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Inside Washington (05/11/2012)
  • WASHINGTON (5/14/12)--The Consumer Financial Protection Bureau (CFPB) may require each financial institution to maintain a single database for all consumer complaints, a representative from a bank that has gone through CFPB's exam process said Thursday (American Banker April 11).  Scott Feinstein, a senior vice president and legal counsel at Sovereign Bank, said that CFPB examiners asked questions about how Sovereign tracks complaints for different products, such as mortgages and cards. Feinstein said he believes the CFPB wants to take a "holistic view" of consumer complaints. CFPB examiners visited Sovereign in the past month, staying for about a week, Feinstein said …
  • ALEXANDRIA, Va. (5/14/12)--The National Credit Union Administration (NCUA) has cancelled today's planned closed board meeting, which was set to begin at 10:00 a.m. ET. However, the agency said, the May 24 open and closed board meetings are still scheduled ...
  • WASHINGTON (5/14/12)--Federal Reserve Board Chairman Ben Bernanke on Thursday denied that restrictive bank examiners are hurting the lending market. Since the financial crisis, bankers have maintained that examiners have targeted even sound loans, making banks hesitant to extend further credit. Bernanke said the central bank looked into specific concerns raised about the examination process and its effect on banks' willingness to lend. The Fed analyzed documentation for more than 300 loans, he said.  "We found that Federal Reserve examiners were appropriately implementing the guidance and were consistently taking a balanced approach in determining loan classifications," Bernanke said. "Moreover, the documentation we reviewed indicated that examiners were carefully considering the full range of information provided by bankers, including relevant mitigating factors, in determining the regulatory treatment for the loans" …
  • WASHINGTON (5/14/12)--U.S. Sen. Bob Casey (D-Pa.) on Thursday questioned the Federal Reserve's recent decision to allow three Chinese, state-owned banks to offer or expand retail banking services in the U.S. In a letter to Federal Reserve Chairman Ben Bernanke, Casey raised questions about the scrutiny given to these banks before approval and whether having the existence of state-owned, Chinese banks would undermine the private U.S. banking system. "China has a long and well documented record of undercutting U.S. companies and workers," Casey said. "China's history of flouting international trade rules requires that any involvement in the U.S. banking system needs close scrutiny." The Fed board announced Wednesday it was approving the application of the Industrial and Commerce Bank of China Ltd., China's largest bank, and two other Chinese firms to purchase The Bank of East Asia U.S.A., which operates in New York and California. The Fed also approved an application by the Bank of China to set up a branch in Chicago and an application by the Agricultural Bank of China Ltd. to establish a branch in New York City …
  • WASHINGTON (5/14/12)--U.S. Sens. Robert Menendez (D-N.J.) and Barbara Boxer (D-Calif.) on Thursday pressed the Federal Housing Finance Agency (FHFA) to introduce measures to make it easier for Fannie Mae and Freddie Mac borrowers to refinance their loans.  Menendez and Boxer introduced legislation last week that would enact those initiatives, but in a conference call Thursday they said the FHFA can move unilaterally to ease restrictions on homeowners. The bill would extend streamlined refinancing for all Fannie and Freddie borrowers, regardless of how much they owe compared to the value of their home; eliminate up-front fees on refinances; eliminate appraisal costs for all borrowers; remove additional barriers to competition; and require second lien holders and mortgage insurers who unreasonably block a refinance to pay a fine …
  • WASHINGTON (5/14/12)--Acting Federal Deposit Insurance Corp. (FDIC) Chairman Martin Gruenberg Thursday summarized the FDIC resolution strategy for winding down troubled banks. The FDIC would likely place the parent company into receivership and pass its assets, principally investments in its subsidiaries, to a newly created bridge holding company, Gruenberg said. Equity claims of the firm's shareholders and the claims of the subordinated and unsecured debt holders would be left behind in the receivership. In exchange the receivership would have the equity in the bridge holding company as an asset. Initially, the bridge holding company would be owned by the receivership. Once the bridge company has established a capital base and its liquidity concerns are addressed, ownership and control of the surviving franchise would be transferred to private hands. To create the capital base of the bridge, some of the debt of the former parent company, which has been left in the receivership, would be converted to equity in the new bridge holding company, Gruenberg said. To do this, the FDIC would estimate the extent of losses in the receivership and apportion these losses to the firm's equity and subordinated and unsecured debt holders according to their order of priority. Read the full text of the speech here  ...


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