Reining it in: The Trump administration proposed a “restructuring” of the Consumer Financial Protection Bureau, in which the agency would get less funding and fewer enforcement powers “along with an overhauled mission that is friendlier to companies.” Acting Director Mick Mulvaney said the agency would “go no further” than fulfilling its mission outlined in the Dodd-Frank and would no longer “push the envelope” on its regulatory reach. Wall Street Journal, Financial Times, Washington Post, American Banker here and here
Cause for worry?: The U.K. Serious Fraud Office’s charges against Barclays, “in theory at least, put the bank’s entire existence at risk: if it is found guilty its license could be revoked,” the Wall Street Journal says. That’s because the charges, stemming from the bank’s secret emergency fundraising from Qatari investors during the crisis of 2008, were made against the bank’s operating company, which holds its banking license, not its holding company. That’s an important distinction.
James "Jes" Staley, chief executive officer of JPMorgan Chase & Co.'s investment bank, speaks during an interview in New York, U.S., on Monday, Dec. 19, 2011. JPMorgan Chase & Co. still views U.S. Treasuries as the world's safest asset and expects that view to continue, Staley said. Photographer: Scott Eells/Bloomberg *** Local Caption *** James "Jes" Staley
Scott Eells/Bloomberg
But “this new element sounds more serious than it probably is,” the paper says. “There are reasons to doubt whether the bank’s license is really under threat.” After all, Barclays is the U.K.’s second-biggest bank by assets. “The potential for chaos and disruption for its customers and the wider financial system caused by taking its license is significant.” Would the Bank of England, which Monday declined to answer questions about what it might do in such an event, allow that to happen?
The Financial Times, by contrast, is taking the charges a lot more seriously. “The move is potentially damaging. A guilty verdict could see it stripped of vital banking licenses.”
Wall Street Journal
Secured:Equifax appointed Jamil Farshchi its chief information security officer. He previously held similar positions at Home Depot, Time Warner and Visa.
Settled:Deutsche Bank agreed to pay more than $4.4 million to settle Securities and Exchange Commission claims that it failed to supervise traders who misled customers about commercial mortgage bond prices. The fine was comprised of $3.7 million to reimburse clients who were defrauded and a $750,000 civil penalty. The former head of the unit, Benjamin Solomon, who was fired in 2015, agreed to a one-year ban from the industry and a $165,000 penalty.
New York Times
Lesson learned? : The Federal Reserve’s punishment of Wells Fargo is unlikely to have “much deterrent effect” against other banks “except perhaps in the short term, says Peter J. Henning, professor of law at Wayne State University in Detroit. “Rather than viewing what happened to Wells Fargo as an instance of ‘there but for the grace of God go I,’ directors and executives at other banks will more likely see it as a case of an aggressive company that crossed the line too many times,” he writes in the White Collar Watch column. “For those looking at this as a harbinger of a federal crackdown on corporate misconduct, this is more likely to be a one-off situation, with little prospect of its happening again in the current deregulatory environment.”
Washington Post
Small is good: Big banks and institutional lenders are stepping up to the plate to lend money to small businesses. Approval rates for these institutions hit record highs last year, according to online lending marketplace Biz2Credit. While smaller regional and community banks continue to approved about half of loan applications from small businesses, the approval rate at big banks rose to 25%, a record high. “What’s even more eye-opening is that institutional investors like pension funds have an approval rate of more than 64%, another historical high.”
Elsewhere
Walking away: Maria Contreras-Sweet, the former banker and head of the Small Business Administration under President Obama, has withdrawn her group’s $500 million offer to buy the Weinstein Co. “after growing infuriated” that New York Attorney General Eric Schneiderman sued to block the sale and insisted the state place a monitor on the board of the new company. Contreras-Sweet had promised to appoint a majority female board of directors if her bid was accepted.
Meanwhile, Steven A. Cohen's private investment firm, Point72 Asset Management, was hit with a discrimination lawsuit Monday. Lauren Bonner, a recruiter at the firm, charged ashe earned as much as two-thirds less than her male counterparts.
Quotable
“Equifax is a company with tremendous potential, and I am confident that we will transform our security program into one of the most advanced and recognized globally.” — Jamil Farshchi, the company’s new chief information security officer.
As it rolls out dozens of new products to up its game in stablecoins and artificial intelligence, the payment company is also working with sellers wishing to expand activities involving non-U.S. corridors.
Jim Richards, who served as the bank's head of anti-money-laundering compliance, says the Federal Reserve is wrongfully denying him compensation that was designed to keep him employed at Wells Fargo.
New Jersey-based ConnectOne Bancorp received FDIC approval for its merger with First of Long Island Corp; lending-services fintech Oportun makes changes to its board of directors; Associated Banc-Corp's Steven Zandpour will succeed David Stein as head of consumer and business banking; and more in this week's banking news roundup.
The Trump administration says it will nominate Jonathan McKernan to serve as Treasury undersecretary for domestic finance. McKernan has already been nominated as the next director of the Consumer Financial Protection Bureau.
