Password protected: JPMorgan Chase and Intuit have reached an agreement that would let the bank's customers check their account information on Intuit's websites – which include Mint.com, TurboTax and QuickBooks – without having to reveal their Chase passwords. Details of the deal are expected to be announced Wednesday morning. Intuit said the deal would give customers more real-time access to their data.
Receiving Wide Coverage ...
Upheld: A New York State appeals court reinstated the conviction of Sergey Aleynikov, a former Goldman Sachs programmer, accused of stealing computer code for the bank's high-speed trading business before taking a job with a hedge fund. The court overturned a decision by a state trial judge, who threw out Aleynikov's 2010 conviction on the grounds that the 1967 law he was convicted under wasn't applicable, since computer software didn't exist at the time. But the appeals court said the law was drafted broadly enough to cover the crime. Wall Street Journal, New York Times
Wall Street Journal
Steven Mnuchin, Treasury secretary nominee for president-elect Donald Trump, sits while meeting with Senate Majority Leader Mitch McConnell, a Republican from Kentucky, not pictured, at the U.S. Capitol in Washington, D.C., U.S., on Tuesday, Dec. 6, 2016. Mnuchin has avoided specifying whether hell maintain his predecessors stance regarding the greenback. Photographer: Andrew Harrer/Bloomberg
Andrew Harrer/Bloomberg
Not just size: Treasury Secretary designate Steven Mnuchin said banks should be regulated "by complexity and activity, not simply size." In written answers to questions from members of the Senate Finance Committee following last week's confirmation hearing, he also endorsed a "comprehensive review" of the U.S. Financial Stability Oversight Council. Mnuchin elaborated on his suggestion of a "21st Century Glass-Steagall" Act: "A bright line between commercial and investment banking, although less complicated, may inhibit the necessary lending and capital markets activities to support a robust economy."
On the job: Consumer Financial Protection Bureau Director Richard Cordray said his agency will continue enforcing consumer protection rules, regardless of who's president. "It's important to keep in mind that we are a law enforcement agency," Cordray told the paper Tuesday. "That's an important part of what we do, and it … has to be kept separate from partisan politics. My job is to take the law as it's given to me and enforce it and implement it faithfully." He didn't say what he might do if President Trump tries to fire him, as some Republicans in Congress want him to do. Trump himself hasn't made any comments about the issue, and Mnuchin said the agency should be retained, although Congress should have control over its budget.
Fannie backs rentals: Fannie Mae has agreed to guarantee up to $1 billion in debt from Blackstone Group's Invitation Homes unit, which the Journal described as "the first time the government-sponsored entity has agreed to guarantee the debt of an institutional owner of single-family houses." Invitation, which the Journal said owns the largest pool of rental homes, is planning to go public; the financing includes a 10-year loan backed by more than 48,000 homes it owns.
"Fannie Mae's involvement is a sign that it believes homeownership will remain out of reach for many Americans and that Wall Street's housing wager will become a long-term business, not just an opportunistic trade made after the foreclosure crisis," the Journal said. "Fannie's support will likely make it cheaper for buyers like Blackstone to add homes in the future."
Parting gift: Former Goldman Sachs chief operating officer Gary Cohn will receive more than $100 million of stock and cash he earned over 25 years at the bank, which would have been unavailable to him for years had he stayed at Goldman, as he joins the Trump administration as a senior economic adviser. Cohn needed to sever ties to Goldman to satisfy federal ethics rules. The bank detailed how it would give Cohn what was due him.
Capital One dips: Capital One said its fourth quarter profit fell 14%, largely due to a 27% jump in provisions for credit losses. Earnings totaled $791 million, or $1.45 a share, versus $920 million, or $1.58 a share, in the year earlier quarter. Revenue rose 6% to $6.57 billion.
Travelers up: Travelers, a Dow component and one of the first big property-casualty insurance companies to release year-end earnings, reported higher operating and net earnings in the fourth quarter. Operating earnings rose to $919 million, or $3.20 a share, up from $886 million, or $2.90 a share, in the year-earlier period. Net earnings increased to $943 million, or $3.28 a share, up from $866 million, or $2.83 a share, a year earlier.
Quotable ...
"I think this independent consumer watchdog as part of that framework is a very important principle and one that we should fight to preserve." – CFPB Director Richard Cordray on the agency's independence from politics
The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
The first-quarter increase involved commercial real estate loans, including some problematic multifamily loans and an office credit, but none of the criticized loans were to consumers, officials at the Dallas company say. Further CRE deterioration is anticipated.
The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
Charge-offs and nonperforming loans rose at the Georgia bank in the first quarter. But it blamed the problem on one large client and said the matter has been resolved.
Amid healthy first-quarter loan growth and improving credit quality, Discover Financial Services slashed its profits by $800 million to offset remediation costs from a 16-year period when it overcharged certain merchants.
