Law and regulation

Leaders in emerging payments and virtual currency have formed a committee to establish a self-regulating body to ensure regulatory compliance as the marketplace changes.

Regulatory reform is likely to continue on its current path if Janet Yellen, the Federal Reserve Board's vice chairman, is tapped to lead the central bank. The future is decidedly murkier if Larry Summers wins the post.

The race to succeed Fed Chairman Ben Bernanke was kicked into high gear last week by rumors President Obama was about to announce his choice. The White House eventually backed off of that, saying a nomination was likely to come in the fall. Still, the speculation over who will be the next central bank chief has reached fever pitch. Following are the top candidates:

American International Group Inc. (AIG) will return funds to customers at its banking unit and shut their accounts amid a retreat from deposit-taking as the Dodd-Frank Act places limits on insurers.

The federal complaint against Castle & Cooke Mortgage issued by the Consumer Financial Protection Bureau looks to be the first of many enforcement actions taken against mortgage originators for failing to follow new loan officer compensation rules.

Bitcoin, a decentralized virtual currency, has been declared illegal in Thailand. Members of the Foreign Exchange Administration and Policy Department made the determination at a meeting on July 29 in the Southeastern Asian country, according to a Bitcoin exchange operator in attendance.

MainSource Financial Group (MSFG) in Greensburg, Ind., has been cleared to redeem the last of the preferred stock it had issued through the Troubled Asset Relief Program.

Modern banking exposes our financial system to considerable risks. Government attempts to contain these risks exacerbate them. Here’s a proposed alternative: A “Depositary” that stores money for a fee without lending.

Visa and MasterCard may differ on their support of chip-and-PIN in the U.S., but they are of one mind in their approach to Australia.

Wells Fargo has temporarily stopped selling defaulted consumer debts to collections agencies. Its move follows a more drastic pullback by JPMorgan Chase and a regulatory crackdown on the collections industry.

Inspired by his old boss Ted Kennedy and steeped in the legal issues surrounding bank regulation, Daniel Tarullo, the Federal Reserve's dominant voice on supervision matters, has amassed significant influence both at home and abroad, as he helps to carry out a major reshaping of the rules governing U.S. banks and the global financial system.

The threat of regulators kicking banks out of the commodities business is driving fears that market liquidity and competition will suffer as a result.

A recap of the informed opinions (and the discussions they generated) on BankThink this week.

Sens. Elizabeth Warren, D-Mass., John McCain, R-Ariz., Maria Cantwell, D-Wash., and Angus Kin, I-Maine proposed a bill that would reinstate the Depression-era Glass-Steagall Act, and analysts believe the legislation will not pass Congress.

The Federal Deposit Insurance Corp. took seven enforcement actions and freed 13 banks from orders in June, according to a list of regulatory actions released Friday.

State laws requiring money-transmitter licenses have raised the barriers to entry for startups trying to compete with banks and entrenched companies like PayPal. But by keeping out smaller, more nimble payments companies, state regulators could affect the banking industry's long-term innovation and growth.

Richard Whiting, executive director and general counsel of the Financial Services Roundtable, has announced he will step down early next year.

The Office of the Comptroller of the Currency will be losing one of its top economists at the end of the month, according to an internal agency memo.

Visa Inc., which operates the world's biggest electronic-payments network, was sued by Wal-Mart Stores Inc.'s Asda unit, William Morrison Supermarkets Plc and Arcadia Group Plc over payment-processing fees.

New York financial regulator Benjamin Lawsky is joining the crackdown on the collection industry, proposing new rules that would tighten record-keeping requirements and other collection practices for banks and third-party debt buyers.