Receiving Wide Coverage ...
Auto Loans in the Spotlight: All of those TV and radio advertisements from car dealerships could be coming back to bite the banks making loans for new cars. Speaking about the overheated market for auto lending, Jamie Dimon, CEO of JPMorgan Chase, said "someone is going to get hurt." Not JPMorgan, of course. "It won't be us," Dimon said.
All joking aside, Dimon and other bank executives expressed concern on Thursday during an industry conference about what they see as excessive risk-taking in the subprime auto market. There are certainly plenty of warning signs. Underwriting standards for auto loans appear to have eased significantly, according to Fitch Ratings. Delinquency rates on auto loans have reached their highest levels since 1996. The volume of car loans held by subprime consumers rose 11% in the first quarter, compared to a year earlier, according to Experian. And, auto sales slumped in May.
Ally Financial's CEO, Jeff Brown, was more upbeat, saying "there are no skeletons in the closet" in terms of the Detroit bank's auto-loan portfolio. He noted Ally has recently produced better risk-adjusted returns.
State of Banking: The WSJ
Chris Larsen, CEO of payments startup Ripple, compares banks' role in society to that of
U.S. Bancorp CEO Richard Davis said banks are
Roger Freeman, founder of drone developer FreeBird Flight, said
Finally, "Heard on the Street" columnist David Reilly said it's unrealistic to expect that
Bankers will get their chance to respond to the WSJ series this weekend.
Wall Street Journal
The largest banks will probably be required to apply capital surcharges to
The "Heard on the Street" column interprets Powell's and Tarullo's comments to mean that banks can get as big as they want, but they will
The Consumer Financial Protection Bureau's proposed rules for payday lenders could be
Meanwhile, financial institutions that see it as their mission to provide financial help to those with modest means—i.e., credit unions—believe the CFPB's rules may hurt their ability to carry out their mission. "We fear that we may be reaching the point at which the credit union can no longer provide short-term, small-dollar credit and still be seen as a responsible steward of our members' capital," said Keith Sultemeier, chief executive of Kinecta Federal Credit Union.
One of the largest payday lenders, Advance America, blasted the CFPB proposal. "For the already highly regulated businesses that offer these consumers' preferred credit option, particularly smaller lenders, they are a death sentence," said Advance America executive Jamie Fulmer.
Financial Times
Swift could be delivering a swift kick in the pants to members who don't maintain strong defenses against cyber thieves, CEO Gottfried Leibbrandt said in an interview. In light of recent losses at the Bangladeshi central bank and others, Swift may begin enforcing
"We could say that if the immediate security around Swift is not in order we could cut you off, you shouldn't be on the network," he said. "Maybe some banks say if you comply only with the lowest standards we can't do business with you or we can do business with you but we have to put in additional controls."
In addition to strengthening their technical cyber defenses, Swift is going to ask its members to communicate more quickly when they see indications of potential trouble.
If the United Kingdom leaves the European Union, it could force JPMorgan Chase to reorganize its British operations and
New York Times
An unsigned editorial blasted the Consumer Financial Protection Bureau for its "lame" attempt to
The editorial also worries that the language instructing lenders to determine if borrowers can repay their loans is too vague, which could lead banks to sidestep the requirement. The Times also notes the Pew Charitable Trusts has serious concerns with the CFPB's proposal, namely that it still allows lenders to make high-interest loans weighed down with additional fees.
The Treasury Department deployed the
Washington Post
A group that includes the Financial Services Roundtable
Investment management firms say the new rule will make it more expensive for them to conduct business, possibly forcing them to stop giving advice altogether to clients with fewer assets to invest.