Receiving Wide Coverage ...

Return to Form?: Community banks are doing very well, thank you very much, Mr. Dimon. But it's not necessarily a return to the salad days of pre-2008. The Wall Street Journal's ongoing series on the banking industry looks at the state of community banking, and pronounces the sector healthy, but facing serious issues.

Earnings and lending are up, though they haven't quite returned to pre-crisis levels. The main challenge is the regulatory regime, designed for big banks but nevertheless applicable to community banks. "It's a hell of a lot better than it was 2010 to 2012, but it's still not where it was," Camden Fine of the Independent Community Bankers of America said in an interview.

The series will continue later this week with articles on China and digital banking; a profile of PayPal; and whether banks have restricted mortgage lending to minorities. The series also includes a story Wednesday on Fed Governor Daniel Tarullo, called the most powerful man in banking and the "Wizard of Oz" for his level of influence over the industry.

When Tarullo speaks, banks listen. Example: when the Fed flunked Bank of America and Citigroup in recent stress tests, each bank spent at least $100 million to correct problems highlighted by Tarullo and his Fed minions.

The WSJ profile includes other interesting nuggets into Tarullo's personality and approach to his work. Unnamed sources said Tarullo yelled and cursed at staff members during his early years, both for producing work he didn't like and for disagreeing with him. He's known for a lack of an ability to compromise, especially when presented with data that supports the industry's point of view.

In one example of his refusal to budge on issues, Wells Fargo was recently ordered to raise $40 billion of debt to absorb losses and prevent a bailout. Wells Fargo argued the requirement wasn't necessary and the bank felt Tarullo listened to its reasoning. But he made no changes or adjustments to reflect Wells Fargo's position.

Wall Street Journal

Employers of all stripes are getting into the lending business. While not actually opening companies to make loans, employers from IBM to small businesses are lending to workers to help them make ends meet, from payday loans to consolidation of student-loan debt. They are also providing low-interest or no-interest lines of credit to help cover emergency costs or pay down debt.

"I can't have an effective employee if they are stressed and thinking about waiting tables on the side to make ends meet," said the CEO of a New York creative media agency with 33 workers. It's something that a lot of rank-and-file workers might find useful. About 51% of adults with full-time jobs carry balances on their credit cards and about 40% struggle to meet monthly household expenses, according to a recent PricewaterhouseCoopers survey.

Some employers have partnered with outside firms to help them make loans to workers, such as Ziero Financial, Zebit and Kashable.

Is the housing market headed toward another bubble? Home prices have risen to near-record highs in many parts of the U.S. The latest S&P/Case-Shiller national home-price index has risen to within 4% of its 2006 peak. New-home sales have also risen.

The situation is good for sellers, of course, and for potential buyers who have sterling credit, according to industry experts. But it's going to make it difficult for first-time homebuyers who haven't saved enough for a downpayment.

Financial Times

JPMorgan Chase, HSBC and Bank of Tokyo-Mitsubishi are expected to be involved in the Kingdom of Saudi Arabia's upcoming $15 billion bond sale.

Washington Post

A Barclays banker in New York was charged with insider trading for passing along tips to a plumber friend. Steven McClatchey faces 20 years in prison, for passing along tips that helped his friend make $76,000 in stock trades. In exchange, the plumber renovated McClatchey's bathroom for free and paid McClatchey thousands of dollars.


Reuters: Bank of America plans to hire more than 100 financial advisers for its U.S. Trust unit, as a way to boost wealth-management revenue. That will give U.S. Trust more than 450 advisers companywide. U.S. Trust serves clients with at least $3 million of personal assets.

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