Receiving Wide Coverage ...
Dimon Throws Down: Outspoken JPMorgan Chase chief Jamie Dimon isn't afraid to raise some hackles and that tendency is on full display in his annual letter to shareholders. The Financial Times and Bloomberg both focus on Dimon's prediction that regulatory requirements will be to blame for the next financial crisis. His letter argues that capital and liquidity rules have limited banks' ability to withstand market turmoil, and predicts the next crisis will involve "more volatile" markets and "a rapid decline in valuations" as a result. The Wall Street Journal opts to highlight Dimon's discussion of the regulatory landscape, including his objections to the practice of requiring banks to pay penalties to multiple regulators over the same charges. This "probably warrants a serious policy discussion," he writes. Rules and regulators weren't the only targets of Dimon's letter: he also defended JPMorgan's size by arguing that smaller banks come with their own risks, as American Banker reports. Dimon writes that during the crisis, "many large banks had no problem navigating the financial crisis, while many smaller banks went bankrupt." As American Banker points out, this description overlooks the fact that several big banks, including Citigroup and Bank of America, weathered the crisis with the help of government bailouts.
Live Long and Prosper: Marketplace lender Prosper has raised $165 million in a new financing round that includes several large banks as investors. The funding round led by Credit Suisse values Prosper at $1.9 billion, more than double its valuation a year ago, according to the New York Times. JPMorgan Chase, USAA, SunTrust Banks and BBVA Ventures are among the other banks backing Prosper. The FT says the alternative lender plans to use the funds to "develop a facility in Phoenix, Arizona, where it is focusing on vetting applicants for its unsecured personal loans." Wall Street Journal, Financial Times, New York Times
Wall Street Journal
Americans who lost their homes to foreclosure toward the beginning of the crisis may be about to get another shot at homeownership. Foreclosures and other credit problems stay on credit reports for seven years, after which they are removed. As the end of the period approaches, more borrowers will have credit scores high enough to qualify for a mortgage. That doesn't necessarily mean they'll get one, according to the paper: some people remain too traumatized by foreclosure to risk taking out a new home loan, and many banks have tightened credit access in the aftermath of the crisis.
Fannie Mae and Freddie Mac investors should curb their enthusiasm for Sen. Charles Grassley's quest to get more information about the government's 2012 decision to sweep the housing giants' profits to the Treasury, according to John Carney of "Heard on the Street." Grassley's less concerned with defending investors than with getting documentation. "Investors shouldn't mistake Sen. Grassley's call for more transparency for something more substantive," he writes.
India is making a big push to move people without access to financial services into bank accounts, but the rollout of the government program People Money Scheme has been marred by corruption and confusion, according to the paper. Some customers who already have bank accounts are opening new ones in order to get additional perks like free accident and life-insurance policies and officials are reportedly turning away people who don't have enough money to pay bribes.
New York Times
Wall Street banks need to do a better job vetting the cybersecurity practices of the vendors they work with, according to a review of 40 banks by New York's top financial watchdog Benjamin Lawsky. Among the survey's most worrisome findings: "only about a third require their outside vendors to notify them of any breach to their own networks, which could in turn compromise confidential information of the bank and its customers."
Have you heard that online alternative lenders are going after the small-business borrowers banks don't want? The Times is on it, in the parlance of a Twitter account that pokes affectionate fun at the Gray Lady's belated trend reporting. The focus of this particular article is merchant cash-advance lender Fundbox.
Los Angeles Times: Microsoft and Google are pitching in to help California battle advertisements from illegal payday lenders. The companies' search engines will "quickly remove offending ads when the California Department of Business Oversight formally orders lenders to stop breaking state law that limits such fees," according to the Los Angeles Times.