Regulation

The Treasury Department said Thursday that it did not pay any incentives for foreclosure prevention efforts to Bank of America Corp. and JPMorgan Chase & Co. in the second quarter, as the two banks still need "substantial improvement" in their mortgage servicing operations. But Wells Fargo & Co. did make the cut.

In the Dodd-Frank Act, Congress included an exemption from the five percent risk-retention requirements applied to residential mortgages. Unfortunately, in their proposal to define what qualifies as a "qualified residential mortgage" under that exemption, regulators included only a very narrow test of borrowers' credit risk.

The deals announced Tuesday paved the way for Goldman's sale of its Litton subsidiary to Ocwen Loan Servicing. Both Goldman and Ocwen agreed to reforms in response of allegations of loan-servicing improprieties.

The Federal Reserve Board's decision to hold public hearings and extend the comment period on Capital One Financial Corp.'s planned acquisition of ING Direct has drawn the ire of House Financial Services Chairman Spencer Bachus.

Cullen/Frost Bankers Chief Executive Dick Evans says he's "not interested" in making acquisitions outside of Texas, and derides mounting competitive threats from community bank rivals by comparing them to the "juvenile delinquents down the street."

Banks of all sizes are tackling changes in regulations such as RESPA. Bank of Billings is using loan documentation compliance software to meet the challenge.

The Federal Trade Commission is mailing more than 110,000 refund checks to consumers defrauded by an online operation that tricked payday loan applicants into paying for an unrelated debit card.

The international coordinating body for financial regulation announced Thursday that it has approved an initial set of recommendations for various countries to use to strengthen the oversight of their shadow banking systems.

The Capital One acquisition of ING Direct USA is, as far as we know, the first time size alone has been made an M&A approval criterion for the Federal Reserve.

The banking industry is anxiously awaiting a slew of regulations dealing with systemic risk, capital requirements, and liquidity.