Receiving Wide Coverage ...
Choice Act passes: While most of the attention Thursday was focused on the House's passage of the bill to repeal Obamacare, the House Financial Services Committee approved the Financial Choice Act, which would undo much of the 2010 Dodd-Frank Act. The bill was approved 34-26 along party lines and now goes to the full House.
"Our plan replaces Dodd-Frank's growth-strangling regulations on small banks and credit unions with reforms that expand access to capital so small businesses on Main Street can grow and create jobs," said Rep. Jeb Hensarling, R-Texas, the chairman of the committee and the bill's sponsor. Wall Street Journal, Financial Times, American Banker
Hunting for prey: Latino employees of Wells Fargo trolled streets, Social Security offices, construction sites and factories looking for undocumented immigrants, then took them to local branches and persuaded them to open bank accounts. That's what former Wells employees say in sworn statements to a law firm representing a shareholder who is suing the bank. Mark Molumphy, an attorney for the firm, said the sales practices, dubbed "Hit the Streets Thursday," took place over 15 years and "were not a secret to the bank's executives and should have also been known to its board members," the Washington Post said. The Wells employees said they were "forced to resort to questionable tactics to meet the company's unrealistic sales quotas."
Meanwhile, Wells' policy on whistle-blowers remains a concern. CEO Timothy J. Sloan, last November told bank employees that retaliation against whistle-blowers would "not be tolerated at Wells Fargo." But, says Times columnist James B. Stewart, the "subject of whistle-blowers and how they were treated was relegated to a footnote" in the independent investigator's report on the bank's phony accounts scandal.
"It's buried on Page 87," Howell E. Jackson, a Harvard Law School professor, told Stewart. "My concern is whether whistle-blowers were handled properly and to what degree the board bears responsibility. You don't find any answers in this mumbo-jumbo."
In other Wells news, the bank said it is testing predictive budgeting tools and "chief marketing officer Jamie Moldafsky shared how social media is helping the bank recover from its account-opening crisis."
Good show: HSBC Holdings, Europe's biggest bank by assets, said recently it took its first dividend since 2006 from its American bank, "a milestone in the lender's years-long turnaround," the Wall Street Journal said. Overall, the bank reported better-than-expected first-quarter earnings, fueling investor hopes that it will buy back $2 billion more of shares. Wall Street Journal, Financial Times
Delays: MetLife said the $10 billion spinoff of its Brighthouse consumer division is being delayed by regulators in its home state of Delaware. MetLife CEO Steve Kandarian said the company was unlikely to "have the necessary approvals" to complete the spinoff by the end of June, as it expected.
Separately, the Trump administration said it agreed to delay a federal court case involving federal oversight against MetLife, which could lead to the government dropping the case.
Wall Street Journal
We're not gonna take it anymore: More companies are challenging the Consumer Financial Protection Bureau on enforcement actions rather than settling them "as Republican control of the White House has put the agency's future in doubt." Fully one-third of the agency's 21 enforcement actions this year have been challenged, compared to just six out of 36 last year.
One of those challenges was brought by Ocwen Financial, which waited just five days to ask a court to dismiss a lawsuit filed against it, saying the agency is unconstitutional. "The swift counterattack by Ocwen, a mortgage servicer facing numerous regulatory woes, is an extreme example of how some companies are using the uncertainty surrounding the Consumer Financial Protection Bureau to their advantage."
Marketplace update: The online lending platform Prosper said it mistakenly inflated the stated returns the majority of its investors are making on their money. The miscalculations date back as far as seven quarters but had no effect on the investors' actual investments or the money they received.
Separately, another marketplace lender, Lending Club, is making some progress in bouncing back from its troubles last year. The San Francisco-based company said it originated $1.96 billion of personal loans in the first quarter, down slightly from the previous quarter's total. But banks bought 40% of the loans, up from 31% previously, "indicating that many are now satisfied that the company has ironed out its problems."
"The conduct we have come up with is scandalous. It's outrageous to think that regulators let the bank get away with this." – Attorney Joseph Cotchett, who is suing Wells Fargo