HFSC GOP Gives FRC Faint Praise

We will shortly provide clients with an assessment of the policy implications of the FRC rescue early this morning.  These are already emerging with a statement from HFSC Chairman McHenry (R-NC) in which he praises the FDIC’s decision to sell the bank rather than establish a bridge entity.

Senate Banking Leadership Supports FRC Resolution

In statements today on FRC’s rescue, Chairman Brown (D-OH) reiterated his demand for more big-bank guardrails, demurring on the criticism one might have expected in the wake of JPMorgan’s acquisition in light of Sen. Brown’s longstanding campaign against big-bank consolidation.

FDIC Gives JPM Unique Acquisition Backstops

Although the FDIC’s statement regarding First Republic’s resolution is silent with regard to key terms other than the $13 billion loss it anticipates, the JPM release provides important insight into this precedent-setting acquisition.  Notably, the loss shares are very generous, with the FDIC assuming eighty percent of mortgage losses over the next seven years and eighty percent also for CRE and similar loans over the next five years.

FDIC Opts For Targeted-Coverage Hikes

Despite the furor surrounding its FRC rescue, the FDIC stuck to plan today and released its report on deposit-insurance reform in the wake of SVB’s and SBNY’s resolutions.  We will shortly provide clients with an in-depth assessment of a report which highlights social-media runs at banks with large uninsured balances as key risk drivers that require policy remedy.

CFPB Proposes Safeguards for PACE Loans 

As required by Congress, the CFPB today proposed a rule requiring PACE loan lenders to assess a borrower’s ability to repay and applies TILA civil liability provisions to violations.  In the release accompanying the rule, CFPB Director Chopra claims that PACE loan lenders often “bait” homeowners into unaffordable loans.

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