Mortgage Giant Places Bets Against Homeowners

From: NPR

NPR and ProPublica have found that Freddie Mac, the giant government-owned mortgage company, has been placing financial bets against homeowners. Specifically, Freddie Mac has made targeted investments that pay off if homeowners are unable to refinance their mortgages. At the same time, Freddie has been making it harder for many homeowners to get new loans.



U.S. Consumer Bureau Mulling Rule Exemptions for Smaller Banks

Jan. 24 (Bloomberg) — The U.S. Consumer Financial Protection Bureau may weigh size or market share in exempting community banks from its rules to shield them from the greater regulatory burdens facing their larger rivals.

Richard Cordray, the former Ohio treasurer and attorney general appointed to head the consumer bureau Jan. 4, touted the idea of exclusions for smaller lenders in a conference call organized by the Independent Community Bankers of America.

“The bureau will be considering two-tiered regulatory requirements and exemption thresholds as it writes regulations so that community banks will be able to conduct their business without overly burdensome regulatory requirements,” the Washington-based trade group said in its internal newsletter, citing Cordray’s comments during the Jan. 12 call.

Regulators say will strike balance on Volcker rule

(Reuters) – Regulators said on Wednesday they believe their agencies could implement a ban on proprietary trading without crushing banks’ ability to buy and sell securities on behalf of customers.

The 2010 Dodd-Frank financial oversight law’s Volcker rule prevents banks that receive government backstops such as deposit insurance from making risky trades with their own funds.

Supporters of the crackdown say it will make the financial system safer and more stable.

Regulators, who released a proposed plan in October, have been under pressure from the banking industry since then, and last month extended the comment period into February to allow more time for additional commentary.

Inspector General Criticizes US Regulator’s Oversight Of Home Loan Banks

WASHINGTON (Dow Jones)–A U.S. housing regulator should do a better job overseeing 12 regional institutions that provide funding for home loans amid financial problems at four of the those banks, a government watchdog report said Wednesday.

The report by the inspector general of the Federal Housing Finance Agency examined the agency’s oversight of the 12 Federal Home Loan Banks, which are chartered by the federal government but owned by their member banks and other lenders. They lend money to more than 7,800 banks, thrifts and credit unions, which then use that money to make their own mortgages.

The 2012 Regulatory and Market Landscape

From: WSJ

‘Volcker Rule’

Boon or Bane? It Depends Which Side of Street You’re On

Depending on whom you ask, the so-called Volcker rule will mean either the end of banking as we know it or toothlessly allow banks to continue to bet the house—with the backing of the U.S. taxpayer. Neither of these extremes are true, of course.

The Volcker rule, part of the landmark 2010 Dodd-Frank financial-overhaul law, will curtail large banks’ proprietary-trading activities. In other words, no more multibillion-dollar bets on whether the housing market will rise or fall or whether the dollar is going to do better (or worse) than the euro or yen.