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Residential Capital LLC won bankruptcy court permission to repay more than $1.9 billion in debt immediately, including $1.1 billion to parent Ally Financial Inc. that the defunct mortgage company borrowed before filing for bankruptcy, Bloomberg News reported yesterday. ResCap will make the payments before finishing a plan to distribute more than $4 billion in cash to all creditors, who are owed at least $6.3 billion. ResCap has said that the payments will save it more than $3 million a month in interest costs and won’t be unfair to lower-ranking creditors because the money will go to pay senior debt. The payments are supported by its unsecured creditors' committee and are related to a deal negotiated last month among Ally, ResCap and its major creditors, ResCap said in court papers.

Shareholders in BMC Software Inc. will receive $6.9 billion to sell the corporate-software developer to a group of private-equity firms, but the buyers, led by Bain Capital LLC and Golden Gate Capital, only intend to pay $1.25 billion in cash out of their own pockets, the Wall Street Journal reported today. The rest will come from debt raised by BMC to finance its takeover. The little-noticed acquisition is another milestone in the return of cheap debt and higher-risk deals to Wall Street: The cash put down by BMC's private-equity buyers is the lowest as a percentage of the purchase price of any buyout with loans exceeding $500 million since 2008, according to data-provider Thomson Reuters LPC. The last buyouts with equity contributions comparable to BMC's were those of Harrah's Entertainment Inc. in 2008 and Clear Channel Communications Inc. in 2007, according to data from Thomson Reuters. Both firms have struggled under the resulting leverage and restructured some of their debts, triggering downgrades by credit raters.

House lawmakers vote today on legislation that would curb the U.S. Commodity Futures Trading Commission’s authority to oversee the $633 trillion global swaps market, Bloomberg News reported. The vote takes place as a majority of CFTC commissioners have signaled they want to delay final action on how new derivatives rules apply to foreign banks and the overseas affiliates of U.S. banks and hedge funds. Chairman Gary Gensler insists the agency should take its final vote on the guidance by July 12, when the current deadline expires. The CFTC will decide how to press forward after the Securities and Exchange Commission last month outlined a different approach to regulating swaps that it oversees, which hews closer to industry viewpoints. The House bill would exempt foreign banks from CFTC rules if their home countries have broadly similar regulations and would force the CFTC and SEC to reconcile their approaches.

Some of biggest banks on Wall Street will get an additional two years to comply with a post-financial crisis rule requiring they move risky swap activities into separate affiliates, the Wall Street Journal reported today. The Office of the Comptroller of the Currency (OCC) said that it granted extensions to seven banks, giving them until July 2015 to comply with so-called "swaps push-out" rules required by the 2010 Dodd-Frank law. While the move was largely expected, the OCC's action could further inflame criticism that much of Dodd-Frank remains undone nearly three years after its passage. As of June 3, just 38 percent of rules required by Dodd-Frank had been finalized, while 63 percent of rule-writing deadlines have been missed, according to law firm Davis Polk. The OCC notified Bank of America Corp., J.P. Morgan Chase & Co., Citigroup Inc., Wells Fargo & Co., HSBC Holdings PLC, Morgan Stanley and U.S. Bancorp that they were granted a 24-month extension in response to their requests for a longer transition period.

Royal Bank of Canada, the country’s largest lender, and several units were sued by Rakuten Bank Ltd. over claims it marketed and sold unsuitable securities backed by deteriorating mortgage loans that wiped out a $10 million investment, Bloomberg News reported yesterday. RBC induced Rakuten to invest 1 billion Japanese yen ($10.3 million) in a tranche of notes in a collateralized debt obligation called Logan CDO III Ltd. in June 2007. The notes ultimately became worthless when Rakuten sold them in December 2008 “for a nominal sum equivalent to approximately one cent,” according to a summons filed yesterday in state court in Manhattan. The lawsuit, which accuses RBC of fraudulent misrepresentation, is seeking to recover the U.S. dollar equivalent of the investment plus interest.

Bahrain investment firm Arcapita Bank received approval from a U.S. bankruptcy court yesterday for its plan to repay creditors, thought to be the first that is compliant with sharia, Islamic law, Reuters reported yesterday. Under the plan of reorganization, Arcapita will repay its only secured creditor, Standard Chartered Plc, in full. Arcapita will transfer its assets to a new holding company which will dispose of its investments over time, in an attempt to avoid a firesale liquidation. The company's unsecured creditors will receive the equity in the new holding company as well as their pro rata share in a sharia-compliant loan. General unsecured creditors are expected to receive around 7.7 percent of the $1.9 billion they are owed, according to court documents.

A Securities and Exchange Commission judge ruled that a former Maryland banker perpetrated a short-selling fraud aided by one of the biggest stock-options brokers in the U.S., the Wall Street Journal reported today. Jonathan Feldman, who was accused by the SEC of trading billions of dollars of stock and options in ways that misled other investors, was found by the judge to have engaged in a practice regulators say has grown more prevalent in recent years: "naked short selling." The decision makes it more likely the SEC will proceed with other enforcement cases involving similar activity. An SEC administrative law judge—an independent judicial officer who rules on SEC allegations of securities-law violations—late Friday ordered Feldman to disgorge $2.7 million in profits from his alleged trading scheme and to pay a $2 million civil fine. The judge also ordered optionsXpress Inc., a brokerage firm owned by Charles Schwab Corp., to disgorge $1.6 million and to pay a $2 million civil fine for allegedly violating laws prohibiting naked short selling.

President Barack Obama yesterday nominated one of his longtime economic-policy advisers, Jason Furman, to serve as the next chairman of the White House Council of Economic Advisers, the Wall Street Journal reported today. Furman has been an economic adviser to the president since 2008 and has had a hand in many of Obama's major economic proposals, including those aimed at reducing the deficit and overhauling the nation's corporate tax code. The president's selection will help round out his economic policy team for the second term. That team includes a mix of close advisers, such as Treasury Secretary Jacob Lew and U.S. Trade Representative nominee Mike Froman, and fresh faces in the administration, including Commerce secretary nominee Penny Pritzker.

Bank of America Corp. could put its Countrywide Financial unit into bankruptcy if it fails to win court approval for an $8.5 billion settlement with mortgage investors, a bank executive said yesterday, according to Reuters. Chief Risk Officer Terrence Laughlin was testifying at a hearing in New York state court on whether to approve the deal, which would settle claims by investors who said Countrywide misrepresented the mortgages underlying bonds they bought. During negotiations leading up to the June 2011 settlement, Bank of America threatened to put Countrywide, which it had rescued at the height of the financial crisis in 2008, into bankruptcy. That possibility was still on the table, Laughlin said yesterday. American International Group Inc. and a handful of other investors are challenging the deal, saying that it offers only pennies on the dollar.

U.S. regulators are stepping up scrutiny of overdraft fees charged by banks, a big revenue stream that is helping the industry lessen the hit caused by low interest rates and the sluggish economy, the Wall Street Journal reported today. The Consumer Financial Protection Bureau criticized the U.S. banking industry for practices that it says range from confusing rules on overdraft fees to the increasing likelihood of multiple fees being charged to the same customer. The agency, created by the Dodd-Frank financial-overhaul law in 2010 to be a powerful voice for consumers, said that it has no immediate plans to issue or recommend new overdraft-fee rules. But the report is the strongest signal yet that the CFPB is burrowing into the controversial fees, which generated about $32 billion in revenue in the U.S. last year, according to research firm Moebs Services Inc.