Receiving Wide Coverage ...
Head hunting: The U.S. Justice Department asked the U.S. Court of Appeals in Washington, D.C., Friday to order the restructuring of the Consumer Financial Protection Bureau, specifically giving the president the power to fire its director at will. As currently constituted, the CFPB director can only be removed for cause. However, the JOD brief, filed in PHH Corp.'s lawsuit against the agency, stopped short of calling for abolishing the agency.
"Limitations on the president's authority to remove a single agency head are a recent development to which the executive branch has consistently objected," the Justice Department's brief said. "Under the Constitution and Supreme Court precedent, the general rule is that the president must have authority to remove executive branch agency heads at will."Wall Street Journal, New York Times, Washington Post, American Banker
Pass it on: In addition to its other financial woes, Deutsche Bank agreed to a $7.2 billion settlement with the American government over charges it defrauded investors by selling them shoddy mortgage-backed securities. But it has come up with a novel way to meet one of the requirements of that settlement, namely providing assistance to distressed borrowers. According to the Journal, the bank is offering "attractive financing terms to help investors and other banks buy soured mortgages" from it. Those buyers then in turn offer assistance to the homeowners. Similarly, last week, Goldman Sachs bought 8,000 delinquent mortgages loans from Fannie Mae, which it intends to rework through third parties. Wall Street Journal, New York Times
Wall Street Journal
Well paid: Goldman Sachs CEO Lloyd Blankfein's 2016 pay was cut by 4% and more of his compensation was tied to the bank's performance, "a sign that even the powerful and profitable Wall Street firm isn't immune from investor pressure," the paper comments. Blankfein received $22 million in total pay last year, as his cash bonus fell to $4 million from $6.3 million in 2015 while his salary was unchanged at $2 million. All $16 million of his stock-based bonus is based on Goldman's returns over the next few years. In the previous two years, only half of his bonus was tied to performance, and before that none was.
But he should be thankful he doesn't work at Deutsche Bank, which cut staff bonuses by 80% after suffering its second consecutive full-year loss. The total bonus pool at the German bank was cut to €546 million from €2.4 billion in 2015.
Talk about irony: SquareTwo Financial, a Colorado-based debt collector, filed for prepackaged Chapter 11 bankruptcy plan. As part of the deal, Resurgent Holdings agreed to take ownership of the company and invest $405 million in it.
Internecine feud: The price of bitcoin plunged more than 20% over the weekend as "an increasingly bitter split in the developer community" threatens "to literally break it in two," the Journal reported. "Developers, exchanges, and entrepreneurs have been fighting bitterly for nearly two years over a seemingly small technical question: the size limit of a 'block,' or batch of transactions that gets processed on the bitcoin network," the paper explained. "This sounds like a relatively small and technical matter, but it has resulted in a protracted and antagonistic debate about bitcoin's future." The price of the digital currently dropped to $970 on Saturday before recovering to $999 on Sunday, after hitting a high of $1,259 earlier last week.
New York Times
Evil in the shadow: Two influential Chinese financial officials – the chairman of the country's biggest bank and a senior insurance regulator – issued strong warnings on Saturday about the dangers of shadow banking to the Chinese economy. "Experts worry that untrammeled shadow lending," that takes place outside official channels, "could lead to ticking time bombs that could threaten the financial system of the world's second-largest economy," the Times said. Shadow banking plays a major role in Chinese commerce, as large government-controlled banks are often slow to lend to the private sector.
"There is a greater risk that an independent agency headed by a single person will engage in extreme departures from the president's executive policy." – the U.S. Justice Department in a brief asking a federal appeals court to restructure the CFPB