No help Wells Fargo admitted that, due to a calculation error, it improperly foreclosed on 545 distressed mortgage borrowers after they asked the bank for help. All told, 870 homeowners were denied assistance even though they qualified for it, and more than half eventually lost their homes. “The acknowledgment is sure to increase pressure on the San Francisco-based bank, which has been struggling to repair its image after a series of missteps,” the Washington Post says.
Regarding one of those missteps, Wells said Jay Welker, the head of its private bank and its wealth management division, will retire next March. Welker “was a focal point of a gender bias investigation” into the unit, where “some female executives said Mr. Welker often called women ‘girls’ or told them to put their ‘big-girl panties on.’”
Cindy Charles 415-927-4473 5D
On a more positive note, Wells CFO John Shrewsberry told investors that the bank’s divestment of old crisis-era legacy loans should be winding down by the middle of next year, which will allow “its loan book to grow in line with its huge presence in the U.S. credit market.” Shrewsberry “also suggested that widespread investor concerns about rising deposit costs were overdone,” saying that checking account customers weren’t moving their money into higher-yielding deposit products.
Wall Street Journal
Voluntary or mandatory? The Bank Policy Institute and the American Bankers Association filed a petition with the Federal Reserve and other bank regulators asking them to write a rule stating that they won’t punish banks if they violate regulatory guidance. “The petition is a gambit in a years-long fight over guidance documents, which spell out regulatory expectations from loan underwriting to business relationships with third-party vendors. Bankers say regulators often punish or threaten to punish them for violating guidance, even though compliance is supposed to be voluntary.”
Testing the waters New Jersey-based Investors Bancorp has hired Keefe, Bruyette & Woods to explore a possible sale “amid an uptick in consolidation among smaller lenders.” The bank has about 150 branches in New Jersey and New York. A sale, should it happen, would be the second largest bank deal in the last two years, following Fifth Third’s agreement earlier this year to buy MB Financial for $4.7 billion.
Financial Times
To the rescue Goldman Sachs has hired Mark Filip, a former U.S. deputy attorney general, “as it grapples with an investigation into its role in the 1MDB scandal,” in which two former Goldman bankers have been indicted. Filip’s addition to the bank’s legal team “raises questions over whether the Department of Justice’s criminal division chief, Brian Benczkowski, will be forced to recuse himself from the probe into the bank’s work for the Malaysian investment fund.”
HSBC woes HSBC said it suffered a “serious” data breach in its U.S. retail business in early October, “with fraudsters gaining access to customers’ account details, statement histories and a raft of other personal information.” The bank said it immediately suspended online access to affected accounts, adding that it was not aware that any customers had suffered a financial loss.
Separately, the U.K.’s Financial Conduct Authority is investigating whether Paul Watson, the head of regulatory compliance in HSBC’s global banking and markets division, “possesses the competency to carry out the role. The fresh regulatory investigation comes as the Asia-focused bank tries to return to growth following the end of a five-year period during which it was threatened with criminal charges in the U.S. for its role in money-laundering and sanctions-breaking.”
Rebuilding In an effort to “revitalize its stuttering investment bank,” Bank of America CEO Brian Moynihan has authorized Matthew Koder, the new head of the unit, to hire up to 50 managing directors and staff to support them.
Cleaning house Speaking of money laundering, Danske Bank chairman Ole Andersen is stepping down under pressure from the Maersk family, whose investment company owns about 21% of the scandal-ridden Danish bank. “We have been very troubled by the developments at the bank,” said Robert Uggla, the investment company’s CEO. “We think new leadership is required at both board level and in management.” The bank’s CEO resigned recently after admitting that more than €200 billion of Russian money was laundered through the bank’s Estonian branch over a nine-year period.
Quotable
“HSBC regrets this incident, and we take our responsibility for protecting our customers very seriously.” — A bank spokesman, referring to last month’s data breach in its U.S. retail unit.
A budget bill passed by the House Financial Services Committee would eliminate the Public Company Accounting Oversight Board and cap the Consumer Financial Protection Bureau's budget at roughly $249 million.
As the banking-as-a-service model has evolved over the last decade amid widespread consent orders and BaaS partnership failures, the number of sponsor banks has dwindled, leaving fintechs to compete for the business of those that remain.
First Savings Financial Group could have bailed out of SBA lending after the departures of key executives and loan officers. Instead it retooled the unit, and it's now reaping the benefits.
Citizens Financial Group's promotion of Brendan Coughlin to company president comes at the same time as CFO John Woods prepares to leave for State Street. Both executives have been viewed as potential successors to CEO Bruce Van Saun.
