Receiving Wide Coverage ...
Disparate Impact Sticks Around: The Supreme Court backed the "disparate impact" legal theory yesterday in a decision that dashed the hopes of banks while buoying housing advocates and the Obama Administration. Justices came to a 5-4 decision affirming that plaintiffs can sue organizations under the Fair Housing Act of 1968 by alleging that their housing practices disproportionately impact minorities, even in the absence of proof of intentional discrimination. The New York Times signals its support for the ruling by noting that while "agencies and businesses seldom announce that they are engaging in purposeful discrimination," disparate impact can be shown with hard numbers. The Wall Street Journal sounds a bit taken aback by the ruling and includes multiple perspectives on the decision, including criticism from Texas Governor Greg Abbott. The papers' op-ed sections, meanwhile, assumes their usual positions: the Journal roils with dissatisfaction, while the Times suggests that discrimination needn't be conscious to produce harmful real-world results. The Washington Post's Emily Badger says the ruling implicates a wide range of housing policies, including laws that permit homeowners to rent only to "blood relatives" and that bar the construction of more than one residence per lot. But there may be a silver lining in all this for banks. The Times notes that Justice Anthony Kennedy warned against the abuse of disparate-impact claims in his majority opinion. And American Banker's Joe Adler reported yesterday that the ruling "appeared to set clear hurdles for plaintiffs to prove disparate impact claims, give defendants the ability to seek dismissal of cases early on and limit the damages for clear violations."
Wall Street Journal
Forthcoming rules from the Securities and Exchange Commission could give activist investors a bigger say in the makeup of companies' boards. SEC head Mary Joe White said in a speech Thursday that the agency "is developing rules that would make it easier for shareholders to vote on board candidates offered by investors, in competition with those pushed by the company's management." The change would promote voting on all candidates with a single "universal" ballot as opposed to voting with two separate sets of ballots.
Former AIG chief Maurice "Hank" Greenberg's quest to make the government pay for bailing out the company in 2008 continues. Greenberg tells the Journal that he's not satisfied with a federal court ruling that agreed the government had overstepped its authority in the AIG rescue. He and 275,000 other AIG shareholders requested $40 billion in damages, and he's determined to get it. "We didn't bring the lawsuit to win half of a victory," he tells the paper.
Eurozone banking regulator Danièle Nouy says Europe's governments need to impose uniform rules on its banks in order to strengthen financial stability.
Sen. Elizabeth Warren's recent vocal opposition to the Obama administration's trade bill signals two important shifts in the populist left, according to Gillian Tett. First, she says, the most liberal wing of the Democratic party is becoming an increasingly powerful force in American politics. Second, "Wall Street is no longer the only bogeyman people such as Ms Warren love to attack." Why? Well, for one thing, buttoned-up big-bank chiefs like Brian Moynihan and Michael Corbat are too boring to make good targets. For another, the banking issues of the present day tend to be pretty wonky, while student loans, income inequality and other issues are at the forefront of public discussions.
Alibaba's new online bank is officially open for business, with plans to cater to the small firms that China's state-owned banks often overlook.
New York Times
Rep. Jeb Hensarling will notch a win in his battle against the Export-Import Bank as the bank's charter expires at the end of the month, although the government agency may yet be reauthorized. A Times profile of Hensarling casts him as a hard-nosed yet buoyant leader whose ideological pursuits have driven a rift in the Republican party, with free-market types on one side and supporters of big business on the other.
Thousands of consumer complaints against banks and other financial services companies were unleashed by the Consumer Financial Protection Bureau Thursday. The agency's controversial complaints portal does not vet grievances before posting them onlinea policy that's drawn vocal objections from many in the financial industry. The Associated Press highlights a few of the 7,700 complaints: "U.S. Bank supposedly gave a Wisconsin parent's young son a credit card with a $4,500 limit that he didn't request, and a California couple reported finally catching up on mortgage payments to M&T bank, only to be told they were still a month in arrears."