Receiving Wide Coverage ...
Meet the new boss: Mark Begor, a 35-year veteran of General Electric, has been named CEO of Equifax, the embattled credit bureau. He will replace Paulino do Rego Barros Jr., who has been running the company on an interim basis for the past several months after Richard Smith retired following last year’s massive data breach. Begor had headed several large financial divisions at GE, including what is now Synchrony Financial, the largest U.S. store credit-card issuer.
Equifax still “faces mounting challenges,” the Wall Street Journal noted. “The company is under investigation by federal and state regulators, is a defendant in a number of lawsuits, and is working to regain the trust of the public and its clients, including lenders who are questioning whether to renew contracts with the firm.” Wall Street Journal, New York Times
Still the boss: Deutsche Bank CEO John Cryan said he is “absolutely committed” to doing his job, a day after it was reported that his boss, chairman Paul Achleitner, was shopping for a replacement. “I just wanted to reaffirm that I am absolutely committed to serving our bank and to continuing down the path on which we started some three years ago,” Cryan said in a memo to bank employees. He said the “widespread rumors” about his future were creating a “destabilizing effect” at the bank. Wall Street Journal, Financial Times
Wall Street Journal
Disappointing: The “likely elevation” of John Williams from president of the Federal Reserve Bank of San Francisco to the same position at the New York Fed “has sparked a degree of public criticism rarely seen in the relatively obscure world of regional central bank chiefs,” the Journal reports. “The news disappointed observers who have pressed the Federal Reserve to diversify its leadership ranks, long dominated by white, male economists. Some lamented what they saw as a selection process that needs more public scrutiny and input. Others question Mr. Williams’s economic views.”
(American Banker's got a BankThink piece on the subject: N.Y. Fed doesn't need a regulator who whiffed on Wells)
CFPB check: In an op-ed piece, Sen. Elizabeth Warren, D-Mass, charges that Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, “has undermined the bureau’s work on behalf of consumers and has repeatedly failed to comply with legal mandates, while the Republicans who control Congress have refused to use the tools available to them to rein him in. I intend to use every tool available to me to make sure the CFPB follows the law and stands up for consumers."
False alarm: The recent sharp rise in the Libor rate, which was flashing a “red light” during the financial crisis, “no longer means banks are struggling to find cash,” the Journal’s Heard on the Street column says. If the rate continues to go up “that will prove a problem for indebted companies and households whose interest costs are linked to it,” it says. “If defaults rise, that would lead to pain for lenders too. But for banks’ own funding, this red light no longer signals imminent danger.”
Late warning: Thomas Hoenig, the outgoing vice chairman of the Federal Deposit Insurance Corp., is warning that the bank deregulation bill recently passed by the Senate and making its way through the House could “undermine the long-term resilience of not only the banking system, but the broader economy as well.” Specifically, he’s against loosening capital rules for custody banks. “These trusted custodians must remain pillars of strength and should be retaining capital, not reducing it,” he said in a speech in Washington.
New York Times
On leave: Douglas E. Greenberg, one of Morgan Stanley’s top financial advisers, has been put on “administrative leave pending further review of this situation,” following an investigation by the Times that four women have sought police protection against him over the past 15 years. According to the Times, “for years, Morgan Stanley executives knew about his alleged conduct,” but only took action this week after the paper contacted the company about the claims.
“None of the women Mr. Greenberg is said to have abused were employed by Morgan Stanley,” it said. “But employees in the finance industry — especially those who manage money for clients — are judged in part on their character. That puts the onus on companies, and regulators, to police their conduct even outside the office.”
Stuck in the past: A new study by the National Community Reinvestment Coalition says the “vast majority” of neighborhoods that were redlined as “hazardous” areas to make mortgage loans in back in the late 1930s continue to comprise mostly lower-income minority residents who struggle economically.
“It’s as if some of these places have been trapped in the past, locking neighborhoods into concentrated poverty,” said Jason Richardson, director of research at the consumer advocacy group.
“The team has made meaningful progress in the last several months to address a number of well-publicized issues. I will prioritize continuing our team’s efforts to communicate transparently and restore confidence with consumers, customers, shareholders and policymakers.” — Mark Begor, Equifax’s new CEO.