Receiving Wide Coverage ...
Tapping the Brakes?: Hold your horses on that rate increase. According to analyses in the Financial Times and the New York Times, members of the Federal Open Market Committee appear to remain divided over when to start raising short-term interest rates, based on minutes of the committee's Jan. 27-28 meeting, released on Wednesday. (The Wall Street Journal, however, offers a somewhat-more bullish view of the minutes.) A "premature" rise in rates could damp economic growth, according to the FT. Some members of the panel appear to be worried current economic growth is fragile, the Times reported. There's also a fear among committee members that ditching the word "patient" from its post-meeting statement could trigger an adverse market reaction. The sluggish pace of inflation also worries members. Perhaps one of the main fears of committee members is that if they raise rates too soon, they might have to reverse course later. The Journal's take is the members themselves are uncertain about the timing of a rate increase. But even the Journal's analysis notes some members (the minutes don't identify who said what) are being cautious, in spite of recent pronouncements by some presidents that June is when rates should rise. "Given a choice between moving too soon and risking derailing the recovery, or acting later and risking inflation or a financial bubble, many officials at the meeting said they were inclined to choose the latter," the Journal said.
Wall Street Journal
Subprime lending is soaring, as some consumers appear to be willing to take on more debt and as new lenders crop up. These non-bank lenders are funded by investors willing to take a risk in exchange for higher yields amid a super-low interest rate environment. About 40% of all loans made for credit cards, autos and personal loans, or about $189 billion in total, were made to borrowers deemed to be subprime. That 40% figure should strike fear in the heart of every regulator, as it represents the highest levels of subprime borrowing since 2007, when subprime loans made up 41% of consumer lending outside mortgages.
Financial Times
U.S. banking regulators may be winning the fight over leveraged lending, the paper's "Lex" column opines. The evidence is in the numbers. Leveraged-loan issuance through mid-February fell 39% to $46 billion, from a year earlier. The Federal Reserve and the Office of the Comptroller of the Currency have been trying to crack down on leveraged loans, citing their heightened risk profile.
Elsewhere ...
Boston Globe: Massachusetts Attorney General Maura Healey has joined Sen. Elizabeth Warren, D-Mass., in asking the U.S. Department of Education to forgive the school loans of hundreds of Massachusetts students who were enrolled in schools operated by Corinthian Colleges. The Boston Globe's story doesn't elaborate on how Healey and Warren's effort differs from the plan announced by the company acquiring Corinthian to forgive more than $480 million in student debt. ECMC Group's debt-forgiveness plan was approved by the Consumer Financial Protection Bureau and the Education Department.
Boston Globe: Samsung is getting deeper into the world of financial services. Samsung has agreed to acquire LoopPay, a Burlington, Mass., company that makes a digital-wallet technology. Samsung already offers a fingerprint reader.
Charlotte Observer: SunTrust Banks plans to keep growing in Charlotte, N.C. The Atlanta company recently opened a regional headquarters in Charlotte, and now employs 500 in the city, in areas including wealth management and bond trading. SunTrust CEO Bill Rogers, a North Carolina native, said the number of workers in Charlotte is expected to grow.
