Financial Services Report, Spring 2008

In this issue:

Editor’s Note

MoFo Metrics

Beltway Report

Ahead of the Summons

Privacy Report

California Report

Operations Report

Arbitration Report

Preemption Report

Mortgage Report

Editor’s Note

It is time to play pin the blame on the subprime crisis. Half of all observers blame Greed, another half blame

Wall Street, and the third half say that’s redundant. Baltimore blames Wells Fargo Bank, and not just for the

subprime crisis either . . . also urban decay, youth gangs, drugs, bad posture, and Paris Hilton’s new movie.

We have our own plan, which is to lay all this at the doorstep of Alan Greenspan, ring the doorbell, and run.

The press wallow in gloom, which means that the positive aspects of the subprime crisis are getting overlooked. Our Top Three: (i) Fewer Hummers straddling two parking spaces; (ii) easier to get a power table at Per Se; and (iii) when was the last time you heard a noisy radio ad from a mortgage broker? I have a confession to make. It’s my fault. My name is Jérôme Kerviel. You may say that I exposed Société Générale to $70 billion in potential losses, but mon dieu! Look at the bright side, être optimiste. How many of you go to Las Vegas and lose only 10%? Excuse moi, but just one more jack of spades and Bernanke would have been serving me foie gras by the tonneau. Spit out your gum and sit up straight. Lots of stuff happened this quarter. The hot ticket is the subprime crisis, which is playing to packed houses in Congress. Capitol Hill will be a battleground over bills to revamp

mortgage underwriting standards, force lenders to engage in loan mitigation, and impose caps on interchange fees. The state legislatures have seized the privacy initiative, with five states moving legislation that would make merchants liable to banks for mass data compromise. RESPA litigation took a plot twist in the Eleventh Circuit. Preemption was also a big deal....