The authority of the Financial Stability Oversight Council to label a firm a “systemically important financial institution” triggers duplicative regulation even if bank-like rules are not appropriate to the company.
The Consumer Financial Protection Bureau was created in part to ensure that nonbanks are subject to federal oversight, but the fact is that 99% of banks are exempt from CFPB supervision.
The share of purchase and refinance loans originated by nonbanks are at their highest point since at least 1995, according to an analysis of new Home Mortgage Disclosure Act data.
The Trump administration has implemented an apparent role reversal for the Financial Stability Oversight Council, leaving the true intended role of the post-crisis systemic risk body unclear.
Many of the arguments in this debate have less to do with the applicants’ qualifications than with traditional banks’ fear of new, innovative competitors.
Critics of the industrial bank charter, as well as those who support more mixing of banking and commerce, describe the intent of industrial banks inaccurately.
PHH Corp. will pay the Justice Department $75 million to settle a False Claims Act investigation of its underwriting practices on government-insured mortgages and loans sold to Fannie Mae and Freddie Mac.
