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Posts Tagged ‘bank executives’

Are Loans Unsafe Outside QM?

April 18th, 2013 Comments off

According to nationalmortgagenews, bankers were relieved when the Consumer Financial Protection Bureau (CFPB) released its qualified mortgage rule (QM) in January, which gives the lender protection if a borrower defaults. But now some bank executives are hesitant to make loans outside the QM rule, and worry they could be rapped on the knuckles if they do not. In testimony before a House Financial Services subcommittee (financial institutions), Ken Burgess of First Bancshares of Texas says the risk is too high outside the QM rule, and his bank will no longer offer those loans. Other bankers noted tighter credit standards make it tougher to meet the Community Reinvestment Act requirements, which is lending to less creditworthy borrowers. Charles Kim of Commerce Bancshares representing the Consumers Bankers Association, says, “There’s a continual friction between safety and soundness regulation and then the need to make loans in underserved markets.” MHProNews has learned the panelists support a bill in both houses of Congress to create an independent appeals procedure for bank examinations.

(Image credit: foreclosuelistings)

Dodd-Frank not Likely to Vanish

September 11th, 2012 Comments off

BloombergBusinessWeek says while Republican presidential candidate Mitt Romney has vowed to repeal Dodd-Frank, it’s more likely he would water down some of the restrictions on the most lucrative and profitable investments while providing sufficient oversight to protect the banks. Specifically, banks would toss restrictions on investments in private equity and hedge funds, reduce the reach of the Consumer Federal Protection Bureau (CFPB), and block the Volcker Rule. MHProNews has learned Matthew Albrecht, an analyst with Standard & Poor’s, says the eight biggest U.S. banks could lose between $22 billion and $34 billion due to Dodd-Frank. Mark Calabria, a former Republican Senate aide, says, “From a bank’s perspective, you’d rather have piecemeal reform of Dodd-Frank, not only because there are things in the law you want to keep, but also because you’re going to have more control over the process.” Bank executives are aware of the public’s anger in its role in causing the recession and publicly may favor Dodd-Frank while their lawyers fight behind the front line to weaken the rules.

(Image credit: BloombergBusinessWeek)