Morning Scan: Fed, FDIC Awaited CFPB's Ally Discrimination Settlement; Fintech Worried About Regulation
Editor's note: Morning Scan will not publish on Thursday, Nov. 26 or Friday, Nov. 27 in observance of the Thanksgiving holiday. We'll be back on Monday, Nov. 30. Wall Street Journal In-house lawyers at the Consumer Financial Protection Bureau had proof the Federal Reserve and the Federal Deposit Insurance Corp. were eagerly awaiting its report on Ally Financial. That nugget was included in the House Financial Services Committee report, released on Tuesday, that slammed the CFPB for
Wall Street Journal Shoppers are losing their patience with Black Friday sales, because it's so difficult to figure out what's the best deal on saving money, because of the layers of coupons, flash sales and other discounts. Retailers aren't the only ones at fault. Banks, too, have confused consumers whether a percentage-off deal is better than a dollar amount. Citigroup's Citi Retail Services, the private-label credit card issuer, has tested two offers this season. One gives
Wall Street Journal Diebold confirmed it's in merger talks with Germany's Wincor Nixdorf, under which Diebold would pay $1.8 billion in cash and stock in an acquisition. Diebold will launch its tender offer early next year, with a breakdown of 80% cash and 20% stock. Diebold will raise $2.3 billion in senior secured and unsecured debt to finance the deal; it will also obtain a $500 million revolving credit facility. The combination would surpass NCR as
Wall Street Journal The rise in auto-loan balances, fueled in part by subprime auto lending (read American Banker's coverage of the New York Fed report here), should not necessarily be viewed as a cause for alarm, Equifax's chief economist told the Journal. "The difference between having reliable transportation and not having reliable transportation is life-changing for people," Amy Crews Cutts said. "When you hit a rough patch and are financially on the edge, which is often
Wall Street Journal Square's IPO underachieved, as the fintech startup was forced to slash its share price to $9 from an initial expected range of $11 to $13. The Journal explained what happened thusly: "Public investors are growing more skeptical of the enormous valuations that venture capitalists are putting on private technology companies." Then there's this point: "The company is yet to prove it can turn the business profitable," said analysts at Susquehanna International Group.
Wall Street Journal Prosecutors are pursuing criminal cases against JPMorgan Chase and Royal Bank of Scotland executives for allegedly selling flawed mortgage securities, unnamed sources said. Authorities are looking at a $2.2 billion deal that RBS handled, in which home mortgages were securitized. RBS has already reached a civil settlement with the SEC on the case. JPMorgan is being probed on a different deal, earlier investigated by the Justice Department's Sacramento, Calif., office, related to a
Wall Street Journal The Federal Housing Administration announced Monday its capital reserve ratio rose to 2.07% at the end of September, the first time it had climbed above 2% since the financial crisis. HUD Secretary Julián Castro hailed the FHA's return to financial health as a contributing factor to the current strength of the housing market. FHA's reserve ratio tanked during the financial crisis, as it provided financial backing for mortgages when other lenders wouldn't or
Wall Street Journal Megabanks are "lying low" while Congress tries to wrap up its budget for the year. But that doesn't mean some other financial-services institutions aren't trying to push through their own agendas. Regional banks want to ease their regulatory burden, specifically by raising the $50 billion threshold that triggers stricter oversight under Dodd-Frank. The change is seen as helping institutions like Capital One Financial and M&T Bank. Democrats on the House Financial Services Committee
Receiving Wide Coverage ... Goldman Names New Managing Directors: At Goldman Sachs, 425 employees got their golden ticket. The company named its newest batch of managing directors a much sought-after position at the company just one step below the rank of partner. Goldman now names a new class of managing directors every other November following a lengthy and grueling vetting process, followed by a class photo taken the following January. Before 2013, the bank named
Receiving Wide Coverage ... Apple Eyes P-2-P Payments: In a bid to claim a bigger stake in the payments industry, Apple has begun talks with banks to launch a peer-to-peer payment service. The service would target the market already enjoyed by PayPal's Venmo and Square's Square Cash, the Wall Street Journal reports. Venmo currently accounts for 19% of mobile person-to-person payments, facilitating $2.1 billion in mobile payments during the third quarter alone. As part of this
Receiving Wide Coverage ... Hackers Charged: Charges were announced against three hackers accused of stealing data from more than 100 million people in one of the biggest cybercrimes of all time. The three men reportedly were responsible for the big breach last year at J.P. Morgan Chase and other crimes involving computer networks in South Africa and Brazil, money laundering through Cyprus and illegal card payments processed in Azerbaijan, the Wall Street Journal reports. Two of
Wall Street Journal Bank of America has joined a slew of financial firms to cut off its information from websites and mobile applications that aggregate consumer financial data. Other major banks that have taken such steps include J.P. Morgan Chase and Wells Fargo. Consumers have begun to use these aggregator sites, such as Mint.com, to monitor their multiple financial accounts. But banks are wary to cede any ground to non-bank startups like these, and as reasoning
Receiving Wide Coverage... TLAC, Part II: Not quite two weeks after the Federal Reserve Board released its contentious total loss absorbing capacity (TLAC) proposal, the Financial Stability Board updated its own plan to force "systemically important" banks to issue more debt in order to prevent future global financial crises. The FSB's version calls for these banks to build by 2019 a cushion of at least 16% of their risk-weighted assets in equity and debt, similar to what
Breaking News This Morning ... Employment Report: Unexpectedly Strong Hiring and Unemployment Report Boosts Chance of Rate Hike Wall Street Journal The new tech giants are the companies that control the Internet economy through their dominance in virtual computing: online search, messaging, advertising, applications, computing and storage on demand. The kings of the cloud (as it were): Amazon, Apple, Facebook, Google and Microsoft.
Receiving Wide Coverage ... Yellen Speaks: Risk management still leaves something to be desired at the largest banks, Fed Chair Janet Yellen said during a congressional hearing on Wednesday. "While we have seen some evidence of improved risk management, internal controls, and governance … compliance breakdowns in recent years have undermined confidence," Yellen testified before the House Financial Services Committee.
Wall Street Journal Prosecutors and regulators want to know if traders rigged auctions on government debt. The Justice Department and the Commodity Futures Trading Commission have sent requests to banks that serve as primary dealers, seeking information about orders, trading and pricing in Treasury Department auctions. "Authorities are looking into whether bank traders worked together to bolster their own profits by depressing prices at U.S. government debt auctions," the Journal said, citing unnamed sources.
Morning Scan: RBC Plans to Kickstart Jumbo Mortgages at City National; Visa's Price Tag for Visa Europe
Wall Street Journal Royal Bank of Canada has big plans for wooing the wealthy now that it's locked up City National Bank. After closing its $5.4 billion purchase of the Los Angeles lender, the Canadian bank plans to rework its jumbo-mortgage product, in an attempt to lure more high-net-worth clients. It's not a novel concept. Other banks have used jumbo mortgages as bait to reel in the rich and sell them other products, such as investment
Breaking News This Morning ... Visa: Visa agrees to buy Visa Europe for about $23 billion. HSBC: HSBC postpones HQ decision. Wall Street Journal The Uber-killed-taxis narrative doesn't apply to banks vis-a-vis Apple Pay, said "Heard on the Street." Take JPMorgan Chase's Chase Pay as an example. JPMorgan has already inked deals with Walmart and Best Buy to accept payments through Chase Pay. Yes, JPMorgan is having to cannibalize its own profits to win market share. (Isn't that what
Breaking News This Morning ... KeyCorp to Buy First Niagara: KeyCorp announced early Friday that it plans to acquire First Niagara Financial Group for roughly $4.1 billion. The announcement, which was quickly heralded one of the biggest bank mergers of the year, added further fuel to claims that 2015 has been the biggest year for banks since the crisis, the Wall Street Journal writes. The deal capped off a busy week for bank mergers, after New
Receiving Wide Coverage ... Deutsche Bank Gets a Trim: After reporting a heavy 6 billion euro loss for the third quarter, Deutsche Bank announced it will cut jobs over the next two years. Deutsche will shed 9,000 full-time jobs, 6,000 external contractors and 20,000 other positions, according to the Wall Street Journal. In total, the bank employs around 100,000 people. The job cuts are part of a plan that the bank called "Strategy 2020," which should
Receiving Wide Coverage ... Barclays’ New Boss: Barclays has tapped former J.P. Morgan Chase senior investment banker and hedge fund executive James Staley as its new chief executive. Staley fills the void left by Antony Jenkins, who was sacked by the British bank’s board after it lost confidence in how he would improve returns to shareholders, the New York Times writes. Jenkins himself replaced Robert Diamond, Jr., who was fired in the wake of Barclays’ admission
Breaking News This Morning ... The New York Department of Financial Services is in for a major shake-up. The department’s interim head Anthony Albanese and its spokesman Matthew Anderson have told the office of New York Governor Andrew Cuomo that they will step down. The Wall Street Journal reports their decision to leave the agency comes at a time when the NYDFS has butted heads with the governor’s office more than in the past. Reportedly, Cuomo
Receiving Wide Coverage ... Rate Rise on the Horizon? Continued global economic woes look likely to continue to put a damper on the possibility of the Federal Reserve electing to raise rates this week. Recently, China has reported soft GDP growth, and Japan eyed a major decline in export growth, the Wall Street Journal reports. Instability at the global economic level helped fuel the Feds previous decision not to raise rates in September. Of course, its
Breaking News This Morning ... Earnings: Citizens Financial Group, First Niagara Financial Group, Prosperity Bancshares Wall Street Journal Barclays and Credit Suisse Group are in talks to pay a combined $150 million to settle a lawsuit that alleges wrongdoing in the operation of dark pools, the private stock-trading platforms that have come under regulatory scrutiny. The Securities and Exchange Commission and the New York State Attorney General are in discussions with the banks about the settlement, unnamed sources
Breaking News This Morning ... Earnings: Huntington Bancshares, Iberiabank, Community Bank System Receiving Wide Coverage ... Thain's Exit: Everyone takes a look at John Thain after he announced his pending retirement as head honcho of CIT Group. Thain's narrative is re-told, as he departed Merrill Lynch with the Wall Street bank in a mess, returned to CIT to implement a turnaround and exited after the crowning achievement of the OneWest Bank acquisition. All the reports mention his successor,
Breaking News This Morning ... Earnings: New York Community Bancorp, Fulton Financial, BankUnited Receiving Wide Coverage ... Breaking It Off: It has been a nice, decade-long relationship between JPMorgan Chase and Highbridge Capital Management, but the private-equity business is basically saying it's time to move on. And even JPMorgan officials agree it is time to see other people, so to speak. Reports in two major dailies said Jamie Dimon & Co. is close to finalizing a deal that
Breaking News This Morning ... Earnings: Fifth Third, Regions, Synovus, Signature, Bank of New York Mellon Receiving Wide Coverage ... Morgan Stanley's Miss: The investment bank's third-quarter results fell far short of analyst expectations, owing to steep declines in its trading and private equity businesses. The firm warned trading won't recover soon, given macroeconomic headwinds from China, the Fed, and the commodities markets. The Washington Post notes "the effect of the trading decline on the bank’s bottom line
Wall Street Journal First it was Swiss banks charging clients to hold their deposits. Now it's U.S. banks' turn. State Street for the first time has begun charging fees to hold some large dollar deposits, unnamed sources said. JPMorgan Chase has also started charging fees, helping it cut unwanted deposits by more than $150 billion this year. Bank of New York Mellon and Northern Trust, the other two large custodial banks haven't yet begun charging to
Wall Street Journal Netflix blamed the shift to EMV credit and debit cards for its 10.2% year-over-year decline in U.S. subscribers. Card firms are having none of that talk. One unnamed card industry executive said Netflix is the only subscription-based business complaining about such a problem, so the problem must be Netflix.
Receiving Wide Coverage ... B of A, Wells Offer Hope: After JPMorgan Chase's disappointing third-quarter earnings report, Bank of America and Wells Fargo followed up with some better news. The Charlotte, N.C., and San Francisco banks issued their earnings on Wednesday and each offered some nuggets of promise. B of A's trading revenue didn't suffer as much as JPMorgan's did. Expenses decreased, thanks in no small part to a decline in legal expenses. The number of charged-off
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