BANKTHINK

morning scan

Morning Scan: Dodd-Frank Rules Expected; Stumpf Talks

Wall Street Journal Dodd-Frank-mandated rules on providing more information on the quality of the mortgages and other loans that back securities are expected to be finalized Wednesday. The Securities and Exchange Commission's rules on asset-backed securities will require banks to provide data to investors like borrowers' credit scores and debt levels. The idea is to help investors rely less on credit ratings. The SEC is also expected to release rules forcing Moody's, S&P and other debt-rating…

Morning Scan: Hedge Funds Sue BNY Mellon; Community Banks' Bond Sales

Receiving Wide Coverage ... Sued: Several hedge funds have sued Bank of New York Mellon over its trustee role in overseeing payments from bonds on which Argentina defaulted in 2001. The suit, filed in London, seeks access to the interest payments the funds claim they are owed, after a federal judge blocked the payments last month. Wall Street Journal …

Morning Scan: Yellen's Mixed Signals; Banks to Exit Muni Bonds?

Receiving Wide Coverage ... Mixed Signals: Fed Chair Janet Yellen went to Wyoming and all she brought back to Washington, D.C., was a lousy T-shirt, with no better sign whatsoever of when short-term interest rates will rise. At the Kansas City Fed's yearly economic symposium in Jackson Hole, Wyo., Yellen gave a slew of mixed signals on whether she thinks the U.S. job market has improved enough yet to warrant a rise in rates, the Wall…

Morning Scan: B of A's 'Mortgage Sins'; CFPB Can't Stop Revolving Door

Receiving Wide Coverage ... BofA's 'Mortgage Sins': Documents released as part of Bank of America's $17 billion settlement with the U.S. government "read like a highlight reel of the mortgage sins that fed the 2008 financial crisis," the New York Times reports. The Times and the Wall Street Journal focus on a few particularly striking passages. Former Countrywide Financial chief Angelo Mozilo warned in a 2005 email that a possible condo-market crash would be a "financial…

Morning Scan: Countrywide's Mozilo May Face U.S. Suit; BofA to Reach $17B Deal

Receiving Wide Coverage ... BofA's $16.7B Settlement: The Justice Department and Bank of America are expected to announce a $16.7 billion deal Thursday to settle charges the bank misrepresented the quality of its mortgage-backed securities. "The settlement amount is the largest ever reached between the U.S. and a single company, and is approximately equal to the bank's total profit for the past three years," the Wall Street Journal reports. Bank of America chief Brian Moynihan has…

Morning Scan: Another AML Hit for Standard Chartered; BofA's Montag Now Sole COO

Receiving Wide Coverage ... AML Déjà Vu: Standard Chartered has agreed to pay $300 million, accept temporary restrictions on its dollar-clearing activity and cut ties with some business clients in the United Arab Emirates in order to settle charges related to flaws in its system for identifying suspicious transactions. This is the second time the New York State Department of Financial Services has hit the British Bank with an anti-money laundering penalty in just two years.…

Morning Scan: Dorsey Live-Tweets #Ferguson Protests; Is the U.S. Ready for EMV?

Receiving Wide Coverage ... Dorsey Heads to #Ferguson: Twitter co-founder and Square CEO Jack Dorsey joined protestors in Ferguson, Mo., over the weekend as they demonstrated against the police shooting of unarmed African-American teenager Michael Brown. Dorsey, a St. Louis native, documented the protests in tweets, retweets, photos and Vine videos on Saturday and Sunday. Although some of Dorsey's retweets reported fighting and tear gas in parts of Ferguson, his own posts captured peaceful marches, including…

Morning Scan: PwC to Pay $25M for Softening Bank Report; Big Data Too Messy

Receiving Wide Coverage ... PwC's $25M Penalty: Bank auditor PricewaterhouseCoopers has agreed to pay $25 million over charges it watered down a report on sanctions violations by Bank of Tokyo-Mitsubishi UFJ, according to the New York Times. The settlement with the New York State Department of Financial Services would also impose a two-year ban on PwC's ability to do some kinds of consulting work for banks under New York regulation. Bank of Tokyo hired PwC in…

Morning Scan: Banks Load Up on Cheap Debt; Supervalu Hacked?

Receiving Wide Coverage ... Debt for Sale: Get it while it's cheap. Banks are selling bonds in the U.S. at a record pace, thanks to low rates and emerging confidence in the banking sector, the Journal said. Comerica has sold a total of $600 million in bonds this year, the Dallas bank's first bond sales in almost four years. Synchrony Financial, the credit card business spun off from General Electric, JPMorgan Chase and Bank of America…

Morning Scan: Amazon Jumps into Card Readers; New Subprime Mortgage Trend?

Receiving Wide Coverage ... Amazon's Card Reader: Amazon head honcho Jeff Bezos is notorious for his predilection for spending money and his apparent lack of concern with making a profit. So it should come as no surprise when the Journal quotes an Amazon analyst saying the e-commerce giant won't make any money off its new Square-like mobile card reader, Amazon Local Register, which American Banker reported on Wednesday. The Journal notes that while Square has become…

Morning Scan: Housing Recovery Stalls; Ocwen Financial's Woes

Receiving Wide Coverage ... What Housing Rebound? That must have been a dream. Two reports in Wednesday's papers served as ice-cold buckets of water on any hope you may have had that the value of your home was surging. First, the Journal reported on a National Association of Realtors release, which said single-family housing prices rose 4.4% in the 12 month-period that ended in the second quarter; that's the slowest annual pace since 2012. In sum,…

Morning Scan: JPM Sells Private Equity Stake; Usury Charges for Payday Lender

Receiving Wide Coverage ... Sold: JPMorgan Chase is selling half of its $4.5 billion in holdings in its One Equity Partners private-equity unit, in part because of the requirement that banks reduce investments made with their own money, and in part because of new capital requirements. The Journal story on the sale also throws in another reason for selling the business unit, by pulling a quote from Jamie Dimon from a recent earnings conference call: "It…

Morning Scan: Job Market Gains, But Rates to Remain Low; Banks' Enemy

Receiving Wide Coverage ... Recovery and Liftoff: There are signs of an improving economy, yes. Factory orders are up, there are fewer vacancies in apartment buildings. Unemployment is falling, too, the Wall Street Journal and Bloomberg report. But, until there is more significant improvement in the job market and wage growth, Fed Chair Janet Yellen and other Fed officials in all likelihood are going to lean toward keeping short-term interest rates near zero, the Journal says.…

Morning Scan: Credit Scoring Gets a Shake-Up; Bair Warns on TBTF

Receiving Wide Coverage ... Credit Where It's Due: Banks may start offering more affordable loans to a broader range of Americans because of changes in the way credit scores are calculated. FICO will place less weight on unpaid medical debt and exclude all overdue bills that have been settled with collection agencies, according to news reports. "The moves follow months of discussions with lenders and the Consumer Financial Protection Bureau aimed at boosting lending without creating…

Morning Scan: B of A Nears $16B-$17B Deal; Banks' Living Wills 'Too Sanguine'

Receiving Wide Coverage ... BofA's Very Big Deal: Bank of America has reached a tentative agreement with the Justice Department to pay between $16 billion and $17 billion to settle charges related to the sale of shoddy mortgage-backed securities, according to multiple news reports. The expected deal is a bit of an about-face for BofA, which just a few weeks ago was drawing the line at a $13 billion fine and protesting that it was being…

Morning Scan: Regulators Flunk Banks' Living Wills; Hackers Steal 1B Passwords

Receiving Wide Coverage ... Living Wills Need Do-Over: Eleven big banks remain dangerously unprepared to wind down in the event of a crisis, according to U.S. regulators. "The Federal Reserve and the Federal Deposit Insurance Corp. said bankruptcy plans submitted by big banks make 'unrealistic or inadequately supported' assumptions and 'fail to make, or even to identify, the kinds of changes in firm structure and practices that would be necessary to enhance the prospects for' an…

Morning Scan: Lawsky Deepens Ocwen Probe; Should Firms Stay Mum on Data Breaches?

Receiving Wide Coverage ... Ocwen Under Fire: New York financial watchdog Benjamin Lawsky is turning up the heat against mortgage servicer Ocwen Financial. The superintendent of New York's Department of Financial Services is accusing Ocwen of routing as much as $65 million worth of fees each year to an affiliated insurance company, Altisource. In a letter to Ocwen's general counsel Lawsky also highlights "serious concerns about the apparently conflicted role played by Ocwen executive chairman William…

Morning Scan: HSBC Says Workers Play It Too Safe; CFPB Targets Debt Collectors

Receiving Wide Coverage ... HSBC Earnings Fall: HSBC's first-half profit dipped 5% from the same period a year ago because of sluggish performance in its investment banking, wealth management and retail businesses. Its net profit was $9.46 billion, compared to $10 billion. HSBC chairman Douglas Finch cited employees' fear of regulatory punishment as a mounting concern. "There is … an observable and growing danger of disproportionate risk aversion creeping into decision-making in our businesses as individuals,…

Morning Scan: Who's Calling Who TBTF?; Overdraft Fees Under a Microscope

Receiving Wide Coverage ... GAO No Help on TBTF: So are certain banks "too big to fail"? The release of the Government Accountability Office's report on Thursday did little to answer that question, with both sides claiming victory, as an American Banker article noted Thursday. The Financial Times quoted Paul Saltzman of the Clearing House (the group representing JPMorgan Chase, Citi and other big Wall Street firms) saying, too big to fail "perceptions have substantially diminished."…

Morning Scan: Judge Fines B of A in 'Hustle' Case; Fed Sees Good Signs

Receiving Wide Coverage ... B of A to Pay for 'Hustle': Federal Judge Jed Rakoff ordered Bank of America to pay $1.3 billion for selling toxic mortgages to Fannie Mae and Freddie Mac, as part of its so-called "Hustle" program. The $1.3 billion penalty was less than the $2.1 billion the government sought, but "greatly in excess of what the bank hoped to pay," the Financial Times reported. Rakoff, who called the scheme "brazen fraud," also…

Morning Scan: DOJ Extends Barclays Probe; Lawsky Wants Internal Monitors

Receiving Wide Coverage ... Forex Probe Update: U.S. prosecutors have stepped up their probe into Barclays' alleged foreign exchange manipulation, the Wall Street Journal, New York Times and Financial Times all report. The London bank said the U.S. extended a pact known as a "nonprosecution agreement" in the investigation. The new pact gives the Justice Department more time to decide if Barclays breached the 2012 nonprosecution agreement it had previously signed not to commit crimes in…

Morning Scan: UBS, Deutsche Bank Fall in the Dark Pool; Zillow and Trulia Merge

Receiving Wide Coverage ... UBS Dark Pool Probed: Swiss bank UBS disclosed on Monday the Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the New York attorney general are investigating its dark pool operation, the Wall Street Journal reported. Meanwhile, Deutsche Bank got an inquiry about high-speed trading, the Financial Times said. Barclays is already the focus of an Eric Schneiderman probe into whether it has deceived electronic trading investors. Dark pool trades are…

Morning Scan: JPM Unloading $1.3B; OCC Questions Chase Wealth Ops

Receiving Wide Coverage ... JPMorgan Unloads: JPMorgan Chase agreed to sell a $1.3 billion debt and securities portfolio to Bain Capital's Sankaty Advisors, both the Wall Street Journal and Bloomberg reported. Chase's Hong Kong-based portfolio group, called the Global Special Opportunities Group, invests mainly in high-yield debt. Chase's sale of the unit is part of the wider trend of big banks unloading assets to comply with rules that they improve capital ratios and comply with the…

Morning Scan: New Rule for Foreign Banks' Bad Loans

Receiving Wide Coverage ... Foreign Banks to Face the Music: Banks outside the U.S. will have to deal with loan losses sooner under a new accounting rule issued by the International Accounting Standards Board. "Under the new standard, non-U.S. banks will have to book loan losses based on their expectation that future losses will occur, beginning in 2018," the Wall Street Journal reports. "That is expected to speed up the booking of losses and require greater…

Morning Scan: Trouble at Deutsche Bank; Choke Point Sore Spot

Receiving Wide Coverage ... Deutsche Bank's Troubles: The news of the New York Fed's stern rebuke to Deutsche Bank over its questionable financial data has industry observers making bets on the fallout. Deutsche Bank's chief financial officer, Stefan Krause, is now in the hot seat, according to the Wall Street Journal. Krause launched an effort to whip the bank's financial data into shape in 2010, but progress has been slow. Krause is far from the bank's…

Morning Scan: Fed Up with Deutsche Bank; CIT's Big Deal

Receiving Wide Coverage ... CIT Goes Big: CIT Group's plan to buy OneWest Bank for $3.4 billion is a big deal in more ways than one. Not only is it the industry's biggest purchase since 2012, CIT would become "the world's first intentionally created SIFI" with $67 billion in assets, as noted by the Journal's John Carney. Investors are cheering CIT chief John Thain's decision to leap over the $50 billion asset threshold because the deal…

Morning Scan: CIT's $3.4B OneWest Deal; Debating Dodd-Frank; Sour Suisse

Breaking News This Morning ... CIT Buying OneWest for $3.4 Billion: "CIT Group Inc., the business lender led by Wall Street veteran John Thain, said Tuesday it had reached a deal to buy the parent company of OneWest Bank NA for $3.4 billion, a move Mr. Thain called 'transformational.' " Wall Street Journal, New York Times Receiving Wide Coverage ... …

Morning Scan: Dodd-Frank Turns Four; Subprime Auto Loans Boom

Wall Street Journal New York Attorney General Eric Schneiderman isn't alone in his concerns about Barclays' dark pool activities. Trading firms including RBC Capital Markets and T. Rowe Price Group worried in the months before Schneiderman sued Barclays that their orders were getting subpar treatment on the dark pool because of high-frequency traders. What's more, "a number of Barclays employees privately expressed concerns to top stock-trading executives that the firm was giving high-frequency traders too much…

Morning Scan: Lawsky's BitLicense; UK Banking Inquiry; Morgan Stanley Stability

Receiving Wide Coverage ... Return to Stability: Gains in wealth management and investment banking helped Morgan Stanley nearly double its profit in the second quarter. The papers played up how the bank has focused on stable businesses while relying less on fixed income. The Wall Street Journal said Morgan Stanley has largely shrugged off" bond trading declines that have hurt other firms. The New York Times said the bank has proved skeptics wrong that it could…

Morning Scan: B of A, DOJ Battle on Settlement; Fed Pressured to Raise Rates

Receiving Wide Coverage ... Deal or No Deal: Bank of America and the Justice Department are at odds over how much the Charlotte, N.C., bank should pay to settle charges that it sold shoddy mortgage-backed securities in the run-up to the financial crisis. According to the Wall Street Journal, DOJ lawyers rebuffed B of A's offer to pay $13 billion in cash and consumer relief in a Tuesday meeting. The Financial Times' sources say Bank of…

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