Receiving Wide Coverage ...
Sweet Partial Victory: Bankers were mostly happy with a revision that softens the criteria for qualified residential mortgages. A provision of the Dodd-Frank Act requires banks and other lenders to retain 5% credit risk of loans they sell on the secondary market that don't fit QRM requirements. However, regulators revised the definition of the QRM exemption and it is so broad that 98% of loans last year would have been covered, the Wall Street Journal said.
The original proposal, which drew widespread criticism, would have limited the QRM exemption to loans with a 20% downpayment and a maximum 80% loan-to-value ratio. Additionally, it set maximum debt-to-income ratio for QRMs at 36%. Under the revised proposal, QRMs would be more aligned with the qualified mortgage rule finalized by the Consumer Financial Protection Bureau in January. The new proposal removed the downpayment requirement and increased the debt-to-income ratio to 43%.
The new plan drew some criticism. Daniel Gallagher, a Securities and Exchange Commission commissioner, called the proposed exemption "unrealistic and dangerously broad," the Journal reported. The paper's Heard on the Street section argued that regulators "may once again be putting hopes for short-term economic gain ahead of the
Still, the fight is far from over for bankers. The new proposal also asks for comments on restricting the QRM criteria to mortgages with a maximum 70% loan-to-value ratio and increasing the downpayment requirement to 30%. Experts predict the final rule would "strike a middle path" between proposals of a zero downpayment and 30%, with the rule settling at 10%, the Washington Post said.
Meeting of the Minds: Switzerland and the U.S. are reportedly close to an agreement that would end a longtime dispute over how to punish Swiss banks for helping American tax evaders. Under the settlement, banks could secure deferred prosecution agreements in exchange for admitting to wrongdoing, providing account holder information and paying penalties, according to the New York Times, citing an unnamed Justice Department official. U.S. authorities could collect more than $1 billion in fines, the Journal said. Final details of the settlement could be released as soon as next week, FT reported. Settling the dispute was praised by the Swiss Bankers Association, which said the agreement "enables all banks in Switzerland to settle their U.S. past quickly and conclusively and creates the necessary legal certainty," according to FT.
Please Believe Me: Bank of England Governor Mark Carney tried to convince skeptics that he would not follow the U.S. in curbing stimulus efforts, and that the bank would keep interest rates low. Earlier this month he indicated that rates would stay at 0.5% until unemployment fell from the current 7.8% to 7% or for up to three years, causing some to worry that rates would rise sooner than previously expected. But in his speech Wednesday to the owners of small- and medium-sized businesses, Carney said that the bank would not increase rates until "jobs, incomes and spending are recovering at a sustainable pace," according to the New York Times. However, the Financial Times' reported that
Hiring Practices: JPMorgan Chase has created a task force to look into its
Wall Street Journal
Janet Yellen, the Federal Reserve's vice chairman, "
Questions continue to linger about Nasdaq's trading outage last week. The Securities Information Processor, the industry group that oversees the Nasdaq data feed, will meet next week to
Rules from the Department of Health and Human Services will require insurers participating in the new health-insurance exchanges to
A former
Washington Post
The number of Americans signing agreements to