Receiving Wide Coverage ...
Excuse me, you’re in my seat: The Consumer Financial Protection Bureau started the week with two people asserting they are the agency’s acting director: President Trump’s choice Mick Mulvaney and Leandra English, appointed by former director Richard Cordray, who filed a lawsuit Sunday to block Mulvaney’s appointment.
“Mr. Mulvaney appeared to be in control for now — pending the outcome of Ms. English’s lawsuit,” the Wall Street Journal reports. After arriving at the agency at 7:30 in the morning armed with donuts for the staff, he announced a 30-day freeze on hiring, the issuance of new rules, and payments out of the CFPB’s civil penalties fund. Wall Street Journal, Financial Times, New York Times, Washington Post, American Banker here and here
Federal Judge Timothy J. Kelly, who was appointed by President Trump last summer, said he would move quickly on the competing claims between the White House and English. The administration was expected to file its response to English’s demand for a temporary restraining order Monday night.
The New York Times explains the legal fight.
It also offers a sampling of the “differing perspectives worth your time” from both the right and the left on the squabble.
The president will eventually prevail, according to William McGurn, a member of the Wall Street Journal editorial board. “As so often happens when progressives overreach so publicly, the likeliest winner will be President Trump,” he writes. “In the end, the rebellion at the CFPB is about far more than an acting director. The defiance is a gift to Republicans, giving them a rare political opening to clip the wings of an agency designed to go rogue — while highlighting to the American people what happens when federal power is divorced from democratic accountability.”
Edward Luce, the Financial Times’ Washington columnist and commentator, agrees — sort of. “Even if the courts upheld Ms. English as the rightful director, it would only offer a brief reprieve to the agency’s Democratic supporters,” he writes. “Mr. Trump would then nominate a new head who would presumably be confirmed by a Republican-controlled Senate. It is also a safe bet that the new boss would share Mr. Trump’s scathing views of an agency that Republicans blame for putting community banks out of business, dampening mortgage lending, and stifling financial innovation.”
The New York Times concurs, although not happily. The current fight over agency leadership “won’t stop its inevitable gutting,” it says. “Eventually, Trump will be able to make good on his promise to eviscerate the watchdog.”
But that’s not the end of it. The battle over CFPB leadership is only “the most recent example of the banker-friendly approach that has gripped Washington,” the New York Times says. “Less visible are the subtle but steady efforts at the White House, in federal agencies and on Capitol Hill to lessen the regulatory burden on banks and financial firms since President Trump took office.”
Wall Street Journal
Here we go again: Employees of Wells Fargo’s foreign exchange unit overcharged hundreds of clients in the pursuit of bonuses, the paper reports. “An internal review showed that out of roughly 300 fee agreements based on anything from informal handshakes to emails to signed documents, only about 35 companies were charged the actual price they had been offered for currency trades handled by Wells Fargo,” the paper said. The bank recently fired four bankers following its investigation and federal prosecutors have opened their own probe.
Patience rewarded: Top executives at Goldman Sachs are cashing in big time on 10-year old stock options. The options, written in 2007, gave the executives the right to buy shares at $204.16 apiece, but the stock only briefly traded above that level over the next decade. Last Friday, the day the options expired, Goldman stock closed at $235.95. CEO Lloyd Blankfein made about $5 million on the options, the paper reports while several others made a total of nearly $10 million.
Slimming down: Société Générale said it will close 15% of its branch network and cut up to 900 jobs in its home French market as it tries to reduce costs and expedite its move into digital banking. “I am convinced that the European banking sector is going through a kind of industrial revolution, which will probably take the next 10 years,” CEO Frédéric Oudéa told the paper.
“[Initial coin offerings] represent the most pervasive, open and notorious violation of federal securities laws since the Code of Hammurabi. It’s more than the extent of the violation. It’s the almost comedic quality of the violation.” — Joseph Grundfest, a former commissioner at the Securities and Exchange Commission, who says he is urging current commission officials and staff to bring legal cases against such offerings.