Receiving Wide Coverage ...
Libor scandal charges: The Justice Department indicted two French bankers for allegedly trying to manipulate the London interbank offered rate, “the latest U.S. attempt to prosecute alleged participants in a multibillion-dollar scandal that roiled global markets.” The agency accused the two bankers, who worked at Société Générale, of ordering their subordinates to submit lowball figures that were used to calculate Libor. Wall Street Journal, Financial Times

Coincidentally, the Federal Reserve began seeking public comment on three proposed rates to replace the “scandal-plagued” Libor. The new rates “are meant to provide a more reliable data set for overnight borrowing costs across Wall Street” and would serve as benchmarks for firms using U.S. Treasury securities as collateral for short-term loans.

Wall Street Journal
A nice Blend: Wells Fargo and U.S. Bancorp signed deals with mortgage software startup Blend Labs to help them compete better against offerings such as Quicken Loans’ Rocket Mortgage product, which promise to reduce the time it takes to get a mortgage approved. Blend also announced a new $100 million funding round.

Tom Wind, president of U.S. Bank’s mortgage division, said the software could help the bank take four or five days off the lending process and eventually cut in half the time it takes to get a loan. “I’ve never chosen a startup for a project of this size and scale before,” added Michael DeVito, Wells Fargo’s head of mortgage production.

Widening the pool: Ford Motor Credit is expected to announce Friday that it is looking at ways to “review new data” in order to approve more people with limited credit histories for loans and leases. The move “is expected to unfold in coming years, even as concerns mount about rising auto-loan losses in the industry.”

JPMorgan’s hate list: How will JPMorgan Chase’s customers react to the bank’s recent decision to “legitimize and fund an outfit that exists to smear conservatives,” Kimberley A. Strassel, a member of the paper’s editorial board, wonders, referring to the bank’s recent gift of $500,000 to the “notorious Southern Poverty Law Center.”

Financial Times
No time to loosen up: Robert Kaplan, the president of the Federal Reserve Bank of Dallas, isn’t in favor of watering down the Fed’s stress tests on America’s biggest banks, especially at a time when asset prices are soaring. In an interview with the FT ahead of the Kansas City Fed’s annual symposium in Jackson Hole, Wyo., this weekend, Kaplan said, “While market valuations may be full, I don’t see a build-up yet of excessive debt and one of the reasons is we have had very tough macroprudential policies, particularly on the big banks.” However, Kaplan said he did favor reviewing regulatory burdens on smaller banks. “I think [the economy] may be being hurt by what we are doing with small and mid-sized banks, and I am concerned about that and I want to see that change,” he said.

Back to business: The Fed has lifted its order banning Santander’s U.S. holding company or its subsidiaries from paying dividends or making any capital distributions. The order was imposed three years ago after Santander Consumer USA paid its American parent a $52 million dividend, which violated restrictions put on the bank after it a failed stress test in March 2014.

Quotable
“Now is not the time to be easing back on annual stress testing for big banks.” — Robert Kaplan, president of the Federal Reserve Bank of Dallas.

Robert Kaplan, president of the Federal Reserve Bank of Dallas, speaks during the American Economic Association annual conference in Chicago.
Robert Kaplan, president of the Federal Reserve Bank of Dallas, speaks during the American Economic Association annual conference in Chicago. Bloomberg News

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