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Fed Reins in Foreign Banks: The Federal Reserve has finalized new rules for large foreign banks operating in the U.S. that will require many to hold more capital and conduct tougher stress tests. The rules will require about 100 foreign banks with at least $50 billion in assets to follow tighter capital and liquidity standards that also apply to 24 U.S. bank holding companies of that size, the Financial Times reports. Many of the rules take effect in July 2016. Seventeen foreign banks, including Barclays, Deutsche Bank and Credit Suisse, will have to set up separately capitalized intermediate holding companies for their U.S. subsidiaries. Foreign banks that largely operate as broker-dealers in the U.S., such as Barclays, will be more affected by leverage rules that force them to hold capital against off-balance sheet exposures such as repurchase transactions. However, the leverage rules don't take effect until January 2018. According to the Wall Street Journal, foreign banks fought the proposed rules, but the Fed stood firm, arguing that it provided billions in emergency funding to U.S. units of foreign banks during the financial crisis.

Wall Street Journal

The Journal took a stab at estimating the total cost of the Target breach, in which 40 million credit card account records were stolen along with email or physical addresses of 70 million customers. Banks have issued more than 17 million new credit cards to customers, which has cost more than $200 million. Each of the retailers hit by the attack has spent thousands of collective hours of employee time responding to it. A study backed by computer security firm McAfee last year estimated the total cost to the U.S. economy at up to $100 billion. And a sympathetic profile of Target CEO Gregg Steinhafel outlines the toll the massive breach has taken on his career. Steinhafel is portrayed as bravely insisting on reporting the large total number of Target customers potentially affected — 110 million — in spite of objections from other executives at the company. "Target won't be defined by the breach, but how we handle the breach," Steinhafel is quoted as saying. Later, he decided to extend free credit reports to all customers who might be affected. The crisis has damaged the retailer's brand and analysts estimate it may cost Target billions of dollars.

New York Times

Shoddy paperwork, erroneous fees and wrongful evictions — sound familiar? In a long, anecdote-laden report on mortgage loan complaints, the Times paints a damning portrait of the mortgage business. The expose focuses on the role of loan servicers that collect mortgage payments, such as Nationstar and Ocwen Financial, which according to the paper "have great power in deciding whether homeowners can win a mortgage modification or must hand over their home in a foreclosure" and have been buying up servicing rights "at a voracious rate. As a result, some homeowners are mired in delays and confronting the same heartaches, like the peculiar frustration of being asked for the same documents over and over again as the rights to their mortgage changes hands." One borrower says she's been bounced among three separate servicers, and cannot get answers from any of them. A Montana couple thought they had finally won an agreement with their lender, Bank of America, to reduce their mortgage bill and save their home after more than three years of fighting foreclosure. A few months later, however, their mortgage modification appeared to have vanished: BofA had sold servicing rights to their mortgage to Nationstar. Regulators say the specialty servicers have not upgraded their technology or infrastructure to accommodate the glut of new mortgage and they benefit when they work through the troubled loans as quickly as possible, the paper reports.

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