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Inside Washington (03/17/2011)
* WASHINGTON (3/18/11)--Federal Deposit Insurance Corp. Chairman Sheila Bair's last scheduled address to the American Bankers Association underscored the tension between the regulator and financial institutions, including credit unions. Bair was direct in her comments to the group, saying that financial institutions did not serve the best interests of American consumers in the events leading up to the financial crisis. “In policy terms, the success of the financial sector is not an end in itself, but a means to an end--which is to support the vitality of the real economy and the livelihood of the American people,” Bair said. “What really matters to the life of our nation is enabling entrepreneurs to build new businesses that create more well-paying jobs, and enabling families to put a roof over their heads and educate their children. In our national economic life, your contribution as bankers, and ours as regulators, can only be measured against this yardstick. And let’s be completely honest--in the period that led up to the financial crisis we did not get the job done.” The question-and-answer period of Bair’s presentation added to the tension (American Banker March 17). Bankers argued that the Dodd-Frank Act was overregulating their industry and interfering with their day-to-day operations. Credit unions have registered many of the same arguments. Bair said Dodd-Frank was targeted to large institutions and small financial institutions were exaggerating the effects of the law … * WASHINGTON (3/18/11)--The Department of Housing and Urban Development (HUD) has initiated an enforcement action against a large lender that coerced title agents into covering settlement costs that exceeded the amounts disclosed on good faith estimatex. HUD would not identify the lender (American Banker March 17). If closing costs end up exceeding the estimate given to loan applicants, the lender must repay borrowers above set amounts, according to Real Estate Settlement Procedures Act rules. The large lender sent letters and invoices to title agents demanding reimbursements and threatened to deny them future business if they didn’t pay, Laura Gipe, a Respa specialist at HUD, told the American Land Title Association on Tuesday … * WASHINGTON (3/18/11)--At a House hearing nominally scheduled as oversight of the rules creating the Consumer Financial Protection Bureau (CFPB), the conversation at one point turned to a settlement agreement being negotiated between a group of state attorneys general and several federal agencies with the major mortgage servicers. During the hearing, some lawmakers slammed Elizabeth Warren of the CFPB for her role in the negotiations. Meanwhile, outside the hearing room, two state attorneys general voiced their opposition to the proposed deal. Both indicated that mistakes banks had made in mortgage servicing needed to be corrected, but said the 27-page proposed agreement went too far when it pushed principal reductions and other broad changes (American Banker March 17) …


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