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Inside Washington (12/02/2011)
  • WASHINGTON (12/5/11)--Housing and Urban Development Secretary Shaun Donovan on Thursday offered alternatives for increasing the Federal Housing Administration's reserves before the House Committee on Financial Services (American Banker Dec. 2). Donovan said he expects to release a proposal in the coming months. Donovan's testimony came in the wake of a report that showed the Federal Housing Administrations (FHA) capital reserve ratio to about one-eighth of the 2% minimum standard required by law. Members of Congress expressed concern that the agency may require a bailout by taxpayers. Borrowers with low credit scores are now required to make a 10% down payment to qualify for an FHA mortgage, while borrowers with higher scores must make a 3.5% down payment, Donovan said. The bulk of the FHA losses are from loans originated before 2009, Donovan added. More recent loans are turning a profit, he said …
  • WASHINGTON (12/5/11)--Treasury Secretary Tim Geithner on Thursday said efforts by members of Congress to weaken the Dodd-Frank Act--including blocking key oversight positions, proposing legislation to repeal the law, or using cost-benefit analysis as a roadblock--will not succeed (American Banker Dec. 2).  Dodd-Frank's reforms are "sensible and essential," Geithner said, speaking before a conference hosted by the Financial Oversight Stability Council. The Obama administration and Congress took on the process of financial reform soon after the financial crisis, rather than waiting until the damage had been repaired to maximize the prospects of enduring changes. Efforts to undermine those reforms could limit future available credit to businesses and expose consumers to further abuse, he said …
  • WASHINGTON (12/5/11)--Senate Majority Leader Harry Reid (D-Nev.) will schedule a vote next week on Richard Cordray's nomination as director of the Consumer Financial Protection Bureau (CFPB), a spokesman for Reid said Thursday. Speaking to reporters in Washington, Reid said he would set votes next week to limit debate on four or five nominations (Bloomberg Dec. 2). Cordray is among those to be up for a vote, according to Adam Jentleson, a spokesman for Reid. Cordray, a former Ohio attorney general, is the CFPB's enforcement director. His nomination has drawn opposition from Republicans, who have promised to block any nominee for unless the CFPB's funding and leadership structures are changed. In a May letter, 44 lawmakers called for a board of directors to run the agency. The letter also demanded that the new agency be funded by congressional appropriations. Under the current structure, the CFPB's budget is set from the Federal Reserve. The Republican hold enough votes to block the Cordray nomination …
  • WASHINGTON (12/5/11)--Rep. Barney Frank (D-Mass) said Thursday the deadlock in Congress over the confirmation of a director for Consumer Financial Protection Bureau (CFPB) may not be broken until after the 2012 election. The bureau's full authority's is contingent on the Senate confirmation of a director, a provision which Frank said he regrets as one of the authors of the Dodd-Frank Act (American Banker Dec. 2). The provision was pushed by Senate leaders. The CFPB still has the power to enforce all existing consumer financial laws transferred from other regulators, Frank said. The confirmation of a director for the CFPB in the best interest of banks and credit unions, most of which are subject to the bureau's rules and oversight while their nonbank counterparts are not until a director is confirmed, Frank said …


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