Swipe Fees Battle Renewed; Soured Mortgages Remain

Editor's note: Morning Scan will not publish on Monday, July 4 in observance of Independence Day. We'll be back on Tuesday, July 5.

Receiving Wide Coverage ...

At odds: Just in time for July 4th, the fireworks over swipe fees have been reignited. An appeals court in Manhattan has overturned a landmark settlement between the country's merchants and Visa and MasterCard. The court found that retailers were "inadequately" represented, because the same lawyers spoke for two groups of merchants with different interests.

Retailers had argued that processing fees were too high due to price fixing among the credit card networks. The 2012 deal, worth more than $7 billion, was one of the largest antitrust settlements in history. New York Times, Wall Street Journal

New deal for bad mortgages: The Federal Housing Administration is overhauling a program that sells troubled loans to private investors. Among other changes, the firms will now have to consider principle reductions to help keep distressed borrowers in their houses before moving on to other options, including foreclosure.

Meanwhile, New York City is launching a program to buy troubled mortgages directly from the Department of Housing and Urban Development, according to the Journal. Housing advocates and some lawmakers have pushed for cities and nonprofits to step in as an alternative to having the soured loans sold to investors. New York is one of the first cities to do so. New York Times, Wall Street Journal

Wall Street Journal

Giving back: Following the Federal Reserve's stress tests, the largest banks are approved to return 83% of their estimated earnings to shareholders on average – that's up from 69% last year. But with so many firms paying out most of their projected earnings, "there may not be much more runway for big payout increases in coming years."

Negative feedback: Deutsche Bank has been named the riskiest financial institution in the world by a new International Monetary Fund report – not exactly a coveted distinction. The label follows news that the bank's U.S. unit was one of just two to fail the second part of the Fed's annual exam.

99 problems, plus Brexit: Yet another look at CEO Tidjane Thiam's attempt to turn around troubled Credit Suisse. Celebrating his one-year anniversary with the bank today, Thiam faces blowback from Britain's vote to leave the European Union in addition to internal problems.

Speed bumps ahead? The New York Stock Exchange and its sister markets are considering adding "speed bumps" to protect investors from high-frequency traders. The move follows the SEC's approval of dark pool IEX as an exchange. IEX was featured in Michael Lewis' 2014 book "Flash Boys," with its founders hailed for "trying to restore balance to the stock market."