Wall Street Journal

An offer they can refuse: Facebook has asked several large U.S. banks — including JPMorgan Chase, Wells Fargo, Citigroup and U.S. Bancorp — “to share detailed financial information about their customers, including card transactions and checking-account balances, as part of an effort to offer new services to users. Facebook said it wouldn’t use the bank data for ad-targeting purposes or share it with third parties.”

Data privacy is a sticking point in the banks’ conversations with Facebook,” and one unnamed bank walked away “due to privacy concerns,” the paper reports.

“While the pitch is supposed to be enticing, bank executives say they see little benefit to it, particularly when compared to the potential drawbacks, including heightened data privacy and regulatory scrutiny concerns.”

Mark Zuckerberg, chief executive officer and founder of Facebook.
Mark Zuckerberg, chief executive officer and founder of Facebook. Bloomberg News

American Banker notes: "While Facebook is promising bankers that it won't use any financial data for ads or share it with third parties, that is unlikely to pass muster with compliance officers, executives and regulators."

On board: Federal Deposit Insurance Corp. Chairman Jelena McWilliams said her “top priorities are examining the regulatory burden on small banks, speeding up her agency’s review of bank-charter applications and helping banks introduce new financial products for underserved communities.” She expressed support for last week’s Treasury Department proposal to create a regulatory “sandbox” to foster new ideas. “If we can create a framework where that green light is given in a way that is safe for the consumers, why not?” she said.

Be patient: Despite a rather ho-hum second quarter earnings report dragged down by higher expenses, HSBC “is building the future earnings power it promised.” The bank “is finding the loan growth it promised and that should boost earnings and dividends in the years ahead. HSBC is never going to shoot the lights out — nor will it try to — but it still looks a better bet than many rivals.”

Looking at Lee: The White House is reportedly considering Allison H. Lee, a former enforcement lawyer, to fill the Democratic slot on the Securities and Exchange Commission. Lee would replace Kara Stein, whose term expired last year and must be replaced by the end of the year. Among other past enforcement cases, Lee worked on mortgage-backed securities cases against JPMorgan Chase and Credit Suisse Group.

Danish AML probe: Denmark has launched a criminal investigation against its largest bank, Danske Bank. The Danish Public Prosecutor for Serious Economic and International Crime is looking into charges that the bank’s Estonian branch was used to launder money from 2007 to 2015.

Put a lid on it: Freddie Mac announced a program to offer lower-cost loans for owners of apartment buildings if they agree to cap rent increases for the life of the loans. “We can provide an economic basis for private, profit-oriented developers to pursue a strategy where they didn’t raise rents by quite as much,” said David Brickman, head of Freddie Mac’s multifamily division.

Financial Times

The next step: Online real estate listings company Zillow said it is getting into the mortgage lending business as part of its plan to “reshape the U.S. homebuying market.” The company, which also operates the Trulia and StreetEasy websites, said it has reached an agreement to buy Mortgage Lenders of America in order to “create a better homebuying experience by building products that ease and simplify the transaction.”

Bad precedent: Bank of America is looking to move a “small number” of research analysts from London to Paris, “heightening concerns about London’s future as a financial services center after Brexit. While the number of research staff involved is small, the precedent of moving people who could stay in London into continental hubs will worry the U.K., which is keen to preserve as much of its financial services ecosystem as possible.”

Going global: Regulators from 11 countries — including the Consumer Financial Protection Bureau — announced the creation of a “global sandbox,” called the Global Financial Innovation Network, to encourage financial technology business growth.


“It’s very interesting how the world turns. In ’08 Facebook was one of those companies that was a big platform to criticize banks, they were very out front of criticizing banks for not being responsible citizens. I think banks were more responsible citizens in ’08 than some of the social media companies are today. And it affects everyone in the world. The banks have never had that much pull.” — Gary Cohn, former president of Goldman Sachs and former chief White House economic adviser to President Trump.

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