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Inside Washington (05/16/2012)
  • WASHINGTON (5/17/12)--Uncertainty within the housing market has discouraged both lender and home buyers, Federal Reserve Board Gov. Elizabeth Duke said Monday. Duke said uncertainty has slowed several aspects of the market: the strength of the economic recovery and the trajectory of future house prices; the costs and liabilities of originating and servicing mortgage loans; the regulatory environment; and the future structure of Fannie Mae and Freddie Mac. As long as economic conditions remain tepid and unemployment remains high, lenders will be hesitant to apply for credit, Duke said. Reluctance to make loans because of the higher cost of servicing delinquent loans could stem from uncertainty about future standards for delinquency servicing, she added. Some uncertainty was resolved by state attorneys' general settlement with the five largest servicers and the consent orders that 14 large servicers have entered into with federal regulators. However, only about two-thirds of mortgages are covered by the settlement terms or are subject to consent orders, she said. Regulatory uncertainty has arisen from Dodd-Frank Act requirements to define a "qualified mortgage" and a "qualified residential mortgage," both of which could affect the cost and availability of credit, Duke said. The future role of the government in the mortgage market also remains unclear. Nearly three and a half years after the Fannie Mae and Freddie Mac entered conservatorship, policymakers have not reached consensus about the future structure of the government-sponsored enterprises …
  • WASHINGTON (5/17/12)--Although it has support from both Republicans and Democrats, a bill that would protect privileged information provided to the Consumer Financial Protection Bureau (CFPB) by financial institutions remains mired in the Senate. Industry observers believe Sen. Bob Corker (R-Tenn.) delayed the bill's passage by attempting to attach it to a larger package of changes to the Dodd-Frank Act (American Banker May 16). An identical version of the bill recently passed the House on a voice vote. The bill amends the Federal Deposit Insurance Act, 12 U.S.C. 1811, to specifically state that materials that financial institutions provide to the CFPB remain privileged under both attorney-client and work product privileges …
  • WASHINGTON (5/17/12)--Senate Majority Leader Harry Reid (D-Nev.) Tuesday moved the Senate toward voice votes on President Barack Obama's two nominees for the Federal Reserve Board. A vote could come today on whether to consider the nominations of Jerome Powell and Jeremy Stein. Sixty votes will be needed to move forward with a debate on the nominees (American Banker May 16). Reid cited the $2 billion trading loss at JPMorgan Chase as impetus for moving forward with the votes. Minority Leader Mitch McConnell (R-Ky.) suggested Powell and Stein have bipartisan support. Both were approved in March by the Senate Banking Committee. But Sens. David Vitter (R-La.) and Jim Demint (R-S.C.), registered objections to the committee's approval. Vitter told The Wall Street Journal last week that he has been blocking the nominations because of the Federal Reserve's monetary policies and the two nominees' close relationships with Fed Chairman Ben Bernanke …


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