Intuit eyes Credit Karma; JPMorgan Chase plans U.K. digital bank

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Instant Karma

The maker of TurboTax is nearing a deal to buy privately-held Credit Karma for about $7 billion in cash and stock, "a move that would push the bookkeeping-software giant further into consumer finance, " the Wall Street Journal reports. "Credit Karma offers its customers free access to their credit scores and borrowing history, alerts to possible data breaches, credit monitoring and tax preparation and filing. Customers in turn receive offers from other companies for credit cards and loans tailored to their credit history, and Credit Karma makes money when customers use those products."

"Credit Karma has been at the leading edge of a large group of start-ups in the financial technology sector over the last decade," the New York Times noted. "It says its customers include a third of all Americans who have a credit profile."

Wall Street Journal

Charm offensive

Comptroller of the Currency Joseph Otting has been "personally lobbying" bank CEOs, including JPMorgan Chase's Jamie Dimon and Bank of America's Brian Moynihan, "to win support for his signature initiative:" an overhaul of the Community Reinvestment Act. "The responses have been cordial but lukewarm," the Journal says.

"Under current rules, banks are graded on the loans and investments they make in communities around their branches—a measure that doesn't account for online deposits. Mr. Otting's proposal would add areas where banks draw large amounts of deposits, even if they have no branches there. And it would provide clarity on the types of loans and investments that count under the rules."

Thinking about tomorrow

Morgan Stanley's proposed acquisition of E-Trade is the latest indication that "investment banks are eyeing non-affluent customers as a source of growth amid sluggish trading and deal-making revenues," the Journal states in an editorial. "They also hope to bring in non-millionaire customers whom they hope to someday sell more services. In other words, Wall Street banks are all making long bets on the middle-class becoming richer."

"Morgan Stanley's E-Trade acquisition would also diversify its funding base and could make its balance sheet sturdier during a downturn. But the merger's success will hinge on a prosperous American middle class."

Financial Times

U.K. launch

JPMorgan Chase "is in talks with London regulators about launching a digital bank in the U.K. this year. The new operation, which is likely to include savings and lending products, comes two years after fellow U.S. banking giant Goldman Sachs launched its digital bank Marcus in the U.K. JPMorgan is likely to target a broader audience and could become a significant player in the U.K. retail banking market."

Clive Adamson, the former head of supervision at the Financial Conduct Authority, "has been asked to chair the new business," the Times added. "Mr. Adamson has already held several non-executive roles at JPMorgan since leaving the regulator in 2015, including chairing its international business between 2016 and 2019. He is currently a non-executive director at JPMorgan Securities, one of its main European legal entities."

Pressure mounting

Nest, the U.K.'s largest pension fund with 8.5 million members, wants Barclays to present a "clear and robust plan" to phase out financing some fossil fuel companies "as the bank faces growing pressure over its role in global warming." The fund said "it would support a landmark climate change resolution" at Barclays' annual meeting in May that would ask "the bank to stop financing energy companies that are not aligned with the Paris Agreement to tackle global temperature rises."

"Barclays ranks as the world's sixth-largest backer of fossil fuels and the largest financier of fossil fuel of any European bank, exceeding its peers by $27 billion, according to the Rainforest Action Network."

Meanwhile, Barclays "is preparing to start the search for a new chief executive to replace Jes Staley, making it the latest European bank to look for new leadership at a time of upheaval in the industry's top ranks. Mr. Staley, 63, who has led the bank since December 2015, has told colleagues he expects to leave the group by the end of next year."

"A rough timetable for Mr. Staley's departure was in place before Britain's top financial regulators recently launched an investigation into his ties to Jeffrey Epstein, the pedophile financier. But the probe had 'focused minds' on the bank's board of directors and injected a sense of urgency into the process."

Not interested

Jean Pierre Mustier, the CEO of UniCredit, Italy's largest bank, "has ruled himself out of the running to be the next chief executive of HSBC. Mr. Mustier had been identified as the preferred external candidate by HSBC's board of directors, setting up what would have been a two-horse with internal contender Noel Quinn, who has been acting as interim chief executive since August."

"HSBC has been searching for a permanent leader since August last year, when the board ousted John Flint as its chief executive because it was concerned that he did not have the right plan to turn the bank round. Mr. Quinn, who had headed HSBC's commercial bank, was immediately appointed as an interim replacement."

It's "hard to explain, at first glance, the sweeping strategic decisions taken" by Quinn in light of his interim status, the FT comments, urging chairman Mark Tucker "not to extend the interim awkwardness much longer."

In on Libra

Libra, Facebook's digital currency project, has added ecommerce company Shopify to its ranks, "its first new recruit since a wave of big technology and finance companies quit the initiative over regulatory concerns" last year. "Libra has been working on developing a blueprint for a 'Libra 2.0' that addresses U.S. regulators' concerns, and choosing new members to replenish its ranks after receiving hundreds of applications. If the digital currency launches, Shopify might be able to help the 1 million merchants globally selling goods via its platform to avoid cumbersome credit card fees on international transactions."

"As a member of the Libra Association, we will work collectively to build a payment network that makes money easier to access and supports merchants and consumers everywhere," Shopify said in a blog post. It said it will contribute $10 million to the project "and sit on the board that oversees its development."

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Intuit Joseph Otting CRA JPMorgan Chase Morgan Stanley HSBC Facebook Libra Barclays