Wall Street Journal
Now, not everyone can join. In response to complaints credit unions have expanded beyond their original mission to serve specific population groups, the top regulator of federal credit unions approved new rules limiting CU membership qualifications. Credit unions will no longer be allowed to set up charities and other associations, under their so-called Field of Membership rules, for the sole purpose of attracting new members. The National Credit Union Administration approved the rules Thursday. CU groups say the measure goes too far, because there is already a provision in place to test if a CU's association or charity meets qualifications. The American Bankers Association said the measure doesn't go far enough as the NCUA dropped several provisions included in the original proposal. The ABA has complained for decades that CUs should be allowed to retain their tax advantages and also be allowed to remove restrictions on membership requirements. The article includes an example that eats away at ABA members: SCE Federal Credit Union in Southern California includes on its website this phrase: "If you're reading this, you can join."
The Securities and Exchange Commission forbids banks from selling stakes in hedge funds or in other private offerings, unless banks can obtain a waiver from the SEC. The provision is known as the bad-actor ban. However, banks are averting the rule by manipulating a loophole that allows them to waive the disqualification in a regulatory settlement. For example, Deutsche Bank last week avoided the threat of a ban on selling stakes in hedge funds by including language in an $800 million settlement it reached with the Commodity Futures Trading Commission over a rate-rigging investigation. The waivers themselves have been a point of contention among SEC commissioners, with two Democrats on the commission publicly dissenting against granting waivers, and a Republican commissioner saying that it's understandable a company would try to avoid triggering an automatic disqualification by including language in regulatory settlements.
Staff members for Senate Banking Chairman Richard Shelby, R-Ala., and Sen. Sherrod Brown of Ohio, the committee's top Democrat, haven't met in weeks to discuss a bipartisan regulatory-relief package, unnamed aides said. The measure is intended to help ease the regulatory burden on community banks and some regional banks and a vote is scheduled May 14.
Financial Times
Small and mid-sized businesses aren't the only ones getting turned away by megabanks. Smaller hedge funds and asset managers are also getting no love from big banks, that increasingly believe it's not worth the time to deal with money-runners who aren't of a certain size. Tormar Associates, a two-man family office in Stamford, Conn., told the paper Citigroup's FX Prime unit cut it off after Tormar refused to go along with its demands to pony up more cash for a bet on the Swiss franc. Citi then unwound Tormar's accounts and ended its relationship with Tormar, at a steep loss to the small money manager. The Citi-Tormar event is an example how "big banks would rather surround themselves with the biggest clients," the FT proclaims.
Rocket-ship enthusiast Richard Branson's Virgin Money reported boffo quarterly earnings, thanks to higher mortgage banking revenue.
New York Times
Sarah J. Dahlgren, head of bank supervision at the Federal Reserve Bank of New York, will leave at the end of the year. The New York Fed did not give a reason for her planned departure, and it did not name her successor. New York Fed Chairman William Dudley has leaned heavily on Dahlgren to help him improve the Fed's bank regulation since the 2008 financial crisis.
Washington Post
The Post looks at the introduction of EMV-enabled credit and debit cards in the U.S. The story quotes industry experts who say EMV credit cards in the U.S. won't be as secure as European cards because they won't require a PIN (debit cards will require a PIN).
Arlington, Va., company Applied Predictive Technologies is profiled. APT, which MasterCard is acquiring for $600 million, makes software to track clues from consumers that help merchants make decisions on how to market products.
Elsewhere ...
Los Angeles Times: Community groups in Los Angeles have called on City National Bank to do a better job of explaining the community benefits of its sale to Royal Bank of Canada and perhaps promise to increase spending on serving minority and low-income groups. Community activists have been very vocal, and successful to a degree, in demanding banks make changes ahead of proposed mergers. Groups like the National Asian American Coalition, the National Diversity Coalition and the Los Angeles Latino Chamber of Commerce all raised concerns about CIT Group's acquisition agreement with OneWest Bank. The two banks agreed to spend $5 billion on community reinvestment and the groups have said they support the merger. City National has already agreed to commit $11 billion to Community Reinvestment Act spending over the next five years, as part of its RBC sale agreement. The California Reinvestment Coalition, which opposed the OneWest sale, supports the City National deal.
Lexington (Ky.) Herald-Leader: An unoccupied bank branch in Lexington, Ky., that preservationists want to save has been spared the bulldozer for the time being. The former Peoples Bank branch is an example of the distinctive Googie-style architecture, with a zig-zag roof design and blue-glazed tile. A developer had planned to demolish the building, but agreed to a three-week delay, in order to give preservationist groups time to raise money to move the building.
