Financial Services Legislative And Regulatory Update -- May 21, 2012

In This Issue:

Leading The Past Week; Legislative Branch; House of Representatives; Executive Branch; OCC; CFTC; SEC; FHFA; and Upcoming Hearings.

Excerpt from Leading The Past Week

The news last week was clearly dominated by JP Morgan?s trading loss. However, while we anticipate that the bank will be in the forefront of the news for a few more weeks, it seems that any substantive impacts from the event will come from the Administration and not from Congress. Even though the Senate Banking Committee announced a hearing schedule where Jamie Dimon will be forced to testify, and that the political environment is so toxic that the House Agriculture Committee called off a hearing that would have modified Dodd-Frank regulations on swaps, it is unlikely that there will be any real legislative based changes to Dodd-Frank in response to JP Morgan?s trading loss, as even in the midst of the news cycle, House Financial Services Committee Chairman Spencer Bachus (R-AL) noted that the $2 billion loss represents approximately 1 percent of its total net worth of the bank and only “one month” worth of earning —signaling the company will not be affected in the long-run. Conversely, the Administration appears to have much greater leverage against the bank, and politically the White House, despite the President?s initial kind words about Jamie Dimon, have to be calculating the political value of coming down hard on the bank. With that in mind, it was not surprising to see that the Justice Department and the SEC have separately launched investigations into the bank?s trades, and that Treasury Secretary Tim Geithner suggested JP Morgan CEO Jamie Dimon step down from the New York Fed.

Please see full issue below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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