Receiving Wide Coverage ...
FDIC nominee: President Trump has nominated James Clinger, chief counsel to the House Financial Services Committee chairman, to head the Federal Deposit Insurance Corp. Clinger’s nomination is a “big step towards loosening the shackles on Wall Street,” the Financial Times commented. It comes as “Wall Street banks lower their expectations for an overhaul of Dodd-Frank in Congress and pin their hopes instead on Trump-appointed regulators watering down rules within existing law.” Wall Street Journal, Financial Times, American Banker
Wall Street Journal
Fighting back: Consumer Financial Protection Bureau Director Richard Cordray is rebutting charges by the House Financial Services Committee’s staff that he failed to do his job in handling the investigation into Wells Fargo’s phony accounts scandal and that he failed to cooperate with the committee in its own probe of the matter. The panel’s staff recommended that Cordray be held in contempt if the charges are found to be true.
“The staff report suggests that the consumer bureau, and I myself, refused to brief committee staff about the work we did on these matters,” Cordray wrote to committee chairman Jeb Hensarling, R-Texas. “That is not what happened, and the staff report selectively mentions only some of the communications.”
Catering to the small: Morgan Stanley will soon allow investors with as little as $5,000 to use its robo-advisory service, known as Morgan Stanley Access Investing. The change, expected this fall, shows the big Wall Street bank “is in the midst of a digital transformation that will let the U.S.’s biggest brokerage by number of financial advisers embrace some of the country’s smallest investors.”
Millennial investors who prefer robo-investing generally want to put their money in socially responsible investments, the Journal reports in a separate story.
Giving back: The largest American banks are ready to start returning more of their excess capital to shareholders, in some cases more than they earn in profits, as they pass the latest round of stress tests, the FT reports. According to Goldman Sachs, “about a dozen” large banks will ask the Federal Reserve to allow them to make payouts in excess of profits, “up from a handful last year.”
Fintech advance: Klarna, the Swedish fintech company that already controls a large share of the online payments business in Germany and Scandinavia, has received a banking license from the Swedish Financial Supervisory Authority. The paper said it is the largest European fintech company to win a banking license in Europe. The company has 60 million customers in Europe and processed €13 billion in transactions last year.
New York Times
Coming back for more: Subprime auto lenders are aggressively suing borrowers whose cars were repossessed more than 10 years ago if the amount recovered at resale didn't cover the loan. The lawsuits, known as deficiency cases, are piling up in state courts as lenders try to get back the money they say they are still owed.
“With mortgages, people could turn in the keys to their house and walk away,” the paper reports. “But with auto debt, there is increasingly no exit. Repossession, rather than being the end, is just the beginning.”
“How am I still paying for a car I don’t have?” — Yvette Harris, whose car was repossessed more than a decade ago but is still paying off her loan.