Category Archives: Banking industry

OCC Misses Another Conflict of Interest: Foreclosure Review Outreach/Payment Processor Rust Consulting Owned By Residential Real Estate Player Apollo, Being Sold to VC Arm of Citigroup

It appears that the Office of the Comptroller of the Currency and the Fed dropped the ball yet again on vetting firms involved in the Orwellianly-named Independent Foreclosure Review (IFR) for conflicts of interest. Michael Olenick’s expose on Allonhill, one of the “independent consultants” hired by Wells Fargo, led to Allonhill’s role being curtailed considerably.

But there’s no way to curtail the role of Rust Consulting, a firm that has been central in the Independent Foreclosure Reviews virtually from their onset. And as we’ll see, Rust has ample conflicts of interest when it was engaged to handle mailings and outreach under the IFR, and is about to become even more conflicted.

Rajiv Sethi: Macon Money, the Anti-Bitcoin

By Rajiv Sethi, Professor of Economics, Barnard College, Columbia University. Cross posted from his blog

One of Kati London’sprojects is Macon Money. This simple experiment, amazingly enough, sheds light on some fundamental questions in monetary economics, helps explain why conventional monetary policy via asset purchases has recently been so ineffective in stimulating the economy, suggests alternative approaches that might be substantially more effective, and speaks to the feasibility of the Chicago Plan (originally advanced by Henry Simons and Irving Fisher, and recently endorsed by a couple of IMF economists) to abolish privately issued money.

Wolf Richter: Luxembourg Is Not The Next Cyprus, Not Yet, But….

Yves here. This article if anything underplays how much a one-trick pony Luxembourg is and what a fix it is in if Germany and/or the EU continues its campaign against tax avoidance and evasion. Luxembourg hope to come to an understanding with the Eurozone and slowly reach accommodations, which would still shrink its banks, but in a less brutal manner than Cyprus. But with such a large financial sector, any action is still going to cause a fair number of customers to flee. It’s hard to see how any gradual path can be found, which then raises the question of whether a series of bank failures in Luxembourg would have broader ramifications.

Bank “Zombie Title” Rises, Hurting Communities and Borrowers, as OCC and Fed Sit Pat

We’ve written before about the perverse phenomenon known as “zombie title.” Kate Berry of American Banker provides an update.

More Foreclosure Review Fiasco: Paying Agent Rust Consulting Sends Letters to Different Addresses Than on Borrower Letters, Refuses to Make Corrections

Hedge fund manager and famed short seller David Einhorn is right: no matter how bad you think it is, it’s worse.

Independent Foreclosure Review Fiasco: OCC and Fed Decided Not to Find Harm

The last few days have had more and more ugly revelations emerge about the botched OCC and Fed Independent Foreclosure Review settlement, with some particularly important ones coming out of the hearings in Robert Menendez’s Senate Banking subcommittee today.

More Washington Sleaze: Lobbyist Tip Stoked Health Care Stock Jump

Yesterday, we featured an important article by Noam Scheiber on how Obama insiders cash out on their connections once they leave the fold. Today, in the Wall Street Journal, we read of the Congressional version in terms of how a tip by a lobbyist (and former Congressional aide) connected to an investment research firm led to a Congressional decision being leaked to investors before it was announced officially.

Here’s How the Foreclosure Reviews Could Have Been Done Much Faster and Cheaper

Yves here. The OCC made the not-surprising confession in Senate hearings last week that if it had to do them all over again, it would have handled them differently.

On the assumption that the OCC is sincere in its repentance, Michael Olenick offers one way to have executed the reviews at vastly lower cost than the botched process that resulted.

Foreclosure Review Hearings Show It’s Time to Burn Down the OCC

There has already been a lot of good commentary on the Senate hearings on the misnamed Independent Foreclosure Reviews, notably by Pam Martens. I’ve finally gotten a transcript (it will be going up shortly at Corrente) which helps in reviewing it more carefully. Since Part 2 of the hearings take place this week, I’ll focus on some key issues that haven’t gotten the attention they warrant.

Obama Honors Thatcher with TVA “Privatization” Plan, Kicks Ordinary People in the Stomach Again

Nathan Tankus is a student and research assistant at the University of Ottawa. You can follow him on Twitter at @NathanTankus

President Obama adopted a reflective tone to mark the passing of Maggie Thatcher. Commenting on her death, he stated “the world has lost one of the great champions of freedom and liberty.” In Obama’s proposed budget, we found out what the terms “freedom” and “liberty” mean: the freedom for the old to go hungry and the freedom of the poor to go cold.

Troika Demands Another €6 Billion from Cyprus, Making “Rescue” Bigger Than GDP

Nothing like dramatic proof that austerity is a failure