Nonbank

A bipartisan group of senators is proposing legislation to require the Financial Stability Oversight Council to weigh alternatives before putting a large, complex nonbank under Federal Reserve supervision.

The interagency panel formed to head off approaching systemic risks must figure out its next move after having undone designations of nonbank firms.

Policymakers should not let mortgage REITs, hedge funds and other firms gain membership through captive insurance companies.

The alternative is waiting for state and federal regulators to take steps that could disrupt the flow of capital and put some firms out of business.

An agency report said servicing portfolios have shrunk by nearly half in 10 years as much of the mortgage market has shifted to nonbanks.

The CFPB ordered Village Capital & Investment in Henderson, Nev., to issue refunds and pay a penalty for allegedly misrepresenting the cost savings in a refi product.

FDIC Chairman Jelena McWilliams questioned whether regulators and banks are fully capturing the emerging risks of a new shadow banking system.

Citigroup CEO Michael Corbat added to the chorus of bankers offering warnings about credit risks that loom outside of the banking industry.

The Financial Stability Oversight Council announced Wednesday that it was rescinding the SIFI label for Prudential, a culmination of almost a decade of fierce debate about how regulators should address the risk of nonbank financial firms.

Gov. Jerry Brown’s administration sent letters Wednesday to 20 nonbank lenders that charge triple-digit annual percentage rates to try to determine if their use of online referrals is steering borrowers into larger loans than they want or need.