Wall Street Journal
GE sells French mortgages: General Electric received a binding offer for its French prime mortgage portfolio from a newly established French entity backed by an Austrian bank. The deal increases GE Capital's asset sales to about $192 billion, close to its goal of selling $200 billion as part of its plan to disband its GE Capital unit. The deal is expected to close in the fourth quarter.
More on the New York Fed hack: The Wall Street Journal sheds more light on the February 4 hack of the Federal Reserve Bank of New York, in which cyberthieves stole $81 million from the Bangladesh central bank's account. The paper says the theft "harmed New York Fed's reputation and exposed gaps" in the global movement of money.
Seller beware: The FT profiles Consumer Financial Protection Bureau chief Richard Cordray, who "does not demur when asked if he is engineering a shift in responsibility from buyer beware to seller beware," the paper says. "Banks can and should and do make plenty of money for actual value rendered to their customers," Cordray replies. "But they need to think about treating their customers fairly and that needs to be a much higher priority than it was. They can do just fine while treating their customers right, and they no longer need to try to find ways to treat their customers badly to get a little extra squeeze."
Unprepared: Nearly half of big banks outside the U.S. are unprepared for the implementation of International Accounting Standards Board's IFRS 9 Financial Instruments. The rules, which are scheduled to go into effect in less than two years, force banks and other institutions to provision for expected future losses rather than actual losses already suffered. U.S. banks, which are governed by their own rules, are exempt from the regulations. Forty-six percent of 91 banks surveyed by the paper do not believe they have enough resources to be ready by the 2018 implementation date, and nearly two-thirds are unsure how the rules might impact their balance sheets. Banks that have made the calculations believe the rules will result in a surge in bad-debt provisions and cause their capital ratios to worsen.
No more passwords: The U.K.'s Standard Chartered Bank is replacing PINs and passwords with voice recognition and fingerprints for many of its customers starting this year. Customers will be able to check bank balances and access investments through their mobile phones without having to remember multiple passwords.
Auditor on trial: PwC went on trial in Miami last week for its alleged failure to detect a mortgage fraud that led to the 2009 collapse of Colonial BancGroup, the sixth-largest bank failure in U.S. history. PwC gave the bank's parent a clean bill of health in each of the seven years running up to the bank's failure.
PwC is being sued for $5.5 billion on behalf of a trustee of Taylor, Bean & Whitaker, a defunct mortgage originator, for failing to catch a multibillion-dollar conspiracy between TBW's founder and Colonial Bank, which supplied the company with loans. In opening statements, PWC's attorneys argued the accounting firm had no relationship with TBW and never audited the company nor had access to its records.
New York Times
Avoiding debt: Millennials aren't just avoiding mortgages; they're also shunning credit card debt. The percentage of Americans under 35 who have credit card debt is now at its lowest level since the Fed began collecting statistics in 1989.
Under pressure: Consumers who bought universal life policies in the 1980s and 1990s, some of which guaranteed annual returns of 4% or more, are suing the insurance companies who wrote the policies, accusing them of raising their premiums in order to get the customers to cancel the policies. The companies are under pressure from the low interest rate environment, which makes it difficult for them to earn enough money to make good on their promises.
"Companies that sell policies that run for decades, like life and long-term care insurance, face a twofold challenge: how to fund policies that were sold back when their actuaries couldn't envision a world of interest rates below 8 percent and what to sell now, when those same actuaries can't envision an appreciable rise in rates anytime soon," the paper says.