Receiving Wide Coverage ... SoFi chief quits: Social Finance’s chairman and CEO Mike Cagney plans to leave the company he co-founded following lawsuits alleging sexual harassment and unfair work practices at the online lender. He will step down from the chairman’s role immediately and stay as CEO until a replacement is found. Cagney told employees that “negative press [has] become a distraction from the company’s core mission.” Wall Street Journal, Financial Times, New York Times
Processing Content
Mike Cagney, co-founder and chief executive officer of Social Finance Inc., speaks during a Bloomberg Technology television interview in San Francisco, California, on Monday, Dec. 19, 2016. The online lending company known as SoFi, which specializes in refinancing student loans, is pushing back plans for an initial public offering in order to focus on developing other business lines, said Cagney. Photographer: David Paul Morris/Bloomberg
David Paul Morris/Bloomberg
Wall Street Journal Preparing for the worst?: In the months before the massive data breach, revealed last week, Equifax spent more than half a million dollars to lobby Congress and federal agencies to get them to ease up on regulation of credit reporting companies, the paper says. Among the issues it lobbied for was limiting the legal liability of such companies as well as “data security and breach notification” and “cybersecurity threat information sharing.”
"Equifax may have displaced Wells Fargo as the new poster child of bad financial behavior for policymakers on Capitol Hill," according to American Banker. Meanwhile the Senate Finance Committee wants answers from Equifax Chief Executive Officer Richard Smith.
The Equifax data breach “could force some lenders to hit the brakes” on their lending goals, especially nontraditional companies that lend money online to customers mainly based on electronic credit checks. “Those checks could become less effective in weeding out someone putting in a loan application with a false identity,” the paper reports.
Moving on: Edith Cooper, head of human resources at Goldman Sachs and one of the highest-ranking black women on Wall Street, is leaving the bank at the end of the year. “In her nine years overseeing Goldman’s workforce, Ms. Cooper managed huge changes in recruiting and compensation as Goldman sought to refine its sharper edges and grappled with the fallout of the financial crisis,” the paper says.
Financial Times A long wait for Justice: Federal prosecutors filed a civil lawsuit against the former head of subprime trading at Deutsche Bank, accusing him of misleading investors about loans backing more than $1 billion worth of mortgage-backed securities that were issued before the financial crisis. The executive, Paul Mangione, allegedly participated in a “fraudulent and illegal scheme” that duped investors out of hundreds of millions of dollars.
What are they thinking?: Goldman’s plan to export its nascent consumer finance business to the U.K. is criticized by columnist Patrick Jenkins. “It is not an obvious move” and “defies a lot of logic,” he writes. The market is crowded, loan pricing is competitive, and deposits don’t come cheap. “The timing looks questionable, too.”
Early warning: Citigroup expects its third-quarter securities trading revenue to be down about 15% compared to the same period a year ago, “casting an early shadow” on upcoming quarterly results. Trading revenue was down 5% year-on-year in the second quarter.
Quotable “There are some really great tools out there, but the industry today mostly uses older [identification] methodologies. It could take years for the industry to catch up and move to new identity validation standards.” — Zach Perret, chief executive of Plaid Technologies, about the efficacy of electronic credit checks.
The move comes about a year after rising delinquency levels prompted SBA to raise lender fees and tightened underwriting standards in its flagship 7(a) program.
Select ChatGPT users can now connect their bank accounts to the AI-powered chatbot for personal money management advice based on their financial history.
Suncoast Credit Union moved from one-time identity checks to monitoring members for the life of the account. It says fraud losses fell more than a third.
The $110 million settlement, which was mapped out last fall, requires Wells Fargo to establish a $100 million fund to provide downpayment and closing-cost assistance to eligible borrowers who live in or plan to buy a home in certain low- and moderate-income census tracts.
Whether red or blue, leaders share an affinity for battling fintech giants, as the liberal mayor is pressuring regulators to scuttle Western Union's plan to buy digital transfer Intermex, shortly following PayPal's 'DEI settlement' with the Trump administration.
Prashant Sharma, JPMorgan Payments' executive director of biometrics and identity solutions, spoke with American Banker about agentic commerce and how liability is shifting as a result of large language models.
