Monthly Archives: June 2015

Deutsche Bank Staff Probed Over Libor by Frankfurt Prosecutors

Frankfurt prosecutors are investigating Deutsche Bank AG employees over their roles in the Libor-rigging scandal.

Authorities opened the probe after receiving a Libor report compiled by German financial regulator Bafin, said Nadja Niesen, a spokeswoman for Frankfurt prosecutors.

“We will first analyze the Bafin report before deciding where this investigation will head,” said Niesen. “There is nothing more to say about the case at the moment.”

The Frankfurt-based lender has paid billions of dollars in fines to settle investigations into its role in rigging the London interbank offered rate. The misconduct involved at least 29 Deutsche Bank employees including managers, traders and rate-submitters, primarily based in London but also in Frankfurt, Tokyo and New York, according to the U.K. Financial Conduct Authority.

Read on.

Regulators: Banks still failing mortgage service tests

Four years after pledging to clean up wide-ranging foreclosure abuses, Wells Fargo & Co., JPMorgan Chase & Co. and four other banks still aren’t complying with customer-service standards imposed by a federal regulator.

The Office of the Comptroller of the Currency said last week that it has restricted mortgage servicing operations at Wells Fargo, Chase, U.S. Bancorp, Santander Bank, EverBank Financial Corp. and HSBC Holdings.

“We’re not satisfied with where they are at this point in time,” Morris Morgan, deputy comptroller for large banks, said during a conference call.

By contrast, the agency said it had lifted consent orders against Bank of America Corp., Citigroup Inc. and PNC Financial Services, finding that they have complied with the orders issued in April 2011 and amended in February 2013.

Morgan said regulators expect that Wells Fargo, Chase and the other four noncomplying banks to take “months, not years,” to meet servicing standards.

For now, the banks must seek permission from the comptroller to name senior servicing managers, set up offshore call centers or acquire mortgage servicing business, which collects payments and handles foreclosures.

Read on.

Revolving Door Spins: “Retired” Dallas Fed Chief Joins Barclays As “Senior Advisor”

Spin revolving door, spin.

Recently “retired” Dallas Fed chief Richard Fisher — who really, really believed that talk of falling oil prices negatively affecting the Texas economy amounted to “bull droppings” until a JP Morgan analyst reminded him that the “only thing dropping in the Texas economy [was] jobs” — is following proudly in the footsteps of Ben Bernanke, Jeremy Stein, and Janet Yellen (if you count unofficial, off-the-record ‘consultations’) by becoming the latest Fed policymaker to ink a lucrative deal ‘advising’ the private sector.

As WSJ reports, Fisher will become a “senior advisor” to Barclays starting on July 1:

Barclays PLC on Monday named Richard Fisher, who recently retired from his post as head of the Federal Reserve Bank of Dallas, as senior adviser at the bank.

Read on.

JPMorgan Just Cornered The Commodity Derivative Market, And This Time There Is Proof

Zerohedge:

For years there had been speculation, rumor and hearsay that JPM had cornered the US commodities market. Now, finally, we have documented proof.

* * *

Traditionally, we look at the OCC’s Quarterly Bank Report on derivatives activities to see which was the largest bank in the US in terms of total notional derivative holdings. The reason being that like on frequent occasions in the past, we find some stunning  results, such as most recently in January when we wrote that, for the first time, Citigroup had eclipsed JPM as the largest US bank in total derivatives, with just over $70 trillion compared to perennial megabank JPM’s $65.3 trillion as of the third quarter of 2014, explaining also why Citigroup had drafted the Swaps push out language in the Omnibus Bill.

And while this time there was little exciting to report at the consolidated level (JPM overtook Citi in Q4 only for Citi to once again become the world’s largest bank in total derivatives with $56.6 trillion compared to $56.2 trillion for JPM and $52 trillion for Goldman as Bloomberg reported earlier), and in fact total notional derivatives tumbled from $220.4 trillion in Q4 to $203.1 trillion in Q1 the lowest level since 2008…

Victory for HECM Non-Borrowing Spouses at Last

After more than six years of struggle for justice for older Americans whose spouses borrowed money through HECM reverse mortgages, we have victory!

HECM surviving non-borrowing spouses will be able to stay in their homes if their borrowing spouses die without having to spend huge sums of money to pay down the mortgage loan balance, an obstacle to a humane resolution of the  non-borrowing spouses’ displacement crisis.

A new policy released on Friday, June 12, 2015 removed two harsh conditions in a now revoked policy that we strongly objected to on this blog. We are grateful to God for this sweet victory!

We grateful to the many surviving non-borrowing spouses, their families, and their lawyers across the country who reached out to us and shared their harrowing stories with us. Their stories inspired us to fight on, even when the outcome looked bleak, even when many thought we were crazy to challenge the “considered” HECM reverse-mortgage policies of a very powerful federal bureaucracy such as the U.S. Department of Housing & Urban Development (HUD), even when many industry voices fell silent and resigned to policies that hurt their customers as well as their own bottomline.

Read on.

Miami-Dade to close dedicated foreclosure courts

Miami-Dade Circuit Court will stop dedicating three courtrooms to foreclosure cases as their backlog winds down. Circuit Judge Jennifer Bailey, head of civil courts, ordered that trials and summary judgments involving foreclosures will be assigned to circuit judges rather than senior judges in the foreclosure-dedicated courtrooms. The foreclosure courts in Miami-Dade will formally shut down on Tuesday, June 30, the last day of the state’s fiscal year. In 2013, the state government provided its court system with extra funding, temporary staff and other resources to clear a mounting number of foreclosure cases. The state hasn’t renewed the extra funding. – See more at: http://therealdeal.com/miami/blog/2015/06/27/miami-dade-to-close-dedicated-foreclosure-courts/#sthash.ClRYC5fw.upOSOBga.dpuf

Supreme Court: Fair Housing Act claims can use “disparate impact”

In a blow to the housing and mortgage finance industry but a victory for fair housing advocates, the Supreme Court ruled in a contentious and qualified opinion that the legal doctrine of “disparate impact” is cognizable under the Fair Housing Act.

The 5-4 decision holds that there is a disparate impact claim under the FHA as a matter of statutory interpretation.

The majority opinion, which can be read here and which was written by Justice Anthony Kennedy, strongly cautions that remedial orders in disparate impact cases that impose racial targets or quotas could be unconstitutional.

The question in the case of Texas Department of Housing and Community Affairs v. Inclusive Communities Projectsis whether the Fair Housing Act allows lawsuits based on disparate impact – that is, an allegation that a law or practice has a discriminatory effect, even if it wasn’t based on a discriminatory purpose. The Court had granted review to consider this question in two earlier cases, but both of those cases settled before the Court could rule on them.

Read on.

Bernie Sanders Blasted Fed Chair in 2003: ‘You Don’t Know What’s Going on in the Real World!’

Bradblog:

In a blistering confrontation with then-Fed Chairman Alan Greenspan during a 2003 Congressional Hearing (see video below) — five years before the 2008 meltdown of Wall Street — then-Rep. Bernie Sanders (I-VT) revealed why he may be better positioned now to square off against right-wing economics than Hillary Clinton who, twenty years ago,served as a member of the Wal-Mart Board of Directors.

(The Arkansas-based company was a principal beneficiary of President Bill Clinton’s decision to ram NAFTA through on the fast track. And, even now, though Hillary has been critical of a number of the company’s practices, influential members of the Walton family, the mega-billionaire owners of the retail giant, have been very supportive of the Clintons.)

During that 2003 hearing, as revealed by this must-see video compiled by Sanders supporters, the Congressman arguably demolished not only Greenspan, but the fundamentalist market-based economics that remain the centerpiece of today’s Republican Party and at the center of the dispute over new international trade agreements, such as the TPP.

After chastising the Fed Chairman for being out of touch with the needs of ordinary Americans — “You don’t know what’s going on in the real world!” — Sanders unleashed this…

You talk about an improving economy while we have lost 3 million private sector jobs in the last two years. Long-term unemployment has more than tripled. Unemployment is higher than it has been since 1994. We have a $4 trillion national debt. 1.4 million Americans have lost their health insurance. Millions of seniors can’t afford prescription drugs. Middle-class families can’t send their kids to college. … Bankruptcy cases have increased by a record breaking 23%. Business investment is at its lowest level in more than 50 years. CEOs make more than 500 times of what their workers make. The middle class is shrinking. We have the greatest gap between the rich and the poor of any industrialized nation, and this is an economy that is improving? I’d hate to see what would happen if our economy was sinking.

While Sanders neither mentioned Hillary Clinton then, and no doubt would refrain from anything resembling a personal attack now, his remarks help illustrate why the Wal-Mart-connected Hillary may be ill-positioned to serve as the Democratic Party’s instrument for meaningful economic reform…

Today you [Greenspan] have a new low by suggesting that manufacturing in America doesn’t matter. “It doesn’t matter where the product is produced!” We lost 2 million manufacturing jobs in the last two years alone — 10% of our workforce. Wal-Mart has replaced General Motors as the major employer in America, paying people starvation wages rather than living wages. And all of that does not matter to you? It doesn’t matter if its produced in China where workers are making 30 cents an hour or produced in Vermont where workers can make $20 an hour, it doesn’t matter!You have told the American people that you support a trade policy, which is selling them out — only working for the CEOs who can take our plants to China, Mexico and India.

City controller: L.A. paid Wells Fargo for ‘nonexistent’ check printing

Los Angeles City Controller Ron Galperin says the city paid more than $500,000 to Wells Fargo Bank for “nonexistent services” — charges for printing checks that the city was actually printing itself.

Galperin and his aides are demanding that the money be returned. In a letter sent last week to the city treasurer and obtained by The Times, Galperin urged that the overpaid money be recovered “as swiftly as possible.”

“It is troubling that these overbillings have occurred and remained undetected for such a long period of time,” he wrote.

Wells Fargo Wholesale Banking spokesman Gabriel Boehmer said the company was working with the city to examine the payments and had stopped the disputed charges in May “as we began to research the matter.”

“If a refund or adjustment is due to the city, we will make one, just as we would with any other customer,” Boehmer wrote in a statement emailed to The Times.

Read on.

Greek Capital Controls Begin: Greek Banks, Stock Market Will Not Open On Monday

Update 2: Greece’s Skai reports that if/when banks reopen (supposedly on Tuesday), a 60€ withdrawal limit will be imposed.

Update: In a televised address to the nation, Greek PM Alexis Tsipras assured Greeks that their deposits are safe despite an upcoming bank holiday and despite the fact that Greek stocks will not open for trading on Monday. Tsipras also said Athens has re-applied for a bailout extension and urged Greeks to “remain calm” in the face of what is sure to be a turbulent week.

  • GREEK PRIME MINISTER SAYS GREEK PEOPLE SHOULD REMAIN CALM
  • GREEK PM: BANK OF GREECE PROPOSED BANK TRANSACTION RESTRICTIONS
  • GREEK PRIME SAID GREECE RE-APPLIED FOR BAILOUT EXTENSION
  • GREEK PRIME MINISTER SAYS DEPOSITS ARE COMPLETELY SAFE

Earlier:

Despite the reassurances from any and all elected (and unelected) officials, given the run on bank ATMs in Greece has turned into a stampede, it is not surprising that:

  • GREEK BANKS TO REMAIN CLOSED FROM MONDAY FOR A WEEK: PIRAEUS BANK CEO
  • PIRAEUS BANK CEO THOMOPOULOS SPEAKS TO REPORTERS IN ATHENS

The announcement was made when Piraeus Bank CEO Anthimos Thomopoulos told reporters after a meeting of the government’s financial-stability panel on Sunday. The launch of capital controls just as the Greek summer tourism season starts, is sure to be the final crushing blow to Greece, whose entire economy will now grind to a halt.

Read on.