Receiving Wide Coverage ...
You had to figure that with an election night, and lots of other distractions such as the continued buzz over the SAC Capital plea deal, commercial banks would get a break for at least one 24-hour news cycle.
Scan the major dailies, and there are threats coming from all directions, including regulatory probes, lawsuits and fines. Even Bitcoin is going to get scrutiny on Capitol Hill.
Regulators in Overdrive: The Consumer Financial Protection Bureau has told Ally Financial that it failed to prevent auto dealers from violating laws against discriminatory lending practices, the Detroit company said Tuesday. Ally is in talks with the regulator about possible penalties and reforms to its business, the Journal says. The matter is one of a wide range government-related problems that have constrained the lender's earnings, which fell 76% last quarter.
Meanwhile, financial regulators from the U.S., Switzerland and Germany urged the International Swaps and Derivatives Association on Tuesday to suspend early-termination and other rights in derivatives contracts that would make it harder to seize systemically important banks on the verge of a crisis, the Journal says.
Several papers reported that the Commodity Futures Trading Commission made a second proposal to limit trader speculation in commodities. The first "position limits" rule was thrown out by a judge. CFTC Commissioner Bart Chilton quoted the Etta James song "At Last" at the CFTC's meeting Tuesday, but Commissioner Scott O'Malia said the revised plan won't be music to the court's ears, the FT reports. Chilton announced at the same meeting he will be leaving the commission in the coming weeks. That could be a problem because the five-member commission which still has a lot of work to do on Dodd-Frank rules already has an open seat and its chairman, Gary Gensler, is expected to leave by yearend, the Journal says. The Post story captures more of the color from the meeting and the personality of Chilton, whom it described as a "liberal firebrand." (Nice hair shot, too.)
Can There Really Be More Mortgage Suits? Yes. AIG is poised to sue a number of global banks for allegedly selling it bad mortgage securities in the precrisis years that nearly destroyed the insurance company, the FT reports. Morgan Stanley says it may be one of the suit's targets, the report says. Some confidential settlements with other banks may already have been reached.
More Libor Mess: At least six large banks are expected to be hit with fines from European antitrust regulators within the next month related to their alleged manipulation of the London interbank offered rate and other benchmark interest rates, the Journal reports. Individual penalties could exceed $1 billion. JPMorgan Chase (JPM) , Deutsche Bank, Crédit Agricole SA, Société Générale SA, HSBC Holdings and Royal Bank of Scotland Group are among those expected to be fined, the story says.
The Bitcoin Beat Doesn't Stop: Two Senate committees are expected in coming weeks to hold the first hearings on policy issues raised by Bitcoin and other virtual currencies, the Journal's "Washington Wire" blog reports. Meanwhile, the cost of developing the technology that "makes" Bitcoins is soaring, another Journal story says. Related legal costs are on the rise, too, that story adds. Meanwhile, the Post's "The Switch Blog" says the rising price of Bitcoins means at least for now that critics who called Bitcoin "a bubble" were wrong.
Wall Street Journal
Momma, don't let your children grow up to be bankers. ... Elite business-school grads are opting to take jobs with technology companies instead of Wall Street firms. The tech companies pay less, but they are seen as more glamorous, fulfilling and perhaps less demanding in terms of hours.
Fifth Third Bancorp (FITB) in Cincinnati has shifted Daniel Poston from chief financial officer to chief strategy and administration officer after reaching a tentative settlement with the Securities and Exchange Commission regarding its accounting for certain commercial real estate loans.
Barclays is scrambling fill the holes created by the suspension of six currency traders last week that stems from a broad regulatory probe of foreign-exchange markets.
From the department of lingering problems ... Deutsche Bank co-CEO Jurgen Fitschen is reportedly a new suspect in an investigation of the bank's part in the collapse of a big media company more than a decade ago.
The on-again, off-again appetite for shares in Chinese banks is on again because the impact of a summer liquidity crunch has faded.
New York Times
Banks can take some solace in the fact that New York financial regulator Benjamin Lawsky is investigating somebody else: pension-fund advisors. He is mulling reforms that resemble accounting and regulatory requirements for banks and insurance companies.
Just what you wanted to read over your A.M. coffee your wealthiest customers may be about to start their own "family" banks.
A federal bankruptcy judge approved a plan Tuesday that appears to assure that MF Global customers will recover the entire $1.6 billion they lost.
Here's a rundown of protections for borrowers under the new student-loan rules.
Judge for yourself, but CEO Lloyd Blankfein says Goldman Sachs is engaged in some do-gooder investments, such as up-front capital for early childhood education, that can also make money.