Daily Archives: May 12, 2015

Banks Prep Defense for Anti-Wall Street Campaigns

Senior executives from seven banks met on March 31 to discuss options

WASHINGTON—Top executives from the biggest U.S. banks, concerned about anti-Wall Street rhetoric already bubbling up on the 2016 campaign trail, are working to push back against the prevailing narrative that banks are bad.

Senior executives from seven of the biggest U.S. banks gathered or dialed into a March 31 meeting on the 51st floor of the Bank of America Tower in New York to discuss the upcoming election cycle and how the firms can counteract what they view as false and damaging statements about large banks, according to emails reviewed by The Wall Street Journal and people familiar with the meeting.

The effort underscores the degree to which Wall Street remains a political punching bag and a source of anger among lawmakers and the public nearly seven years after the financial crisis. Already, several presidential candidates have lobbed criticism at Wall Street and directly attacked big banks and Sen. Elizabeth Warren (D., Mass) continues to exert pressure, warning about big banks’ efforts to roll back financial regulations.

The banks aren’t launching a new ad campaign or lobbying blitz, people familiar with the discussions said. And many bank officials are skeptical they can do much to counteract critics without triggering more damaging backlash.

The lunchtime gathering in March, organized by John Rogers, an executive vice president at Goldman Sachs Group Inc., and James Mahoney, Bank of America Corp.’s head of corporate communications and public policy, focused on what various candidates have said on the campaign trail, which statements were troubling and how in the course of their regular communications and outreach work bank officials could set the record straight, according to one participant.

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Citigroup Says DOJ Won’t Bring Case Over Libor Rigging

Law360, New York (May 11, 2015, 10:26 AM ET) — The U.S. Department of Justice has elected not to bring a case against Citigroup Inc. in its wide-ranging investigation into alleged rigging of the London Interbank Offered Rate, the bank said in a Monday securities filing.

The New York-based bank had earlier said that the Justice Department was looking into the activities of its traders, and Citigroup’s Citibank N.A. unit was mentioned as having had employees engaged in Libor manipulation with colleagues from Deutsche Bank AG in that bank’s settlement last month.

Source: Law360

Nomura found liable for selling toxic mortgages to Fannie, Freddie

A federal judge ruled Monday that Nomura Holdings (NMR) misled Fannie Mae and Freddie Macmade false representations about the quality of mortgages that were used to back $2 billion securities it sold to the GSEs.

According to court records, U.S. District Judge Denise Cote found Nomura liable when he ruled for the Federal Housing Finance Agency, which acts as conservator for the GSEs, after overseeing the non-jury trial.

“The offering documents did not correctly describe the mortgage loans,” the judge said in his lengthy, 361-page decision. “The magnitude of falsity, conservatively measured, is enormous.”

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Republicans Try To Strip Predatory Lending Protections For American Troops, Again

Congress is screwing the soldiers, again! Wave the flag and hail the troops, then knife them in the back in exchange of corporate money for Congress from their corporate bed buddies!

WASHINGTON — House Republicans are again attacking measures aimed at protecting U.S. troops from predatory lending practices, two weeks after a similarGOP effort failed.

The military has been grappling with the financial impact of predatory lending on service members for years. In 2006, Congress passed legislation cracking down on some forms of high-interest credit, particularly payday lending. Lenders responded by exploiting loopholes in the law, and late last year, the Department of Defense proposed a new set of regulations designed to curb these creative workarounds that target troops.

Republicans have been working to kill those regulations before they can take effect. This week, Rep. Steve Stivers (R-Ohio) will offer legislation that would block DOD from finalizing its rules until a host of unrealistic technical certifications could be made for a database of active-duty military members. The House will vote on Stivers’ plan as an amendment to the National Defense Authorization Act, a major bill that establishes military funding.

Thousands of service members receive short-term, high-interest loans each year, according to a 2014 report by the Consumer Financial Protection Bureau, which has documented a raft of abusive tactics targeting soldiers and their families. One family that took out a $2,600 loan ended up paying back $3,966.84 over the course of a year. Another borrower spent $1,428.28 to pay off a $485 loan in just six months.

Stivers has been one of the payday lending industry’s favorite members of Congress since he took office in 2011. Over the 2012 and 2014 election cycles, payday loan companies contributed $69,625 to his campaign, according to data from the Center for Responsive Politics.

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