Regulatory reform

Treasury Secretary-designate Steven Mnuchin will divest himself of his investments and interests in a number of companies and funds once confirmed, including a fund that has bet on Fannie Mae and Freddie Mac being recapitalized and released from government control.

Sen. Elizabeth Warren rallied progressives on Tuesday night to launch a campaign to defend the Consumer Financial Protection Bureau and the Dodd-Frank Act.

The effort to end regulatory absolutism will most likely succeed if it is framed as a pro-economy reform, with members of both political parties driving the train.

House Democrats sent a letter Tuesday to President-elect Donald J. Trump, urging him to reject calls by Republicans to fire Richard Cordray.

The Federal Housing Administration said it would cut the annual premium by 25 basis points starting on Jan. 27, giving President-elect Donald Trump a limited window to delay or scrap the cut.

Donald Trump's victory is forcing observers to recast predictions for the new year. Following is a guide to which policymakers to watch and who is poised to make the biggest impact in 2017.

A 2018 deadline to automate government payments is fast approaching. Only with a mix of technology solutions and cooperation among agencies can that deadline be met.

In just under a year, Sen. Heidi Heitkamp has emerged as a key player on the Banking Committee, helping to work on a bipartisan housing finance reform bill and championing legislation to provide relief to small banks.

It´s open season on regulatory restructuring: Bank regulators are gathering in the House Financial Services Committee this morning to share their views on the Obama administration´s plan to overhaul the financial system. BankThink is brining you live blogging coverage of the hearing, which will consist of two panels of witnesses. Treasury Secretary Timothy Geithner will take the stage first, alone. He´ll be followed by Federal Reserve Chairman Ben Bernanke, FDIC Chairman Sheila Bair; Comptroller of the Currency John Dugan, OTS Director John Bowman, and Joseph Smith, Jr., the North Carolina state banking commissioner, testifying together. Stay tuned.

Trouble in the commercial real estate market is highlighting a disparity between large and small banks with ominous implications for the Obama administration´s approach to "too-big-to-fail." Though officials have insisted that banks would not want to be classified as "Tier 1" institutions due to the higher capital requirements and additional leverage restrictions they´d face, the CRE problem proves there are still advantages to being very big.

The pieces of a more equitable fate for troubled financial giants are beginning to come into view as evidenced by this week´s private-sector rescue of CIT. The lender´s salvation may serve as a prop for future government bailout strategies. But its ordeal is also further proof that the government needs more power to seize and resolve large companies.

Federal Reserve Chairman Ben Bernanke will be making the rounds in Congress this week to discuss the state of the economy while the other banking regulators prepare to voice their views on regulatory restructuring. The Office of the Comptroller of the Currency´s underwriting survey is due out early in the week, and the Treasury department is expecting by Thursday letters from the largest 25 banks detailing their progress on loan modifications.

There will be plenty of bustle on the Hill this week as the early August date for Congress´ summer recess advances. Legislators are holding on, for the most part, to ambitious regulatory restructuring plans, and hearings on financial regulatory issues will abound. Treasury Secretary Timothy Geithner, meanwhile will be overseas-thus safe, for a week, from Congressional scrutiny.

Over the past week or two a new regulatory proposal laid out in the op-ed pages of The Guardian has gathered steam, and we thought it was time to share it with BankThink´s readers. The idea is to make bank mismanagement a criminal offense, something similar to negligent homicide. If a bank founders, its upper management can be investigated for recklessness.

This week, Congress is back in session and the financial regulatory committees will be hard at work on a system overhaul. Thrown into the mix is a new set of rules governing private equity investments in failed banks, put out to comment by the Federal Deposit Insurance Corp.

Remember the good ol´ days of lemonade and big front porches? And grandpa with his candies? And-wait; let´s try that again. Remember when the drive-thru bank tellers at your local branch recognized you and sent lollipops for your kids through the pneumatic tube?

House Financial Services Committee Chairman Barney Frank is determined not to waste Congress´ last week in session before the July 4 break: He plans to charge ahead with regulatory restructuring hearings. The Senate Banking Committee will also hold a hearing on part of the regulatory restructuring effort. Elsewhere in Washington, the Federal Open Market Committee will meet-though the outcome of that gathering isn´t really a nail-biter. Afterwards, Fed Chairman Ben Bernanke will be called to justify Bank of America´s acquisition of Merrill Lynch to Congress.

"Too many cooks," declared the Economist; "basically punts on the question of how to keep it from happening all over again," Paul Krugman wrote in today´s New York Times; "an exercise in political triangulation," says the Washington Post´s Steven Pearlstein.

This morning Treasury Secretary Timothy Geithner will answer questions from the Senate Banking Committee on the Obama Administration´s new regulatory restructuring plan and BankThink will be keeping you up today with a live blog of the hearing. Watch for some tough grilling on the proposal to give the Federal Reserve the power to monitor and regulate systemic risk. The committee members have been particularly resistant to the idea of giving the Fed more power, and several of them voiced fresh concerns yesterday after President Obama announced the plan. Geithner will have to defend the plan twice today; this morning's Senate hearing will be followed by one in the House Financial Services Committee.

Check out Eliot Spitzer´s latest column for Slate.com, published today. In it he briefly outlines a problem with the Federal Reserve Bank of New York: its lack of independence from Wall Street and the absence of representatives of "the public" on its board. The column mostly focuses on the board´s structural problems, but at the end Spitzer rattles off a list of alternative potential board members whose participation could improve the New York Fed´s impartiality.