Editor's Note: This is a monthly publication on economic trends and financial policy issues. In this publication you can read "The Longbrake Letter", an analysis of economic trends and conditions written by Bill Longbrake, as well as commentary on financial regulation and policy written by members of the law firm Barnett, Sivon & Natter, P.C., a Washington, DC based law firm that specializes in financial services law.

ISSUE: #33, January 2013

The Longbrake Letter
- Bill Longbrake
After an interruption during the first half of the year because of significant tax increases, the most likely trajectory for the U.S. economy during the remainder of 2013 and beyond is gradual improvement. But significant downside risks posed by U.S. fiscal policy and Europe's economic recession remain. While optimists may be right that the economy is on the mend, the U.S. appears to be on a course over the longer run that will result in slow growth, which will make it harder to finance social programs, reduce the public debt and deal with growing income inequality. In this month's letter, Bill Longbrake examines these topics and also includes updates on the 2013 economic outlook and risks to the outlook, trends in employment, personal income and consumption, monetary and fiscal policy developments, and a brief update on Europe, China and Japan.

Where is the DFA-Mandated Study on Insurance Regulation?
- Jim Sivon
This article highlights the delay in the preparation of a Dodd-Frank mandated study on the regulation of insurance.

Two Brief Comments on the New Ability-to-Repay (ATR) Rule.
- Bob Barnett
CFPB can dramatically improve its new QM rule by reconsidering the DTI standard and the 43% cap, and providing a safe harbor if borrowers make regular payments for a Bureau-specified definitive period of time such as 18 months or 24 months after origination or recast.

CFPB's Final Rule on Final Rules
-Katie Wechsler
In late December, the Consumer Financial Protection Bureau (CFPB) promulgated an unusual rule establishing the date for determining when the agency's rules are officially “issued.” [77 Fed. Reg. 76353 (Dec 28, 2012)] This article examines the rule and discusses its implications.

The Revised Basel Liquidity Framework
- Ray Natter
The Basel Committee recently announced a revised agreement for the liquidity requirements. The new liquidity rules will be phased-in over a four year period beginning on January 1, 2015. Some additional flexibility is provided for meeting the test, but this flexibility is limited by high haircut and stringent requirements.