Wall Street Journal
The Consumer Financial Protection Bureau is exploring a potential new regulation to require payday lenders to make sure borrowers can repay their loans, anonymice tell the Wall Street Journal. The proposal is expected to be discussed early this year in a panel of small lenders the CFPB plans to convene. Such a rule would please consumer advocates, who also want the CFPB to require payday lenders to verify borrowers' incomes, expenses and credit histories. A spokesman for the largest payday lender, Advance America, said the proposed rules would "eliminate a viable credit option and drive them to miss bill payments, use overdraft programs, or turn to dangerous, illegally operating lenders." States have historically been responsible for regulating payday lenders. South Dakota, which pioneered the payday-lending industry when it repealed interest-rate caps, may soon reverse course and ban payday lending if voters approve a ballot measure.
U.S. credit-card issuers are adopting features to beef up security of credit and debit cards, but they're not going as far as Canadian, European and Australian banks and adopting chip-and-pin technology. The issue is creating friction between banks and some retailers, who prefer banks adopt the tougher-security measures of banks abroad. (The Journal article touches on many points that have already been reported by American Banker.) One feature being added to some U.S. cards is a chip that creates a unique code for each transaction. U.S. bankers say they aren't adding chip-and-PIN requirements because consumers don't want the burden of having to remember a four-digit PIN. Instead, institutions like Bank of America, Citigroup and JPMorgan Chase are adopting chip-and-signature features. A few institutions have chosen chip-and-PIN technology, however, including United Nations Federal Credit Union.
Disruptors don't necessarily spell doom for banks, although smaller institutions may have more trouble adapting than larger banks, the Heard on the Street column writes. Large banks will probably survive because they control the payment system and disruptors like Apple Pay and PayPal must operate on top of those payment-system rails. LendingClub is also heavily dependent on banks.
A group affiliated with the Chinese online gaming and social network firm Tencent has launched China's first online-only bank, called WeBank. China last year approved the formation of six privately owned banks and WeBank is one.
New York Times
The Bitcoin Foundation's global policy director has resigned, an indication the advocacy group is now less interested in regulatory issues and more interested in technology and infrastructure development.
NPR: JPMorgan Chase and other U.S. banks are closing some customers' accounts in Mexico as regulators heighten scrutiny in an effort to enforce anti-money laundering laws. Some of the customers whose accounts have been closed are legitimate, and include American-owned businesses. A JPMorgan spokeswoman told NPR the bank closed "fewer than 5,000 small foreign business accounts" because it's trying to comply with anti-money laundering regulations. The CEO of the Arizona Bankers Association said the banks closing accounts are trying to do the right thing and "don't want to help facilitate illegal conduct."