Retailers target rewards cards; Deutsche Bank scolded on AML
Receiving Wide Coverage ...
Deutsche Bank warned on AML
Deutsche Bank was ordered to beef up its anti-money laundering and anti-terror financing protections in a "public reprimand" by Germany's Federal Financial Supervisory Authority, or BaFin. "The regulator privately reprimanded Deutsche Bank for missing reporting deadlines and other procedural requirements of German law."
BaFin selected the bank's regular auditor KPMG to monitor the program and gave it three years to report back. "It is the first time the regulator has installed an external monitor for this purpose," the Financial Times said. "The decision comes one year after Germany's largest lender agreed to pay $630 million to settle U.S. and U.K. investigations into the alleged laundering of $10 billion of assets by Russian clients."
Separately, John Bartling, the former president and CEO of Invitation Homes, a Blackstone-backed real-estate investment trust, has joined Deutsche as vice chairman of investment banking in the bank's real estate, gaming and leisure unit. The bank advised Invitation Homes when it went public in January 2017 and later that year when it merged with Starwood Waypoint Homes.
"The hiring of an ex-CEO with experience in asset management, private equity and real-estate banking should bring Deutsche Bank additional CEO access and help it increase its overall advisory and lending businesses in the Midwest and other areas outside of New York City," a DB banker said.
Wall Street Journal
Several large retailers — including Amazon, Target and Home Depot — are trying to end Visa and Mastercard's "honor all cards" rule in order to reject rewards cards, which typically carry higher swipe fees. They are likely to opt out of last week's $6.2 billion settlement offer to end the merchants' suit against the payments companies and large banks.
"If merchants could pick and choose among Visa or Mastercard credit cards, those with the highest merchant fees — and most generous rewards — likely would be on the chopping block."
The Journal's editors aren't amused by California Governor Jerry Brown's ignoring a judicial order to return $331 million he had "unlawfully diverted from the national mortgage settlement" to balance the state's budget. "Neither the Governor nor the Legislature may override a court settlement," the editors assert. "But more important than the misuse of money is the state's contempt for the law."
The Journal looks back at the long career of Mark W. Olson, the former president of the American Bankers Association and the youngest to hold the position, who died September 12. He was also a member of the Federal Reserve Board and chairman of the Public Company Accounting Oversight Board. (American Banker recounted Olson's career here.)
Simple, the online-only bank backed by Spain's BBVA, is offering to pay more than 2.0% on checking accounts, "a move likely to heap further pressure on larger banks to increase their deposit rates." "I can't predict what the industry will do," said Simple executive chairman Dickson Chu. "But I hope our announcement is a wake-up call. People deserve better [rates]."
Leaner times ahead
Profits at European banks are expected to drop by 40% over the next five years, the result of "increasing regulatory scrutiny, Brexit-related costs, rising bad loan provisions and low interest rates." "Europe's banks are still destroying capital," said Florian Forst, a partner at Zeb, the German banking consultancy that issued the report.
Fair is fair
Here in America, European banks are looking for "a relaxation of rules around stress tests and capital requirements" after U.S. banks received similar relief under the banking reform law passed earlier this year. And they are getting support from some senators, who fear retribution against American banks overseas.
Blockchain group grows
More than 75 of the world's biggest banks have joined the Interbank Information Network (IIN) that would use blockchain technology to accelerate payments and reduce errors. The banks "are turning to the blockchain to fight the threat of new payments rivals in what will be the regulated banking industry's largest application of the distributed ledger technology underpinning cryptocurrencies."
Gemini Trust Company, the New York-based cryptocurrency exchange set up by Cameron and Tyler Winklevoss, is looking to expand into the U.K. The company has hired advisers to look into the potential move.
Citi settles card case
Citigroup said it will pay $5 million to settle Department of Justice claims that it "robo-signed" more than 71,000 consumer bankruptcy cases in its Macy's co-branded credit card portfolio. The $5 million will be distributed pro rata, with each cardholder expected to receive about $70.
"I don't think I would be good at it. I'm not a political person, per se." — JPMorgan Chase CEO Jamie Dimon, once again dismissing the idea of his running for president, in an interview with CNBC's Mad Money program.