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morning scan

Morning Scan: Wells' Troubles Mount; Bill Would Boost Fintech

Receiving Wide Coverage ... Another day, another woe: The pressure on Wells Fargo continues to increase. Eight Democrat senators Thursday asked the Labor Department to open an investigation into the bank's workplace practices. Specifically, the senators, led by Elizabeth Warren, D-Mass., asked the department's Wage and Hour Division to examine whether Wells "aggressively skirted" overtime laws and failed to properly compensate its lower-level employees. Labor said it was taking "very seriously" complaints about how the bank…

Morning Scan: House Wants Shot at Stumpf; Phones to Replace Banks?

Receiving Wide Coverage ... Round Two: Congress isn't through with Wells Fargo CEO John Stumpf just yet. Following his pummeling before the Senate Banking Committee Tuesday, Stumpf has been asked to testify before the House Financial Services Committee next week on the bank's phony accounts scandal. The New York Times' Gretchen Morgenson says Wells' recent behavior was no surprise to attorneys who battled the bank in mortgage foreclosure cases after the housing meltdown. "During the financial crisis,…

Morning Scan: Stumpf Grilled; Buffett Protégé Joins JPM Board

Receiving Wide Coverage ... How long?: Wells Fargo CEO John G. Stumpf told the Senate Banking Committee the bank's pervasive pattern of illegally opening banking accounts without its customers' permission may have gone on even longer than previously believed. "Although the bank has traced the illegal account openings to 2011, it is investigating whether they may have begun even sooner," Stumpf told the panel, according to the New York Times. Stumpf said he found about the…

Morning Scan: Heat Remains on Wells; Blockchain Editing Tool

Receiving Wide Coverage ... Deeply sorry: Wells Fargo CEO John G. Stumpf will tell the Senate Banking Committee Tuesday that he is "deeply sorry" the bank opened bank accounts and credit cards for customers without permission and that he takes "full responsibility" for scandal, according to his prepared opening remarks that were obtained by the New York Times and Wall Street Journal. Stumpf will strike "a decidedly contrite tone" before the committee, the Times said. "I…

Morning Scan: Wells' Sales Culture Ran Amok; Deutsche Says 'No'

Receiving Wide Coverage ... Too much pressure: Wells Fargo's sales culture "rooted itself so deeply … that it eventually spiraled out of control," the Wall Street Journal reports. "Questionable sales tactics … were an open secret in Wells Fargo branches across the country," according to interviews the paper conducted with more than three dozen current and former employees, from area presidents down to tellers. "Many branch managers routinely monitored employees' progress toward meeting sales goals, sometimes…

Morning Scan: DOJ's $14B Deutsche Proposal; Big-Small Double-Standard?

Receiving Wide Coverage ... Opening bid: The Justice Department has proposed that Deutsche Bank pay $14 billion to settle a series of mortgage-backed securities investigations dating back to the financial crisis, "a number that would rank among the largest of what other banks have paid to resolve similar claims and is well above what investors have been expecting," the Wall Street Journal reported. The figure is preliminary, and it's unclear how much of that proposed amount…

Morning Scan: Wells Subpoenaed; Activist Seeks Changes to 'Clubby' Board

Receiving Wide Coverage ... Wells probed: Federal prosecutors in at least three districts have begun investigating Wells Fargo's sales practices in the wake of last week's $185 million settlement. The Wall Street Journal reported that federal prosecutors in Manhattan and San Francisco sent subpoenas to the bank. The investigation "is focusing on whether someone senior within the bank directed employees to falsify documents in conjunction with the opening of accounts and products without consumers' knowledge or…

Morning Scan: Wells Officials and Blame; Dodd-Frank Bill Advances

Receiving Wide Coverage ... Blame game: Wells Fargo CEO John Stumpf and CFO John Shrewsberry both tried to deflect blame for the company's phony accounts scandal. In an interview with the Wall Street Journal, Stumpf "appeared to lay blame for the problems with the employees involved than with any flaw in Wells Fargo's systems or culture." …

Morning Scan: Clawbacks Demanded; $450 Credit Card Blowout

Receiving Wide Coverage ... Stumpf to the Hill: The Senate Banking Committee plans to question Wells Fargo CEO John Stumpf as pressure on the bank grows in light of the unauthorized accounts scandal. Several Wells executives are scheduled to brief panel members Tuesday prior to the hearing, which is scheduled for September 20. "Clearly there is a disconnect between whatever Mr. Stumpf was telling the public and what was actually going on at Wells Fargo —…

Morning Scan: Wells Not Clear Yet; Both Sides of Blockchain

Receiving Wide Coverage ... It ain't over...: Wells Fargo's settlement last week didn't end its woes. While the bank was making apologies, officials were assessing the situation. Sen. Jeff Merkley, D-Ore., a member of the Senate Banking Committee, called on the panel to hold hearings to find out exactly what happened. A member of the Federal Reserve Board also weighed in. "What I have seen is that too many banks, instead of putting in place a…

Morning Scan: B of A Deal on Bonuses; What's the Goal?

Receiving Wide Coverage ... Incentive to cheat?: Wells Fargo was hit with the largest penalty in the history of the Consumer Financial Protection Bureau to settle charges that thousands of employees created unauthorized bank and credit card accounts for customers in order to collect bonuses for themselves. The company fired 5,300 employees as a result. The bank agreed to pay a $185 million regulatory enforcement action plus another $5 million in customer remediation. Wells' own analysis…

Morning Scan: Wells Fargo Hit Over Sales Tactics; SoFi Seeks $500M

Receiving Wide Coverage ... Two heads...: JPMorgan Chase said Mark Leung, head of its Asia Pacific equities business since 2014, and Jason Sippel, global head of prime services, will together run the bank's global equities division. The two replace Tim Throsby, who left to run Barclays' corporate and international division. Wall Street Journal, Financial Times Wall Street Journal …

Morning Scan: Behind the Wells-Amazon Blowup; Chip Terminal Woes

Receiving Wide Coverage ... Leaving: Tim O'Hara, the head of Credit Suisse's global markets division for just the past 10 months after a 30-year career at the bank, is leaving. He will be replaced by Brian Chin, co-head of credit. The unit has suffered heavy losses over the past year. Wall Street Journal, Financial Times Wall Street Journal …

Morning Scan: Barclays Adds Another JPM Alum; PayPal/MasterCard Deal

Receiving Wide Coverage ... Barclays expands team: Tim Throsby, JPMorgan's global head of equities, is moving toBarclays as head of its corporate and international division and chief executive of its corporate and investment bank. He is the latest JPM executive to join CEO James E. Staley, himself a former JPM veteran, at the British bank. Previous JPMorgan hires include Paul Compton, who was named Barclays group chief operating officer in February, and CS Venkatakrishnan, Barclays' new…

Morning Scan: Banks May Sue Over Stress Tests; JPM in China

Editor's note: Morning Scan will not publish on Monday, Sept. 5 in observance of Labor Day. We'll be back on Tuesday, Sept. 6. Wall Street Journal Stressed out: Bank trade groups are mulling whether to sue the Federal Reserve to challenge the methodology it uses to perform its annual stress tests on financial institutions. Some banks believe the Fed is violating the Administrative Procedure Act by not allowing public input into the test, including from the banks…

Morning Scan: Deutsche Bank Weighs Future; Kanas to Retire

Receiving Wide Coverage ... Call for consolidation: Deutsche Bank CEO John Cryan called for more consolidation in the profit-challenged European banking industry, just after a German magazine reported the bank had considered amd rejected a bid for rival Commerzbank. "It is undeniable that Europe's banks are stuck in a fundamental dilemma," he said in remarks prepared for delivery at a conference in Frankfurt. "We have become significantly more secure since the financial crisis. We maintain more…

Morning Scan: AML Explanation; Sledgehammers and Bullets

Wall Street Journal AML clarification: U.S. banking regulators issued a "Fact Sheet" that tries to clarify anti-money-laundering rules that some critics say are forcing banks to cut off access to innocent countries, businesses and individuals for fear of being penalized. The report is intended to "dispel certain myths" about the rules, which have caused some banks to refrain from serving customers in island nations, emerging-market countries and those in drug-ridden areas, such as the U.S. border…

Morning Scan: Congresswoman Seeks Volcker Data; Transferwise Flies Solo

Wall Street Journal Cutting out banks: Transferwise, the global money transfer startup that has so far worked indirectly with consumers through its bank partners, wants its own independent licenses, eschewing banks. The five-year-old London-based company currently partners with Barclays in the U.K. and Community Federal Savings Bank in New York. It has licenses in 37 states, and can operate independently in three states that don't require licenses. The company's CEO says having its own licenses will…

Morning Scan: Goldman, Morgan Stanley Widen Their Nets

Wall Street Journal Different strokes: As trading revenues shrink and more stringent regulations and higher capital requirements pinch their top and bottom lines, Goldman Sachs and Morgan Stanley "have turned to more basic banking businesses, betting that the cachet of their brand names can overcome relative lack of experience in dealing with the deposits and loans of middle-class Americans." …

Morning Scan: Barclays Cuts Back; Marketplace Lenders' Woes

Wall Street Journal More sales at Barclays: Barclays is ready to announce three separate asset sales as it trims its balance sheet. The British bank is expected to announce the completion of the sale of its Italian retail business in the next few days, followed soon after by its Iberian credit cards unit and its Egyptian franchise. …

Morning Scan: More Banks Embrace Blockchain; Mobile Banking Hacks

Receiving Wide Coverage ... Launching Concord: R3 CEV, a startup tech company that is working with more than 60 banks to build a new banking infrastructure system using blockchain technology, filed for a patent. Concord, as the project is called, aspires to be "a universal platform connecting bank operations within firms and across rival firms. It is aimed at digitizing and speeding up so-called middle- and back-office functions, like clearing and settling securities trades, registering a…

Morning Scan: Reforming the Fed; New Digital Currency?

Wall Street Journal Arbitration rule comments: The CFPB received nearly 13,000 comments on its proposed rule that would restrict the use of mandatory arbitration clauses and make it easier for consumers to sue banks. The rule would prohibit financial services companies from using the clauses to block class-action suits, although consumers would still be required to use arbitration to resolve individual disputes. The agency is expected to issue a final rule next year after it reviews…

Morning Scan: A $500M Idea; Excluding Reserves from Balance Sheets

Wall Street Journal Paying for convenience: More than 20% of bank customers would be willing to pay as much as $3 a month to use their bank's mobile app while about 40% would be in at $1 a month, according to a survey by S&P Global Market Intelligence. Banks could generate as much as $500 million in annual revenue by charging customers, S&P says, with Bank of America, Wells Fargo, and JPMorgan Chase the biggest winners. …

Morning Scan: Bitcoin and Ransomware; Steven Cohen Buys Into Square

Receiving Wide Coverage ... Blame it on bitcoin: Bitcoin may be fueling the recent surge in ransomware attacks, which have quadrupled in the past year to about 4,000 a day, according to the U.S. Department of Justice, "Attacks spiked this year amid the growing use of bitcoin and improved encryption software," the Wall Street Journal said. "Bitcoin is now the preferred payment method of most ransomware infections because it allows users to send and receive money…

Morning Scan: Boosting Bank Stocks; Goldman Names Consumer Bank

Receiving Wide Coverage ... Meet Marcus: Goldman Sachs will name its new U.S. consumer banking arm Marcus. "The familiar first name, reportedly the product of extensive market research and lengthy internal discussions," according to the Financial Times, is the namesake of the company's founder Marcus Goldman. The name also tries to divert attention away from the parent company's various legal and political problems since the financial crisis, according to reports. Wall Street Journal, Financial Times, New…

Morning Scan: Big Cutbacks at Avant; CFPB Goes Undercover

Receiving Wide Coverage ... Convicted: Sean Stewart, a former investment banker at Perella Weinberg and JPMorgan Chase, was found guilty in federal court on all nine counts of securities fraud for passing tips about pending healthcare mergers to his father. The scheme, in which the father recruited a partner to trade on the information, reaped $1.16 million in profits, according to the U.S. Department of Justice. Wall Street Journal, Financial Times Wall Street Journal …

Morning Scan: Citi, JPM Tap New Tech Execs; First Republic Goes for the Gold

Receiving Wide Coverage ... Musical tech chairs: Citigroup named Gavin Michael, American Banker's Digital Banker of the Year, its head of technology for global consumer banking. Michael, head of digital for consumer and community banking at JPMorgan, will replace Mark Torkos, who retired in July. Michael will assume his new role in November. Bill Wallace, who was head of operations for JPMorgan's consumer bank, was named to replace Michael. The two announcements follow the departure of…

Morning Scan: ValueAct Buys Stake in Morgan Stanley; AIG Selling Unit

Receiving Wide Coverage ... ValueAct buys Morgan Stanley stake: The activist hedge fund ValueAct Capital Management said it has bought a 2% stake, valued at about $1.1 billion, in Morgan Stanley, but said it is not looking for the bank to make major changes. "We are completely supportive of [Morgan Stanley CEO James] Gorman and impressed by his leadership over the past six years," ValueAct founder Jeff Ubben told the Financial Times. ValueAct said the market…

Morning Scan: Cordray on Treating Customers; Foreign Banks Unprepared

Wall Street Journal GE sells French mortgages: General Electric received a binding offer for its French prime mortgage portfolio from a newly established French entity backed by an Austrian bank. The deal increases GE Capital's asset sales to about $192 billion, close to its goal of selling $200 billion as part of its plan to disband its GE Capital unit. The deal is expected to close in the fourth quarter. …

Morning Scan: World Economic Forum Endorses Blockchain; Late Heloc Payments

Wall Street Journal Another mortgage bill comes due: More homeowners are missing payments on the home equity lines of credit they took out 10 years ago as the lines reset to include principal payments, not just interest. That can lead to a huge payment shock totaling hundreds of dollars a month for which many homeowners find they aren't prepared. The 30-day delinquency rate on Heloc balances that were originated in early 2006 jumped to 4.4% from…

Will Tech Advances Hurt the Underbanked?
It's long been assumed that technology will help the financially underserved access the banking services they need. Christine Duhaime, founder of the Digital Financial Institute, a fintech think-tank, says this assumption is wrong.
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