2014 February FIRE Policy News

Issue Date: 
February, 2014
Newspaper PDF: 

The February issue of FIRE Policy News reports a federal bankruptcy judge has ruled Detroit may reorganize under bankruptcy law, meaning holders of Detroit bonds could take losses, city workers and retirees could see wages and benefits cut, and other creditors could end up with pennies on the dollars owed. Detroit has more than 100,000 creditors.

Also in this issue:

  • The Consumer Financial Protection Bureau’s new qualified mortgage stipulations went into effect in January, legally putting into effect some of the requirements lenders already had put into place on their own.
  • Despite spending more than $8.6 million so far, with another $8 million projected for developing the online portal to handle registration of foreign financial institutions for the Foreign Account Tax Compliance Act, the IRS is still unprepared for the law, according to a report by the Treasury Inspector General for Tax Administration. The delay threatens to compromise the information of Americans and the foreign institutions that have been coerced into serving the IRS under the law.
  • On a snowy day in Washington, several federal agencies packed some mean regulatory snowballs that will most likely overshoot their supposed destination of Wall Street and land with a thud on the businesses and investors of Main Street.
  • The federal government’s rescue of Fannie Mae and Freddie is becoming a bonanza for the government. A conservatorship requires the conservator to act in the best interest of its beneficiaries, but the original stock purchase agreement and the Third Amendment, which benefited only FHFA and Treasury, were signed in blatant violation of that basic duty.
  • A Congressional Budget Office study shows the top 40 percent of income earners paid 106.2 percent of total federal income taxes, while the bottom 40 percent paid -9.1 percent. The top 20 percent of income earners paid 92.9 percent of total income taxes in 2010 (the latest year available), and the next-highest 20 percent paid 13.3 percent of total income taxes, so the top 40 percent paid 106.2 percent.
  • New regulations emanating from Basel III are extremely complicated, almost incomprehensibly so. Certain provisions are unclear and/or still unresolved and are awaiting industry comments before final publication.

Newspaper Articles in this Issue