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morning scan

Morning Scan: Home Prices Flatten in Potential Good News for Buyers; RBS' Citizens Sell-Off

Wall Street Journal The rate of home-price appreciation has slowed, according to the S&P/Case-Shiller Home Price Index for May, which economists say is a good sign more potential buyers will soon be able to afford to buy. After home prices increased at low double-digit percentage rates per month in 2013, price gains per month this year have hovered just above 4%. A recent report from the National Association of Realtors was somewhat misleading. NAR said median…

Morning Scan: Merchants Seek Dismissal of $6B Credit Card Settlement; Faulty Credit Reports Targeted

Wall Street Journal If you can't trust your lawyer, who can you trust? Visa, MasterCard and millions of merchants may see the $6 billion settlement of a class-action lawsuit go up in smoke. The reason is what a legal ethics expert described as "gross misbehavior" by the lawyers involved. The settlement resolved a lawsuit alleging the credit-card networks engaged in price-fixing when they banned merchants from charging customers more when they used a credit card instead…

Morning Scan: B of A to Pledge $75B to Climate Change Lending; Citi, B of A Shares Lag

Wall Street Journal Bank of America is one of more than a dozen companies expected to sign an agreement Monday at the White House to address climate change. B of A and others will invest more than $140 billion to reduce carbon emissions. B of A specifically will commit $75 billion through lending and other financing by 2025; it's on top of a previous commitment of $50 billion by B of A. None of the companies…

Morning Scan: Banks Questioned in FIFA Probe; B of A's Management Shuffle Examined

Wall Street Journal Federal prosecutors and New York's top banking cop have contacted at least 10 banks for questioning on whether they should have alerted authorities about suspicious money transfers involving FIFA, soccer's world governing body. The U.S. Attorney's office in Brooklyn and has contacted Delta National Bank & Trust in New York, HSBC and Standard Chartered, unnamed sources said. At least three other "major" international banks have also been contacted by the U.S. Attorney but…

Morning Scan: Moynihan Shuffles B of A's Management Ranks; N.Y. Regulator Queries Banks

Receiving Wide Coverage ... B of A Deck Shuffling: Brian Moynihan is playing musical chairs again. Bank of America's chief executive made a number of personnel moves late Wednesday, including the dismissal, or resignation, of Chief Financial Officer Bruce Thompson; details of all the moves are outlined in American Banker. The Wall Street Journal and the New York Times both speculate the executive shuffling was a response to regulators chastising the firm's leadership for mistakes on…

Morning Scan: Shelby in No Rush to Confirm Fed Nominees; Banks to Pay for New Roads?

Wall Street Journal The Federal Reserve Board will soon be at full-strength for the first time since August 2013, thanks to the nomination of University of Michigan economics professor Kathryn Dominguez. Not so fast my friend, said Sen. Richard Shelby, chairman of the Senate Banking Committee. Shelby said he's in no hurry to schedule confirmation hearings for Dominguez and for the other nominee, ex-Bank of Hawaii CEO Allan Landon. "We're not going to rush to judgment…

Morning Scan: Fed Approves Capital Restraints; Michigan Economist Tapped for Fed Vacancy

Receiving Wide Coverage ... Banks' Capital Restraints: Get smaller, or else. That's the message from the Fed to big banks after the finalization of rules on Monday. The Fed approved a graduated surcharge for globally risky banks and it established capital requirements for GE Capital. Fed Chair Janet Yellen said the capital surcharge rule is designed to reduce the potential for large institutions to fail, or force them to reduce their risk profile. In effect, it…

Morning Scan: Dodd, Frank Assess Namesake Law; Bidding Wars Back in Housing Market

Receiving Wide Coverage ... Dodd-Frank, Five Years Later: On the five-year anniversary of Dodd-Frank, Barney Frank and Christopher Dodd sat down for a Q&A session. Dodd said he thinks Too Big to Fail is dead, in part because regulators are forced to "sit down together" at least four times a year to study the landscape. (In an interview with the Financial Times, Frank is adamant TBTF is dead and he disagrees with Sen. Elizabeth Warren's plan…

Morning Scan: Yellen Open to Higher SIFI Threshold; Has Citi Turned a Corner?

Receiving Wide Coverage ... Marketplace Lenders in Treasury's Sights: Greater regulation may be coming to the buzz-filled world of marketplace lending. The Treasury Department has begun a study of the industry's risks and advantages, which could lay the groundwork for rules down the line. The New York Times says Treasury's announcement of the study strikes a "largely supportive tone," expressing interest in the industry's potential to expand credit access for underserved demographics. But the Treasury's desire…

Morning Scan: Citigroup Rebounds; Masters Hired by Santander

Breaking News This Morning ... Earnings Galore: Citigroup, like its rival Bank of America, reported a huge increase in second-quarter profit, compared to a year earlier, thanks in large part to the lack of a costly legal settlement related to mortgages. Citi's net income rose to $4.85 billion from $181 million a year earlier. Meanwhile, BB&T's second-quarter net income increased to $454 million from $424 million a year earlier. However, merger-related charges and a loss from…

Morning Scan: B of A Profits Soar; How to Split Bank Settlements

Breaking News This Morning ... B of A Earnings: Bank of America more than doubled its second-quarter profits to $5.32 billion, up from $2.29 billion a year ago. What a difference the lack of a costly mortgage settlement makes! The Wall Street Journal has a handy list of other items to look out for in the bank's report. Receiving Wide Coverage ... …

Morning Scan: Clinton on Wall Street; Fed vs.Congress

Breaking News This Morning ... 2Q Kickoff: Ringing in the second-quarter earnings season this morning are Wells Fargo and JPMorgan Chase. Wells Fargo's second-quarter earning were essentially unchanged from a year ago, while JPMorgan profits rose 5% thanks to cost-cutting measures. Receiving Wide Coverage ... Clinton's Financial Vision: The economic policies aired by presidential candidate Hillary Clinton in a Monday speech position her as left of center—but not so far over as other contenders gunning for the Democratic…

Morning Scan: Greece Strikes Deal; London Whale Off Hook

Receiving Wide Coverage ... Greece Folds: Greece has struck a deal with European leaders that would allow it to stay in the eurozone — but at a heavy cost. Under the terms of the deal, the country would receive a bailout package of up to €86 billion ($96 billion) in exchange for "punishing" austerity measures and what the Financial Times deems "the most intrusive economic supervision program ever mounted in the EU." Among the most controversial…

Morning Scan: U.K.'s 'London Whale' Hunt Off; U.S. Data Breach Tally

Receiving Wide Coverage... Calling Off the 'Whale' Hunt: At least in the U.K., the London Whale is off the hook. The U.K. Financial Conduct Authority said it will drop its investigation of Bruno Iksil, the Frenchman at the center of the fiasco in which JPMorgan Chase lost $6.2 billion on bad bets on derivatives. The Authority's internal panel of independent experts decided that it didn't have enough evidence to pursue a strong case. So, the Authority…

Morning Scan: Barclays' McFarlane Plans Long Ride; Fifth Third's New Chief

Receiving Wide Coverage. ... More on Jenkins' Ouster: The Journal has an article, based on interviews with anonymice, that paints a very negative portrait of ex-Barclays CEO Antony Jenkins. For one, Jenkins liked to tell people he had a "warm working relationship" with Barclays Chairman John McFarlane, who this week fired Jenkins and named himself the interim CEO. McFarlane was apparently miffed that it was taking so long for Jenkins to fix Barclays' myriad problems and…

Morning Scan: Santander's Enforcement Action; Debating Encryption

Receiving Wide Coverage ... Santander Feels the Heat: The Federal Reserve has issued a sweeping enforcement action against Banco Santander's U.S. holding company, ordering it to improve—well, a whole lot of stuff. Regulators identified Santander's capital management, corporate governance, and ability to meet daily funding needs as areas in need of remediation, along with risk management at its consumer lending unit. No fine is attached to the action yet, but the Fed could add one later.…

Morning Scan: New Details on Banks' Living Wills; Do Clawbacks Get Results?

Receiving Wide Coverage ... Envisioning the End: Twelve big banks have published details of their revised living wills, which attempt to demonstrate to regulators that they could fail without throwing the financial system into a tailspin. For banks, the months-long review period of their updated proposals may be a nail-biter: regulators already deemed most plans unrealistic last year. If the Federal Reserve and Federal Deposit Insurance Corp. aren't convinced by their new strategies, banks could face…

Morning Scan: Greek Vote Fallout; Do Big Fines Breed Better Bank Cultures?

Receiving Wide Coverage ... What's Next for Greece: One day after Greeks voted overwhelmingly to reject the bailout terms offered by European creditors, the country's future is up the air. One thing that's for sure: controversial Greek finance minister Yanis Varoufakis is stepping down at the behest of prime minister Alexis Tsipras in an effort to smooth upcoming negotiations with European creditors. Varoufakis has no regrets about the hardball tactics that aggravated eurozone officials: "I shall…

Morning Scan: SEC Votes for Clawbacks; Silk Road Agent Dreamed of Silver Screen

Editor's note: Morning Scan will not publish on Friday, July 3 in observance of the Independence Day holiday. We'll be back on Monday, July 6. Receiving Wide Coverage ... Better Check the Math: Executives may soon have more skin in the game when it comes to accurate financial reporting. The Securities and Exchange Commission voted 3-2 to back a new plan that would require public companies to rescind executive officers' bonuses if accounting errors are discovered …

Morning Scan: Tsipras Softens Greek Demands; Will Fintech Kill Universal Banks?

Receiving Wide Coverage ... Ch-Ch-Changes: Fintech will be shaking up the banking industry for years to come, according to a report from the World Economic Forum and Deloitte. The wide-ranging report instructs banks to prepare themselves for a state of near-constant disruption as tech firms alter consumers' expectations by making financial services faster and cheaper. The Wall Street Journal notes the reports' authors also arranged meetings between old-school behemoths like Visa and JPMorgan Chase and upstarts…

Morning Scan: JPMorgan Upgrades Prepaid Cards; Who's Afraid of a Grexit?

Receiving Wide Coverage ... All Eyes on Greece: Now that Greece has closed its banks for at least a week in order to avoid a run as bailout negotiations with the European Union have stalled, speculation is rampant about how the emergency measure will play out. The Wall Street Journal warns Greek banks may not have enough cash on hand to get through the week if all of the country's residents withdraw the maximum amount permitted…

Morning Scan: Greece Shutters Banks as Crisis Intensifies; Fintech's Many Fans

Receiving Wide Coverage ... Greece Bank Shutdown: Greece has closed its banks for the next six days and imposed capital controls in an effort to avert financial panic as the country edges closer to a potential exit from the eurozone. Over the weekend, steady streams of depositors had already emptied many ATMs in Athens, according to the Wall Street Journal. The rapidly escalating Greek debt crisis rattled global markets Monday, with the S&P 500 on track…

Morning Scan: Disparate Impact Survives; CFPB Unleashes Complaints

Receiving Wide Coverage ... Disparate Impact Sticks Around: The Supreme Court backed the "disparate impact" legal theory yesterday in a decision that dashed the hopes of banks while buoying housing advocates and the Obama Administration. Justices came to a 5-4 decision affirming that plaintiffs can sue organizations under the Fair Housing Act of 1968 by alleging that their housing practices disproportionately impact minorities, even in the absence of proof of intentional discrimination. The New York Times…

Morning Scan: Reputational Challenges; Home Loans Get Riskier

Receiving Wide Coverage ... Regaining a Good Name ... Slowly: Americans trust banks more now than they did in 2012—but that's a pretty low bar to clear. Twenty-eight percent of people say they have a lot of confidence in banks, up from 21% the last time the survey was conducted three years ago, according to a June Gallup survey of 1,527 adults. While the American Bankers Association's blog appeared heartened by the improvement, other op-eds say…

Morning Scan: Housing's Uneven Recovery; Digital Banking on Dates

Receiving Wide Coverage ... An Uneven Recovery: Home prices are appreciating in wealthier areas, but values in poorer towns continue to lag behind, the Wall Street Journal reports. In the working-class suburb of Lithonia, Ga., for example, 54% of homeowners are underwater; the same is true of 15% of homes worth less than $200,000 nationwide, compared to just 6% of homes worth more than $200,000. One way to help struggling homeowners could be to slash the…

Morning Scan: Bernanke's a Hamilton Fan; Teaming with Marketplace Lenders

Receiving Wide Coverage ... Save Hamilton: Ben Bernanke has joined the growing chorus of those who say the Treasury should bump Andrew Jackson from his perch on the $20 to make way for the first woman on U.S. currency — and leave Alexander Hamilton be on the $10. The former Fed chief writes on his blog that he's "appalled" by the plan to push aside Hamilton (who Bernanke calls "without doubt the best and most foresighted…

Morning Scan: Dimon on Jimmy Lee; Regulators' Biggest Fear

Wall Street Journal Jimmy Lee, the JPMorgan Chase vice chairman who unexpectedly died last week, will be "irreplaceable," according to CEO Jamie Dimon. Lee was responsible for being the point man to JPMorgan's top corporate clients; his duties will be farmed out to several executives. One example of Lee's importance: when General Electric earlier this year decided to sell off its GE Capital banking unit, Dimon and Lee were both summoned to a GE conference room…

Morning Scan: Ancient IT Hobbles Banks; Saving Hamilton

Receiving Wide Coverage ... Brushing the Dust Off IT: Banks around the world use IT systems are basically antiques, and recent tech glitches at Royal Bank of Scotland and Commonwealth Bank of Australia are making that problem increasingly difficult to ignore. The Financial Times reports that part of the issue is that three-quarters of banks' tech spending has to go toward the cost of keeping the old, complex systems running, leaving them with just a fraction…

Morning Scan: Fed Inches Toward Rate Hike; A Woman on the Ten-Spot

Receiving Wide Coverage ... Rate-Hike Watch: The Federal Reserve still plans to raise rates later this year. But much like an overbooked friend, it prefers to keep its level of commitment to that plan soft. Both the New York Times and the Wall Street Journal emphasize that the pace of the eventual rate hike is likely to be even slower than expected. The central bank may increase rates just once in 2015, by a quarter percentage…

Morning Scan: Stress-Test Season Kicks Off; Overdrafts Slide

Receiving Wide Coverage ... No End to AIG Case: In answer to yesterday's Morning Scan question about whether former AIG chief Maurice Greenberg would be appeased by a federal court ruling that validated his case against the federal government but awarded AIG shareholders zero dollars: nope. Greenberg plans to appeal the decision by Judge Thomas Wheeler, the papers report. Wheeler found that the government had reached beyond its legal authority in the 2008 bailout of insurer…