Wall Street Journal
The rise in auto-loan balances, fueled in part by subprime auto lending (read American Banker's coverage of the New York Fed report here), should not necessarily be viewed as a cause for alarm, Equifax's chief economist told the Journal. "The difference between having reliable transportation and not having reliable transportation is life-changing for people," Amy Crews Cutts said. "When you hit a rough patch and are financially on the edge, which is often the case with people in subprime credit, having a car can be the difference between getting and keeping a job" or never getting out of the spiral, she said.
Square's IPO excited investors focused on the tech industry, because CEO Jack Dorsey was willing to cut the share price to get the deal done. Investors who center on financial services, however, were more worried because of Square's lack of profits. Square had to cut its IPO price from initial estimates, but the shares rose 45% in their first full day of trading.
Square's IPO has been closely watched by many market observers, as it's considered a potential bellwether for the heretofore challenging IPO market. Oh by the way, Square's future isn't in payments, "Heard on the Street" opines. Instead, Square will make money (if it makes money) by providing services to small business, like its receivable-financing subsidiary, Square Capital.
Then there's Heard on the Street's supplemental concern about Dorsey getting distracted by his other gig; he moonlights as CEO of Twitter.
Regions Financial in Birmingham, Ala., will cut $300 million in expenses over the next three years through hiring restrictions, branch closures and automation. The moves are necessary because of the persistent near-zero interest rate environment, Regions' chief financial officer said.
Rep. Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee, outlined in an op-ed his selling points for the Fed Oversight Reform and Modernization Act, which passed the House on Thursday. See American Banker's coverage of the Fed reform bill here. In essence, Hensarling argues the FORM Act won't compromise the Fed's independence. Rather, it'll affect "how and when the exercise of [the Fed's] discretionary monetary policy is communicated to the public."
American Express has been sued by the city of San Francisco for allegedly using anticompetitive measures by placing restraints on merchants. American Express is "responsible for billions of dollars in excessive and improper costs" placed on retailers and consumers, as a result of its charging "excessive" fees on card transactions. Amex also banned its merchants from doing anything to encourage customers to use less-costly payment methods.
HSBC Holdings has found itself ensnared in an awkward position in a war over alleged fraud. A Swiss art dealer was detained in Monaco earlier this year on allegations he overcharged a Russian art collector by $1 billion for paintings, and then tried to launder the money with a Monaco citizen. HSBC's role is that, in February, the bank said it had provided a joint account to the Swiss art dealer and the Monaco citizen, providing fodder for allegations the two conspired to pull off the money laundering.
Now, HSBC said it made a mistake and the two didn't have a joint account at HSBC. The art dealer and the Monaco citizen are questioning if HSBC improperly fell under the influence of the Russian art collector, who also happens to be one of HSBC's major private banking customers in Monaco.
Elsewhere ...
Charlotte Observer: A repeal of part of Dodd-Frank last year has allowed Bank of America, JPMorgan Chase and other big banks to keep about $10 trillion in risky trades on their books, Sen. Elizabeth Warren, D-Mass., and Rep. Elijah Cummings, D-Md., said. The repeal reversed a provision that requires banks to separate swaps trading from deposit-taking units. If the repeal had not taken place, $10 trillion in swaps trades would have been pushed out to entities that are not insured with taxpayer money. How does the Tea Party feel about that?
TechCrunch: Smartphone manufacturer LG plans to introduce its own mobile-payments app, with the brand name of LG Pay. LG will partner with fellow South Korean companies Shinhan Bank and KB Kookmin Bank on the effort.
Fortune: Total housing inventory has been falling since the worst of the housing crisis and it's not getting any better. New home construction also continues to fall. Part of the problem, at least to listen to homebuilders' complaints, is the shortage of both labor and land.
NJBIZ: The U.K.'s Standard Chartered Bank plans to house about 140 employees in its financial-crimes compliance division at an office tower in Newark, N.J.
