Receiving Wide Coverage ...
Blame game: Wells Fargo CEO John Stumpf and CFO John Shrewsberry both tried to deflect blame for the company's phony accounts scandal. In an interview with the Wall Street Journal, Stumpf "appeared to lay blame for the problems with the employees involved than with any flaw in Wells Fargo's systems or culture."
"There was no incentive to do bad things," he said, adding that "if they're not going to do the thing that we ask them to do — put customers first, honor our vision and values — I don't want them here." The bank fired 5,300 employees for creating accounts that customers didn't request. In a subsequent quote issued through a bank spokeswoman, he was a little more contrite. "I feel accountable and our leadership team feels accountable — and we want all our stakeholders to know that," he said.
Speaking at a financial-services conference in New York, Shrewsberry blamed bank employees "who weren't high performers. It was people trying to meet minimum goals to hang onto their job." Wells said it would eliminate branch-level sales goals that have been blamed for encouraging employees to cross-sell products to customers, even if they never asked for them.
The scandal has cost Wells the title of largest U.S. bank by market capitalization, which it has held for the last 3½ years. On Tuesday Wells shares fell 3.3%, reducing the bank's market cap to $236.94 billion, while those of JPMorgan Chase fell 0.8%, putting that bank's stock market valuation at $240.31 billion. Of course, American Banker has coverage here, here, here and here.
Dodd-Frank opponents win round one: The House Financial Services Committee passed a bill that would roll back significant portions of the Dodd-Frank Act, including the Volcker Rule and the Durbin Amendment. "It has been six years since the passage of Dodd-Frank. We were told it would lift our economy, but instead we are stuck in the slowest, weakest, most tepid recovery in the history of the Republic," said Jeb Hensarling, R-Texas, chairman of the committee and the sponsor of the bill. Called the Financial Choice Act, the bill passed, 30-26, with one Republican joining 25 Democrats voting against it. The legislation is not expected to be adopted this year "but it could influence the broader debate over financial reform and provide a starting point" for Hensarling to try to gut Dodd-Frank in the next Congress. Wall Street Journal, New York Times, American Banker
Hired: Lending Club named Thomas Casey, defunct Washington Mutual's CFO of from 2002-2008, as its finance chief. WaMu was seized and its assets subsequently purchased by JPMorgan Chase in 2008 at the height of the global financial crisis. He most recently served as CFO at Acelity LP, a medical device company. Wall Street Journal, Financial Times, American Banker
Trimming: Fifth Third Bancorp said it plans to consolidate or sell an additional 44 branches and five parcels of land early next year. Last year the Cincinnati-based regional said it planned to sell or consolidate about 100 branches and about 30 other properties. On Tuesday Fifth Third said it also plans to control discretionary spending and reduce unused office space. Wall Street Journal, American Banker
Super money: "It can withstand a spin cycle in a washing machine filled with extremely hot water. It can be eaten by mischievous toddlers or pet hamsters without causing lethal indigestion. It can fend off wily criminals with tiny lettering visible only under a microscope." What is it? It's the U.K.'s new five-pound note, which is made of polymer, "a thin, flexible plastic film that makes it stronger, safer and more resistant to counterfeiters." It can also "better withstand being repeatedly folded into wallets or scrunched up inside pockets," according to Mark Carney, the governor of the Bank of England. It's graced by a picture of Sir Winston Churchill. New York Times, Financial Times
Wall Street Journal
Cyber bill: New York Gov. Andrew Cuomo and the Department of Financial Services proposed regulations that would require banks to establish cybersecurity programs. Under the proposal, which will be open for public comment for 45 days, banks would be required to hire a chief information security officer and implement systems to detect and deter cyber-attacks and protect consumer data. Banks would also have 72 hours to notify the agency of any material data breach. "This regulation helps guarantee the financial services industry upholds its obligation to protect consumers and ensure that its systems are sufficiently constructed to prevent cyber-attacks to the fullest extent possible," the governor said.