CFPB’s new fight; branch manager to the stars exits
Receiving Wide Coverage ...
Outta there: The head of compliance at Danske Bank, Denmark’s largest bank, has resigned “amid a growing money-laundering scandal that is leaving investors in the Danish lender unsettled.” But the executive, Anders Jorgensen, said his resignation isn’t connected to the investigation into more than $8 billion of suspicious transactions at the bank’s Estonian branch.
“The scandal raises questions over who in the bank’s leadership knew of the problems with its anti-money laundering controls and what they did about it,” the Financial Times says. “A whistleblower at the Estonian branch alerted some managers in Copenhagen at the end of 2013 to the problems, which were confirmed by internal auditors just before Mr. Jorgensen joined in 2014.” Wall Street Journal, Financial Times
Wall Street Journal
Fraud fight: President Trump signed an executive order to create a task force of several federal regulatory and law-enforcement agencies — including the Consumer Financial Protection Bureau — to combat consumer fraud, particularly against veterans and the elderly. In addition to the CFPB, the other agencies include the Justice Department, Securities and Exchange Commission and Federal Trade Commission, plus state and local law enforcement.
“The effort comes amid criticism from consumer advocates that the administration’s move to ease regulations for the financial industry threatens to harm consumers, particularly an overhaul of the CFPB,” the paper says.
Departing: An executive who managed four Morgan Stanley brokerage offices in Los Angeles that catered to celebrities left the firm this week after several employees claimed he ignored harassment allegations at the branches. The executive, Robert Perry, wasn’t accused of harassment himself but allegedly looked the other way or merely transferred accused employees to other offices. The branches were among the firm’s most lucrative, counting clients such as Elon Musk and Katy Perry.
Unhappy campers: Marriott and Starwood’s plan to combine their credit card loyalty program is “sparking anger among travelers.” The changes, which kick in next month, “could reduce loyalty rewards for heavy users by thousands of dollars annually.”
Another try: The European Central Bank has set “bank-specific expectations” to pressure financial institutions to deal with nonperforming loans, “one of the biggest problems left over from the economic slump.”
“The current aggregate level of non-performing loans remains far too high compared to international standards and further efforts are necessary to ensure that the non-performing loans issue in the euro area is adequately addressed,” the ECB said. An earlier effort to set industry-wide standards for treating nonperforming loans “ran into trouble.”
New York Times
Sorry: PayPal has apologized to a British man for sending a dunning notice three weeks after his wife died of breast cancer at 37, demanding immediate payment of more than $4,000 in debt. “As soon as our teams became aware of this mistake, we contacted Mr. [Howard] Durdle directly to offer our support, cleared the outstanding debt and closed down his wife’s account as he requested,” PayPal said. “We have also urgently reviewed the company’s internal processes and have made changes to ensure that an insensitive error of this nature never happens again.”
Tough times: Participants at the recent National Association of Real Estate Editors conference in Las Vegas received a stark assessment of the U.S. housing market, with home affordability a major issue, both for renters and buyers. “There is no city in the country where a person making the minimum wage can afford to rent a two-bedroom apartment,” the paper reports. “Millennials, in particular, are finding that the housing market continues to be challenging. The desire to own a single-family home is there, [but] when millennials do buy they end up buying homes in their second-choice neighborhoods, which are more affordable.”
“We absolutely intend to continue to protect consumers. It will give us a chance to prove that a lot of what you might have heard about us since I took over management of the bureau is not accurate.” — Mick Mulvaney, acting chief of the CFPB, about the new federal task force to combat consumer fraud.