Receiving Wide Coverage ...
Open-door policy: The Treasury Department and the Comptroller of the Currency gave approval to allow online lenders, payments processors and financial technology companies to more easily compete with banks. A Treasury report released Tuesday recommended “industry-friendly policy changes be adopted by regulators,” including “regulatory financial relief to startups,” “a fresh look at rules governing fintech investments by banks,” and easing the resale of loans by nonbank lenders, the Wall Street Journal says.
That was followed by Comptroller Joseph Otting, who said his agency would start accepting applications by fintech firms for federal banking licenses “effective immediately.” He said the charters “can make the federal banking system stronger by promoting economic growth and opportunity, modernization and innovation, and competition.” Wall Street Journal, New York Times, American Banker here and here
Meanwhile, one of the banking industry’s own fintech startups is suffering growing pains, according to the Journal. Zelle, the year-old bank-owned money transfer service, is struggling “to distinguish itself from competitors it’s trying to fend off,” such as PayPal’s Venmo and Square’s Cash App. “Usage is up, but most banks haven’t signed on. Behind the scenes, it runs on plumbing that’s more than 40 years old. Zelle’s rocky debut shows the challenges of trying to make alterations to an industry often slow to change and still weighed down by old infrastructure.”
Wall Street Journal
Robot revolution: Bank of America and Morgan Stanley are backing a new company called Luma Financial that attempts to “connect retail brokers seeking market-linked CDs, structured notes and other products to the banks that issue them.” The venture, in which the banks invest in Luma and sell their own products through it, will compete with Goldman Sachs’ Simon, which sells notes through broker networks. “The goal of Luma, Simon and a handful of startups is to replace expensive human sales forces and lay cheaper, digital pipes to the retail investors who buy structured notes.”
Aloha: BNP Paribas said it would sell 20 million shares in First Hawaiian Bank, reducing its stake to 33.3%. The French bank sold a $500 million stake in First Hawaiian two years ago “as it looked to focus on core activities in the face of U.S. regulatory pressure.”
Dazed and confused: An apparently indecisive bank robber tried to hold up a Bayonne, N.J., bank but skedaddled when his plan failed. According to police, the would-be thief handed a teller a note demanding “all the money” but then changed his mind, took the note back and then said he wanted to open an account instead. When he couldn’t produce the proper credentials to do that he took off, before bank security and the police could arrive.
“We must keep pace with industry changes and encourage financial ingenuity to foster the nation’s vibrant financial-services and technology sectors.” — Treasury Secretary Steven Mnuchin.