CFPB nominee stands strong; Wells Fargo’s latest issue

Receiving Wide Coverage ...

Didn’t land a glove: Kathy Kraninger, President Trump’s nominee to head the Consumer Financial Protection, “faced grilling” at her confirmation hearing before the Senate Banking Committee Thursday but “emerged largely unscathed.” She told the panel the bureau would be “fair and transparent” under her leadership and the agency would pursue the “proper balancing of all interests,” both consumers’ and financial companies’. Wall Street Journal, Washington Post, American Banker

Andrew Harrer/Bloomberg

Big dip: Shares of Bank of New York Mellon dropped more than 5% on Thursday, their biggest daily loss in more than two years, after the bank reported “tepid revenue growth” in the second quarter. Net income rose 14% but barely beat analysts’ per-share estimates, while revenue grew 5%. The bank also said it lost two key clients. “The results highlight the main challenge facing BNY Mellon and other custody banks: how to extract more fees from the money managers, brokers and other clients they serve,” the Wall Street Journal says. Wall Street Journal, Financial Times, American Banker

Wall Street Journal

More trouble: Wells Fargo is in more hot water after it said it is refunding “tens of millions of dollars” for so-called add-on products, including pet insurance and legal services, that it added to customers’ accounts without their full understanding. The CFPB is looking into the matter, “focusing on whether customers were deceived, their awareness of the products and their ability to cancel the products.”

Boffo: Capital One said second quarter net income jumped 84% as credit card spending rose sharply and credit losses fell. Revenue rose 7%. The company’s U.S. credit card net charge-off rate fell to 4.72% from 5.11% a year earlier, the first year-over-year drop in three years.

Help wanted: Goldman Sachs has hired 15 people from outside the company “at the elite rank of partner” over the past year, “the biggest influx of senior executives in two decades.” And it’s not done yet, “as the firm plugs weak spots in its network of investment bankers, builds out new businesses in consumer and commercial banking and replenishes trading ranks depleted by the post-crisis lull. The hiring push is an acknowledgment that Goldman, which is trying to add $5 billion in annual revenue by 2020, must look beyond homegrown talent to grow.”

Better rates: Federal Reserve Vice Chair Randal Quarles said the Fed should consider launching an average financing rate, alongside its replacement for the tainted Libor rate, in order to increase trading and market liquidity.

Financial Times

Unfinished business: Ben Bernanke, Henry Paulson and Timothy Geithner “revealed this week that they are surprised and dismayed by the degree to which Europe’s financial system remains troubled a decade” after the financial crisis. “They worry that the system remains rather weak and think they know why: unlike their American counterparts, continental European leaders did not proactively use government funds to recapitalize their banks, insist on proper transparency about bad loans or close down insolvent lenders.”

The International Monetary Fund seems to agree, warning that “parts of the eurozone’s banking system are still vulnerable despite the region’s economic recovery” and calling for “changes to the regime that oversees lenders to prevent another financial crisis.”

Quotable

“Now I’m just saying the same thing that I would have said as a private citizen. So somebody would say, ‘Oh, maybe you shouldn’t say that as president.’ I couldn’t care less what they say, because my views haven’t changed.” — President Trump, on possible reaction to his criticism of Federal Reserve interest rate policy.