Equifax hack claims two executives; Cagney out at SoFi

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The heads start rolling: The Equifax data breach has claimed its first two executives. The company late Friday announced the immediate retirement of David Webb, its chief information officer, and Susan Mauldin, its head security officer. They will be replaced, respectively, by Mark Rohrwasser, who joined Equifax last year as head of the company’s International IT operations, and Russ Ayres, most recently vice president of IT. Wall Street Journal, Financial Times, New York Times, Washington Post, American Banker

As many as 400,000 British consumers may have had their personal information stolen in the Equifax hack, which could make it “one of the biggest data breaches on record in the U.K.,” the Financial Times reported. The U.K.’s Financial Conduct Authority and the Information Commissioner’s Office have been called in to investigate, adding to the multiple probes already underway in the U.S.

The Wall Street Journal looks inside the Equifax hack, which reaches back as far as last March.

New York Gov. Andrew M. Cuomo "will propose regulations on Monday that subject credit reporting agencies to the same rules as banks and insurances companies in order to protect consumers." The reporting agencies will have to register with the state Department of Financial Services. “The proposed regulations would, in effect, make it illegal for unregistered credit reporting agencies to compile reports on consumers in New York or to collect fees from banks for their services,” the New York Times reports.

Peter Foley/Bloomberg

Goodbye again: Social Finance CEO Mike Cagney is leaving the company immediately and giving up his board seat. Tom Hutton, who replaced Cagney as chairman of the board early last week, was named interim CEO. Cagney was originally slated to stay on as CEO and retain a board seat until a permanent replacement was named, but the acceleration of his departure was “a nod to the fact that keeping Mr. Cagney around was also proving to be a [distraction],” the Journal said. Friday’s announcement “raises the specter of a more disruptive transition that threatens the firm’s ambitious business prospects.” Wall Street Journal, Financial Times, New York Times, American Banker

Indeed, SoFi’s application to become a bank “has almost no chance of approval” following the sexual harassment scandal that cost Cagney his job, a senior adviser to the company and a former chairman of the Securities and Exchange Commission told the FT. “This departure of Mike makes that a very questionable attainment,” said Arthur Levitt, referring to SoFi’s application for a bank charter in Utah. “So for a company as aggressive as SoFi, I think the chances of that happening were slim. Now they become almost impossible.”

Another one bites the dust: Jonathan Cox, the senior compliance official responsible for the whistleblower program at Barclays, is leaving the company after settling an employment dispute with the British bank. Cox’s lawsuit was scheduled to begin last Wednesday but was reportedly settled out of court. It’s not clear if the suit or the settlement were related to an investigation into CEO Jes Staley’s attempt to unmask a whistleblower. Wall Street Journal, Financial Times

Wall Street Journal
Smaller is better: Bank of America changed its retail banking strategy. After pulling all of its branches out of Indiana four years ago it is returning, targeting more affluent customers in Indianapolis.

B of A “has gotten rid of around 1,600 branches since the financial crisis as it seeks to rekindle sagging profits and focus on major metropolitan areas,” the paper reports. “The strategy would represent a stark change for any big lender, but it is a particularly striking departure for a bank built over decades on the idea of offering a coast-to-coast network in areas urban and rural.”

But B of A’s departure from small-town Indiana didn’t leave consumers in those places without banks, just big banks, and they’re OK with that. “Some residents once tied to the big lender find they enjoy the benefits of a small-town bank,” the paper writes in a sidebar.

No resolution: Fannie Mae and Freddie Mac will wait quite a while longer for their futures to be addressed, the paper reports, “crowded out by matters such as taxes, immigration and flood insurance. Moreover, prospects that the Senate will eventually pass a broad revamp of the companies also have dimmed.”

Grow your own: A report from the Bank for International Settlements says central banks should consider minting their own digital currencies in order to counter the risks from bitcoin and other cryptocurrencies,

Quotable
“What’s happening to crypto now is what happened to Dogecoin. I’m worried that this time, it’s on a much grander scale.” — Jackson Palmer, referring to the cryptocurrency he created four years ago as a joke, but which nonetheless soared in value to as much as $400 million, caught up in the digital currency craze, before collapsing.