Dodd-Frank News Center

Former bank president sentenced to two years for bank fraud and money laundering

This story appeared in Bank Digest.

Christy Romero, Special Inspector General for the Troubled Asset Relief Program, and Charles M. Oberly III, United States Attorney for the District of Delaware, have announced that on Nov. 24, 2014, United States District Judge Richard G. Andrews sentenced James A. Ladio, age 58, of Wilmington, Del., to two years in federal prison for his role in a loan scheme involving TARP recipient Wilmington Trust Corporation.

Ladio, former president and chief executive officer of MidCoast Community Bank, pled guilty on Dec. 17, 2013, to two counts of bank fraud and two counts of money laundering. The charges related to a nominee loan scheme in which Ladio recruited two former MidCoast customers to obtain loans, the proceeds of which the customers loaned back to Ladio.

According to facts revealed during the sentencing hearing, Ladio had been involved in a decade-long "loan-swap" arrangement with former Wilmington Trust market manager Brian Bailey, in which the two men allegedly provided more than 20 loans to each other totaling more than $1.5 million. In June 2010, Wilmington Trust called Ladio's loans and required him to enter into a Global Restructuring Agreement. Ladio was said to have engaged in the nominee loan scheme in substantial part to make interest and principal payments under the agreement.

Agencies jointly provide feedback on Wells Fargo's second resolution plan

This story appeared in Bank Digest.

The Federal Reserve Board and Federal Deposit Insurance Corporation announced that they had completed their review of Wells Fargo & Co.'s 2014 resolution plan and issued a joint letter to the firm. The agencies noted improvements from the original plan submitted in 2013, including the narrative describing the firm's preferred resolution strategy and the progress in addressing the five obstacles identified in guidance issued by the agencies.

Under the guidance given to Wells Fargo for preparation of the 2014 plan submission, the firm's 2014 plan provides a basis for a resolution strategy that could facilitate an orderly resolution under bankruptcy. If fully developed in the future, Wells Fargo's plan could reduce the risk that the company's failure would pose to the stability of the U.S. financial system. These improvements notwithstanding, the agencies have also jointly identified specific shortcomings of the 2014 resolution plan that need to be addressed in the 2015 plan. The letter details the specific shortcomings and the expectations of the agencies for the 2015 submission.

Fed seeks comments on enhanced regulation of GE Capital

This story appeared in Bank Digest.

The Federal Reserve Board announced that it is seeking public comment on applying enhanced prudential standards, found in the Dodd-Frank Act, for the regulation and supervision of General Electric Capital Corporation.

The Financial Stability Oversight Council designated GE Capital for enhanced supervision by the Fed in July 2013. In its designation, FSOC noted that distress at GE Capital could trigger a run on money market mutual funds and lead to a broader withdrawal of investments from the commercial paper market and other short-term funding markets.

The Fed is seeking to apply to enhanced prudential standards to GE Capital given the substantial similarity of the company's activities and risk profile to that of a similarly-sized bank holding company. If the enhanced prudential standards are applied to GE Capital, the company would have to comply with certain requirements related to risk-based and leverage capital, capital planning, stress testing, liquidity, and risk management.

FHFA directs Fannie Mae and Freddie Mac to change requirement relating to sales of existing REO

This story appeared in Bank Digest.

The Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to alter one of their policies relating to the sale of real estate owned properties in their current inventory. The change will permit the two companies to sell existing REO properties to any qualified purchaser at the property's fair-market value, as determined by the Enterprises.

Prior to this directive, the Enterprises required homeowners who have been through foreclosure and want to buy their home back to pay the entire amount owed on the mortgage. This requirement similarly applied to anyone buying the home for the benefit of the previous homeowner. Under the new policy change for existing REO properties, former homeowners who are able to repurchase their home--or a third-party able to purchase on their behalf--may do so under the fair-market value policy that already applies to other purchasers of REO properties.

The policy change is limited to Fannie Mae and Freddie Mac REO inventory of single-family homes as of Nov. 25, 2014. Fannie Mae and Freddie Mac have approximately 121,000 properties in their combined REO inventory. Certain property exclusions may apply and will be handled by the Enterprises on a case-by-case basis.

CFPB Ombudsman releases 2014 annual report

This story appeared in Bank Digest.

Wendy Kamenshine, Ombudsman for the Consumer Financial Protection Bureau, has released the Ombudsman's third annual report. This year's report includes a new section called The Ombudsman in Practice. The CFPB Ombudsman is an independent, impartial, and confidential resource that assists consumers and companies in informally resolving issues with the CFPB.

FHFA announces GSEs' conforming loan limits for 2015

This story appeared in Bank Digest.

The Federal Reserve Board has released its first Semiannual Report on Banking Applications Activity, which provides aggregate information on proposals filed by banking organizations and reviewed by the Federal Reserve. The report includes statistics on the number of proposals that have been approved, denied, and withdrawn, as well as general information about the length of time taken to process proposals. Additionally, it discusses common reasons that proposals have been withdrawn from consideration.

Delaney and Ross: GAO report makes clear need for FSOC reform

This story appeared in Bank Digest.

Following the release of a report by the Government Accountability Office that offered three recommendations for how the Financial Stability Oversight Council should improve its process for deciding whether to designate nonbanks companies as systemically important financial institutions, Reps. John K. Delaney (D-Md) and Dennis Ross (R-Fla) issued a joint statement.

CFPB releases Fall 2014 rulemaking agenda

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has released a semi-annual update of its rulemaking agenda in conjunction with a broader initiative led by the Office of Management and Budget to publish a Unified Agenda of Regulatory and Deregulatory Actions across the federal government. The bureau's regulatory agenda includes rulemaking actions in the following stages: pre-rule, proposed rule, final rule, long term actions, and completed actions.

FHFA releases 2015-2019 strategic plan

This story appeared in Bank Digest.

The Federal Housing Finance Agency has released its strategic plan for Fiscal Years 2015-2019. The plan, which reflects the agency's priorities as regulator of the Federal Home Loan Banks and as regulator and conservator of Fannie Mae and Freddie Mac (the Enterprises). The FHFA's strategic plan also reflects the priorities outlined for the Enterprises in the 2014 Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac, which the agency released in May. 

CFPB to expand mortgage servicing rules

This story appeared in Bank Digest.

The CFPB intends to propose amendments to its rules on mortgage loan servicing to give distressed borrowers and successors in interest even more protection. According to the bureau, the proposal will address nine separate subjects:

1. servicing protections for successors in interest;
2. the “delinquency” definition;
3. requests for information on a loan owner or assignee;
4. force-placed insurance;
5. early intervention notices and live contact requirements;
6. loss mitigation application processing;
7. prompt payment crediting;
8. periodic statements; and
9. the “small servicer” definition.