Wall Street Journal
A number of fintech companies have been inquiring about obtaining a fintech charter, realizing that being more regulated could make it easier for them to run their businesses than not, according to Comptroller of the Currency Thomas Curry. Nonbank fintech companies currently operate outside the boundaries of federal oversight. Many of them see that as a business advantage but some also worry their business will clash with the rules of loan making or money transmitting – rules imposed strictly on banks, with whom they often need to partner. A charter would offer fintech firms federal pre-emption from some state-by-state requirements, bring closer regulatory scrutiny of their business plans and more requirements to comply with certain federal banking laws, like the Community Reinvestment Act. "A fintech firm has to look at this as, 'what do I do, and what do I want to do, and does that fit into the bank box,'" Curry said.
Lending Club has met with three hedge funds Och-Ziff Capital Management, Soros Fund Management and Third Point to discuss deals in which they would fund as much as $5 billion in loans. No deal yet, but one could cover a "considerable portion" of Lending Club's annual volume ($8 billion last year). It would also restore confidence in the company's ability to match borrowers with loan buyers. Discussions also included warrants for shares in the marketplace lender.
Two Israeli men who allegedly facilitated a global network of criminal activity by breaking into a dozen companies' computer networks – including JPMorgan Chase, E*Trade Financial, Scottrade and Dow Jones & Co. – have pleaded not guilty to charges. They're accused of stealing customer data and information, including email addresses and phone numbers, to obtain "hundreds of millions of dollars" – all of which ostensible led to the operation of a number of other crimes including running illegal internet casinos, pump-and-dump schemes, a payment processing service for other criminals and an unlicensed bitcoin exchange. At JPMorgan alone they stole data of more than 83 million customers. A third man involved, a U.S. citizen, was arrested in Russia; he is expected to be brought to the U.S.
Partnerships between banks and fintech companies may be inevitable but a report by Accenture highlights a growing anxiety that bank customer data is becoming increasingly vulnerable as legacy financial institutions collaborate with digital startups. About 76% of the 300 bank managers surveyed indicated they strongly agree they are open to more risks than they can manage as a result of digital developments. About 85% said new digital products and services are putting data-handling concerns in the spotlight, exposing banks to "exponentially more risk" and another 85% strongly agree a lack of data security and ethical controls could exclude them from partnering.
New York Times
Banks and regulators have been taking a stricter view of cross-border money transfers, turning the business opportunity they once presented banks into a liability. Money transmitters are having their bank accounts closed or frozen over money laundering concerns and other regulatory scrutiny. Two years ago JPMorgan closed its low-cost remittance service; last year Citi agreed to a $140 million regulatory penalty for failing to safeguard against money laundering. Citi also closed its Banamex USA unit, which it bought 14 years earlier to serve Hispanic families living on either side of the border. (Mexico is the biggest destination for money transfers from the United States, the World Bank says). Wells Fargo still offers services to money-transfer companies and their agents – but only those with whom it has a relationship and with tougher checks. Meanwhile, costs for unbanked money-transmitters are going up. "Regulators say they are growing concerned that people will resort to sending cash across the border, which is harder to track and riskier," the paper reports.
Millard Sheets was an American painter known for the murals and mosaics he created for 50 branch banks in Southern California. Many of those projects have been preserved and are now scattered across the U.S. Adam Arenson, director of the urban studies program at Manhattan College, has been documenting the banks for six years and is set to publish a book next year titled "Millard Sheets and Home Savings: Mid-Century Modern Corporate Art and Urban Identity for Southern California and Beyond." Because Sheets' art is "of the establishment" and not avant-garde, art historians haven't given it very much attention – despite his collaboration with the likes of Walt Disney and abstract artist Hans Hofmann. But Arenson says he repeatedly discovers other people researching and protecting the works from demolition. One of Sheets' sons, artist Tony Sheets, runs a website tracking his father's art and helping transfer any endangered works to new homes.