Receiving Wide Coverage ...
No bonuses: Wells Fargo's board stripped eight top executives, including CEO Timothy Sloan and CFO John Shrewsberry, of their 2016 cash bonuses and clawed back up to half the stock awards in response to the bank's phony accounts scandal. The actions "don't reflect the culpability of individuals but are meant to show their accountability for the bank's overall performance and reputational risk as a result of the scandal," the Wall Street Journal reported. The moves will cost the executives about $32 million. Wall Street Journal, Financial Times, Washington Post, American Banker
Wells also disclosed that the number of customers affected by the scandal may be bigger than the 2.1 million originally estimated. And its legal costs could be $1.8 billion more than expected.
Big shakeup: Bridgewater Associates, the world's biggest hedge fund, said its billionaire founder Ray Dalio will step down as co-chief executive and co-CEO Jon Rubinstein, the former Apple executive, is leaving the company after less than a year. Dalio, who remains as co-chairman and co-chief investment officer, told clients that he and Rubinstein "mutually agree that [Rubinstein] is not a cultural fit" for the company. Rubinstein will be replaced by David McCormick, the company's president and a former Treasury Department official. It was also reported that Craig Mundie, a former deputy to Bill Gates at Microsoft, was removed recently as co-executive chairman. According to the Journal, the company has had five chief executives since the beginning of 2016. Wall Street Journal, Financial Times, New York Times
Wall Street Journal
Card war: American Express announced it is boosting the rewards – and the annual fee – on its Platinum charge card for the second time since last October in order to stay competitive with similar cards offered by banks, such as JPMorgan Chase's Sapphire Reserve card. Platinum cardholders will now get more rewards for using their cards at hotels booked through Amex's travel agency plus $200 worth of Uber rides a year. The annual fee will rise to $550 from $450 starting March 30.
Despite the changes, Amex just can't match the rewards and services that a commercial bank can, the Heard on the Street column says.
I'm a believer: The KBW Nasdaq Bank index rose more than 3% on Wednesday to reach its highest level since late 2007, before the global financial crisis. The index has gained about 32% since Donald Trump's election, outperforming the S&P 500 by about 20 percentage points. As a result, "bank executives themselves are now looking to reinvest in their businesses rather than just hoping to return more capital to shareholders," the paper said. "That is a big change from recent years when executives were mostly in a defensive crouch."
Unwelcome surprise: Homeowners who took out home equity lines of credit 10 years ago during the housing boom may be facing much larger monthly payments as those loans reset to include principal as well as interest payments. The monthly payment on a $50,000 Heloc at 3.25%, for example, would more than double to $283.60, including both P&I, from an interest-only payment of $135.42. Many borrowers aren't prepared, bankers say, because they took out the loans so long ago.
New York Times
Where's the money?: Thousands of customers have filed a class action suit against PayPal claiming that the electronic payments company's philanthropic website failed to direct their donations to the intended charities. The plaintiffs claim that the PayPal Giving Fund, which processed $7.3 billion in online contributions last year, redirects donations to other organizations if the intended charity doesn't have an account with PayPal, and doesn't inform either the donors or the intended charities when it does.
"It's been 10 years since they signed the loan documentation, and for a lot of our customers, it's not top of mind." – Mike Kinane, senior vice president of consumer lending at TD Bank, about home equity lines of credit that are about to reprice