In the crosshairs Wells Fargo’s woes continue. “Regulators have identified problems across Wells Fargo’s technology operations, including software vulnerabilities, cybersecurity concerns and risk-management inconsistencies,” the Wall Street Journal reports. The Office of the Comptroller of the Currency recently sent Wells Fargo a regulatory warning that may be the precursor of an enforcement action. “The bank also has failed or isn’t expected to meet deadlines on around two dozen technology-focused OCC regulatory warnings … that have been issued since 2014 or earlier.”
A Wells Fargo & Co. sign sits on display outside the company's offices in San Francisco, California, U.S., on Tuesday, April 27, 2010. Wells Fargo & Co., the fourth-largest U.S. bank by assets and deposits, may raise its dividend once capital levels satisfy regulators and if the economic recovery continues, said Chief Executive Officer John Stumpf. Photographer: David Paul Morris/Bloomberg
David Paul Morris/Bloomberg
That may be the least of its worries. The Democrat takeover of the House on Tuesday “likely means Rep. Maxine Waters, D-Calif., will seize the gavel of the House Financial Services Committee. Wells Fargo, with its litany of consumer abuse scandals, tops the list of megabanks in line for rough treatment under the committee’s hot lights,” the Washington Post says.
Welcome to the club As expected, Goldman Sachs named 69 new partners, the smallest group in two decades and the first class under CEO, David Solomon. “Twenty-six percent of the new partners are women, a sign of progress toward Mr. Solomon’s promise to close Goldman’s gender gap.”
Millennials make up 29%, Asians 20% and blacks 6%. The women and black percentages were records, the bank said.
Ready to fight UBS said it will fight expected civil charges from the Department of Justice that it sold toxic mortgage-backed securities before the financial crisis. “The DOJ’s claims aren’t supported by the facts or the law. UBS will contest any such complaint vigorously in the interest of its shareholders. UBS is confident in its legal position and has been fully prepared for some time to defend itself in court,” the bank said. Wall Street Journal, Financial Times
Wall Street Journal
Another angle Banks “are pulling data from social-media sentiment, geospatial mapping and other unorthodox sources” in a new strategy to “try to juice up interest in — and revenue from — their giant research arms that are struggling to stay relevant. They are also increasingly making their data feeds available directly to clients, without the surrounding research notes that often go unread.”
Financial Times
Thought provoking Lloyds Banking Group has taken a 10%, £11 million stake in Thought Machine, a London-based fintech company “that is developing a new core banking platform” as part of the bank’s effort to “to speed up its ambitious digitization plans.” The bank said Thought Machine’s technology “could allow it to provide more tailored products and develop new services more quickly,” with some expected next year.
Sanctioned The Bank of England’s Prudential Regulation Authority, which oversees the largest lenders and insurers in the country, has issued “rare” individual penalties against two former executives of Mitsubishi UFJ Financial Group for failing to tell the BoE about actions taken against them by the New York Department of Financial Services.
Quotable
“It is obviously very distressing to see two former Goldman Sachs employees went so blatantly around our policies and so blatantly broke the law. I feel horrible about the fact that people who worked at Goldman Sachs, and it doesn’t matter whether it’s a partner or it’s an entry level employee, would go around our policies and break the law.” — Goldman CEO David Solomon on the recent indictment of two former Goldman bankers in the Malaysian fund fraud.
A budget bill passed by the House Financial Services Committee would eliminate the Public Company Accounting Oversight Board and cap the Consumer Financial Protection Bureau's budget at roughly $249 million.
As the banking-as-a-service model has evolved over the last decade amid widespread consent orders and BaaS partnership failures, the number of sponsor banks has dwindled, leaving fintechs to compete for the business of those that remain.
First Savings Financial Group could have bailed out of SBA lending after the departures of key executives and loan officers. Instead it retooled the unit, and it's now reaping the benefits.
Citizens Financial Group's promotion of Brendan Coughlin to company president comes at the same time as CFO John Woods prepares to leave for State Street. Both executives have been viewed as potential successors to CEO Bruce Van Saun.
