Regulation

"Lawyers for the Federal Reserve Board filed an appeal Monday against a judgment that invalidated its 2011 rule placing a cap on debit interchange fees," writes American Banker's Donna Borak.

WASHINGTON — Financial regulators said Tuesday that lenders who only make so-called qualified mortgages should not be concerned about inadvertently triggering a fair-lending violation.

Lenders will be exposed to material put-back risk unless steps are taken to set industry standards for loan origination and processing.

The two cities join New York, L.A. and other cities in trying to force the banks that hold municipal deposits to make more loans in low-income neighborhoods. Some industry officials oppose them, while others welcome them.

Blacks and Hispanics are likely to find it more difficult to obtain credit or face paying higher prices when the "qualified mortgage" rule goes fully into effect, a process that could take up to seven years.

The Federal Reserve released Bank of New York Mellon (BK) from a regulatory action requiring it to tighten up its internal controls.

Fannie Mae and Freddie Mac have tightened their 'representation and warranty' framework. Other public sector mortgage funders, including FHA, VA, and the USDA should follow suit … or risk being left with lemons.

The new qualified-mortgage rule is pressuring vendors of loan origination systems to work with lenders to re-code their systems. There's a lot of work to be done before the Jan. 10 deadline.

Many payments companies see a conflict between innovation and regulation, with each side perceiving the other as out of touch with their needs, particularly when it comes to new technology.

Higher capital requirements for federal mortgage lenders, more stringent QM and QRM requirements for borrowers and a heightened reliance on private markets will help keep taxpayers from paying for future bailouts.