Law and regulation

The Federal Reserve Board's controversial decision to rejigger its securities portfolio was right given the economy's weak outlook and the likely slowdown in consumer price inflation in 2012, a senior economist at the Federal Reserve Bank of Cleveland says.

The Senate Banking Committee is expected to vote next week on the nomination of Richard Corday to be the first director of the Consumer Financial Protection Bureau.

Securities and Exchange Commission inspectors said a large credit rating firm "appeared to allow" for a pending rating decision to be disclosed to certain people before the action was publicly announced.

Once slated for liquidation, Corus Bankshares Inc. received court approval for its bankruptcy exit plan that calls for the former Illinois bank holding company to emerge as a real estate investment firm.

Codorus Valley Bancorp in York, Pa., repurchased a warrant to buy more than 260,000 it issued to the Treasury Department in 2009 as part of its participation in the Trouble Asset Relief Program.

Bond investors are turning against Ally Financial Inc., the auto and home lender majority-owned by the U.S. government, as mounting mortgage liabilities threaten its turnaround plan.

Japan's Financial Services Agency is nearing completion of an investigation into the local arm of U.S. financial giant Citigroup Inc. on suspicion of lax compliance, with questions remaining over anti-money laundering controls, and will likely issue sanctions as early as next month, people familiar with the matter said Friday.

A watchdog agency's report reveals a mad dash in 2009 by B of A, Citi and other banks to repay their Tarp funds. Regulators clashed with each other over the repayment terms and ultimately relaxed their own rules.

Nine major servicers regulated by the Office of the Comptroller of the Currency completed 180,000 foreclosure actions in the second quarter, but these firms are still managing roughly 1.3 million borrowers who are going through the foreclosure process.

The Consumer Financial Protection Bureau is applauding the Treasury Department for guidance it issued Thursday that would help members of the military avoid foreclosure.

When Michel Barnier of the European Commission singled out auditors for enhanced scrutiny this week, he was reacting to anger, in Europe at least, over the "no bark, no bite" behavior of accounting "watchdogs" before, during, and after the financial crisis.

The Durbin Amendment on debit interchange has been cited as reason for banks to shutter branches. Still, some observers believe it is one of many factors, if not the scapegoat, for closures that were necessary regardless of regulatory change.

Is Bank of America charging for debit cards because it is shortsighted or because it is too bloated to compete against smaller institutions for consumer accounts?

At the bailout law's three-year anniversary, the Small Business Lending Fund has offered some banks a way out. But with that escape hatch now closed, roughly 400 small banks remain stuck in the program.

Bank of America Corp., the largest bank by assets, plans to start charging its checking customers $5 per month, or $60 annually, if they use their debit cards to make purchases. The fees will go into effect early next year.

"In financial ecosystems, evolutionary forces have often been survival of the fattest rather than the fittest." So says Andrew Haldane, Executive Director for Financial Stability at the Bank of England. He is right.

The overall level of current and performing mortgage loans fell slightly in the second quarter as early stage delinquencies ticked up, according to the latest mortgage metrics report.

Rep. Ron Paul will hold a hearing Tuesday on the results of the government's audit of the Federal Reserve's emergency lending programs introduced amid the financial crisis.

Boston Federal Reserve Bank president Eric Rosengren wants Fannie Mae and Freddie Mac to do more to refinance homeowners and address housing market problems.

Consumer statute lawsuits filed against collection agencies and creditors jumped to 530 in the first half of September, compared with 467 in the second half of August, according to data from U.S. District Courts.