Wall Street Journal
Incentives dropped: Wells Fargo said it will stop offering bonuses to its securities brokers for urging customers to take out loans, including mortgages, securities-backed loans and other consumer lines of credit. "Such bonuses usually come in the form of deferred compensation and can add several thousand dollars to a broker's annual pay," the Journal said. Erik Karanik, a managing director at Wells Fargo Advisors, said the move brings the brokerage unit in line with the rest of the bank, which has changed its sales incentives in the wake of the phony accounts scandal.
The Securities and Exchange Commission will apparently take no further action over a portfolio of bad loans Wells Fargo assumed when it bought Wachovia during the financial crisis. The agency had questioned Wells about how it valued and accounted for the loans but concluded its review without taking further action.
Misbehaving: TCF Financial has received the most consumer complaints filed with the Consumer Financial Protection Bureau so far this year based on the percentage of its deposits, according to a new study. The Minnesota-based bank has gotten 12.3 complaints for each $1 billion in deposits. It was followed by several big banks: Citigroup with 8.6 complaints per $1 billion of deposits, Wells Fargo with 8, SunTrust with 7.7, and Bank of America Corp. with 7.2. When ranked by the actual number of complaints, Wells Fargo ranked first with 10,204, followed by BofA with 8,953 and Citigroup with 8,065.
Fed adopts TLAC rule: The Federal Reserve formally adopted a rule that could force big banks to issue large amounts of long-term debt in order to avoid future taxpayer-funded bailouts. Under the total-loss absorbing capacity rule, or TLAC, the eight U.S. banks considered "systemically important," plus large foreign-owned banks that operate here, would have to issue debt that can be converted into equity in a crisis so they wouldn't need to be bailed out by taxpayers. Banks have the option of instead reducing their balance sheets to comply with the rule.
Partners: PayPal and Citigroup have created a partnership that will make it easier for customers to use mobile phones to pay for things at checkout. Starting next year, Citigroup, which has 143 million customer accounts, and Fidelity National Information Services, which connects to about 6,000 U.S. banks, will let customers who load their cards into their PayPal accounts pay at the point-of-sale with their cell phones.
Balanced: Goldman Sachs' new senior management team "restores financial diversity" at the firm. "The group is more balanced than the securities traders who have dominated in recent years," the FT says.
New York Times
Fee alert: The CFPB is warning college students that debit cards sponsored by their schools may carry excessive fees. "Just because an account has a college logo on it doesn't mean it's a good account for them," said Seth Frotman, the agency's student loan ombudsman. About 10 million students attend a college that has a debit card deal with a bank, according to the bureau.
"The financial advisers are dealing with the headlines and dealing with questions in some part from their clients. We want to be ahead of the curve and make sure for next year our advisers are focused on the client." — Erik Karanik, managing director at Wells Fargo Advisors