Ant Financial buying MoneyGram; Will blockchain 'change the world'?

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Giant ant: Ant Financial Services Group, China's biggest online payments company, which is controlled by Alibaba founder Jack Ma, agreed to buy U.S. money-transfer provider MoneyGram International for $880 million in cash. The deal will enable Ant to "gain a large footprint and a brand-name in the U.S. and expand its global money-transfer business, ultimately bringing it into closer competition with PayPal Holdings Inc. and other established payments companies," the Wall Street Journal said. But it may also draw scrutiny from the Trump administration. Wall Street Journal, Financial Times, New York Times

Blockchain believers: Jude Scott, chief executive of Cayman Finance, says compliance in financial services could be revolutionized by financial technology, specifically blockchain, which would become the standard for verifying customer credentials. That would make bank processes more efficient for both firms and regulators. He's advocating global standards for areas such as money laundering.

Separately, the FT profiles several of the "evangelizing entrepreneurs" who think blockchain technology "will change the world." But they still have some hills to climb. While many financial services companies and organizations "are buying into the hype, too," there is "no strong sign yet of the world's fiendishly competitive major banks embracing the spirit of co-operation." And according to one blockchain executive, "There needs to be deep and collaborative thinking on what kind of infrastructure you need to support global financial transactions in the cloud."

Wall Street Journal

Priorities: House Speaker Paul Ryan, R-Wis., told Republican lawmakers at a party retreat in Philadelphia Thursday that relieving regulatory pressure on financial companies will be a top priority in 2017. Ryan's comments "indicate Republican leaders have the 2010 Dodd-Frank financial overhaul and other financial regulatory issues high on their list of targets as they seek to reverse Obama administration policies," the Journal said.

Pru defends firings: Prudential Financial said three former employees who are suing the insurance company for wrongful dismissal were fired for inappropriate conduct. The three employees were part of a Prudential group that was reviewing whether Wells Fargo employees had signed up bank customers for Pru insurance policies without their knowledge. In their lawsuit, the employees say they were fired for advocating a more forceful approach than Prudential was taking to rein in the program. Prudential later dropped the sales program.

Settled: Citigroup agreed to pay $18 million to settle allegations by the Securities and Exchange Commission that it overcharged at least 60,000 investment advisory clients. One of the reasons customers were overbilled was because the bank allegedly didn't enter the proper billing rates into its computer systems over a 15-year period.

New York Times

Quid pro quo?: Goldman Sachs's agreement to expedite cash and stock payments to Gary Cohn, its former president, who is joining the Trump administration, "has revived a debate over whether veterans of the firm who enter public service receive special treatment from the firm — or whether the firm receives such treatment from former employees in government."

Richard W. Painter, a University of Minnesota Law School professor and the chief White House ethics lawyer under George W. Bush, told the Times that the accelerated payments – which the paper says totaled about $285 million – smacked of favoritism. "They're playing a game, and they're playing a game to make this person feel beholden to Goldman Sachs," Painter said.

HAMP lessons: The Times looks back on the largely unsuccessful eight-year run of the Home Affordable Modification Program, which came to an end last month without truly fulfilling its mission of preventing foreclosures and helping struggling borrowers keep their homes. But the paper reports the private sector is looking to learn from HAMP's mistakes and come up with its own programs.

"Banks and mortgage lenders say they are ready to step in with their own foreclosure-prevention programs, modeled on what they learned from the Obama administration's effort," the Times says. "Armed with years of new data, financial companies say they now know how to make loan-modification programs successful, for both borrowers — who want to protect their homes — and lenders, who want to limit their losses on delinquent loans headed for default."

Quotable ...

"We will also pursue financial reform that will help striving Americans get the credit they need to realize their dreams." — President Donald Trump said at a meeting of congressional Republicans in Philadelphia

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