Daily Archives: October 28, 2014

Don’t break up banks — let Dodd-Frank work, experts say

Dodd-Frank bill has helped to make the large bank safer???? Yeah, right.

WASHINGTON (MarketWatch) — Financial regulation experts said Tuesday breaking up large banks could be costly while offering no additional safety-benefits for the economy.

The meeting at the Bipartisan Policy Center during two discussions convened to discuss the policy paper which argued the Dodd-Frank financial reform law have largely helped banks operate safer, would cost the economy, that it would be hard to do and that it would do little to reduce risk.

“What I’d be concerned about is, we’d inhibit recovery,” said Martin Baily, Co-Chair of the Financial Regulatory Reform Initiative and co-author of the report, adding it could restrict lending.

Marcus Stanley, policy director for Americans for Financial Reform, criticized the report, saying it looked too positively at the effects of Dodd-Frank. “We are some distance from where regulators feel confident,” Stanley said, in regards to resolving a bank.

Read on.

City homeowners lose property for just $250 in unpaid taxes

Homeowners in Baltimore can lose their houses for as little as $250 in unpaid taxes — a threshold far lower than in other cities — according to a new Abell Foundation report that urges a change in the practice.

The report calls on Baltimore officials and the Maryland General Assembly to add protections for owner-occupied homes and simplify a city system that often confuses homeowners, enriches investors and adds to the number of vacant properties that line neighborhood streets.

City Councilwoman Mary Pat Clarke said she’s seen many residents, often elderly, get swept up in tax lien sales, and she wants the city to raise the threshold that triggers a sale to $750 in back taxes.

“So many elderly people go into tax sale,” she said. “They get confused. They maybe don’t account exactly for what’s owed. Bills get misplaced and sometimes they don’t have the money. We need to raise the limits.”

A homeowner in Washington needs to be $2,500 behind in taxes before a property is subject to a tax lien sale, 10 times higher than the threshold in Baltimore. Residential homes in New York City are subject to tax sales at $1,000.

Read on.

IRS seizes woman’s entire savings because she deposits cash less than $10,000 at a time

If only she understood the rules of depositing cash payments. Click here.

The Week:

An Iowa woman named Carole Hinders saw her bank balance go from $33,000 to zero thanks to IRS confiscation. Hinders, who owns a small, cash-only Mexican restaurant, has not been charged with any crime and is not suspected of tax fraud. The IRS says they took her money solely because she deposited too little of it at a time, and the agency claims she did so to avoid the required reporting of any bank transaction over $10,000. She says she just thought it was helpful to save the bank paperwork.

Though the $10,000 rule is ostensibly designed to help catch terrorists and drug dealers, it is far more often used on regular citizens who are unlikely to ever see their money returned. “I don’t think [the IRS is] really interested in anything,” said a lawyer representing another seizure case. “They just want the money.”

To keep her restaurant afloat following the confiscation of her savings, Hinders has had to take out a second mortgage and max out her credit cards. “How can this happen?” she asks. “Who takes your money before they prove that you’ve done anything wrong with it?”

 

Delamaide: Nobel economist talks tough on banks

WASHINGTON — Governments need to intervene to “tame” giant firms in banking and other industries where a few companies dominate the sector, according to the latest Nobel Prize winner.

“The science of taming powerful firms” is the way the Nobel Prize committee this week summed up the research on government regulation by the newest laureate in economics, Frenchman Jean Tirole.

Classic economics teaches us that competition will normally make companies act in the public interest because they will strive to succeed by delivering high quality at low cost.

“But many industries are not very competitive, and this lack of competition widens the scope for beneficial public intervention,” the prize committee said in its citation for Tirole, who is affiliated with the University of Toulouse.

Read on.

Calif. Fund Fights Barclays’ Dark Pool Suit Transfer Bid

Law360, New York (October 27, 2014, 8:37 PM ET) — Institutional financial firm Great Pacific Securities on Friday asked the U.S. Judicial Panel on Multidistrict Litigation to not consolidate its proposed California class action alleging Barclays PLC let predatory high-frequency traders run amok in its dark pools with litigation in New York.

Great Pacific said that its California action only alleges that Barclays misled clients, while the New York action covers broader issues of operating stock exchanges and includes non-Barclays defendants. Barclays marketed its unregulated exchanges as safe from high frequency traders, according to the suit,…

Source: Law360