Hensarling drops Durbin repeal; Court hears CFPB challenge

Receiving Wide Coverage ...
Skeptical: A federal appeals court appeared skeptical about declaring the Consumer Financial Protection Bureau's structure unconstitutional. The court heard oral arguments in the case brought by PHH, a New Jersey-based mortgage lender, which was accused of violating a real estate law and fined $109 million by the agency. The company is challenging the CFPB's powers and independence from the White House, including if the agency's director can be fired by the president. Wall Street Journal, Washington Post, American Banker

In a separate case, a federal appeals court "sharply questioned" the powers of the Securities and Exchange Commission's internal courts, "in a case that could transform how the Wall Street regulator carries out its enforcement authority."

Drop it: Rep. Jeb Hensarling, R-Texas, the chairman of the House Financial Services Committee, agreed to drop a provision from his Dodd-Frank overhaul bill that sought to repeal the Durbin amendment that limits debit-card swipe fees. "We won't let this one provision hinder passage of an important priority bill," Hensarling said. Wall Street Journal, Washington Post, Politico

Andrew Harrer/Bloomberg

FX fine: The New York State Department of Financial Services slapped BNP Paribas, France's biggest bank, with a $350 million fine for what it called "nearly unfettered misconduct" in the bank's foreign exchange business. BNP traders conspired with rival companies to manipulate FX prices and rates, made fake trades and shared details on customer orders with traders at other firms, the DFS said. "BNP Paribas deeply regrets the past misconduct which led to this settlement," the bank said. Wall Street Journal, Financial Times

Wall Street Journal
Promising: The Journal's Heard on the Street column says a "promising consensus is beginning to form about the ultimate future of Fannie Mae and Freddie Mac."

What happens next: The Journal also looks at what happens on June 9, when the Labor Department's so-called fiduciary rule on retirement savings accounts is set to go into effect.

Financial Times
Buyer beware: The FT warns about investing in digital tokens that "promise you absolutely nothing in return" and that are a product of "one of the most sophisticated hype machines to hit markets in a long time."

Growing impatient: OnDeck, the marketplace lender, recently announced that it plans to focus on making a profit, rather than growing loan originations, after failing to make money in eight of the past 10 quarters. But that's simply not enough for some of its investors. Mario Cibelli, managing partner at Marathon Partners Equity Management, wants the company to make bigger cost cuts and consider selling the company. "Clearly the additional cuts are a step in the right direction but my instinct is that this is not enough," he said. "The level of overhead still seems unhinged from reality."

Stamp of approval: Funding Circle, the largest peer-to-peer lender in the U.K., has received regulatory approval from the Financial Conduct Authority for its "burgeoning" small business lending site. The online company connects investors to borrowers, cutting out banks as the middlemen. "Regulatory approval is seen as a crucial hallmark for a sector that has a wide range of lending practices, some of which have drawn scrutiny from the watchdog in the past," the FT noted.

New York Times
Big idea: Opendoor, a tech startup that has raised more than $300 million in equity and taken on more than $500 million in debt, has created a website that will instantly buy your home at a "fair" price and close on it in a few days. It plans to be in 10 markets by the end of this year.

"If it works, Opendoor could be transformative," the Times says. "By making buying and selling houses as easy as buying and selling cars, it might thoroughly alter the American economy and change how we think of homeownership."

Quotable
"You have to forget everything that you used to do and really reimagine completely what your product, what your service, what your core purpose is in a digital way toward customers." — David Gledhill, group CIO and head of technology and operations at Singapore-based DBS Bank.