Parental leave for all JPMorgan Chase said it changed its parental leave policy to ensure that it applies equally to men and women and set up a $5 million fund to compensate men who were “denied, or deterred from asking for, parental leave as a primary caregiver.” The new policy is part of a settlement with one of its employees, Derek Rotondo, who sued the bank two years ago for denying him 16 weeks paid leave because the bank said he wasn’t his child’s primary caregiver.
“We are pleased to have reached an agreement in this matter and look forward to more effectively communicating the policy so that all men and women employees are aware of their benefits,” said Reid Broda, the bank’s associate general counsel.
“The case was an embarrassment for JPMorgan, which holds itself up as a progressive, family-friendly employer with policies more generous than most rivals, and last year increased non-primary caregiver leave to six weeks at full pay,” the Financial Times comments. “The bank argued that its policies were meant to be gender neutral but were incorrectly applied.” Wall Street Journal, Financial Times, New York Times, Washington Post, American Banker
Separately, the bank said deposit growth “is slowing as customers withdraw some of their money and stash it with competing banks that pay higher interest rates.” But Gordon Smith, co-president and chief operating officer, said “most of those customers still keep Chase as their main bank.”
Cheaper mortgages The average 30-year fixed-rate mortgage dropped below 4% this week for the first time since early last year, “adding to hopes for a revival in the housing market.” Rates are down nearly a full percentage points since November. Wall Street Journal, Washington Post
Meanwhile, the Treasury Department and the Federal Housing Finance Agency “are putting the finishing touches on a plan to return mortgage-finance giants Fannie Mae and Freddie Mac to private-shareholder ownership," the Wall Street Journal reports. "The proposal is expected to include a version of what has been called ‘recap and release,’ which would ensure the firms have adequate capital to absorb loan losses in a future housing slump and thus avoid needing another taxpayer-backed bailout. If carried out, the companies could return to a status similar to how they operated before the financial crisis. Still, administration officials would prefer Congress to act on a more sweeping remake of housing finance.”
Wall Street Journal
The right tools for the job “Regulatory tools such as bank stress tests, capital buffers and liquidity requirements appear to be better suited for ensuring the soundness of the financial system” than interest rate policy, Randal Quarles, Federal Reserve vice chair for supervision, said. “While there is evidence that financial vulnerabilities have the potential to translate into macroeconomic risks, a general consensus has emerged that monetary policy should be guided primarily by the outlook for unemployment and inflation, and not by the state of financial vulnerabilities,” Quarles said in prepared remarks for a conference.
Randal Quarles, vice chairman of supervision at the Federal Reserve, smiles during the National Association of Business Economics' (NABE) Economic Policy Conference in Washington, D.C., U.S. on Monday, Feb. 26, 2018. Quarles offered an optimistic view of the U.S. economy, suggesting it may be on the cusp of a sustained period of faster growth and reaffirming his support for "gradual" interest-rate increases. Photographer: Joshua Roberts/Bloomberg
Joshua Roberts/Bloomberg
Hop right in Grasshopper Bancorp “plans to challenge Silicon Valley Bank as a go-to financier for startups.” The parent of Grasshopper Bank raised "more than $131 million in initial capital" and is “looking to tap into the growth of technology startups and the venture-capital firms that fund them. Grasshopper Chief Executive Judith Erwin said she believes that the barriers for new entrants to the banking business are falling, as cloud computing and improvements in banking software enable upstarts to provide an expanded slate of services and compete with even the biggest lenders.”
Financial Times
Layoffs ahead HSBC is planning “several hundred job cuts at its investment bank as it tightens its control on costs and braces for pressure on revenues and a deteriorating economic outlook.” The layoffs, which are expected to start next month and be completed by yearend, “will be focused on underperforming businesses across the trading, capital markets and advisory divisions. The cost drive at the investment bank is part of HSBC’s Project Oak, which is trying to shift resources to the most profitable business lines.”
Quotable
“You can’t achieve full equality for women in the workplace unless and until men are taking on a more active role at home.” — Galen Sherwin, an attorney with the American Civil Liberties Union’s Women’s Rights Project who represented JPMorgan Chase employee Derek Rotondo in his case against the bank for parental leave
As the banking-as-a-service model has evolved over the last decade amid widespread consent orders and BaaS partnership failures, the number of sponsor banks has dwindled, leaving fintechs to compete for the business of those that remain.
First Savings Financial Group could have bailed out of SBA lending after the departures of key executives and loan officers. Instead it retooled the unit, and it's now reaping the benefits.
Citizens Financial Group's promotion of Brendan Coughlin to company president comes at the same time as CFO John Woods prepares to leave for State Street. Both executives have been viewed as potential successors to CEO Bruce Van Saun.
The card network took a 3% stake in Corpay to improve international payment processing for corporate clients, while also pushing technology that aims to drastically reduce the need for human supervision of artificial intelligence.
