Receiving Wide Coverage ...
No forgiveness
“When Covid-19 hit the economy, most debt collectors gave borrowers a break, cutting back on lawsuits amid lockdowns, closed courts and loan-forbearance initiatives.” But Sherman Financial Group, “one of the biggest and least-known companies in the industry, did the opposite. It filed more lawsuits to squeeze cash from people behind on their credit-card bills,” The Wall Street Journal reported.
“In doing so, Sherman has cemented its reputation as a nonconformist in the industry. Since founding the company two decades ago, Sherman Chief Executive Ben Navarro has helped transform the once small and fragmented business of collecting old credit-card debt into a multibillion-dollar industry dominated by huge firms. And while many of his competitors have retrenched during economic downturns, Mr. Navarro has capitalized on them, expanding in the wake of the 2008 financial crisis and bucking industry trends during Covid.”
No PPP for you
Separately, “predatory debt collectors would be barred from collecting any more money from the federal government’s Paycheck Protection Program under recently proposed U.S. legislation," The Wasington Post reports. "Rep. Suzanne Bonamici (D-Ore.) and Rep. Marie Newman (D-Ill.) introduced the measure last week, arguing that during the pandemic, abusive collectors had harassed consumers and that such firms should not be eligible for the federal relief. Their proposal would block firms that have violated federal debt collection laws from receiving the forgivable loans.”
Wall Street Journal
Zoom doesn’t cut it
JPMorgan Chase CEO Jamie Dimon expects “nearly all” of its bank-branch employees “to report back to a physical location full time, as would many in critical operations and trading,” once the pandemic runs its course, he said in his annual letter to shareholders. “A smaller group will work under a hybrid model, Mr. Dimon said, while perhaps 10% of employees in ‘very specific roles’ will work from home every day.”
“JPMorgan’s stance on remote work is in keeping with other big banks, which have been slow to adopt large-scale hybrid arrangements and permanent work-from-home roles. One big exception is Citigroup, which last month said most employees would only be expected in the office three days a week after coronavirus restrictions are lifted.”
Dimon also said Big Tech and fintechs are “here to stay” and “vowed to be aggressive in taking on these new challengers,” American Banker reported.
Blinded by the light
Credit Suisse “is examining how, after years of beefing up compliance and risk, it pushed into risky trades that it couldn’t easily exit. The bank’s double-barreled financial crisis shares a common theme: a bank that looked the other way when warning signs argued for pulling back on lucrative corners of its business.”
Take my card
Instacart and DoorDash, “two of the biggest winners in the pandemic delivery boom, are looking to launch their own credit cards.” Instacart “has chosen JPMorgan Chase to issue a credit card that will reward frequent users,” while DoorDash “has received offers from more than 10 large banks and financial-technology firms to issue” its rewards card.
Both Instacart and DoorDash “are betting that at least some of the increased demand will remain after the pandemic ends and hoping that the cards will stoke customer loyalty and attract new users. Banks, for their part, see these new partnerships as a way to diversify beyond travel rewards cards, which fell out of favor with some consumers when the coronavirus pandemic brought travel almost to a standstill.”
Regulatory help
The credit card startup Petal Card, “which issues credit cards to people with limited credit histories, has hired Elizabeth Corbett, who once worked as a senior official at the Consumer Financial Protection Bureau, as its new general counsel and chief compliance officer. The hiring of Ms. Corbett comes as the fintech company, which said it has raised more than $100 million in equity funding, looks for help navigating regulatory issues in Washington and expanding its product offerings.”
Petal “issues credit cards by analyzing a person’s digital financial record and an alternative measure of creditworthiness based on income, savings and spending history, instead of a credit score.”
Financial Times
Take it, please
Cerberus “is likely to be paid about €500 million to take HSBC’s French retail bank off its hands, a far cry from the €11.1 billion that HSBC coughed up when buying into France in 2000. As things stand, HSBC will pay Cerberus in part to cover badly needed investment in IT systems and some restructuring. From HSBC’s perspective, it’s better to let someone else do the heavy lifting. Although painful, selling now could fit with a strategic shift to Asia.”
“If Cerberus pulls the deal off and has timed this right, then we could look back at this sale as a bottom of sorts for European retail banking.”
Crypto deal
State Street is “lending its trading technology to a digital currency trading venue.” The bank “said on Thursday it would partner with Pure Digital, a start-up that aims to be the main institutional platform for bitcoin. The new trading venue will offer cash cryptocurrency trading for investors through their existing bank relationships, with State Street’s Currenex platform providing the underlying technology.”
“Banks are telling us that they can’t ignore client demand for crypto assets and they realize it’s a market they need to get into,” said Lauren Kiley, Pure Digital’s CEO.
Quotable
“Remote work virtually eliminates spontaneous learning and creativity because you don’t run into people at the coffee machine, talk with clients in unplanned scenarios, or travel to meet with customers and employees for feedback on your products and services.” — JPMorgan Chase CEO Jamie Dimon, in his annual letter to shareholders, saying “nearly all” of the bank’s employees will return to the office after the pandemic is over.
