Equifax may be ready to settle; No hint of Dimon’s eventual successor

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Let's make a deal
Equifax is expected to announce as early as Monday that will it pay around $700 million to the Federal Trade Commission, the Consumer Financial Protection Bureau and most state attorneys general to settle “a slew of state and federal investigations” into its massive 2017 data breach. The deal would also settle a nationwide consumer class-action lawsuit.

“The deal would clear a cloud that has hung over Equifax since it revealed in September 2017 that hackers had penetrated its systems and gained access to consumers’ names, Social Security numbers, birth dates and addresses,” the Wall Street Journal says. Wall Street Journal, New York Times, American Banker

A matter of trust
Facebook “may need a longer timetable if it wants the government to hit the like button on Libra.” Last week’s “humble-pie approach” before two congressional committees “didn’t work. It was immediately apparent politicians on both sides of the aisle were wondering the same thing: If Facebook can’t be trusted with my summer vacation photos, how is it responsible enough to handle cryptocurrency?”

American Banker has a more sanguine take. “Lawmakers from both sides of the aisle raised serious questions about Facebook's cryptocurrency project at hearings [last] week, but many at the same time have voiced objection to congressional action aimed at stopping the launch of Libra. Even Democrats, who in general have been more critical of the company's plans, appear split on legislation to block any of the tech firms from delving further into the financial services business.”

Financial Times

Heirless?
JPMorgan Chase CFO Jennifer Piepszak’s first earnings call last week got the rumor mill spinning anew as to who will eventually succeed Jamie Dimon as CEO. “Just do not expect the recent shake-up to reveal Mr. Dimon’s heir any time soon.”

“Ms. Piepszak’s elevation gives her frontline experience with investors and analysts and a public profile, as well as experience in the nerve center of JPMorgan after 25 years working across its divisions. Insiders at JPMorgan argue that the changes under Mr. Dimon are designed to give people the opportunity to gain more skills that will keep them at the firm and position them for more varied careers.”

Separately, the bank has launched a data analytics tool “that aims to predict how investors agitating for change will influence other company shareholders, in the latest example of advisers using technology to help clients ward off activists.” The bank “has created a huge data set on previous activist situations at U.S.-listed companies, and used that to build a profile of how various shareholders typically respond to individual activists. The system can isolate which shareholders are likely to support a given activist's approach and which are likely to sell their stakes if a given activist joins a company’s share register. The data are then cross-referenced against a client’s shareholder base.”

Shot in the arm
Spending gave “a welcome boost” to U.S. credit card issuers in the second quarter. “Companies from JPMorgan Chase and Capital One to Synchrony Financial have reported growth in card spending … that eclipsed figures for the first quarter.”

Wake-up call
Last November’s raid of Deutsche Bank’s headquarters by German prosecutors seeking evidence of alleged money laundering was the catalyzing event that convinced CEO Christian Sewing that he had to take drastic action to overhaul Germany’s largest bank. “The traumatic day symbolized the end of an era for Deutsche, once the world’s biggest bank by assets. By then, Mr. Sewing already knew he was heading towards another dire set of quarterly earnings. Added to the raid, this emboldened him to call time on a two-decade attempt to conquer Wall Street.”

New York Times

False security
The estimated 25 million safe deposit boxes in America “operate in a legal gray zone within the highly regulated banking industry. There are no federal laws governing the boxes; no rules require banks to compensate customers if their property is stolen or destroyed. Even when a bank is clearly at fault, customers rarely recover more than a small fraction of what they’ve lost — if they recover anything at all. The combination of lax regulations and customers not paying attention to the fine print of their box-leasing agreements allows many banks to deflect responsibility when valuables are damaged or go missing.”

Quotable

“For the past 20 years, Deutsche has been ruled by investment bankers in London and New York. Saying ‘enough of it, the party is over!’ required a lot of courage.” — A financial adviser, commenting on Deutsche Bank CEO Christian Sewing’s decision to dismantle the bank’s investment banking operation

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