BankThink

Cash America International, one of the payday lending industry's biggest companies, has agreed to pay up to $19 million for alleged violations that include impeding the Consumer Financial Protection Bureau's examination process.

We can talk all we want about policies, process and technology, but in the end, financial services remains a people-based business. Having the right people in key risk management roles will yield the strong institutions of tomorrow.

Receiving Wide Coverage ...Ring Fenced: Credit Suisse has begun to wall off its Swiss banking business from riskier investment banking operations in the U.S. and U.K. in order to address regulators' concerns over "too big to fail." The plan includes combining two London subsidiaries and transferring its U.S. derivatives business to its U.S. subsidiary. (The unit currently operates out of London.) UBS similarly announced plans to ring fence its banking operations last month. Wall Street Journal, New York Times, Financial Times

"Payday lender Cash America International will pay up to $19 million to settle allegations that it robo-signed court documents, overcharged members of the military, and took steps to impede an examination by the Consumer Financial Protection Bureau," writes American Banker's Kevin Wack.

The U.S. could be at a competitive disadvantage by being less proactive in the area of gender diversity on boards. We’ll need to engage CEOs everywhere to achieve meaningful progress.

The buzzy credit card consolidator, at least in its initial incarnation, doesn’t render wallets redundant or, even, allow the consumer to do anything they can’t already.

Receiving Wide Coverage ...How Justice Built Its Case Against JPM: The $13 billion civil settlement JPMorgan Chase reached with the Justice Department on Tuesday, the largest penalty a single company has ever paid to the government, started with the Justice Department's discovery of a 2006 meeting in which bank executives decided to continue selling shoddy mortgage securities despite major red flags, according to the Wall Street Journal. As part of the civil settlement, JPMorgan acknowledged it told investors the mortgage loans in securities it packaged and sold complied with underwriting guidelines, while bank employees knew that many of the loans in question didn't. A team of government officials poured through documents detailing loans so weak they likely didn't even qualify as subprime mortgages — some had overstated income, inflated appraisals and skewed loan-to-value ratios. And a cooperating former employee warned her bosses the bank was vastly overstating the quality of the loans being securitized and sold in the run-up to the financial crisis. The New York Times' Dealbook take on the settlement focuses more on the negotiations between the bank and the government. The bank's CEO, Jaime Dimon was a "familiar number" on the cellphone of Tony West, a top Justice official. West repeatedly pressured the executive for more money to settle the case; the $13 billion is about half the bank's annual profit. "Mr. West's negotiating tactics underscore a broader strategy shift at the Justice Department, where prosecutors are seeking to hit Wall Street where it hurts most: the bottom line," Dealbook wrote. (Meanwhile, a recent issue of the New Yorker imagined a chummy conversation between Dimon and Eric Holder during settlement negotiations. What will become of that $13 billion? According to the Financial Times, about $4 billion will actually go to struggling homeowners. The rest will be divided between the Department of Justice, attorneys general from states including New York and California, the National Credit Union Administration and the Federal Housing Finance Authority.

Government officials hope to squeeze the giants down to size while executives are counting on thriving with modified business models. Reality lies somewhere in the middle.

The risk retention provision remains one of the top unfinished items for regulators implementing the 2010 Dodd-Frank Act. Regulators' second proposal may be more popular than the original, though it still leaves banks wary.

In seeking to prevent future financial contagion, the U.S. may have gone too far in regulating the mortgage industry, cutting millions of potential buyers out of the real estate market.