Receiving Wide Coverage ...
Making amends: In an op-ed piece in the Wall Street Journal, Equifax interim CEO Paulino do Rego Barros Jr. offers an apology and an olive branch to consumers following the company’s data breach. “On behalf of Equifax, I want to express my sincere and total apology to every consumer affected by our recent data breach. People across the country and around the world, including our friends and family members, put their trust in our company. We didn’t live up to expectations.”
By next January 31, Equifax promises to offer “a new service allowing all consumers the option of controlling access to their personal credit data,” he says. “The service we are developing will let consumers easily lock and unlock access to their Equifax credit files. You will be able to do this at will. It will be reliable, safe and simple. Most significantly, the service will be offered free, for life.”
Consumer Financial Protection Bureau Director Richard Cordray warned the credit bureau industry that it faces tougher supervision following the Equifax hack.
“We’re going to have monitoring in place that’s preventive,” Cordray said in an interview on CNBC. “It’s going to be a different regime than we’re used to. In the past they dealt with these problems on their own. … That’s not good enough. If they’re going to restore public confidence in this marketplace and if they’re going to create the kind of reforms necessary, they’re going to have to recognize the old days of just doing what they want, being subject to lawsuits now and then, are over.” New York Times, Washington Post, American Banker
Simpler rules: The three main financial services regulators — the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency — proposed simplified bank capital rules affecting small and regional lenders. “This proposal aims to strike a balance between reducing complexity on the one hand, and continuing to ensure appropriate capital requirements for banks’ construction lending activities on the other,” said FDIC Chairman Martin Gruenberg.
But Thomas Hoenig, the FDIC’s vice chairman, said the proposed modification is “neither simpler nor less burdensome.”
“It falls well short of achieving the kind of simplification that would provide truly meaningful benefit to the industry, investors, and the public,” Hoenig told a meeting of the FDIC board. “Unfortunately, the proposed changes will only perpetuate the disparate capital benefits across banks of different sizes and provide only minimal regulatory reporting relief.” Financial Times, American Banker
Wall Street Journal
Refi probe: Ginnie Mae is investigating lenders it suspects of “churning” mortgage refinances among military veterans, leading some borrowers to be stuck with thousands of dollars in unnecessary fees from multiple refis that offer the borrowers little benefit. The agency is planning to speak to least half a dozen lenders about their refinance practices, the paper reports, and is also considering taking civil legal action against some of them. It also recently formed a “Lender Abuse Task Force” with the Department of Veterans Affairs.
Not worried: JPMorgan Chase is unlikely to have to set aside reserves to cover a $4 billion Texas jury award against the bank for allegedly mishandling the estate of a former American Airlines executive. That’s because all but $4.7 million of the award was punitive, not actual damages, and the bank is “highly confident the jury verdict will not stand.” At the same time, “the arcane and often complex way that companies account for possible legal losses — a process that is often more art than science,” will allow the bank to avoid reserving anywhere close to that figure.
Help wanted: The Securities and Exchange Commission wants to beef up cybersecurity following the recently discovered hack into its computer database last year. But “finding and recruiting these new workers won’t be easy,” the paper says, as it is competing with other agencies and private companies for tech talent.
And the SEC and other government agencies are at a competitive disadvantage, since private companies can pay more.
One-stop banking: HSBC is planning to roll out a new mobile banking app in the U.K. next year that would allow customers to view all their accounts, including those at other banks. “The move is aimed at placing HSBC at the center of peoples’ financial relationships, acting as a hub through which customers can manage all their accounts and spending habits,” the paper says.
New York Times
Bored of banking?: Consumers are becoming too complacent, if not bored, with financial scandals that the larger picture is being lost, according to Rana Foroohar, an associate editor and global business columnist at The Financial Times.
“Over the last 10 years, there has been so much financial scandal, so many battles between regulators and financiers, and so much complexity (more liquidity and less leverage with your tier one capital, anyone?) that a large swath of the public has become numb to the debate about how to make our financial system safer,” she writes in an opinion piece in the New York Times. “That’s a dangerous problem, because despite all of the wrangling and rulemaking, there’s a core truth about our financial system that we have yet to comprehend fully: It isn’t serving us, we’re serving it.”
“When people say the mortgage industry has learned its lesson, this seems to suggest that that may not be the case.” — Michael Bright, Ginnie Mae’s acting president, discussing some lenders’ practice of refinancing veterans’ mortgages multiple times in order to rack up fees.