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Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and other big banks are marshaling opposition on Capitol Hill to kill a proposal by House Ways and Means Committee Chairman Dave Camp (R-Mich.) to tax the nation's largest financial firms, the Wall Street Journal reported today. The companies are curtailing financing for GOP lawmakers and warning of an economic hit. A summary of Camp's legislation said that he proposed the tax on large financial institutions in part because it would offset the lower borrowing costs they receive from a perceived government backstop. The big firms dispute that such a subsidy exists. The tax, tucked into a broader tax-revision package announced last month, is aimed at bringing in $86 billion in revenue over the next decade and eliminating what his staff calls a "massive taxpayer-funded subsidy" big banks receive from the perception the U.S. would step in to prevent their collapse.

A bankruptcy judge approved First Mariner Bancorp's request to auction off its Baltimore bank quickly, a process that drew heated objections from creditors and the U.S. Trustee, the Baltimore Sun reported today. Bankruptcy Judge David E. Rice set an April 7 deadline for bids on First Mariner Bank, with the auction to be held three days later if any bids come through. In an order filed over the weekend, he wrote that the bank's parent company "articulated good and sufficient reasons" for the timing and other procedures. First Mariner filed for bankruptcy protection Feb. 10, capping its years-long struggle to get back on solid footing after residential loans soured during the housing bust. It has operated under a federal regulatory order to increase its capital level since 2009, and it was unable pay millions of dollars in interest payments due in December on trust-preferred securities.

Nearly six years after the government rescued Fannie Mae and Freddie Mac, top members in the Senate and the White House agreed on a framework to wind down the mortgage giants and overhaul the nation's $10 trillion mortgage market, the Wall Street Journal reported today. The plan, by Senate Banking Committee leaders Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho), calls for replacing Fannie and Freddie with a new system of federally insured mortgage securities in which private insurers would be required to take initial losses before any government guarantee would be triggered. Even though top Democrats and Republicans on the Senate panel have reached an agreement, a full Senate vote isn't assured, and there is even less certainty that members in the House will go along. There is deep unease among House Republicans to maintaining a significant federal backstop for the U.S. mortgage market. Congress will also be less likely to take up a bill as November's midterm elections draw closer, leaving less time for debate.

Puerto Rico is expected to sell roughly $3 billion in bonds today at interest rates that are considerably lower than many investors in the municipal market had expected, providing a rare bright spot for the cash-squeezed island, the New York Times reported today. The lower yields, investors say, are being driven by a combination of factors, including a recent flow of investments in mutual funds that are large buyers of municipal bonds, Puerto Rico’s progress in closing its chronic budget gap, its improved financial disclosures and a general sense of relief that the commonwealth still has access to the debt market. The commonwealth’s fiscal agent, the Government Development Bank, also has hired an affiliate of a well-known restructuring firm, raising concerns among some investors that Puerto Rico is weighing a revamping of its existing debt load, even as it prepares to raise fresh funds. The hiring by Puerto Rico of James Millstein, a restructuring specialist, has raised questions over whether the commonwealth plans to revamp its existing debt while it is about to sell $3 billion in bonds to raise money. Given its status as a U.S. territory, Puerto Rico is not eligible to file for chapter 9 protection.

Recently released emails are part of a trove of internal communications and documents, mostly from 2006 and 2007, that paint a troubling picture of how Credit Suisse, a major player in the American mortgage market, operated as the housing bubble inflated, the New York Times DealBook blog reported today. The documents, filed in Massachusetts state court as part of an investor lawsuit, suggest that top officials at the bank routinely pressed subordinates to override due diligence standards and accept questionable loans that were subsequently bundled into mortgage investments. The documents are noteworthy because Credit Suisse, unlike many other major banks, has refused to settle large lawsuits stemming from the mortgage crisis. The bank has long maintained that its operations were held to a high standard and that the mortgage investments it sold lost value largely because of the broad housing collapse, rather than its practices.

The government’s effort to push banks out of the mortgage-servicing business is propelling the transfer of customers' loans into companies such as hedge funds and nonbank financial firms, the Wall Street Journal reported today. The shift is fueling concern among federal and state regulators about the level of oversight and capital requirements in the industries now servicing a growing share of these loans. Banks such as Morgan Stanley, Bank of America Corp., Goldman Sachs Group Inc. and Ally Financial Inc., have been selling mortgage-servicing rights to nonbank companies, including Ocwen Financial Corp. and Nationstar Mortgage Holdings Inc., which have doubled their servicing portfolios in the past year. About $1.03 trillion of mortgage-servicing rights were sold in 2013, with the vast majority going to nonbank firms, said Guy Cecala, publisher and chief executive officer of industry newsletter Inside Mortgage Finance. Among the 30 largest mortgage servicers, nonbank firms held a 17 percent market share at the end of 2013, up from 9 percent at the end of 2012 and 6 percent at the end of 2011.

The judge in the trial of former Jefferies Group LLC bond trader Jesse Litvak sent the case to the jury, which will weigh whether statements he made to clients were inconsequential or aggressive sales tactics that constituted fraud, the Wall Street Journal reported today. The federal government argues that Litvak committed securities fraud by misrepresenting to clients the prices of certain residential mortgage-backed securities he was selling and buying on their behalf, in a bid to boost his trading revenue. The verdict in Litvak's trial will be closely watched, as it could set a precedent for a government probe launched after Litvak was arrested last year. Investigators in that probe are looking at whether traders at other banks acted similarly.

More than 1,600 stockbrokers have records that failed to disclose bankruptcy filings, criminal charges or other red flags in violation of regulations, without regulators noticing, according to a Wall Street Journal analysis today. These same brokers have also accumulated more disciplinary actions by regulators and complaints from clients, on average, than other brokers, the Journal’s analysis of hundreds of thousands of stockbroker records shows. The findings reveal a significant hole in regulation of the brokerage business.

Five former members of Bernard L. Madoff’s inner circle told a “staggering” number of lies to prop up their boss’s $17.5 billion Ponzi scheme, a prosecutor said during closing arguments in their criminal trial, Bloomberg News reported yesterday. “Day after day, year after year, these defendants told an avalanche of different lies that allowed Madoff to steal billions from investors,” Assistant U.S. Attorney John Zach told jurors in Manhattan federal court. They each “made the fraud possible in their own way.” Testimony in the case ended yesterday. The criminal trial, now in its fifth month, is the first stemming from the swindle, which collapsed after Madoff’s arrest in December 2008 revealed his investment advisory unit hoarded customer cash for decades instead of using it to buy securities. Prosecutors say that the five were driven by greed to create millions of fake trading confirmations, bogus customer statements and falsified internal records to trick customers and regulators. Defense lawyers claim the group was duped into unwittingly aiding Madoff’s plot. All deny wrongdoing.

Investment-banking fees generated from advisory services and debt and equity issuance rose 4.9 percent to an estimated $53.4 billion in 2013, according to data compiled by Bloomberg News yesterday. That’s the highest amount since the peak of $86.9 billion in the pre–financial crisis, irrationally exuberant year of 2007. U.S. equity markets went on a tear in 2013, with the Standard & Poor’s 500 Index surging 30 percent. Initial public offerings, from companies such as Twitter Inc. and Hilton Worldwide Holdings Inc., returned in a big way. The total value of global IPO issues rose 45 percent to $164.7 billion, according to Bloomberg data. The rebounding U.S. stock market last year also gave voice to a noisier brand of investor: the activist. Hedge-fund executives, asset managers and other institutional shareholders are increasingly using their large stakes to wrest changes from corporate boards, which dealmakers say may translate to fee revenue down the road. Activists targeted 369 companies last year, 12 percent more than in 2012 and 14 percent more than in 2011, according to Philadelphia-based Hedge Fund Solutions LLC, which tracks investor agitation.