* WASHINGTON (5/28/09)--The Federal Reserve Board Wednesday approved amendments
to Appendix A of Regulation CC regarding the restructuring of check processing operations. On July 25, the banks will transfer the check-processing operations of the head office of the Federal Reserve Bank of Minneapolis to the head office of the Federal Reserve Bank of Cleveland ... * WASHINGTON (5/28/09)--In advance of the Treasury’s anticipated July release of a regulatory restructuring package, an independent and nonpartisan research organization offered a list of 57 recommendations for financial structure (American Banker
May 27). The Committee on Capital Markets Regulation, which comprises 25 leaders from the investor, business, finance law accounting and academia communities, recommends establishing a Financial Services Authority to oversee the financial system and giving the Fed the power to oversee systemically important institutions. It also calls for increasing disclosures for investors and of bank metrics, and listing and trading of credit default swaps on exchanges ... * WASHINGTON (5/28/09)--Sen. Jack Reed (D-R.I.) expressed concerns about private-equity firms purchasing failing banks in a letter he sent to banking regulators and the Treasury Department last week. The purchases represent another “dangerous” example of institutions and firms shopping around a risky activity until they find a regulator who will allow it, he said. Last week, the Federal Deposit Insurance Corp. said it would provide guidance on the matter ... * WASHINGTON (5/28/09)--About 102 lenders have been kicked out of the Federal Housing Administration’s (FHA) single-family mortgage insurance program for violations. The Department of Housing and Urban Development (HUD) said it would crack down on lenders who do not meet high standards of conduct (National Mortgage News
May 27). For example, Hogar Mortgage and Financial Services Inc. was suspended by HUD from making loans for five years. The lender also must pay a $151,000 fine. Hogar violated FHA underwriting requirements. Of its 680 FHA loans, 19 defaulted or resulted in a claim ... * WASHINGTON (5/28/09)--In a op-ed Wednesday, Washington Post
business and economic columnist Steven Pearlstein blasted Comptroller of the Currency John Dugan for saying that a special assessment by the Federal Deposit Insurance Corp. (FDIC) was unfair to large banks, and for “running interference for the big banks he is supposed to regulate.” Dugan remains in denial about his agency’s role in the financial crisis, according to Pearlstein. Dugan had rejected an idea by FDIC Chair Sheila Bair to impose an assessment fee to replenish the FDIC reserve fund, which has been depleted by bank failures. It irked Dugan that the burden for supporting the fund would be placed on the bigger banks instead of on community and regional institutions, Pearlstein said ... * WASHINGTON (5/28/09)--Some banks are asking the government if they can use public money to purchase bad bank assets. The banks are lobbying to bid on assets for sale under the government’s Public Private Investment Program (PPIP). Specifically, the banks are interested in the Legacy Loans Program, which will use the PPIP infusion to sell whole loans, including commercial and residential mortgages (The Wall Street Journal
May 27). Officials haven’t said if banks can buy and sell loans yet. Some critics say that if banks are allowed to bid on the assets, they will benefit from taxpayer money. PPIP, expected to launch this summer, was established to sell bad bank assets to private investors in exchange for financial aid ...