Top Six Stories in Regulation and Reform
April 15, 2013 11:42 AM
Policymakers came back from the Easter recess loaded for bear, as President Obama released his budget and Senate Democrats dug into the independent foreclosure reviews. Here are the six stories in regulation and reform that you shouldn't have missed last week.
Senate Democrats took regulators to task at a hearing last week over their handling of the independent foreclosure reviews. Once again, Sen. Warren made the most of her questioning time, arguing that the OCC and Fed had little intellectual basis for arriving at the ultimate $9.3 billion figure they used in an ultimate settlement with the servicers. The OCC used the same hearing to say it is seeking enforcement powers against bank consultants.
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Speaking of that settlement, how much will affected borrowers actually see of that $9.3 billion? Not very much, according to data released by regulators last week. Roughly 60% will receive just $300, while only a tiny fraction will receive the highest potential payment of $125,000.
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President Obama's budget said that Treasury may need to give the Federal Housing Administration almost $1 billion to shore up its capital reserves. It also embraced a plan that would tax as ordinary income gains and losses from certain derivatives contracts. Speaking of the president, he also took time to meet with 15 bank CEOs , including Jamie Dimon and Brian Moynihan.
Two FDIC board members are urging policymakers to strengthen a leverage ratio that would be applied to banks as part of the Basel III accord, arguing the risk-based capital system is significantly flawed.
The FDIC gave banks a pleasant surprise last week when it said it will refund nearly $6 billion in overpaid assessments. The agency cautioned the Deposit Insurance Fund still has a long way to go, but said it no longer needs some prepaid assessments levied in 2009 as a way to avoid borrowing money from the Treasury Department to shore up the fund.
MetLife is determined not to go quietly into that good night. Its CEO, Steve Kandarian, made the case last week for why the firm is not systemically important - and should not be designated as such by FSOC.
