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U.S. prosecutors said that former Bank of America Corp. executive Phillip D. Murphy pleaded guilty to conspiring to defraud bond investors and the U.S. government through a bid-rigging scheme, Bloomberg News reported yesterday. Murphy, former head of the bank’s municipal derivatives desk, admitted in federal court in Charlotte, N.C., to manipulating the bidding process for investment agreements covering municipal-bond proceeds, Steven Tugander, a U.S. Justice Department lawyer, said yesterday. Murphy’s guilty plea resulted from the government’s multiyear probe of bid-rigging of investment contracts involving monies generated by municipal bonds. Bank of America, JPMorgan Chase & Co., UBS AG, Wells Fargo & Co. and General Electric Co. have acknowledged that former employees engaged in illegal activity in connection with the scheme, and the companies paid a total of $743 million in restitution and penalties.

Ocwen Financial Corp., one of the nation's largest mortgage servicers, said that New York’s Department of Financial Services "halted indefinitely" its agreement to buy the rights to service $39 billion of loans from Wells Fargo & Co., the Wall Street Journal reported today. The office of Benjamin Lawsky, superintendent of the New York regulator, has been investigating Ocwen since December 2012 over alleged abusive behavior toward homeowners. The regulator scuttled the Wells Fargo deal because it was concerned about Ocwen's ability to handle more loans given the alleged abuses. The market for mortgage-servicing rights shifted after the U.S. housing market collapsed in 2008. Mortgage servicing rights peaked at $11.19 trillion of loans in 2007, according to Inside Mortgage Finance. The figure stood at $9.9 trillion as of the fourth quarter of 2013.

American Express Co. won preliminary court approval of a settlement with U.S. merchants over transaction fees that the retailers say complements a multibillion-dollar accord with Visa Inc. and MasterCard Inc., Bloomberg News reported yesterday. U.S. District Judge Nicholas Garaufis made the ruling yesterday and scheduled a Sept. 17 hearing on final approval. The deal allows shops to encourage customers to use debit cards, which cost retailers less to process than credit card purchases. The accord “unlocks the value” of the settlement with Visa and MasterCard, lawyers for businesses that accept American Express cards said in a Dec. 20 court filing. Under that settlement, Visa and MasterCard offered businesses some ability to add surcharges to credit-card transactions as a way to steer customers away from them.

Lawyers in Colorado who pass on to homeowners the court costs of filing a foreclosure lawsuit against them would have to prove they incurred the expenses, under a state legislative bill introduced recently, the Denver Post reported today. Additionally, foreclosure lawyers would be required under the bill proposed by Colorado Rep. Beth McCann (D-Denver) to keep receipts and other proof that demonstrate that the expenses they say a homeowner must pay to end the foreclosure process are real. The legislation, HB-1130, unanimously passed a Colorado House subcommittee on Wednesday and will be heard by the entire assembly. If it passes the House, it will move to the Senate for hearings.

The top executive of Ally Financial Inc. said Thursday the company should be able to exit the U.S. government's crisis-era rescue program by year-end following recent moves to divest several businesses and improve relationships with banking regulators, the Wall Street Journal reported today. The Detroit-based company has streamlined its operations in recent years in an effort to overcome legal hurdles that had hindered its ability to fully repay the $17.2 billion it received through the Treasury Department's Troubled Asset Relief Program, and to strengthen its financial profile. The quarter showed Ally is holding its own against several large banks such as Wells Fargo & Co. and U.S. Bancorp that have focused their efforts on taking a bigger share of the auto-lending market in recent years. Over the last two years, the company has sold international operations, severed ties with its former subprime mortgage subsidiary and addressed several legal issues in an effort to concentrate on its U.S. auto-lending and online-banking businesses. It may seek to get out from government ownership through a potential initial public offering.

More lenders are introducing fees on checking accounts, just as consumers and business are pouring record amounts into the most basic of banking services, the Wall Street Journal reported today. After regulators made it harder for banks to collect debit-card fees and new laws led to higher compliance costs, banks have been looking for different sources of income. Recent evidence suggests that one of them is the humble checking account, an entry-level service offered to most customers. About 41 precedent of U.S. financial institutions aren't offering unconditional free checking accounts this year, up eight percentage points from a year earlier, according to Moebs Services, an economic-research firm in Lake Bluff, Ill. The firm surveyed 2,890 institutions, including large and small banks and credit unions, in January. The last time free checking was harder to come by was in 2002.

U.S. regulators are again weighing whether to ease the impact of the "Volcker rule," this time on a $300 billion market for loans to U.S. companies, the Wall Street Journal reported today. Federal Reserve governor Daniel Tarullo told lawmakers yesterday that regulators are considering whether to loosen provisions that could affect collateralized loan obligations (CLOs), which are securities backed by bundles of loans made to companies with low credit ratings. Both Democrats and Republicans on the House Financial Services Committee yesterday pressed Tarullo and other regulators on the interagency group responsible for coordinating the implementation and enforcement of the Volcker rule to ease its impact on CLOs. As a result of the Volcker rule's ban on certain types of trading, many banks that own CLOs may have to divest them, according to industry officials. Industry representatives have urged U.S. agencies to exempt CLOs by clarifying that they are debt investments and aren't equivalent to the equity investments prohibited under the Volcker rule, which five U.S. financial overseers completed in December.

Axonic Capital LLC, LibreMax Capital LLC and Saba Capital Management LP are among firms positioning to provide loans as more than $1 trillion in commercial real-estate debt originated before the property crash comes due over the next three years, aiming to bridge the gap for borrowers needing more cash than banks are willing to lend, Bloomberg News reported today. Funds that buy corporate debt or mortgage-backed securities that package dozens of loans are targeting individual buildings, drawn by yields as high as 15 percent after returns elsewhere in credit markets shrunk. The firms are wagering commercial property values will continue to rebound after recouping 75 percent of their decline since 2009 even with the record wave of maturing loans. About $350 billion in commercial real estate debt comes due every year through 2017 after a borrowing binge last decade, according to Morgan Stanley. The firms are aiming to provide mezzanine loans, which are repaid after traditional commercial mortgages if a borrower defaults, making them a riskier bet in exchange for higher yields.

U.S. and European Union officials are nearing a deal to grant EU swap-trading platforms a reprieve from Dodd-Frank Act rules set to take effect next week, Bloomberg News reported yesterday. The agreement would free trading facilities in the EU from U.S. rules for swap-execution facilities at least temporarily. The negotiations between the Commodity Futures Trading Commission and European authorities are still under way and the agreement could change before Feb. 15, when the rules requiring the use of platforms take effect. The international reach of CFTC rules has been among the most contentious issues between the Washington-based regulator and financial firms that operate around the world. Wall Street lobbying groups that represent banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. sued in December, seeking to limit the agency’s ability to impose rules outside the U.S.

The House Financial Services Committee will hold a hearing at 10 a.m. ET today titled “The Impact of the Volcker Rule on Job Creators, Part II.” Scheduled witnesses include SEC Chair Mary Jo White, Federal Reserve Board Governor Daniel Tarullo, Comptroller of the Currency Thomas Curry, FDIC Chair Martin Gruenberg and CFTC Acting Chair Mark Wetjen. For more info, please click here: http://financialservices.house.gov/calendar/eventsingle.aspx?EventID=36…