Government officials have struck a $25 billion settlement with five of the nation's largest lenders to address mortgage-servicing and foreclosure abuses committed by the companies.
The agreement, which the U.S. Justice Department announced Thursday after more than 16 months of negotiations involving all 50 U.S. states, federal authorities and the banks, provides financial relief for homeowners and toughens standards for how financial firms service mortgage loans. Joining the deal are the country's largest mortgage servicers: Ally Financial, Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM), and Wells Fargo (WFC).
Under the terms of the deal, mortgage servicers must allocate $20 billion to various types of mortgage relief for borrowers. At least $10 billion of that total will go toward reducing the principal for borrowers who are behind, or at risk of defaulting on, their loans at the time of the settlement and who owe more on their mortgages that their homes are worth. A minimum of $3 billion will go toward helping homeowners who also are "underwater," but current on their loans, refinance at lower interest rates. Up to $7 billion will be allocated toward offering other forms of aid, including forbearance of principal for unemployed borrowers, "short sales," and financial assistance for homeowners whose homes are foreclosed. In addition, loan servicers must pay $4.25 billion to the states and $750 million to the federal government.
For more: Banks in $25B deal to settle foreclosure abuses - CBS News
Showing posts with label The US Banking Industry. Show all posts
Showing posts with label The US Banking Industry. Show all posts
12/7/11
US Economy: Bernanke calls Bloomberg report on US Fed $13 billion loans to banks "wildly inaccurate"
Bloomberg Markets Magazine last month published an article called "Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress." The article was widely referenced by other news organizations, including The New York Times.
The Bloomberg article said the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system when all guarantees and lending limits were added up.
While Bernanke did not mention Bloomberg or any other news organization by name, he said in a letter to lawmakers that the figure and other estimates of larger total amounts of lending, were "wildly inaccurate." On any given day, Fed credit from its emergency liquidity programs was never more than about $1.5 trillion, he said.
Matthew Winkler, editor-in-chief of Bloomberg News, said in a statement: "Bloomberg stands by its reporting." The news agency also released a lengthy point-by-point response to the Fed staff memo.
The US Fed had strenuously resisted providing information about discount window borrowers, arguing that banks would be unwilling to use the lending facility if their actions risked becoming public out of fear they could be seen as weak.
When the data was released in March, it showed that banks from Europe had drawn tens of billions of dollars from the U.S. central bank during the crisis. In addition, the Fed was instructed by the new Dodd-Frank financial reform law to divulge borrowing from other lending programs it created to stabilize financial markets during the economic meltdown. A December 2010 data release revealed that major banks had been big beneficiaries from some of those programs.
EU-Digest
The Bloomberg article said the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system when all guarantees and lending limits were added up.
While Bernanke did not mention Bloomberg or any other news organization by name, he said in a letter to lawmakers that the figure and other estimates of larger total amounts of lending, were "wildly inaccurate." On any given day, Fed credit from its emergency liquidity programs was never more than about $1.5 trillion, he said.
Matthew Winkler, editor-in-chief of Bloomberg News, said in a statement: "Bloomberg stands by its reporting." The news agency also released a lengthy point-by-point response to the Fed staff memo.
The US Fed had strenuously resisted providing information about discount window borrowers, arguing that banks would be unwilling to use the lending facility if their actions risked becoming public out of fear they could be seen as weak.
When the data was released in March, it showed that banks from Europe had drawn tens of billions of dollars from the U.S. central bank during the crisis. In addition, the Fed was instructed by the new Dodd-Frank financial reform law to divulge borrowing from other lending programs it created to stabilize financial markets during the economic meltdown. A December 2010 data release revealed that major banks had been big beneficiaries from some of those programs.
EU-Digest
11/1/11
US Banking Industry: Public revolt gets results - Bank of America Backs Off From Plan to Charge Debit-Card Fee
Bank of America Corp., the second- biggest U.S. lender by deposits, abandoned plans to charge $5 a month for debit cards after a nationwide backlash from consumers and lawmakers. “For a lot of consumers, this was the last straw,” said Jean Ann Fox, director of financial services for the Washington- based Consumer Federation of America. “Banks have been making a lot of changes to accounts, adding fees and raising the minimum balance needed, and consumers were clear that they objected to one more fee.”
For more: Bank of America Backs Off From Plan to Charge Debit-Card Fee - BusinessWeek
The bank canceled the fee, which would have started in January, afteras they said listening “to our customers very closely,” David Darnell, co-chief operating officer, said in a statement today. The lender also cited competitive pressure.
Bank of America reversed course after rivals including JPMorgan Chase & Co. and Wells Fargo & Co. decided against similar charges, leaving the Charlotte, North Carolina-based firm the only U.S. lender among the biggest five with plans to introduce the fee. Citigroup Inc. and U.S. Bancorp had already rejected the idea, while SunTrust Banks Inc. and Regions Financial Corp. eliminated their check-card fees yesterday.
Note EU-Digest: once again an example that Public Revolt will eventually have results against unfair business practices and corporate manipulation.
10/23/11
The US Banking Industry: Which Bank Is the Worst for America? 5 Behemoths That Hold The US Political System Hostage
Big Finance has a long history of working hard to deregulate the American economic system on behalf of global capitalism run amok. One of its biggest coups was the overturning of the Glass-Steagall Act, a Depression-era law that created a firewall between investment banking and the commercial banks that hold deposits and make loans.
The first victory in the quest to overturn this major protection came in 1986. Under intense pressure from Wall Street, the Federal Reserve reinterpreted a key section of Glass-Steagall, deciding that commercial banks could make up to 5 percent of their gross revenues from investment banking. After the board heard arguments from Citicorp, J.P. Morgan and Bankers Trust, it loosened the restrictions further: in 1989, the limit was raised to 10 percent of revenues, and in 1996, they hiked it up to 25 percent.
Then, according to a report by PBS' Frontline, “In the 1997-'98 election cycle, the finance, insurance, and real estate industries (known as the FIRE sector), spen[t] more than $200 million on lobbying and [made] more than $150 million in political donations” – most of which were “targeted to members of Congressional banking committees and other committees with direct jurisdiction over financial services legislation.”
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