Archive for Government and Legislation
A group of liberal Democratic senators are seeking to broaden the regulations concerning big banks, as they’ve introduced legislation to limit the size of banks in the United States, of which only Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC) and JP Morgan Chase (NYSE:JPM) would be included.
Citigroup (NYSE:C) has been divesting of some of its assets, evidently allowing them to fall under the parameters proposed by the senators.
Sen. Sherrod Brown (D-Ohio), along with with fellow co-sponsors of the bill – Bob Casey of Pennsylvania,Jeff Merkley of Oregon and Ted Kaufman of Delaware, said this about what was behind it:
“We want limits on the size of banks. The issue is not how to resolve banks that are too big to fail—that needs to be addressed, it needs to be done right whether it’s $50 billion, whether it’s $100 billion, whether it’s other kinds of ways to do the resolution of too big to fail. But the major issue is to keep the banks from getting too large to begin with, both the deposit banks and the non-depository banks.”
Guidelines for banks under the legislation would be to limit the liabilities held by any bank to 2 percent of the GDP or 10 percent of all insured banks deposits in America. As mentioned, at this time the only banks which would be affected by it would be Bank of America, Wells Fargo and JP Morgan Chase, although the measure would keep other banks from growing that large in the future.
What Brown and the other co-sponsors are hoping for is that the legislation will be added as an amendment to the bill which Chris Dodd will bring to the Senate floor sometime soon.
Assuming it is allowed to go forward and become part of regulation, banks under the guidelines would be given three years to sell assets to meet the parameters of the bill.
This article (Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC) and JP Morgan Chase (NYSE:JPM) Will be Downsized if Liberal Democrats Get Their Way) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.
SEC Files Fraud Charges Against Goldman Sachs (NYSE: GS)
Posted by: | CommentsThe Securities and Exchange Commission filed charges against Goldman Sachs Group Inc (NYSE: GS) on Friday, accusing the Wall Street firm of defrauding investors in a sale of securities tied to subprime mortgages.
The SEC announced that it has charged Goldman Sachs and one of the company’s vice presidents, Fabrice Tourre, for failing to disclose conflicts in a 2007 sale of collateralized debt obligations which lead to a $1 billion loss by investors, according to the SEC.
The SEC’s civil fraud complaint stated that Goldman Sachs allowed hedge fund Paulson & Co to help select securities in the CDO, but failed to tell investors that Paulson was betting that the CDO would fail (shorting the CDO).
“The product was new and complex but the deception and conflicts are old and simple,” said Robert Khuzami, director of the Division of Enforcement for the SEC.
“Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party,” he said.
Goldman Sachs shares have declined by more than 10% during morning trading following the SEC’s announcement.
This article (SEC Files Fraud Charges Against Goldman Sachs (NYSE: GS)) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.
In her testimony before the House Financial Services Committee today, which assembled to find out where the bank is in regard to modifying mortgages in trouble, president of Bank of America Home Loans, Barbara Desoer, didn’t have real good news, underscoring the many problems related to helping borrowers stay in their homes.
The other major purpose of the meeting is to gather data which can than be used to adapt the existing loan modification programs to be more efficient and helpful. At least that’s the theory.
One of the comments made by Desoer in prepared statements was that “There has not been adequate success in getting enough customers to accept the offers and complete the documentation and trial period required to obtain a permanent modification.”
This is a nice way of saying people with loans are interested or not cooperating; at least not a large proportion of them.
The assumption by lawmakers that people want to save their homes at any cost is largely one created and generated by the media to create some sensationalism. The fact is many people actually have no interest, or at least, aren’t willing to take the necessary steps to make it happen.
Part of it seems to be the usual red tape associated with partaking in the modification program, which is time consuming and confusing to some, which discourages people from participating in the programs.
That’s what Desoer is saying in a nice way above. On the banks side, they are doing everything possible within the parameters given them to make it happen, but borrowers simply aren’t responding to it at the levels they were expected to. This is frustrating the banks, who have, in most cases, attempted to legitimately make it happen.
Desoer said at the hearing that there are over 16,000 Bank of America employees working with borrowers to get their mortgages modified. She added the bank is at a “critical point” in the process, and the ongoing recession, regardless of reports to the contrary, is making it difficult for those who do want to use the program to make it work.
Continued depressed values of homes and ongoing unemployment were cited a key reasons for this, along with other weaknesses in the economy which affect borrowers.
It seems for those that really do want to modify their mortgages, they simply don’t see any way out, even if they are able to extend the time in their homes through changing to more favorable terms.
With that the case, most aren’t going to jump through the government hoops only to find out several months later that they’re right back to where they started from.
For Bank of America residential borrowers, Desoer said about 1.4 million or 10 percent of them are now 60 or more days behind on their mortgage payment, and the bank has already written down $10.4 billion over the last couple of years in relationship to mortgages.
According to Desoer, there must be changes in the program if they want to get more people to participate, and until that happens, there probably isn’t going to be any improvement for borrowers who really want to stay in their homes.
This article (Bank of America (NYSE:BAC) Mortgage Picture Not Looking Pretty Says President of Home Loans) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.