Receiving Wide Coverage It's legal: The U.S. Court of Appeals for the District of Columbia Circuit upheld the constitutionality of the Consumer Financial Protection Bureau’s single-director structure. The court, in a divided ruling, rejected arguments that Congress improperly set up the agency in 2010 to make it difficult for the president to remove the agency’s director except for cause.
Mick Mulvaney, director of the Office of Management and Budget (OMB), speaks during an interview at the Securities Industry And Financial Markets Association (SIFMA) annual meting in Washington, D.C., U.S., on Tuesday, Oct. 24, 2017. SIFMA represents the U.S. securities industry including broker-dealers, banks and asset managers with nearly one million employees providing access to the capital markets. Photographer: Andrew Harrer/Bloomberg
Andrew Harrer/Bloomberg
Still, “the case has taken on less practical urgency since the Trump administration took control of the bureau in November,” the Wall Street Journal notes. Acting director Mick Mulvaney, “a longtime critic of the CFPB, has begun overhauling the bureau in line with Republican priorities.” Wall Street Journal, New York Times, Washington Post, American Banker here and here
Indeed, that revamp is “reaping dividends” for high-interest lenders, as the agency eases its oversight of the industry “after closely scrutinizing it during the Obama era,” the Journal reports. For example, it recently ended a four-year investigation of World Acceptance Corp., a South Carolina-based subprime lender.
Wall Street Journal No longer pals: PayPal’s stock dropped sharply in after-hours trading Wednesday after eBay, which used to own PayPay until it spun it off as a separate company in 2015, said the company would no longer be its primary payments provider after 2020, when it will be replaced by Adyen BV, a Dutch fintech startup.
Upon closer inspection...: The Commodity Futures Trading Commission said it is “reconsidering” its previous hands-off approach to approving new futures products following the launch of bitcoin futures. “The volatility of bitcoin, coupled with worries about the lack of transparency and cyber vulnerability of bitcoin exchanges, led some on Wall Street … to call on the CFTC to take a harder look at virtual currency derivatives before allowing them to come to market,” the paper reports.
Volatile indeed. The price of the cybercurrency plunged 28% in January, its biggest monthly drop in three years, falling below $10,000 on Wednesday, a two-month low. The price has dropped by nearly half since hitting its record high of $19,282 in mid-December.
SoFi layoffs: Social Finance said it is laying off about 65 people in its mortgage division, “an area the company previously highlighted for its growth prospects,” the paper reports. The layoffs account for about 5% of its 1,300-person workforce. The job cuts come a week after the online lender hired Twitter executive Anthony Noto to be its next CEO.
Changing partners: Cabela’s, the 15th largest credit-card issuer in the U.S., is moving its business from Visa to Mastercard. The move is “the latest in a series of wins for Mastercard,” which recently won the business from Kroger and Bank of America’s cash-rewards credit card.
Moving on: Stephen Cutler, JPMorgan Chase’s longtime general counsel, is leaving the bank to join Simpson Thacher & Bartlett as a partner. Cutler, who spent 11 years at JPM, was general counsel until the end of 2015 and has since served as vice chairman.
It's not what you know...: Grameen America, a nonprofit microlender for women entrepreneurs, uses unique lending criteria, according to a profile in the paper. “To get a Grameen loan, you don’t need any collateral or credit history, just the support of a small group of Grameen loan recipients who can vouch for you,” it says. The loans, which start at $500, must be repaid in six months. Interest rates start at 18% but decline as the loan is repaid.
“Everyone makes a commitment to be responsible to her peers and Grameen America,” said Alethia Mendez, Grameen’s senior director of operations and program strategy.
Financial Times Too long?: JPMorgan Chase investors and board members “clearly like the idea of [Jamie] Dimon staying around” for at least five more years, the paper acknowledges. “And yet, however impressive the individual, long tenures can create big headaches,” it warns. “Overstaying is a common error. Longstanding bosses, particularly successful ones, can spill over from confident and capable into arrogant and disengaged.”
New York Times Same old: It's no surprise that Equifax’s new service, unveiled Wednesday, that allows consumers to lock access to their credit files from a mobile phone, didn’t work, the paper says. “It was supposed to be simple: You download the app and swipe the lock to the right, which restricts access to your file. Except that’s not what happened.”
Quotable “Congress’s decision to provide the CFPB director a degree of insulation reflects its permissible judgment that civil regulation of consumer financial protection should be kept one step removed from political winds and presidential will.” — U.S. Court of Appeals Judge Cornelia Pillard, writing for the court’s majority.
Federal Reserve Gov. Lisa Cook said in a speech Friday that the market's response to recent volatility shows resilience, but more study is needed about the financial stability implications of business relationships between banks and nonbanks.
The Supreme Court blocked a lower court injunction reinstating two Democrats who had been fired without cause from the National Labor Relations Board and Merit Systems Protection Board, explicitly holding that Federal Reserve Board members would not be affected by the case.
BancFirst Corp. plans to acquire American Bank of Oklahoma; JPMorganChase rolls out a new platform to advise clients on international dynamics; Greg Cunningham takes on a new title, expanded duties at U.S. Bancorp; and more in this week's banking news roundup.
With licensing bills progressing through both the House and Senate, stablecoins are poised to become part of the regulated financial sector. How the banking and payments landscape will respond to that is up for debate.
