Law and regulation

VantageSouth Bancshares (VSB) in Raleigh, N.C., has redeemed all outstanding shares issued to the Treasury Department under the Troubled Asset Relief Program.

A financial reform group hoping to block the government's $13 billion settlement with JPMorgan Chase faces a steep uphill climb.

Bankers are mulling new ways to serve consumers with low incomes and poor credit profiles after the crackdown on deposit advances, but the prospect of smaller profits and continuing uncertainty about regulations may dissuade a serious effort.

The volume of complaints lodged by distressed borrowers to four of the largest U.S. banks has stabilized, the monitor for the national mortgage settlement says.

The biggest banks are coming off a year when their stocks and profits soared. Yet below the surface, they face a number of vexing problems: more regulation, less lucrative trading, an inability to do big deals and lower multiples than many smaller rivals. American Banker staffers discuss whether such factors may some day encourage shareholders to agitate for breakups.

"Servicers now face compensatory fees, not for mistakes or unreasonable delays, but simply as the cost of doing business," Mortgage Bankers Association President David Stevens says.

Steven Antonakes, the CFPB's deputy director, gave a speech which indicated the agency has shifted to a hard-line stance regarding compliance with a new mortgage servicing rule that went into effect last month. "Business as usual has ended in the mortgage servicing industry," he said.

Even legislators can run into trouble with creditors.

As Credit Suisse Group AG (CSGN) sees it, time has run out on New York Attorney General Eric Schneiderman’s pursuit of Wall Street banks for mortgage fraud that helped trigger the financial crisis.

JPMorgan Chase & Co. dropped Al-Rajhi Bank, the world's largest Shariah-compliant lender, as a correspondent banking client amid a push to improve risk controls, said two people with direct knowledge of the move.

Sens. Tim Johnson and Mike Crapo run the risk of proposing a second-rate solution for the market to gain mass support for their new legislation.

Risk-weighted regulations doom banks to lend too much, on too easy terms, to "infallible" borrowers –some of whom, as a result, will eventually prove to be very risky.

Pressured by overseas governments and institutions, the Fed nevertheless stayed the course in finalizing tough new rules for roughly 100 foreign banks doing business in the U.S. — a sign that the central bank's emphasis remains on national stability over international cooperation.

The Federal Deposit Insurance Corp. is suing eight former officers and directors of Habersham Bank over their role in the failure of the Clarkesville, Ga., lender.

First Citizens Banc Corp (FCZA) in Sandusky, Ohio, has exited the Troubled Asset Relief Program.

WASHINGTON -- The Federal Deposit Insurance Corp. is allowing the public an extra month to weigh in on the agency's strategic plan for unwinding failed behemoths.

The Federal Reserve Board is set to alter its strategy for supervising foreign banks in the U.S., making it somewhat less onerous for smaller global institutions.

Before regulators go any further, they should open a public dialogue to make sure they don't do a lot more harm by eliminating the few lenders that remain.

The Community Home Lenders Association is concerned the high fees will be more of a drag on home purchase volume as interest rates rise.

U.S. households took on debt at a faster clip in the fourth quarter than at any time in seven years, but credit quality measures continued to improve, according to economic reports issued Tuesday by the Federal Reserve Bank of New York and other sources.