetings. "Members of Congress cannot make themselves part of the executive branch," Lubben writes. "You would think a congressman would have remembered that."
The Times editorial board applauds President Obama's move this week to expand student debt relief and a bill to create a fund that would allow student loan borrowers to refinance their debt at lower interest rates. The Senate is scheduled to vote on the refinancing bill Wennesday, though the paper notes that House Republicans will oppose it because the fund would be paid for by a new tax on millionaires.
Travel website Expedia now allows users to pay for their hotel bookings in Bitcoin. Brian Fung argues that Expedia stands to benefit from the move because it could cut down on the transaction fees that credit card companies charge merchants.