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.
The newest version of the House housing bill would make a ban on institutional investors owning some homes less harsh than the Senate version by removing a seven year mandate on selling build-to-rent homes.
The National Credit Union Administration Tuesday submitted a rule to the Office of Management and Budget stating that federal law preempts state laws on interchange, blocking an Illinois statute banning the collection of swipe fees on taxes and tips.
The Federal Financial Institutions Examination Council — whose members include federal bank regulators — issued a proposal Tuesday to overhaul the bank supervisory ratings process, the first such revision in 30 years. The proposal would reduce the weight management grades have on supervisory ratings and would require rating downgrades to be tied to explicit financial risks.
JPMorganChase's shareholders have occasionally floated proposals to make sure the bank's lobbying dollars match its public statements. At the company's annual meeting on Monday, support for one such measure was down significantly from a similar proposal in 2023.
Flagstar Bank extended Joseph Otting's employment contract by one year and granted him new stock awards. Simultaneously, the bank promoted two executives to serve as co-presidents, in a move that could be a hint at CEO succession plans.
The two fintechs will increase distribution of a 'pay by bank' option that has picked up steam in recent years as merchants and consumers seek relief from card fees.
