Wall Street Journal
Regulators are looking at credit unions, and regional banks to a lesser extent, as the weak link in the money laundering fight. With regulatory scrutiny pushing big banks out of the business of handling transactions for money-services businesses, such as check-cashers, those businesses are now turning to credit unions. And many of those credit unions are small institutions without the sophisticated technology and processes needed to weed out money-launderers. Drug dealers and other criminal groups typically use nontraditional financial-services companies, like check cashers, to move money. Actors Federal Credit Union in New York, whose membership consists largely of Broadway actors, and Bethex Federal Credit Union in the Bronx are two of 50 credit unions identified in a Financial Crimes Enforcement Network confidential report as vulnerable to money-laundering schemes. The Fincen report didn't accuse Actors FCU or any of the other credit unions of wrongdoing. Separately, the Office of the Comptroller of the Currency is looking as increased risks from regional banks doing business with correspondent-banking clients.
Now it can be told which banks rejected the proposed $19 million settlement between MasterCard and Target to cover financial institutions' losses from the 2013 data breach at Target. The banks that blew up the deal were Citigroup, Capital One Financial and JPMorgan Chase, unnamed sources told the Journal. Banks have estimated that their losses from the breach total about $18 billion. Since there were a few zeroes missing from the banks' loss estimate versus the $19 million settlement figure, banks were clearly not pleased with the preliminary pact.
That's so 1990s. Voice mail is on its deathbed at several banks, including JPMorgan Chase, Citigroup and Bank of America. Tens of thousands of employees at JPMorgan will lose voice mail in the coming months, as a way to both save money (JPMorgan estimates it will save about $3.2 million yearly) and make workers more efficient (it takes less time read texts and emails than scroll through voice mails, JPMorgan reasoned). JPMorgan's decision to kill voice mail was first reported on Tuesday by Bloomberg. Citi may remove voice mail if specific employee groups are found to not use it. B of A may also eliminate it. The banks said employees who routinely deal with clients won't have their voice mail removed. While voice mail appears to be heading to the same fate as rotary-dial phones, a Canadian bank consultant said texts and emails can't replace the value of a phone conversation, which often helps leads prospective clients to schedule appointments.
Make a mistake and you may have to pay for it. The Securities and Exchange Commission is expected to soon propose a rule requiring companies that err in their financial reports to "claw back" compensation from top executives, if the incentives resulted from the mistake. The claw back proposal is a requirement of Dodd-Frank.
While the claw back proposal moves forward, Sen. Elizabeth Warren, D-Mass., remains none too pleased with the SEC's work in other areas pertaining to Dodd-Frank. The Journal laid out the contents of Warren's letter to SEC chair Mary Jo White. American Banker New York Times
The consumer-advocacy group Better Markets, which pursues tougher regulations for banks, has hired a former staffer of Rep. Jeb Hensarling, R-Texas, as senior counsel and director of research. Frank Medina had previously been a senior lawyer for the House Financial Services Committee, which Hensarling chairs. Medina also worked at Citigroup and the SEC. Upon his hiring, Medina noted the common ground between Republicans and Democrats on banking issues, such as both wanting to end the too big to fail threat.
The growing disparity between home values in high-income and low-income neighborhoods will continue to weigh down the U.S. economic recovery, Elyse Cherry, CEO of Boston Community Capital, writes in an op-ed. Several policy steps should be taken to address the issue, including a concerted attempt at principal reduction.
Elsewhere ...
CNN Money: Denmark may become the first country to go almost cashless. While essential services, including hospitals and post offices, would still be required to accept cash, all other retailers would no longer need to accept notes or coins starting as soon as January, according to the proposal. Almost 40% of Danes already use Danske Bank's mobile-payments transfer product MobilePay.
Bloomberg: Delta National Bank & Trust in New York, which has been named in the FIFA corruption scandal, has had at least three run-ins with legal authorities worldwide since 2000. One of those involved the bank pleading guilty in 2003 in the U.S. to allegations of failing to report transactions linked to a Colombian drug cartel.
