Nominated: President Trump tapped Judge Neil Gorsuch of the Denver-based 10th U.S. Circuit Court of Appeals for the open Supreme Court seat. Gorsuch is a traditionalist and an admirer of the late Antonin Scalia, whose seat he would fill if confirmed. Wall Street Journal, Financial Times, New York Times, Washington Post
Neil Gorsuch, federal appeals court judge, speaks after being nominated as an associate justice of the U.S. Supreme Court by U.S. President Donald Trump during a ceremony in the East Room of the White House in Washington, D.C., U.S., on Tuesday, Jan. 31, 2017. Replacing the late Justice Antonin Scalia, Trump is setting up a showdown with congressional Democrats over a selection that would bolster the court's conservative wing for a generation or more. Photographer: Andrew Harrer/Bloomberg
Andrew Harrer/Bloomberg
Boycott: Senate Democrats refused to attend committee votes for Treasury secretary-designate Steven Mnuchin and Health and Human Services nominee Tom Price, delaying the confirmation process for both men. The senators said they wanted more information. Some of them claimed that written testimony Mnuchin supplied after his confirmation hearing last month wasn't truthful. Committee rules require at least one member from each party to be present to conduct business. According to the Wall Street Journal, this is the longest timeline for confirming a Treasury secretary for a new administration since at least World War II. Wall Street Journal, New York Times, American Banker
Wall Street Journal
Growing tensions: Banks are cracking down on the security practices of their vendors, whether they're technology companies that store critical financial data or merely food-services companies that post lunch menus on a bank's internal website. "This more stringent review of business relationships is leading to heightened tension between banks, which are trying to ensure the safety of their operations, and their outside contractors, which are being pummeled with demands for information before they even win a potential client's business," the Journal reports. The banks' increased focus on their vendors started after hackers broke into Target's credit card network three years ago by stealing the login credentials of a heating-and-air-conditioning contractor.
Clouds: After agreeing to pay $630 million to settle its latest scandal – allegations that it helped wealthy Russians launder money – Deutsche Bank still faces a "grim mood inside the bank" and a "cloudy profit outlook," the Journal reports Wednesday morning.
Home, sweet home: Invitation Homes, the Blackstone Group unit that owns and rents out single-family homes, raised $1.54 billion in its initial public offering Tuesday, making it the largest American IPO since First Data Corp. raised $2.8 billion in October 2015, according to Dealogic. The real estate investment trust sold 77 million shares at $20 apiece.
Ups and downs: Ally Financial's auto lending business continued to decline as it diversified its business. The former financing arm of General Motors said auto loan originations fell 12% to $8.2 billion in the fourth quarter from the same quarter a year earlier. But total revenue rose 2.2% to $1.37 billion, while retail deposits jumped 20% to $66.58 billion. Ally had net income of $248 million, or 52 cents a share, up from a loss a year earlier.
Financial Times
Slanted?: Europe's financial technology companies believe that new laws being written by the European Banking Authority give too much power to traditional banks. "If it goes ahead as currently written it will not create open banking as the law originally envisaged," said the head of a Swedish online payments company.
At your service: HSBC named Joe Gordon, an executive who has worked in finance for just two years, to run First Direct, its branchless telephone and online banking unit in the U.K. Prior to his appointment, Gordon was head of a customer service unit at HSBC. "First Direct is a primarily customer-service business and Joe has a great deal of experience in running successful customer-focused environments," the bank said.
New York Times
Test case: Steven Davidoff Solomon, a law professor at the University of California-Berkeley, writes in the Times' Deal Professor column that Ant Financial's proposed $880 million acquisition of MoneyGram will be "the first test of the Trump administration's stance on Chinese investment" in the U.S. "The matter may also provide a test case for the reach of banks and payments services," he says.
Quotable ...
"I think this is a completely unprecedented level of obstruction." — Sen. Patrick J. Toomey, R-Pa., about Democrat attempts to delay the confirmation of some of President Trump's cabinet appointees
Most big banks saw modest reductions in their requirements following this year's stress tests. The results come as the Fed prepares to smooth year-to-year swings with a new averaging rule.
The D.C. District Court held a hearing this morning and defendants filed briefs in a case to determine whether Federal Reserve Gov. Lisa Cook will remain on the Federal Reserve Board after her ostensible firing by President Trump earlier this week. No ruling was issued, but one is expected before the FOMC votes in mid-September.
Buy now/pay later lender Affirm hit profitability goals for its fiscal year 2025 and set aggressive guidance for fiscal 2026 ahead of Wall Street's estimates. Its stock soared more than 10% Friday.
The proposed Berkshire Hills-Brookline merger is expected to finalize on Sept. 1; Flagstar Financial has scheduled a special shareholders' meeting to simplify the bank's regulatory structure; former Credit Suisse executives agreed to settle a suit filed by shareholders claiming they failed to maintain adequate risk management; and more in this week's banking news roundup.
Housing regulator Bill Pulte lodged more fraud allegations against Fed Governor Lisa Cook as she filed a temporary restraining order regarding attempts to remove her.
Online lenders are urging the Office of the Comptroller of the Currency to force banks to disclose all account closures to the agency, following an executive order earlier this month.
