Monday, May 06, 2013

TBTF banks may be starting to worry

They probably have little to worry about, as it's highly unlikely the Brown-Vitter bill will pass.  And Daniel Tarullo, a governor of the Federal Reserve, was only giving a speech to the Peterson Institute.  However, Eric Schneiderman, the New York Attorney General, actually filed a suit.

Tarullo probably worried trading banks more than typical banks; he wants them to hold more capital, although he did not specify a ratio.  He feels that, "We would do the American public a fundamental disservice were we to declare victory without tackling the structural weaknesses of short-term wholesale funding markets, both in general and as they affect the ‘too big to fail’ problem.” 

Schneiderman filed a suit against Wells Fargo and BofA for violating the terms of the National Mortgage Settlement, which was agreed to last year by five of the super-banks and the attorneys general of 49 states.  The settlement laid out more than 300 servicing standards that each bank must follow when working with struggling homeowners. Those terms include notifying borrowers within five days that the banks have received necessary documents to complete a loan modification. Schneiderman says that since last October Wells Fargo has violated these standards 210 times and BofA 129 times.

No comments: