Free Republic

US banks have the Phed Pneumonia and the Fauci Flu. Since the Fauci Flu (aka, Covid) outbreak in early 2020, The Federal Reserve lowered their target rate and super-spiked their balance sheet. Helping to lower bank deposit rates to near zero. But despite near zero bank deposit rates, we seeing bank deposits are larger than bank credit such as commercial and industrial loans, residential mortgages loans, car loans, etc. Normally, bank credit EXCEEDS bank deposits. The problem? One of them is negative growth in commercial and industrial lending. It declined 13.5% YoY in August. Of course, The Federal government extended...

If you ask 10 different people what online banking means to them, don’t be surprised if you get 10 different responses. But in the minority community, there’s a very special meaning. Opportunity. Among some minorities, you may hear online banking called a “second chance,” “lifeline” or even “entry into the real world.” In the black community, which has often been left behind by the “brick and mortar” banks, partnering with online lenders and “cyber banks” have given them a seat at the table they never had in the past. One only need look at the checkered history that the bank...

There is a slowdown in bank lending since The Fed’s intervention in March 2020. Bank credit has slowed since March 2021 resulting in banks parking money with The Federal Reserve in the form of reverse repos. Loans and leases are experiencing negative growth rates. Residential real estate loans are also experiencing negative growth rates and a corresponding rise in reverse repo usage. Commercial real estate lending remains in positive territory. Commercial and industrial loans? Also experiencing negative growth rates. Clearly, banks are nervous about inflation since lending at fixed-rates in an inflationary environment is bad news. Not to mention fears...

Typically, banks make money by taking deposits at low rates and lending to borrowers at higher rates (car loans, residential mortgages, business loans, etc.), earning a spread. And bank deposits are usually less than the loans that they extended. Until April 2020. Nothing has been the same since Covid. This is really a unique time, since during the last recessions (2001 and The Great Recession) bank credit exceeded bank deposits. Banks can turn to The Federal Reserve at times like these. The Fed’s reverse repo program lets eligible firms, like banks and money-market mutual-funds, park large amounts of cash overnight...

The Consumer Financial Protection Bureau announced Monday two notices of proposed rulemaking surrounding what’s commonly known as the QM Patch. One of those rulemakings would remove the debt-to-income requirement from qualified mortgages. Back in January, CFPB Director Kathy Kraninger sent a letter to several prominent members of Congress, saying the bureau has decided to propose an amendment to the QM Rule that would “move away” from DTI as a factor in mortgage underwriting. Specifically, Kraninger said at the time that the CFPB has decided to shift from the DTI standard and move to an “alternative, such as a pricing threshold...

The IMF said it “stands ready” to use its $1 trillion lending capacity to help countries that are struggling with the economic impact of the coronavirus.“As a first line of defense, the Fund can deploy its flexible and rapid-disbursing emergency response toolkit,” wrote Kristalina Georgieva, Managing Director of the IMF.The IMF’s announcement comes ahead of what’s expected to be another dismal day on Wall Street despite a move by the globe’s central banks to ease monetary policy. The International Monetary Fund on Monday said it “stands ready” to use its $1 trillion lending capacity to help countries around the world that are struggling with...

Bank of America officially took sides in America’s gun debate Tuesday, announcing it would no longer make loans to companies that make “military-style” weapons. The second-biggest U.S. bank announced Tuesday that it would drop current loan-customers Vista Outdoors, Remington and Sturm Ruger, and blackball any other manufacturer of assault weapons. Bank of America Vice Chairman Anne Finucanetold Bloomberg TV on Tuesday her bank has told those companies “it’s not our intent to underwrite or finance military-style firearms.” “We have had intense conversations over the last few months,” Ms. Finucane told Bloomberg, a network founded by tycoon and gun-control-financier Michael R....

Six Kentucky community banks that could be competing for business have agreed to work together as charter members of the specialty $150 million Commonwealth Infrastructure Fund to finance public-private partnerships (P3) in Kentucky.In the next few months, CIF is expected to reveal one or more inaugural deals.“We are looking at five to 10 potential projects that should start sometime in 2018. We expect to make loans to two or three projects in 2018 after the underwriting process has been completed,” said John Farris, who manages CIF. “We believe we will lend out all $150 million over three to five years...

TUSTIN, Calif., Nov. 2, 2017 /PRNewswire/ -- New American Funding, a leader in the mortgage industry, announced today the launch of its new STEP program, a corporate training curriculum that's designed to prepare people for a career in mortgage banking. STEP, which is Specialized Training Empowering People, is a nationwide program that was developed by the company to equip people for working in every aspect of the industry. STEP provides live weekly online and onsite classes that cover a spectrum of topics ranging from the fundamentals of mortgage banking to compliance education to the specifics about loan products. It's designed...

Though belated, the recent ordinance empowering the Reserve Bank of India to ensure recoveries from wilful defaulters is a step in the right direction. However, a lack of legal authority was never a barrier in the government’s ongoing war against corruption, black money and bad debts. Be that as it may, it is imperative for the government to demonstrate tangible results that would carry conviction with the masses. If only it were to examine the anatomy and modus operandi of national highway projects, it would discover a large-scale plunder of public money waiting to be booked. The usual contractor-engineer-politician troika...

The Federal Reserve gives us the freedom to buy things now that we would otherwise have to wait for.In looking at the Federal Reserve, it is important to note that this is a money system, not just a group of people sitting in a conference room controlling everything having to do with the US dollar. The Fed is a system just like the government of the US is a system. What that means is that no one controls it, and that it is much bigger than any one person or group of people could ever control. They can guide it,...

Two weeks ago, we reported that even as U.S. lenders were professing to their investors that there is no risks with their energy exposure and that they are comfortably reserved for any potential losses, they were reducing their unfunded (and total) exposure to oil and gas exploration companies due to balance sheet, default and contagion concerns.We showed a list 25 deeply distressed companies, whose banks we found have quietly shrunk the borrowing base of their credit facilities anywhere from 6% in the case of Black Ridge Oil and Gas to a whopping 51% for soon to be insolvent New...

In a dangerous deja vu, politicians and lobbyists are pressuring banks to throw open their lending windows for credit-poor people who want to buy homes but may not be able to afford them. Worried about sagging homeownership rates, especially among minorities, the Obama administration seeks to boost homebuying by easing mortgage lending standards — and affordable-housing zealots are egging it on. So are Realtors and brokers hungry for profits. They're all cheering recent moves by Obama regulators to slash down-payment and mortgage insurance requirements for first-time homebuyers at federal agencies that back such mortgages. They also support a plan to...

The Federal Reserve created a monster $4.3 trillion balance sheet, up by $3 trillion from 2008, through quantitative easing. QE ends this fall. Now the Fed is trying to figure out what to do with this monster. Their thinking seems to be that they can maintain control over it by paying banks more money to not make loans. So let's get this right. Households and businesses are attempting to borrow money from banks. But the Federal Reserve may eventually pay banks $100 billion per year not to lend to Main Street. Politicians will have a field day with that. The...

We know the pattern by now. A crisis arises. As my Competitive Enterprise Institute colleague Chris Horner puts it, this administration says, “There’s no time to waste, we must do something now, sign here, details to follow.” And every time, we discover that we have signed up for more than we bargained for. That was the case with the Dodd-Frank Act, passed in 2010 supposedly to solve the problems that caused the financial crisis. Only now are we seeing the details to follow. They amount to a government takeover of the financial industry and increased government control over our behavior,...

Breitbart News has learned that in 2013 the Obama administration launched an under-the-radar project, 'Operation Choke Point,' which is designed to destroy three sectors of the private lending industry: third party payment processors ("TPPPs"), payday lenders, and online lenders. The operation is headed by political operatives and career bureaucrats at the Department of Justice, the FDIC, and the new Consumer Financial Protection Bureau ("CFPB"). It appears to be the latest example of the Obama administration's successful efforts to weaponize the apparatus of the federal government against people and industries it opposes ideologically. According to the Wall Street Journal, the federal...

Mortgage-backed securities legend Lew Ranieri made an impassioned plea for regulations to loosen credit standards on home loans at the Mortgage Bankers Association (MBA) annual conference in Washington D.C. The U.S. mortgage market has experienced an “irrational restriction” of credit as lenders and regulators overreact to the loose lending during the bubble that burst in 2007, mortgage-bond pioneer Lewis Ranieri said. mtgvol1998 “If this legacy persists the consequences will be more profound for the country than the economic losses” caused by the bust, Ranieri said today at an annual conference hosted by the Mortgage Bankers Association in Washington. Ranieri, the...

Late this week, Treasury will report on the performance of servicers in delivering Making Home Affordable (MHA) programs. I understand Treasury will drop everyone’s ratings and do so with little explanation other than that they moved the bar to make required levels more stringent because too many servicers were hitting their highest rating. You know, its like telling Peyton Manning that throwing 7 touchdowns in the game against the Baltimore Ravens wasn’t good enough. He should have thrown 10 TDs! Treasury can continue to raise the bar on servicers and lead people to believe the servicers aren’t doing what is...

Between Jimmy Carter’s Community Reinvestment Act (CRA) and Bill Clinton’s National Homeownership Strategy (NHS), government encouraged lenders make risky loans, homeownership rates are back where they started in 1996. nhsdream2 The goal of Fannie Mae was a 70% homeownership rate. They almost achieved their goal — they got to 69% in 2004. USHOWN_Max_630_378 The home ownership rate increase corresponded with an almost two-fold increase in the GSE affordable housing goals after the National Homeowhership Strategy was declared in 1995. affordgoals Of course, this “great leap forward” in home ownership was not sustainable. The racial makeup of home ownership shows a...

I was on Fox Business with Connell McShane and Dagen McDowell talking about the low homeownership rates for Millenials. I mentioned that mortgage rates are expected to rise, hindering a housing recovery. On that note, Kate Berry at American Banker wrote today about the shrinking of mortgage units at lenders. “Wells Fargo (WFC) and Citigroup (NYSE:C) are laying off hundreds of employees at their mortgage units, one of the most tangible signs yet of the falloff in refinancings and the painful shift underway in the mortgage market.” In the latest Mortgage Bankers survey, mortgage purchase applications remain in a rut...