Wall Street Journal
Tighter grip: The OCC Friday unilaterally revoked parts of its recent regulatory consent order with Wells Fargo following the bank's phony accounts scandal. The agency ordered Wells to first seek its approval before changing its business plans, hiring or firing senior executives or revamping its board of directors. The bank was also banned from making golden parachute payments to departing executives without OCC approval.
Also on Friday, Senator Sherrod Brown of Ohio, the senior Democrat on the Senate Banking Committee, said the bank "either ignored or provided insufficient responses to a host of the senators' questions."
In a follow-up story, the Journal reports that executives at Wells — but at other banks, too — worked over the weekend to try to understand the new OCC order. While Wells "remained in the dark about both the reason for and implications of the banking regulator's mandate," the order "could have implications for other banks that often get multiple waivers in settlements with the OCC," the Journal said. "This could be OCC's shot across the bow that firms shouldn't be assuming that they will be allowed to continue to enjoy the benefits of those waivers," a Journal source said.
ATM hacks: The FBI is warning banks to watch their ATMs following attacks in Taiwan and Thailand in which cybercriminals hacked into cash machines and stole money. The FBI said it is "monitoring emerging reports indicating that well-resourced and organized malicious cyber actors have intentions to target the U.S. financial sector."
More mortgages: AIG, which recently agreed to sell its United Guaranty mortgage insurance unit, is looking to increase its exposure to residential mortgages by making "direct investments" in the loans. Doug Dachille, AIG's chief investment officer, told investors that increasing the company's allocation to U.S. home loans was one of his "key initiatives." Currently AIG has less than $4 billion of residential mortgages on its books, less than 1% of its $515 billion balance sheet.
New York Times
Going fishing?: Coinbase's chief lawyer said the company couldn't "tolerate sweeping fishing expeditions" after it received a request from the IRS "to turn over the identity and full transaction history of millions of customers," the Times reported. The IRS suspects some people are using Bitcoin to evade taxes and asked Coinbase, the largest Bitcoin exchange in the U.S., for the records of all customers who bought the virtual currency from the company over the past three years. "In the past, Coinbase has received narrowly tailored requests for information about customers, but never something as broad as the latest summons," the Times said. The IRS is apparently "interested in going after both large tax evaders as well as small-time Bitcoin users."
Italian conundrum: The problems surmounting Italy's banks "leave Italy and Europe, and to some extent the global economy, with a formidable conundrum," the Times reports. "Europe may never regain economic vigor so long as Italy's banks are a slow-motion emergency. But Italy's banks cannot get healthy without growth. And Italy's economy can't grow without healthy banks." Nearly 20% of all loans in Italy's banking system, or nearly $400 billion worth, are classified as troubled, representing about 40% of all bad loans in the euro zone. "Italy is the perpetual threat that could, at any moment, present the world with an unpleasant surprise potent enough to send legions of officials descending on Rome to try to contain the damage."
"I've never seen anything like this. It's surprising to see the agency reverse themselves on a negotiated agreement without some new information coming to light."
— A former OCC official on the agency's decision to unilaterally change its enforcement action against Wells Fargo.