Receiving Wide Coverage ...

Deeply sorry: Wells Fargo CEO John G. Stumpf will tell the Senate Banking Committee Tuesday that he is "deeply sorry" the bank opened bank accounts and credit cards for customers without permission and that he takes "full responsibility" for scandal, according to his prepared opening remarks that were obtained by the New York Times and Wall Street Journal. Stumpf will strike "a decidedly contrite tone" before the committee, the Times said. "I want to apologize for not doing more sooner to address the causes of this unacceptable activity," he will reportedly testify.

The Times opines "there is a particular feeling of schadenfreude on Wall Street and in certain circles of Washington" about the scandal that engulfs Stumpf and Wells. "Mr. Stumpf was seen as portraying Wells as being different than the risky global investment banks behind the mortgage crisis." Yet not since JPMorgan Chase's London Whale episode four years ago "has a banking executive faced such intense political heat."

The Journal offers 10 questions the Senate Banking Committee should ask Stumpf when he testifies Tuesday. Among them: Is he prepared to forego a bonus this year in an effort to accept responsibility for what happened? Why did Wells not disclose the investigation to investors before the penalty was announced? American Banker also offers a list of things to watch for.

One Wells executive who hasn't been asked to testify before the Senate is Carrie Tolstedt, the executive who formerly headed the bank's retail banking unit. Tolstedt stepped down from the post in July and plans to retire at the end of the year although she still works at Wells. Several senators, led by Elizabeth Warren, D-Mass., sent a letter to Stumpf last week asking him if the bank intends to claw back any of the $20 million in annual bonuses Tolstedt received from 2010 to 2015. The company responded that its board of directors would be responsible for that decision.

Indeed, the prospect of clawing back bonuses is likely to take up a major part of Stumpf's testimony, at least from the Democrat side of the aisle. "They will zoom in on one topic that could have broad implications for the financial industry: whether banks should do more to take back executive pay tied to profits derived from illicit actions," the Journal reports. "The hearing could stoke political momentum for new rules governing pay practicesat the nation's biggest banks, one of the remaining aspects of the Wall Street regulatory overhaul that President Barack Obama aims to complete before leaving office in January."

Attorney Peter J. Henning, the Times' White Collar Watch columnist, says Wells Fargo badly miscalculated the fallout from its accounts scandal. "What is unusual is that the reaction to the settlement seems to have caught Wells Fargo by surprise, as if management had no idea that it would be hit with so much scrutiny on different fronts," he writes. "Unlike many companies that signal the existence of an investigation and its impending settlement in their regulatory filings, Wells Fargo did nothing to condition the market to what was going to come. Maybe that was out of a naïve belief that the size of the settlement — 'only' $185 million — would not attract much attention in an era of multibillion dollar penalties."

Oxymoron?: Accenture plans to announce Tuesday that it is patenting a technique for editing information on blockchain, which strikes some people in the tech community as a contradiction in terms. "To many diehard fans of the technology underpinning the cryptocurrency bitcoin, the move threatens one of its founding principles: that a blockchain should be an immutable ledger of events without the need for a central authority," the Financial Times writes.

But Accenture says that being able to amend or delete information stored on a blockchain will make it more attractive to the financial services industry. "What we are talking about is adapting the blockchain to the corporate world and how do we make it pragmatic and useful for the financial services sector," said Richard Lumb, global head of financial services at the consulting firm. "This prototype allows you expunge a record completely and we think that will be needed by corporates and regulators." Lumb also expressed this opinion in a recent piece in the Times.

Wall Street Journal

Easier terms: Freddie Mac and two nonbank lenders unveiled a pilot mortgage program that allows for looser income and documentation requirements to help make it easier for first-time homebuyers and people with low-to-moderate incomes to qualify for a home loan. Income from recent second jobs and from people who live in the same home will be factored into the borrower's income, and some applicants won't be required to prove how they came up with their downpayments. Fannie Mae introduced similar underwriting requirements previously.

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