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Test can predict success of IVF: U.S. report

WASHINGTON (Reuters) – U.S. researchers have developed a formula that can predict whether fertility treatment will succeed more accurately than using age alone, and used it to develop a commercial test.

George Goehl: Round Two: Banks Need to Rebuild What They Broke

To rebuild the economy and bring hope back to tens of millions of Americans we need the big banks to do their part to fix what they broke. This is the focus of Round Two in our fight to keep the banks honest.

The starting bell for round 2 sounds today in Arlington, Va. as the first of four bank accountability hearings will be held by the nation’s federal banking regulators.

As the recession lingers, the numbers – 11 million jobs gone, 3 million homes foreclosed on, billions in pensions lost, tens of thousands of vacant bank-owned properties – are so staggering that we can become numb to them. But in cities and towns across the country these numbers are all too real, representing fellow Americans struggling to find a job, save their home, or retire with dignity.

That’s the mess. Here’s how we clean it up.

In the lead-up to the foreclosure crisis, only 6 percent of the high-cost subprime loans were made by lenders covered by our community reinvestment laws. This means 94 percent of the high-cost subprime loans were made outside the law of the Community Reinvestment Act. The law works because banks get community reinvestment credit not just for making loans but for making good loans that meet the credit needs of the communities they serve and profit from.

Unfortunately, over the last decade the big banks moved much of their lending outside the law. In an effort to skirt community reinvestment laws, banks began doing their most questionable lending through subsidiaries not subject to the high standards included of the Community Reinvestment Act.

Moving forward we need more lending activities to be covered by our community reinvestment laws. Here are three ways our community reinvestment regulations need to be modernized to keep the banks honest and get good credit moving in America’s cities and towns:

1) Lending by Subsidiaries Must be Included in Bank Exams: Currently the big banks have the choice as to whether the lending of their subsidiaries is reviewed as part of the community reinvestment exam. So, if the lending of a subsidiary mortgage operation would help their score, they include it. If it would hurt their score, they don’t include it. This is one of the only places in American life where you can choose which classes you are graded on. Because we have seen that community reinvestment regulated lenders perform quite well, we should make sure all bank lending activities are included in bank exams.

2) A Grading System That Works: We have a system in place to grade the community reinvestment performance of our nation’s banks. Unfortunately, the big banks have figured out how to rig the system. Under the current rules, a bank, like Wells Fargo, who had a poor record on racial parity in lending (if you are African-American and get a loan from Wells Fargo it is 3.5 times as likely to be a high cost loan as when making a loan to a white applicant with a similar income) and is a big investor in payday loan shops that charge interest rates of over 400%, can receive an “outstanding” rating for meeting community credit needs. We need a rating system that holds banks accountable and ensures they provide quality credit that is good for America’s families and communities.

3) Community-led Economic Development: If we’ve learned anything over the last few years it is that bigger is not better. Big banks and big oil have wreaked major havoc in this country and proved to be unaccountable to the American people. As we rebuild our economy we should put more control in the hands of everyday Americans looking to build wealth in local communities. Rewarding banks for economic investments that are community controlled and grow local wealth can be a game-changer for struggling cities and towns.

The banks created a crisis of incredible proportions. Last week Congress finally passed a bill focused on preventing another one. Now we need the banking regulators to step up and make sure the banks do their part to clean up the mess that they created. A modernized Community Reinvestment Act will be a critical step.

You can help make sure this happens by attending one of the hearings or by sending comment to the banking regulators pushing for bank affiliates and subsidiaries to be covered by the law, a real system for grading that makes sure banks are advancing the common good, and rewarding banks that invest in community-controlled economic development.

Read more: JP Morgan Chase, Foreclosures, Showdown in America, Bank of America, Payday Lending, Racial Justice, Community Reinvestment Act, Wall Street, Wells Fargo, Fair Lending, Citibank, Financial Reform, Financial Crisis, Business News

Anne Butterfield: Boulder’s PACE Brought to a Halt

Just as the economy is poised to slump into the second dip in the W, along comes a federal housing agency to give our economy a little butt-kick into the abyss by thwarting an attractive funding mechanism for home energy retrofits and the jobs that come with them. The decision deprives twenty-two states that have passed laws in support of property assessed clean energy financing (PACE).

It’s a little personal here in Boulder because our county was the first in the nation to fully implement PACE in our program called the Climate Smart Loan Program. And our community has seen $13 million in the past two years, just for the residential program, flow through the economy with this financial instrument that helps a community burn less money by burning less fossil fuels.

However the Federal Housing Finance Agency (FHFA) which regulates Fannie Mae and Freddie Mac (which own or guarantee most of our nation’s home mortgages) has determined that PACE programs “present significant safety and soundness concerns.”

When Fannie and Freddie issued ambiguous warnings about PACE weeks ago, Country Commissioner Will Toor said the mortgage moguls would resolve this in support of PACE “because their position makes so little sense.”

The housing giants’ objection has been stubbornly focused on the senior status of the lien, meaning in the event of a home default the local land tax authority gets paid prior to the mortgage lender. In reality, in a default, only the delinquent amount of tax would be senior, being say, a thousand dollars, rather than the whole retrofit assessment of, say, $15,000. The remaining debt stays with the property.

“The FHFA memo is the classic solution looking for a problem” says Alice Madden of Governor Ritter’s office. “One of the reasons PACE bonds get such high ratings is that the debt stay with the property; these are not personal loans and lenders are simply not at risk.”

At the behest of the Department of Energy and its intent to leverage PACE upgrades with stimulus funding, PACE programs have developed best practices such as aiming for energy savings to exceed the amount of assessment, a retrofit cap which can be no more than 10 per cent of property value, only delinquent amounts of the assessment get paid in foreclosure, and positive equity requirement amongst borrowers.

These standards sure beat subprime mortgages that Fannie and Freddie gladly gobbled up on houses that spill energy in every direction. But the FHFA alleges, without analysis, that PACE financing presents only downsides. Though the agency was lobbied with generous explanation (available through showing that new standards nearly assure cash benefits for borrower and lender, the FHFA has determined as if only downside risks are noteworthy.

Most likely, PACE projects would bolster lenders’ profit margins by easing borrowers’ monthly expenses and risk of default. And it’s not just the lender, borrower, retrofitter and solar manufacturer shall benefit from PACE. Over in wobbly Wall Street, sellers of municipal bonds also want in to this highly attractive bond market made safe by the senior lien status. Barclay’s Capital has asserted that “there would be little to no meaningful bond buyer interest” in PACE liens without the senior status.

Lenders have routinely tolerated senior liens for property-assessed additions such as sidewalks, sewers and schools. But reducing a community’s exposure to coal and natural gas prices? FHFA has deemed this to “not have the traditional community benefits associated with taxing initiatives”.

They better be careful. These lenders got at least $160 billion in bailout for their excellence in “safety and soundness” during the sub prime disaster that laid our nation low. And now as unelected bureaucrats they try to tell us, their taxpayer benefactors, what is what in community benefits?

Toor minces no words: “It’s an outrageous assault on state and local authorities.”

This federal versus local drama makes a taxpayer get a very long memory. Going back to 2003 let’s recall that FHFA’s cohort, the Office of Comptroller of the Currency, preempted all 50 states’ laws against predatory lending and sued to stop local investigations of abusive practices, according to Eliot Spitzer.

Do these banking giants works for the American people? Or do they suffer the cloistered groupthink that infected BP and Mineral Management Services?

Two states already are suing the lenders for obstructing states’ ability to finance efficiency and clean energy.

This is a big political story. Prior to their determination FHFA received a barrage of appeals in favor of PACE from governors, senators, congressmen and advocates. From Colorado, Senators Mark Udall and Michael Bennet, Representatives Jared Polis, Betsey Markey and John Salazar as well as Governor Ritter all wrote in favor of PACE. Watch for more litigation and legislation.

Read more: Subprime Mortgages, Fanny Mae, Mortgage, Pace, Economy, Housing Crisis, Climate Smart Loan Program, Freddy Mac, Fhfa, Recession, Denver News