Wall Street Journal
Amex settles: American Express admitted to charges by the Consumer Financial Protection Bureau that it offered inferior terms to credit card customers in Puerto Rico and other U.S. territories compared to those in the 50 states and agreed to pay $95 million to settle the matter. Amex, which had self-reported the practices to the CFPB, denied that its practices were discriminatory. Wall Street Journal
Digital push: Royal Bank of Canada is quickening job cuts and branch closings in order to accelerate its push into digital and mobile banking. The bank had planned on making the cuts over the next two years, Chief Financial Officer Rod Bolger told the Journal, but decided to move more quickly to help pay for increased digital technology, artificial intelligence and cybersecurity.
Expanding: Mitsubishi UFJ Financial Group, Japan's biggest bank, is moving aggressively to realize its long-term goal of becoming one of the top 10 banks in the U.S. Since February the bank has opened 16 new branches in Florida, Texas and Illinois and opened another two in New York this month through its American banking unit, PurePoint Financial. Since launching, PurePoint has brought in about $3 billion, the FT said. Mitsubishi also owns San Francisco-based Union Bank and a 22% stake in Morgan Stanley.
In the lurch: The crisis at Provident Financial, the U.K. subprime lender whose stock plunged by two-thirds on Tuesday after it issued another profit warning and announced the resignation of its CEO, is expected to leave many of its customers "in a precarious financial position," the FT reports.
"At first glance, the problems at the Provident might seem to offer unexpected good news to their customers, typically cash-strapped people on low incomes" who might believe they could escape paying back their loans, the paper said. "In practice however, Provident borrowers tend to be regulars with a recurring need for new loans."
New York Times
Cordray defends: We missed an op-ed on Tuesday from Consumer Financial Protection Bureau Director Richard Cordray, in which he defends his agency's new rule that prohibits banks from requiring mandatory arbitration in customer disputes. "In truth, by blocking group lawsuits, mandatory arbitration clauses eliminate a powerful means to get justice when a little harm happens to a lot of people," Cordray said in the piece, entitled "Let Consumers Sue Companies." "Our rule restores consumers' legal right to stand up for themselves and have their day in court without having to wait on the government to act."
Cordray also dismissed the idea that the rule threatens the safety and soundness of the banking system. "We estimate the potential costs of this rule for the entire financial system at under $1 billion per year, whereas banks alone made $171 billion in profits last year," Cordray wrote.
Redlining's lasting effects: A new study by the Federal Reserve Bank of Chicago shows that the consequences of redlining – drawn in cities decades ago to separate "hazardous" areas from those deemed the "best" — "codified patterns of racial segregation and disparities in access to credit" that still linger today.
See you in court: The attorney general of Massachusetts sued the Pennsylvania Higher Education Assistance Agency, one of the country's largest servicers of federal student loans, for allegedly mismanaging debt forgiveness programs for public service workers, raising their repayment costs and keeping hundreds of thousands of borrowers in debt longer than they expected. The company, which operates under the name FedLoan, holds an exclusive contract with the U.S. Education Department to service loans in the public service loan forgiveness program and the Teacher Education Assistance for College and Higher Education Grant, or TEACH, program.
The above story also gave us today's quote, from Massachusetts AG Maura Healey: "This company's actions have jeopardized the financial futures of teachers and public servants across the country."