New FDIC chair will listen to bankers; PayPal buys payouts firm

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You’ve got a friend: In her first public remarks since being sworn in as chair of the Federal Deposit Insurance Corp. less than two weeks ago, Jelena McWilliams said the agency needs to be more responsive to banks’ concerns. She said the FDIC will have an “open door policy where we solicit feedback on what’s working and what’s not.”

Andrew Harrer/Bloomberg

But the Financial Times warns that the advantage may have shifted too far in favor of the banks, which may be a dangerous thing. “As the 2008 financial crisis recedes, the industry is becoming emboldened, both in terms of lobbying to loosen regulations and in fighting back against the enforcement agencies,” Brooke Masters, the paper’s comment and analysis editor, writes. “Taken all together, these developments will provide the industry with much more freedom. That will serve as a genuine test of bankers’ claims that they have changed their industry’s culture for the better since the financial crisis. We have to hope that they pass.” Wall Street Journal, Financial Times, American Banker

Wall Street Journal

Expanding: PayPal said it agreed to acquire Hyperwallet Systems for about $400 million, “a deal that augments its offerings to businesses for managing and processing their online and mobile payments.” The fintech firm helps people and small companies receive payments for goods and services they sell online.

The envelope, please: The Federal Reserve releases the first round of its annual bank stress tests on Thursday. This year’s tests will measure how big banks can withstand crisis-level economic conditions, including 10% unemployment. Here are four things to watch for. Plus a primer on what the stress tests are all about.

Living with AI: Bank of America has started a set of online courses to help employees train for “new and evolving roles” following the launch of Erica, its virtual assistant.

Fighting crime: A group of large global banks are holding joint investigations and sharing information on suspicious transactions and accounts to try to fight crime and terrorism. But the effort “has raised concern among privacy advocates, who worry it could lead to some people or companies being penalized without due process.”

Financial Times

No more excuses: Visa said a “very rare” broken switch was to blame for a 10-hour outage in its payments network in the U.K. earlier this month. But the chair of a parliamentary committee said she won’t have much patience for any further disruptions. “The news that debit card payments have overtaken cash use for the first time shows that the reliability of IT systems is becoming ever-more important,” said Nicky Morgan, chair of the Treasury committee. “The detriment caused to consumers by IT failures is greater than ever, so the Committee will become less tolerant of them.”

More, please: Merrill Lynch, which agreed in March to pay $42 million to resolve charges by the New York State attorney general that it misled clients in how it handled their trading orders, has agreed to pay the same amount to the Securities and Exchange Commission to settle similar charges. From 2008 to 2013, the firm told customers it had executed securities trades internally but had in fact secretly routed them to outside firms.

Is this the future?: Bank branches are closing in the U.K. at the “alarming rate” of 60 a month, as nearly 3,000 branches have been shuttered or slated to shut over the past three years. But the flagship Halifax branch in London, allegedly the country’s biggest, might just be “a potential blueprint for the future of banking.”

New York Times

Got your back: President Trump received “some surprising sympathy” from an unlikely source over the recent immigration crisis. “It’s easy to criticize and it’s easy to say what you would do if you didn’t have to bear the consequences of what you decided,” Goldman Sachs CEO Lloyd Blankfein, a Hillary Clinton supporter, told the New York Economic Club on Tuesday. “There are adverse consequences on both sides, that’s what’s really tough, and I have a lot of sympathy on the one hand, but appreciation for the decision-making, and when something doesn’t quite work out right, I don’t want to kill the person that made the decision.”

Quotable

“I’ve never met a banker who said, ‘I actually want to be a bad banker. I really want to harm my consumers.’ I actually think that most entities are very good at trying to comply, trying to do the best they can, and the regulators’ job is actually to make sure that the regulations we promulgate give them a clear path.” — Jelena McWilliams in her first public comments since becoming chairman of the Federal Deposit Insurance Corp.