Daily Archives: March 11, 2015

Fed orders BofA to resubmit capital plan, rejects US units of Deutsche, Santander

The Federal Reserve objects to capital distribution plans proposed by U.S. units of Deutsche Bank and Santander, barring the banks from issuing dividends or stock buybacks until it approves a new plan, the central bank said on Wednesday.

The Fed did not reject capital plans for the remaining 29 banks evaluated in the second part of its annual stress test. Bank of America‘s approval is contingent on it submitting a revised capital strategy by the end of September.

Many banks responded to the approval by tweaking their buybacks and dividends:

  • Morgan Stanley plans to repurchase up to $3.1 billion in common stock starting in the second quarter of 2015.
  • PNC will increase its quarterly dividend on common stock by 3 cents to 51 cents per share in the second quarter of 2015.
  • Wells Fargo‘s dividend rate will increase to 37.5 cents per share in the second quarter of 2015, up from its current rate of 35 cents a share.
  • Discover plans to repurchase up to $2.2 billion in common stock during the five quarters ending June 30, 2016.

Read on.

Emails Reveal Lobbyist Had Undisclosed Role In Andrew Cuomo Financial Crisis Investigation

Great reporting from Propublica!

Howard Glaser, a lobbyist and longtime confidant to Andrew Cuomo, previously denied he was involved in the then-attorney general’s investigations. Newly obtained emails show otherwise.

The Albany Times Union co-published a version of this story.

Previously undisclosed emails by a mortgage industry lobbyist doubling as a consultant for then Attorney General Andrew Cuomo show the lobbyist played a self-described “critical role” in one of Cuomo’s signature financial crisis investigations.

The emails from 2007 and 2008 detail how the lobbyist, longtime Cuomo confidantHoward Glaser, was involved in an investigation of mortgage industry players that included Glaser’s own clients.

In one email, Glaser touted his influence over a Cuomo deal that weakened rules to prevent misdeeds in the mortgage market. That deal, with mortgage giants Fannie Mae and Freddie Mac, reflected Glaser’s “significant, critical, and current input,” he wrote in an email, “a fact to which current [Fannie and Freddie] employees and the NYAG’s office are prepared to attest.” Fannie and Freddie were both Glaser’s clients.

The emails contradict Glaser’s previous account of his involvement in Cuomo’s investigations.

ProPublica and the Albany Times Union reported last year that Glaser was working simultaneously as a consultant for the attorney general’s office and for a bevy of mortgage industry firms. Glaser said at the time that he only gave general advice to Cuomo’s office, that he did not represent clients with the attorney general, and that he was “not involved” in specific mortgage industry cases.

According to the emails, however, Glaser was involved in mortgage industry cases and traveled to Cuomo’s office repeatedly over the course of nearly two years while investigations related to Glaser’s clients unfolded.

“Oy. I Spent the last 48 hrs at the NY AG’s office and am glad to give you an off the record briefing and my observations,” Glaser wrote in a Nov. 7, 2007, email to the federal regulator of Fannie and Freddie. That same day, Cuomo announced subpoenas of the two mortgage giants as part of an investigation into fraudulently inflated home appraisals.

“These emails on their face indicate a serious conflict of interest, a conflict that could very well have influenced enforcement actions by Cuomo, much to the benefit of Glaser’s clients,” said Craig Holman of the government watchdog group Public Citizen.

The new emails also show how Glaser briefed industry players about Cuomo’s investigation while Glaser was involved in it.

Read on.

Ocwen fights class action over mortgage interest tax breaks

(Reuters) – Ocwen Financial has asked a federal judge to dismiss a class action claiming the mortgage servicer misreported mortgage interest to U.S. tax authorities, saying plaintiffs’ claims fall under the purview of the U.S. Internal Revenue Service.

In a motion on Thursday, lawyers for Ocwen said borrowers who sued the company are trying to bypass the IRS, which has procedures in place to handle their dispute over the way mortgage interest was reported.

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Indiana AG Urges Lawmakers Not to Eliminate Foreclosure ‘Settlement Conferences’

Indiana Attorney General Greg Zoeller is trying to stop legislation that would eliminate a consumer protection known as the “settlement conference,” which is a homeowner’s final recourse before their home goes to foreclosure, according to anannouncement on Zoeller’s website.

So far, the proposal has not received sufficient discussion or debate in committee or floor sessions, according to Zoeller. He urged Indiana lawmakers to stop the proposal before it gets any further in order to keep the settlement conference intact as a consumer option to avoid foreclosure and help them stay in their homes.

“After the foreclosure crisis exposed the unethical practices of major mortgage servicers, my office worked extremely hard in our multistate investigation against five major banks to create new consumer protections for distressed homeowners,” Zoeller said. “The right created by law to a court-supervised settlement conference and face-to-face meeting between borrowers and lenders has helped thousands of distressed homeowners work out plans to avoid foreclosures.  We will aggressively oppose any attempt by the bankers’ lobby to roll back the clock and take away this crucial protection.”

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GOP Rep. Open To Strategy Change For Dodd-Frank Fixes

Law360, New York (March 11, 2015, 1:45 PM ET) — A top Republican lawmaker on Wednesday said that in order to get some regulatory relief passed, he may consider a change in strategy after a bill that would address 12 separate fixes to the Dodd-Frank Act was stymied in the Senate.

Rep. Mike Fitzpatrick, R-Pa., has introduced on two separate occasions a bill that would give banks an additional two years to dispose of collateralized loan obligations as required by the Volcker Rule, among 11 other provisions. Both times, the bill has passed through the U.S….

Source: Law360

Congressman introduces legislation to reform CFPB

On March 4, U.S. House Representative Randy Neugebauer introduced H.R. 1266, a bill to reform the CFPB’s leadership structure to replace its single director with a five-member commission appointed by the President. Representative Neugebauer serves at the Chairman of the Financial Institutions and Consumer Credit Subcommittee.

7,500 Sign Up For Tax Repayment Plans To Avoid Foreclosure

DETROIT (AP) — About 7,500 Detroit homeowners have entered into payment plans on their back taxesto prevent foreclosures.

Mayor Mike Duggan and Wayne County Treasurer Raymond Wojtowicz said Tuesday that thousands of others have until the end of the month to do the same.

New laws signed by Gov. Rick Snyder in December cutinterest rates from 18 percent to 6 percent for homeowners behind on their taxes, reduced down payments to get into plans and put a cap on overall past due taxes.

The county held hearings earlier this year to allow homeowners to present their cases.

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JPMorgan Looks To Sink Derivative Suit Over $2B In Fines

Law360, Wilmington (March 10, 2015, 10:45 PM ET) — JPMorgan Chase & Co. urged a Delaware Chancery judge Tuesday to toss a shareholder derivative suit accusing its officers and directors of overseeing faulty money laundering and sanctions controls that led to more than $2 billion in fines, saying similar complaints have already been dealt with by other courts.

At a hearing in Wilmington, counsel for JPMorgan and its top brass told Vice Chancellor Donald F. Parsons Jr. that the current complaint brought by the city of Providence, Rhode Island, should be dismissed because similar derivative…

Source: Law360