Receiving Wide Coverage ...
Home Depot Probes Breach: Home Depot may be the latest retailer to have customer credit and debit card information fall prey to a data breach. The home-improvement store is keeping pretty mum about the details of its investigation into so-called "unusual activity." But security expert and blogger Brian Krebs, who broke the story, reported that "the breach may have extended across all of Home Depot's U.S. stores and could date back to late April or May," according to the Wall Street Journal. Krebs also said the attack could impact even more people than the 40 million whose cards were compromised in Target's holiday-season breach, according to the Financial Times.
Apple Defends iCloud Safety: Apple is denying that hackers breached its iCloud system in order to leak nude celebrity photos. The company attributed the stolen photos to "a very targeted attack on user names, passwords and security questions," as opposed to a broader breach that could impact all iPhone users. Regardless, the company is recommending that customers use long passwords and opt for the two-step verification system in order to better protect their accounts. Wall Street Journal, Financial Times
Wall Street Journal
The Federal Reserve and the Federal Deposit Insurance Corp. are set to vote Wednesday on new liquidity rules aimed at preventing another financial crisis. Regulators are expected to give the thumbs-up to a liquidity coverage ratio, "which would require large banks hold enough safe assetssuch as cash or those that easily convert to cashto fund their operations for 30 days." The rule could put a damper on banks' profit since safer assets offer lower returns, according to the paper. Regulators are also expected to adopt a rule "that will require banks [to] hold capital against every asset on their booksnot just those deemed risky." The article delves into some potential inadvertent consequences of the new rules, including the possibility banks will seek to offset the low returns of safer assets with an uptick in high-risk, high-return loans, resulting in less lending to mid-risk borrowers. But, it notes, some argue "such trade-offs are worth it to make the financial system more stable."
"Banks are making less of their money from customer-account fees than at any time in the past seven decades as strict government rules and changing consumer behavior squeeze a major source of revenue," the Journal reports. The Federal Reserve's 2010 rule requiring customers to opt-in to overdraft coverage has cut into fee revenue, while the rise of online banking has made it easier for customers to check their account balances and refrain from going into the red.
Credit Suisse has turned up a number of unsavory findings as it conducts an internal probe into employee conversations in electronic chat rooms, according to the paper. One London trader has been suspended for allegedly "sharing client communications with her husband, a London-based trader at a rival bank"; her boss is also on leave as a result of the probe. The investigation has turned up additional "allegations of traders on the same London desk using profane, sexist and racist language and watching sex videos on the trading floor."
Auto sales are looking strong in August thanks to low loan rates and steady demand from customers who put off buying cars during the recession, according to the paper.
Perhaps banks should watch their backs: credit unions "are increasing their lending at the fastest clip in years, a sign that a once-sleepy part of the financial world is becoming more aggressive." Outstanding loans grew 9.8% at credit unions in the second quarter, compared to 4.9% growth at banks. While one banker quoted in the article says credit unions will "slowly euthanize community banks," Cutler Dawson, the chief of Navy Federal Credit Union, says most new customers come from bigger lenders.
The hack attack at JPMorgan Chase appears to be an isolated incident, according to the Federal Bureau of Investigation. An anonymouse tells the Journal the "JPMorgan incident was at first conflated with suspicious activity related to other banks. As the investigation continued, the threats appeared to be separate." In other words, lots of banks are getting attacked all the time by lots of different people. Feel better?
New York Times
A federal program aimed at allowing struggling borrowers to stay in their homes by selling delinquent mortgages to investors "is producing modest returns," according to the New York Times. "To date, 2,049 mortgages sold to investors under the program have been reworked to allow the borrowersmany of whom had not made a mortgage payment in three yearsto remain in their homes and start making payments again," the paper reports. But that's a fraction of the 73,000 mortgages the Department of Housing and Urban Development has sold to investors thus far, most of which were "foreclosed on or the borrower was permitted to walk away from a home in exchange of forfeiting any rights to the property."
Citigroup should divide itself into "more manageable pieces" in order to avoid more gaffes like the fraud at its Mexican unit, writes Reuters Breakingviews' Rob Cox. He says the restructuring could even reward shareholders, but admits that "a breakup isn't likely to gain traction" at the moment.
The Justice Department's top fraud prosecutor is heading to banking law firm Simpson Thacher & Bartlett. Jeffrey Knox "is the latest in a long line of federal prosecutors to spin through the so-called revolving door, the symbolic portal through which government lawyers move to the private sector and back again," the paper reports. "The criminal division alone has had four leaders in the last 18 months, two of whom left the Justice Department for law firm partnerships."