The explosive rise of nonbank mortgage servicers over the last few years happened so quickly that regulators have failed to keep up; therefore regulators need to act quickly and increase oversight of nonbanks in an effort to further protect consumers, two prominent Democrats said this week.
In a letter sent Monday to Consumer Financial Protection Bureau Director Richard Cordray, Sen. Elizabeth Warren, D-Mass, and Rep. Elijah Cummings, D-Md, call on the CFPB to increase its oversight of nonbank mortgage servicers, citing a report from theU.S. Government Accountability Office on the rise of nonbank servicers.
The GAO report notes that the share of mortgages serviced by nonbanks increased from approximately 6.8% in 2012 to approximately 24.2% in 2015, in terms of unpaid principal balance.
The opening rounds started in the legal battle between PHH and the Consumer Financial Protection Bureau as the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments on Tuesday.
According to an article in The Wall Street Journal by Yuka Hayashi:
A federal appeals court panel wrestled Tuesday with the question of the Consumer Financial Protection Bureau’s authority, with one judge persistently asking about the constitutionality of the watchdog agency’s structure, saying it concentrates “huge power” in its top official.
The issues dates back to August when a D.C. Circuit Court issued a stay against a $109.2 million fine levied against PHH by CFPB Director Richard Cordray.
Fallout from the explosive Panama Papers leaks spread to Peru in the midst of a bitter presidential election battle when authorities raided the Lima office of the Panamanian law firm Mossak Fonseca.
A team of 20 tax officials and armed national police officers on Monday seized financial documents from the property located across the street from Panama’s embassy, the National Superintendency of Tax Administration (SUNAT) said.
“The team SUNAT has been conducting a series of inquiries … focusing on whether offshore companies created through Mossack Fonseca served to commit unlawful acts such as tax evasion and fraud in our country,” SUNAT said in a statement.
The Panama Papers are based on documents leaked from Mossack Fonseca offices. The global firm has no official standing in Peru but is represented there by Peruvian economist Monica Ycaz Clerc, Ojo Público reported.
U.S. regulators plan to notify some major U.S. banks, includingJPMorgan Chase, that their living wills are inadequate, The Wall Street Journal reported Tuesday, citing sources familiar with the matter.
The Journal reported that the regulatory notifications could come this week, and could “raise the prospect of higher capital requirements or other regulatory sanctions for some of the institutions.”
In the years since the federal government modified its conservatorship agreement withFannie Mae and Freddie Mac to sweep all the profits from the government-sponsored enterprises into the government’s coffers, many observers, including those with a serious financial interest, have questioned whether the so-called “Third Amendment sweep” was even necessary.
At the time, the government claimed that the GSEs were on the brink of collapse, and amended the terms of the GSEs’ conservatorship to ensure that the government had enough money to bail them out again if necessary.
In the aftermath, a series of Fannie and Freddie shareholders sued the government, claiming that the “Third Amendment sweep” was not only unnecessary, but illegal as well.
Can you move 1,200 miles just to lower your taxes? Well, David Tepper can, and it maysave him hundreds of millions of dollars.
Tepper is the founder of hedge fund Appaloosa Management, and he’s worth more than $10 billion, according to Forbes. He ran his firm out of New Jersey for years, but recentlymoved the operation to Miami Beach. The top income tax rate in New Jersey is nearly 9%. In Florida, the top rate is 0. Tepper will save so much money that New Jersey finance officials worry that the tax revenue lost to his move could blow a hole in the state budget.
Connecticut lost a couple of billionaires as well—businessmen Thomas Peterffy and C. Dean Metropoulos, who also decamped for Florida recently. Their departure lowered Connecticut’s billionaire count from 15 to 13. The Nutmeg State is also losing longtime corporate citizen General Electric (GE) to Boston, a move GE made after Connecticut passed big tax hikes. Florida Gov. Rick Scott even invited Yale University to ditch New Haven and relocate to the Sunshine State, to avoid a new tax some Connecticut lawmakers wanted to impose on the school’s endowment. That bill failed to pass, and Yale says it is staying put (for now).
Tax dodges available to the wealthy – but usually, not to the rest of us – have become a sore spot among Americans growing weary of crony capitalism. Democratic presidential candidate Bernie Sanders draws roars of approval when he calls for a sharp tax hike on the wealthy. Republican Donald Trump vows to end certain tax breaks that, he says, allow hedge-fund managers to “get away with murder.” The Obama administration recentlycracked down on corporations that try to avoid paying U.S. taxes through “inversions,” and the Panama Papers scandal, while snaring few Americans, stoked global outrage over the world’s fat cats setting up secret, tax-free accounts far from home.
A simpler tax haven
But there’s a simpler kind of tax haven: States with low or no income taxes, which increasingly seem to be drawing 1 percenters from the finance industry. Unlike many types of work that must be done on-site, investing firms can be run from just about anywhere, as long as a major airport is nearby. The wealthy have always sought to minimize their tax bills, but one new factor may be a tax rule the IRS recently “clarified” to indicate that certain offshore holdings of hedge funds must be repatriated by the end of 2017 – with earnings taxed. Repatriating such funds to a state with no personal income tax could save millions compared with the relatively high rates in the Northeast, California and a few other states.
Looks like Sanders got underneath Dimon’s skin…
Jamie Dimon waved a placard at Bernie Sanders in his annual shareholders letter on Wednesday.
It says, in effect: “Don’t Bite the Hand That Feeds Us.
With the Democratic presidential primary battle coming to New York on April 19, including firebrand Sanders who frequently bashes Wall Street, the JPMorgan Chase chief executive sang a different tune in the letter.
Dimon argued that big banks such as JP Morgan, with structures that span corporate and investment banking, perform “mission-critical services . . . that regional and community banks simply cannot do.”
And here is Dimon’s annual shareholder letter. Click here. Check out the section under “The Banking Industry is Critical.”