With so much speculation surrounding Greece, it may actually be Iran that is on the verge of not being able to pay its foreign debts. That is a worry, at least, of two nearby countries, which yesterday placed new restrictions on trade loans to Iran. Bank regulators in United Arab Emirates in Qatar have been keeping a close watch on Iran’s financial condition and now have ordered their banks not to issue letters of credit for trade with Iran. This is a substantial blow to the mercantile sectors of these countries, so regulators wouldn’t take this step unless there was real worry about Iran paying its bills. Iran’s economy has been in perilous shape for five years, hobbled by government corruption and the declining influence of oil.
New York State today sued three banks, claiming that the back-room system used by many banks for mortgage transfers is operating outside the law. The state is seeking $5,000 in damages for each erroneous court filing, forfeiture of profits, and other penalties.
Bowing to public pressure, Sallie Mae says it will stop charging the $50 fee it currently assesses its student loan customers for every quarter in which they are unemployed. The public interest campaign against Sallie Mae’s unemployment fee was modeled after the campaign against Bank of America’s announced debit card activity fee, which that bank called off three months ago after a flood of customer complaints.
Freddie Mac’s trading department holds derivatives based on mortgage interest. Freddie Mac is said to hold $3 billion of these securities, which could become worthless if homeowners are able to refinance. It represents a striking conflict of interest for Freddie Mac, which stands to lose a fortune in its derivatives trading if it approves large numbers of replacement mortgage loans. The disclosure of this practice, which has been going on for years, has prompted new calls to have the unprofitable government-owned mortgage securities firm shut down.
