Receiving Wide Coverage ... Settled: Royal Bank of Scotland agreed to pay $5.5 billion to the Federal Housing Finance Agency to settle an investigation into its sale of toxic mortgage-backed securities prior to the financial crisis. “The settlement clears one of several obstacles the U.K. government-controlled bank faces before it can resume dividend payments and continue its return to private hands,” the Wall Street Journal says. But the bank still faces a penalty from the Department of Justice that could be more than twice as big. Wall Street Journal, Financial Times, New York Times, American Banker
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Wall Street Journal No cash for you: Visa is offering up to 50 restaurants and food sellers $10,000 to upgrade their payments technology. There’s one catch: They have to agree to stop accepting cash. Consumers would be able to pay only with debit or credit cards or from their cellphones. The offer is part of an initiative Visa unveiled on Monday to start businesses on a “journey to cashless.”
Bowing out: James Clinger, President Trump’s pick to run the Federal Deposit Insurance Corp., has withdrawn from consideration for the post. “The family-related obligations that prompted me to leave government service earlier this year — which have grown more challenging in the interim — are incompatible with the demands of leading an important federal agency like the FDIC,” Clinger said in a statement. American Banker looks at the implications for the agency.
Donald Trump, 2016 Republican presidential nominee, speaks during a campaign rally in Hershey, Pennsylvania, U.S., on Friday, Nov. 4, 2016. As the U.S. presidential race heads into its final weekend, Trump is showing strength in Iowa and Ohio pre-Election Day voting, while Hillary Clintons advantage in early balloting looks stronger in North Carolina and Nevada. Photographer: Andrew Harrer/Bloomberg
Show me the money: The Federal Reserve has been raising interest rates, but retail bank deposits have yet to follow. How long will customers put up with that?
New JPM lobbyist: JPMorgan Chase has named Tim Berry, former chief of staff to two House majority leaders, as its head of government relations and public policy. Berry “will also focus on leveraging Chief Executive James Dimon’s leadership of the Business Roundtable,” the paper says.
German engineering: German auto manufacturer Daimler AG recently sold part of its €100 million ($114.1 million) bond issue using blockchain technology as part of a pilot project, which the firm said was among the first of its kind, according to the paper. Kurt Schäfer, head of treasury at Daimler AG, discusses the deal.
Financial Times Bond battle: Pimco, the big bond house, is suing Wells Fargo for withholding money Pimco claims is owed to bond investors. Wells, the trustee for the bond issues, last month withheld $90 million from investors in residential mortgage-backed securities, saying the money should be kept aside to cover its legal expenses. Pimco accuses Wells of “unauthorized and unlawful looting of trust funds to pay attorneys’ fees and defense costs, and to indemnify itself against its own negligent and willful misconduct.” The dispute “could have implications for billions of dollars still locked up in U.S. mortgage securities created before the financial crisis,” the paper says.
Separately, Equiniti Group agreed to pay $227 million to buy Wells’ share registration unit. The deal is the “latest strategic move by Wells Fargo under recently appointed chief Tim Sloan, who is trying to get the group back on track after a scandal over fake accounts that rocked the banking industry.”
The Federal Reserve's April financial stability report found that asset valuations remain elevated, even as investors are beginning to demand more compensation for risk amid rising uncertainty around monetary policy.
Banking groups that sued the state of Illinois over its law barring banks from charging interchange fees on taxes and tips cheered an appeals court ruling remanding the law to a lower court and vowed to keep the law going into effect, which is slated for July 1.
Stephan Feldgoise and Joshua Schiffrin will join Goldman Sachs' management committee; Fidelity Investments is dismissing about 800 personnel as it restructures its technology and product-delivery teams; Citi has hired JPMorgan's André Ross as its country officer and banking head for South Africa; and more in this week's banking news roundup.
Affirm CEO Max Levchin said that the company did not have any plans for AI-spurred layoffs despite the fact that it was using the technology more for software engineering.
Leaders from Wells Fargo, JPMorganChase and more talked about how banks can respond to the fast-moving changes in money movement, new forms of artificial intelligence, fraud, digital assets and more.
The payments company posted strong adjusted earnings following a dramatic downsizing, which management attributed to the influence of artificial intelligence.
