Banking/Financial Institutions

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have joined forces to combat identity theft.

The independent agencies on Wednesday announced new regulations that will require financial institutions and creditors to enact programs to “detect, prevent and mitigate identity theft” in existing or new accounts.

A consumer advocacy group says it’s time for the Obama administration to require that lenders modify student loans borrowers are having trouble paying back.

The National Consumer Law Center praised the Consumer Financial Protection Bureau’s (CFPB) work to assist the estimated 38 million Americans with outstanding student loans, but said loan modifications won’t be enough to solve the problem.

“Lenders that had no problem saying ‘yes’ to risky loans now have no problem saying ‘no’ when these borrowers need help. The CFPB and other regulators need to step in,” said Arielle Cohen, an attorney with the group.

Rep. Maxine Waters (Calif.), the top Democrat on the House Financial Services Committee, is willing to change the Dodd-Frank financial reform law, but only if the changes are "truly technical."

In remarks before the U.S. Chamber of Commerce, the liberal lawmaker presented herself as willing to work with the business lobby, but drew firm lines on how far she would be willing to go when it came to revisiting the landmark financial reform law.

Waters underlined the narrow category of Dodd-Frank changes she is willing to consider, calling it her "responsibility" to protect the bulk of the overhaul.

"I am certainly not open to wholesale revisions to the act, or receptive to packages of bills which, taken as a whole, essentially repeal its key provisions or dismantle it piece by piece," she said in prepared remarks. "There may be some room for modification in some areas. However, I strongly oppose any attempt to dismantle the main provisions of Dodd-Frank."

“Too big to fail” is a hot topic again on Capitol Hill, and Wall Street is taking note.

A trio of Republican senators are pressing lawmakers to tie student loan interest rates to U.S. Treasuries. 

Sens. Tom Coburn (Okla.), Richard Burr (N.C.), and Lamar Alexander (Tenn.) introduced legislation on Tuesday that would provide a permanent solution to the interest rate issue by requiring that all new loans be tied to the U.S. Treasury 10-year borrowing rate, which stands at 1.75 percent, plus 3 percentage points. 

"Moving to a market-driven approach will benefit both borrowers and taxpayers in the long-term,” Coburn said.  

“Temporary fixes require annual patching and do nothing to solve the real problem," he said. 

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Several Democratic senators are taking aim at interest rates and fees on a broad range of consumer loans. 

Senate Majority Whip Dick Durbin (D-Ill.) along with several other lawmakers, introduced a bill on Tuesday that would create an interest rate and fee cap of 36 percent for all consumer credit transactions, in an effort to end rates that can skyrocket up to 300 percent.  

"As we climb out of the worst recession in a generation, many working families continue to struggle," Durbin said. 

"For some, payday lenders offer a quick way to make ends meet, but often with devastating consequences."

A bipartisan group of senators is pressing bank regulators to hurry up and finish a rule that would tighten restrictions on the nation's biggest banks.

The group is the latest to join a growing push from Capitol Hill for regulators to take a stronger stance against the lingering issue of "too big to fail." The senators putting pressure on bank watchdogs span the political spectrum, and include Sens. Sherrod Brown (D-Ohio), Elizabeth Warren (D-Mass.), Bob Corker (R-Tenn.), David Vitter (R-La.) and Susan Collins (R-Maine). 

In the letter sent Monday, the lawmakers urged regulators to move "deliberately and expeditiously" to finalize rules requiring banks to hold more capital as cushion against losses, as well as ensure that shareholders and creditors would bear the brunt of a bank's collapse instead of the American taxpayer.

A new government watchdog report has found that the Treasury Department's Small Business Lending Fund struggled to do much actual lending to small businesses.

Treasury and banking regulators implementing the underwhelming program pointed fingers at each other when it came to whether banks participating in the program had the capacity to make loans, according to a new report from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

The report also found that the Treasury misspent funds by giving them to bailed out community banks, which in turn used the government dollars to pay off their bailouts and exit from government support, rather than increasing their lending to the business community. Banks with under $10 billion in assets were eligible to participate in the fund.

Two dozen banks that fell under TARP and participated in the program did not increase their business lending at all, while the remaining TARP banks increased lending by $1.13 for each lending fund dollar received. By comparison, banks that received lending support under the program that fell outside of TARP were significantly more active, lending $3.45 for each lending fund dollar received.

About a dozen banks will start making billions in payments to homeowners next week as part of a settlement over shoddy foreclosure practices. 

About 4.2 million borrowers are expected to receive about $3.6 billion — payments ranging from $300 to $125,000 — from 11 mortgage servicers starting April 12 as part of a January agreement reached by the Office of the Comptroller of the Currency and the Federal Reserve Board.

The agreement provides cash payments to borrowers whose homes were in any stage of the foreclosure process in 2009 or 2010 and whose mortgages were serviced by Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo.

Sen. Bernie Sanders (I-Vt.) and Rep. Brad Sherman (D-Calif.) are pushing legislation that would force financial regulators to break up the nation's biggest banks.

The pair argued Tuesday that the Dodd-Frank financial reform law lacks the necessary tools to address the problem of "too big to fail" and only through a legislative demand from Congress could the issue be put to bed.

"What we need is a congressional mandate for anything quite this big," Sherman said.

"Dodd-Frank gives us some tripwires. The goal is that we don't want to be caught with our pants down so to speak," added Sanders. "I don't think that anyone seriously believes that Dodd-Frank has the tools to do what Congressman Sherman and I have suggested."