It’s official: Powell confirmed; Noto to head SoFi
Receiving Wide Coverage
He’s in: Jerome Powell was confirmed as the next chair of the U.S. Federal Reserve by a vote of 84-13 by the full Senate. He will take over when Janet Yellen’s four-year term as chief ends on Feb. 3. While Powell received broad bipartisan support, he was opposed by several senators with presidential aspirations, including Democrats Elizabeth Warren of Massachusetts, Kamala Harris of California and Cory Booker of New Jersey and Republicans Ted Cruz of Texas, Rand Paul of Kentucky, Mike Lee of Utah and Marco Rubio of Florida. Wall Street Journal, Financial Times, New York Times, Washington Post, American Banker
Separately, Marvin Goodfriend, President Trump’s nominee to fill one of three vacancies on the Fed’s board of governors, faced some hostile questions from members of the Senate Banking Committee. Goodfriend, a Carnegie Mellon University professor and former Fed economist, said he supported the Fed’s dual mandate to maintain stable prices and pursue maximum employment, deflecting questions from some Democrats about his past comments that the Fed should have raised interest rates earlier in order to fight inflation.
Also on Capitol Hill, Jelena McWilliams, Trump’s nominee to head the Federal Deposit Insurance Corp., told the banking panel that she will focus on easing regulatory requirements for community banks and plans to speed up the process for reviewing deposit insurance applications for banks.
He’s in, too: As expected, Twitter COO Anthony Noto has accepted the offer to become the next CEO of online lender Social Finance. Interim CEO Tom Hutton, who has been running the company since founder Mike Cagney resigned last September, will become its nonexecutive chairman.
“One of the first tasks for Mr. Noto will be to rebuild the executive team, which has been rocked by departures,” the Wall Street Journal notes. “In addition to Mr. Cagney, SoFi in the past year lost its chief financial officer, chief revenue officer and chief technology officer.” Despite those problems, the company’s lending business has been booming, with loan volume up 79% in last year’s third quarter compared to the comparable period in 2016. Wall Street Journal, Financial Times, New York Times, American Banker
Kinder and gentler: Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, wants the agency to act with “humility and prudence” in dealing with lenders, rather than regulate through heavy-handed enforcement actions, according to a 1,118-word mission statement that was sent to the bureau’s staff on Tuesday. According to the New York Times, Mulvaney “made clear that under his direction, the consumer bureau would be more reluctant to target companies without overwhelming evidence of wrongdoing and suggested that the effect on a business should be weighed more heavily when considering cracking down on potential consumer abuses.” Financial Times, New York Times, American Banker
Wall Street Journal
Everybody’s equal: Bank of America said women and minorities are paid 99% of what men and non-minorities are paid, according to an internal memo from Sheri Bronstein, the bank’s global head of human resources. This is the first time the bank has released the results of this analysis, which it has been doing for more than a decade. B of A said the study “will continue to inform both our ongoing pay for performance practices, including how we continue to bridge gaps that exist.”
Meanwhile, B of A said it has renewed and expanded its anchor office lease at Bank of America Plaza in Los Angeles. The bank is relocating its regional Merrill Lynch and U.S. Trust offices to the 55-story downtown building.
Capital One loss: Capital One reported a net loss of $971 million for the fourth quarter, including a $1.77 billion charge due to the tax reform legislation. Revenue rose 7% to $5.81 billion, slightly below forecasts. For the full year, net income dropped 47% while revenue rose 8%. The company also reported a 17% increase in its provision for credit losses for the full year.
“His track record over the past six years shows he is a thoughtful policymaker.” — Senator Sherrod Brown, D-Ohio, about Fed chair nominee Jerome Powell.