Receiving Wide Coverage ...
New York State Regulatory Update: New York attorney general Eric Schneiderman is pushing forward with plans to sue Wells Fargo for allegedly violating the national mortgage settlement, reports the Times' Jessica Silver-Greenberg. American Banker readers will recall Schneiderman warned Wells and Bank of America of a potential lawsuit over alleged servicing settlement violations back in May. "While Wells Fargo is bracing for a lawsuit, Bank of America is poised to announce a series of additional protections that it has adopted after discussions with Mr. Schneiderman's office," Silver-Greenberg writes. The lawsuit against Wells is expected to be filed as early as today. Meanwhile, New York regulator Benjamin Lawsky scored a big win in his crackdown on the payday lending industry yesterday when a federal judge ruled he did have authority to regulate online lenders with Native American ties. "The ruling could encourage other states with interest rate caps to take legal action to ban tribal lenders that charge triple-digit rates in their jurisdictions," the Washington Post notes.
Your Obligatory JPM Update: Federal authorities expect that Javier Martin-Artajo, one of two former JPMorgan Chase employees facing criminal charges over the "London Whale" trading loss, will be extradited to the U.S. by Spanish authorities, reports the Times. Meanwhile, the Journal says CEO Jamie Dimon is doing just fine, despite the bank's persistent regulatory woes. "For the past two months, the CEO has kept a busy calendar of appearances designed to show the outside world the bank is conducting business as usual," the article notes.
Not So P-2-P Lending: In an article for New York magazine, Felix Salmon profiles Lending Club and suggests the online platform has strayed from its peer-to-peer lending roots. "Lending Club's investors are increasingly hedge funds, or high-net-worth brokerage clients, or other pools of money highly redolent of the Wall Street of old," he writes. "The borrowers are still individuals. But they're being lent money by the very Wall Street institutions that the peer-to-peer system was designed to circumvent." Salmon's profile comes amid news that investment firm Englewood Capital sold a $53 million securitization of Lending Club loans. Per Dealbook, the firm expects to conduct more transactions along the same lines. "The move towards securitization highlights a shift in the growing P-2-P industry," the FT notes, echoing Salmon. "Even as they eschew traditional banking the biggest P-2-P lenders have been increasingly supported by Wall Street and large institutional investors."
Wall Street Journal
A report from the Consumer Financial Protection Bureau finds that, though the Credit Card Accountability, Responsibility and Disclosure Act of 2009 has benefited customers, there are some problems that persist in the industry. Among the CFPB's concerns: the quality of disclosures, card activation fees, "deferred interest" cards and, perhaps unsurprisingly, add-on products like identity theft protection.
A preview of third-quarter earnings season predicts more pain looms for banks. "Poor results could prompt additional job cuts and worsen the already downcast mood on Wall Street," the article notes.
New York Times
JPMorgan Chase and Goldman Sachs have figured out that putting general counsel in charge of regulatory compliance is a bad idea. "Defending a company against regulators is different from making sure it meets their standards," writes columnist Reynolds Holding.
Former Goldman Sachs trader Fabrice "Fabulous Fab" Tourre is seeking a new trial. Tourre, you may recall, was found "liable" on six counts of civil securities fraud back in August.
Newly minted RBS CEO Ross McEwan, formerly head of the bank's retail business, says he now plans to emphasize the bank's retail business.
And, Lastly ...
ZeroAccess, a malicious Bitcoin mining botnet took a hit after a Symantec-operated sinkhole succeeded in detaching a quarter of its bots from the network, reports TechWeekEurope. The botnet was making money "by delivering a click fraud Trojan, which would generate artificial clicks on ads as if they were from legitimate users." Its Bitcoin mining operation was profitable only because it used stolen electricity from infected computers.