Lenders, Credit Karma make a deal; Goldman goes further down Main Street

Receiving Wide Coverage ...

Marcus movement
Goldman Sachs said it is merging Marcus, its fledgling consumer bank, into its investment management unit, a move that will enable it to “offer investment management services to the masses, throwing down the gauntlet to big U.S. brokerage houses like Charles Schwab by taking the venerable Wall Street institution further into Main Street.” Goldman said the new division would launch a “broader wealth-management offering — combining Marcus’ digital capabilities with the more established sales channels and products currently housed within the investment-management division.”

Not again
Wells Fargo has agreed to pay $65 million to settle New York State charges that it misled investors about its cross-selling tactics.

Attorney general Barbara Underwood said Wells knew as early as 2011 that its employees were engaged in fraudulent sales practices but failed to disclose the problem to investors. “The misconduct at Wells Fargo was widespread across the bank and at every level of management — impacting both customers and investors who were misled,” she said. Wall Street Journal, Financial Times, American Banker

Free to go
UBS said it has withdrawn its warning about travel to China after one of its private bankers was prevented from leaving that country. “UBS would like to confirm that we allow all our staff to travel freely in and out of the country and it is business as usual for us in China,” the bank said.

After the incident, several large global banks, including JPMorgan Chase, Citigroup, Standard Chartered and BNP Paribas, had suggested their private bankers put off travel to China.

Wall Street Journal

Sharing secrets
Some of the largest American consumer lenders have agreed to share their underwriting models with Credit Karma, giving the personal finance company “the ability to tell its users with near certainty which loans they will be approved for without having to apply formally. That potentially spares them from being denied and having their credit score dinged.”

“Lenders’ willingness to share information they have kept secret for years shows their hunger for new sources of business,” the paper notes. Credit Karma CEO Kenneth Lin said two of the five largest credit card issuers, plus unsecured consumer lenders LendingClub and Upgrade, have joined the program.

Digital currency debate
Lisa Ellis, a senior equity analyst at MoffettNathanson, and Tim Swanson, founder and director of research at Post Oak Labs, debate the question, “Can bitcoin become a dominant currency?” Ellis says there’s a need for alternatives to today’s currencies, while Swanson says no, only speculators use it, not average consumers.

Financial Times

Starting over
Ten years after it wrote off $10.6 billion of U.S. consumer loans, HSBC is getting back into the business, announcing the launch of a digital lending platform scheduled for the first half of next year. “By adding personal loans to our expanding product suite, we’re meeting the needs of today’s consumers who want a safe, fast and easy way to borrow money online,” said Pablo Sanchez, the bank’s head of retail banking and wealth management for the U.S. and Canada.

Quotable

“We’re in a hell of a mess in every direction.” — Former Federal Reserve Chair Paul Volcker, complaining about the state of the nation, the economy and politics.