Consumers pounce on 4% mortgages; What’s in a name?
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Introducing … Truist?
BB&T and SunTrust Banks said its postmerger name will be Truist Financial Corp. The deal, the largest bank merger since the financial crisis, is expected to close in the second half of this year.
“Truist is a brand name representative of two mission- and purpose-driven companies coming together to serve our clients as a true financial partner,” said SunTrust CEO Bill Rogers, who will serve as chief operating officer of the combined company.
“True to the heritage of both companies, Truist will reflect what we stand for — a shared belief in building a better future for our clients and communities,” said Kelly King, BB&T’s CEO, who will be Truist’s chairman and CEO. Wall Street Journal, Financial Times, New York Times, American Banker
The new name "was far from an immediate hit on social media, with many initially ridiculing it as looking like a typo," American Banker reports.
The drop in mortgage interest rates below 4% sparked a 27% surge in applications last week, “the biggest weekly rise in more than four years,” the Wall Street Journal reports. Refinance applications jumped 47%. “For lenders, which were hit hard by rising rates last year, the reversal has been a welcome sign. The outlook for lenders’ net profit margins turned positive for the first time in almost three years, according to a survey by Fannie Mae released Wednesday.” Wall Street Journal, Financial Times
Meanwhile, Mark Calabria, the newly appointed head of the Federal Housing Finance Agency, wants to light a fire under Congress to work on an overhaul of Fannie Mae and Freddie Mac, “or he will do what he can on his own.” Calabria “believes boosting competition for Fannie and Freddie would curb costs. In a letter to lawmakers released Wednesday, he said granting his agency new chartering authority would reduce reliance on Fannie and Freddie and benefit home buyers by keeping down mortgage costs. He also wants lawmakers to establish an explicit federal guarantee for securities sold by the companies, another measure that could control costs.” Wall Street Journal, American Banker
“The Trump administration’s plan to reform housing finance is gaining in clarity, but it remains decidedly hazy,” according to the Journal.
Wall Street Journal
Back on the Street
Bill Daley, White House chief of staff under President Obama and a former executive at JPMorgan Chase, has been named vice chairman of Bank of New York Mellon, where he’ll be in charge of government affairs, communications, philanthropy and social-responsibility. Daley, who was also Secretary of Commerce under President Clinton, “arrives at BNY Mellon under a CEO [Charles Scharf] who is eager to modernize America’s oldest bank and jump-start its growth. It is not the first time their careers have intersected. Mr. Scharf was part of the cadre of former Bank One executives who assumed a high-ranking position at JPMorgan while Mr. Daley was there.”
The House Financial Services Committee passed unanimously a bill to overhaul the federal flood-insurance program. The bill, which would extend the National Flood Insurance Program for another five years, “aims to change the financial stakes that people in flood-prone areas face when shopping for insurance. The legislation seeks to spur private flood insurance and reduce costs for lower-income policyholders. It also would require the government to make sure more properties that need coverage are identified on updated flood-zone maps.” The measure now goes to the full House and the Senate.
A modest proposal
“As a service to the bank’s board of directors and shareholders,” the paper’s editors offer some tongue-in-cheek job requirements for candidates for Wells Fargo’s vacant CEO position, which the bank has had trouble filling. Here are a few of the must-haves:
- “Candidate must have no banking experience or familiarity with finance (or ideally numbers). Should be adept at dealing with difficult clients and not mind being kicked around by politicians or vilified on social media.
- “Must be comfortable with the responsibilities of a political prop testifying before Congress. The ideal candidate will have worked as a Democratic staff member on Capitol Hill, though exceptions will be made for someone who worked for Richard Cordray during the early days of the Consumer Financial Protection Bureau. Any association with the Liz Warren for President campaign a plus.”
That lack of success in finding a new CEO may lead Wells to keep interim CEO C. Allen Parker permanently, although that move might set off another backlash against the bank.
Citigroup is launching a co-branded credit card with Singapore-based ride-hailing company Grab “as it looks to boost its Asian customer base by about 13% via partnerships with digital firms," Reuters says. "The new cards mark the latest step in Grab’s big push into the financial services sector, an area it has earmarked for growth. For the U.S. bank, it is in line with its strategy to offer its products within online ecosystems as consumers spend more time on smartphones.” The card was launched in the Philippines and will be rolled out to the rest of Southeast Asia later.
“It means kind of whatever you want to make it mean. [It’s] what we in branding call a mostly harmless name.” — Robert Passikoff, founder and president of Brand Keys, about the name Truist, the moniker BB&T and SunTrust have settled on for their merged company