Wall Street Journal

Is this the first wave of backlash to Apple Pay? Or was it simply to be expected that it was only a matter of time before hackers cracked the Apple Pay code? Either way, some banks say they've seen an increasing amount of fraud on Apple Pay devices. The weakness in the system is apparently related to the verification process associated with a user adding a credit card to the service, unnamed sources told the Journal. Here's the most chilling nugget from the story (or would Apple Pay's rivals interpret this as good news?) — the rate of fraud on Apple Pay devices is about 6%, compared to about 0.1% on swipe-based credit card transactions. That's according to payments expert Cherian Abraham. Not surprisingly, Abraham works for a company that provides a payments-technology to companies that use the Android operating system owned by Apple rival Google.

Craig Delany will step down from his post as treasurer at JPMorgan Chase's bank unit, according to unnamed sources. Delany, who also heads JPMorgan's chief investment office, will retire to spend more time with his family, but will remain with the company until his replacement is hired. Delany was named head of the chief investment office after the London whale fiasco, and was named treasurer last year.

Financial Times

What if a large bank was informed of a gaping hole in its cyberdefense fortresses and refused an offer for help? That's apparently the case with an unnamed British bank, which was informed by Bronzeye, a private security firm, that a weakness in its systems could give hackers access to its customers' accounts. Bronzeye offered to help, but the bank "refused to engage with the firm to fix them." The Financial Times article does not say if the bank hired someone else to address the matter. The U.K.'s Financial Conduct Authority was informed about the bank's security loophole, but the agency declined to comment on the specific matter.

It appears that "Fred's Folly" is being converted to a "shark tank" for entrepreneurs. Royal Bank of Scotland is making changes to a "notoriously opulent" executive wing at its headquarters in Edinburgh. The wing, known for deep carpet and expensive art, gave credence to complaints about the hubris of former CEO Fred Goodwin. Now the office space will be handed over to groups like Entrepreneurial Scotland "and Prince's Trust Scotland, which helps disadvantaged youth." Meanwhile, RBS plans to cut about 14,000 jobs in its investment bank.

New York Times

Landlord loans are becoming popular with private equity funds. Some of the same funds, like Blackstone Group and Cerberus Capital Management, that bought foreclosed single-family homes during the economic crisis, fixed them up and put them up for rent are now making loans to small and mid-sized investors who are doing the same thing. Private equity, however, has been criticized for their role in the single-family home rental market, as its presence may have slowed the rebound in mortgage sales. And many private equity firms appear to be getting ready to liquidate many of their holdings in the single-family rental sector, as they seek to record profits from their venture into the space.

Washington Post

The Consumer Financial Protection Bureau is expected to issue a report next week on mandatory arbitration, the Washington Post reported, citing unnamed sources. CFPB Director Richard Cordray will hold a field hearing on Tuesday in Newark, N.J., where he will discuss mandatory arbitration. Consumer advocates oppose mandatory arbitration clauses, which are common in credit cards, because they say they are unfair to consumers and because they force consumers to give up their right to pursue litigation. The Pentagon has also opposed mandatory arbitration and recent regulations proposed by the Pentagon appeared to prohibit credit cards issued to active-duty military members from including the clauses. Industry representatives say the clauses help companies keep costs low by discouraging litigation. The Post article also quotes the American Bankers Association's Nessa Feddis saying the industry has a good record of handling disputes with consumers.

Elsewhere ...

Pittsburgh Post-Gazette: PNC Financial Services Group said it will stop financing coal companies that get at least a quarter of their production through the controversial practice of mountaintop-removal mining. PNC follows other banks including JPMorgan Chase and Wells Fargo in adopting the policy. Environmental groups have pushed PNC and other banks to stop providing loans to companies that use the mining method, saying the process of blasting off the tops of mountains causes debris that contaminates waterways, results in the destruction of habitat for wildlife and causes health problems for humans. PNC disclosed the policy in its annual report issued this month.

Boston Globe: Here's an idea for a new way to reach out to customers. Bob Mahoney, CEO of Belmont Savings Bank in Massachusetts, every week films a video posted on YouTube called "Mahoney Money Minute" in which he spews wisdom on everything from prenuptial agreements to investment management fees. "This helps the bank compete on a different basis than pricing and rates," Mahoney said.

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