Government

The ongoing tension between the Justice Department and the House Oversight Committee saw a new development this week as Rep. Darrell Issa (R-California), committee chair and vocal critic of Attorney General Eric Holder, requested the department turn over all of its documents related to its recent securities settlements with JPMorgan Chase and Citigroup.

Jesse Litvak, registered broker-dealer and former managing director at investment bank Jefferies & Co., Inc., was sentenced this week to two years in federal prison in connection to his conviction for defrauding consumers trading in residential mortgage-backed securities, the office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced.

Former Congressman Barney Frank testified before the House Committee on Financial Services on Wednesday, dismissing criticisms of his namesake Wall Street reform act. In the more than three hour long hearing, Frank and others faced tough questions on the effect that the act has had on the economy and the value of the changes when compared with the toll it takes on financial services firms.

Independent Community Bankers of America (ICBA) submitted a letter to the Consumer Financial Protection Bureau asking the agency to expand the small creditor exemptions set out under its mortgage rules that went into effect in January. ICBA's main request is that mortgage loans held in small creditors' portfolios automatically receive qualified mortgage safe harbor status for as long as the loans are held in those portfolios.

Joseph A. Smith Jr., who also oversees the 2012 National Mortgage Settlement between five major mortgage servicers and 49 states, said Tuesday that Chase has provided more than $6.3 million so far in credited consumer relief, with nearly $5.1 million coming from cuts to borrowers' principal loan amounts and the rest coming from forbearance actions.

It's been four years since the Dodd-Frank Act was signed into law, and the Republican members of the House Financial Services Committee marked the occasion with a new report highlighting its flaws, including its failures to end "too big to fail." "In no way, shape or form does the Dodd-Frank Act end 'too big to fail,'" said Jeb Hensarling (R-Texas), chairman of the committee. "Instead, Dodd-Frank actually enshrines 'too big to fail' into law."

State and federal regulators announced Friday the closing of a Georgia bank, putting the 2014 national bank failure tally at 13. Georgia's Department of Banking and Finance took possession of Conyers-based Eastside Commercial Bank, appointing FDIC as receiver. While FDIC doesn't make its list of Problem Banks open to the public, Eastside has sat on Calculated Risk's unofficial list since 2009.

The CFPB this week proposed a new rule to allow consumers that post complaints the option to opine on the details on its public-facing database. The banking and servicing community is concerned at the idea, with the Consumer Bankers Association's CEO, Richard Hunt, commenting that the proposed system runs the risk of being too one-sided.

In a conference call Tuesday,JPMorgan CEO Jamie Dimon took the time to single out FHA-backed lending as a source of risk for the megabank. "[T]he real question is should we be in the FHA business at all? We're still struggling with that," Dimon said. "Until they come up with some kind of safe harbors or something, we're going to be very, very cautious in that line of business."

According to a joint report from HUD and the Census Bureau, groundbreaking on new homes was at a seasonally adjusted annual rate of 893,000, a drop of 9.3 percent below May's revised annual rate of 985,000. Declines came on both sides of the market: Single-family starts came to a rate of 575,000, down 9.0 percent, according to the report, while multifamily starts fell 9.9 percent to a 318,000 rate.