Receiving Wide Coverage ...
Now, prove it: The Supreme Court ruled 5-3 that Miami has legal standing to sue Bank of America and Wells Fargo for alleged predatory lending under the Fair Housing Act. However, "the court declined to decide whether the city had asserted a direct enough connection between the banks' actions and the harm it claimed," the New York Times noted. The case was sent back to the federal appeals court in Atlanta.
Miami sued the two banks claiming their alleged discriminatory mortgage lending practices caused minority home buyers to default on their mortgages, which in turn caused financial harm to the city. The court rejected the banks' argument the city had no legal standing to sue them. Going forward, however, Miami "will have to establish that the banks caused direct harm to the city — not attenuated, downstream effects — a high standard that could prove challenging to meet," the Wall Street Journal said. Wall Street Journal, New York Times, American Banker
Cleaning house: AXA, the French insurance giant that owns AllianceBernstein, abruptly fired the company's long-time chief executive Peter Kraus and all six of its independent board members. Seth Bernstein, a former JPMorgan Chase executive, was named to replace Kraus and Robert B. Zoellick, a former president of the World Bank, was named chairman. The shake-up "comes as investors continue to abandon higher-priced, actively managed mutual funds in favor of cheaper exchange traded funds that track a wide variety of stock and bond indexes," the New York Times commented. Wall Street Journal, Financial Times, New York Times
Just thinking: President Trump said he is "looking at" bringing back the Glass-Steagall Act's restrictions separating retail from investment banking. "There's some people that want to go back to the old system, right? So we're going to look at that," he said. Bank stocks were little changed after the comments. Wall Street Journal, New York Times
Ripple effect: China's latest attempt to restrain its overleveraged financial system threatens to hamper the country's economy just as credit growth is already starting to slow down. "Investors outside the country don't seem to care, but they should," the Journal says. "China probably isn't going to create another global financial scare as it did in 2015 and at the start of 2016, but the effects will still ripple around the world." Wall Street Journal, Financial Times
Wall Street Journal
The replacements: The Trump administration is preparing to replace Thomas Curry as Comptroller of the Currency, possibly as soon as this week, the paper reports. He would be replaced on an acting basis by Keith Noreika, a banking lawyer at Simpson Thacher & Bartlett, but the permanent job, which requires Senate confirmation, will reportedly go to Joseph Otting, a colleague of Treasury Secretary Steven Mnuchin.
We can do that?: Goldman Sachs is trying to make money the old-fashioned way: by lending it out. The company's old standbys — investment banking, trading and managing money for the wealthy – "just aren't providing the kind of growth it wants," the paper reports. "So Goldman is expanding its reach with a prosaic strategy it once avoided. Lending people money."
Family matter: Barclays CEO Jes Staley is wading into a "messy dispute" between KKR, one of the bank's most powerful clients, and his brother-in-law.
Proxy fight: A pair of proxy advisory firms are squaring off against each other in a Canadian bank's bid to buy a small Chicago bank. Institutional Shareholder Services told PrivateBancorp shareholders to vote against the bank's proposed sale to Canadian Imperial Bank of Commerce. But Glass Lewis & Co. recommends a "yes" vote, saying CIBC's offer is "reasonably sufficient."
"The split recommendations are the latest wrench in a deal announced more than 10 months ago, fueled by CIBC's desire to expand into the U.S.," the paper explains. "But Donald Trump's election win several months later sent shares of U.S. banks, including PrivateBancorp, soaring, and left many shareholders thinking that CIBC's offer was no longer good enough."
Northern run: Also up north, Home Capital Group, Canada's largest subprime mortgage lender, said it has tapped into an emergency credit line as customers withdraw funds following allegations, which the lender denies, that it misled investors about fraudulent mortgage applications. "The flight from Home Capital has focused investor attention on longstanding concerns about the health of the Canadian residential mortgage market and its potential impact on the broader Canadian financial sector," the paper noted.
Know your lender: It turns out the "Bank of Mum and Dad" should be taken seriously as a competitor, at least in the U.K. According to a study by insurance company Legal & General, loans and gifts from family and friends help fund 26% of all U.K. property transactions, making it unofficially the ninth biggest mortgage lender in the country at £6.5 billion, up 30% from a year earlier. More than 40% of prospective homeowners expect to get help from relatives to buy homes, while more than 60% of those under age 35 seek help from family and friends.
"We're a bank. We should act like one." — Goldman Sachs CEO Lloyd Blankfein