Where there's smoke ...: A Democrat running for Florida agriculture commissioner says Wells Fargo closed her account after she told the bank she intended to accept donations from the medical marijuana industry. A spokeswoman for the bank said “it is Wells Fargo’s policy not to knowingly bank or provide services to marijuana businesses or for activities related to those businesses,” citing federal law.
But “the move is highly unusual,” the Washington Post says. By closing the account, Wells Fargo is “denying banking access not to a marijuana business but to a political candidate who may receive donations from the marijuana industry. That could spell trouble for the dozens of national politicians who have received donations from the industry in this campaign cycle.”
Busted: Investors in bitcoin and other digital currencies are licking their wounds now that the “cryptocurrency bubble has burst.” The value of all outstanding cybercurrencies has plunged by about $600 billion, or 75%, since peaking in January, with the price of Bitcoin down from $19,000 in December to about a third of that.
A pile of golden coins - bitcoin cryptocurrency, realistic 3d illustration
Artur Kamalov/eranicle - stock.adobe.com
“The virtual currency markets have been through booms and busts before — and recovered to boom again,” the Financial Times says. “But this bust could have a more lasting impact on the technology’s adoption because of the sheer number of ordinary people who invested in digital tokens over the last year, and who are likely to associate cryptocurrencies with financial ruin for a very long time.”
Meanwhile, several cryptocurrency exchanges have joined together to create “what appears to be the industry’s first self-regulatory organization, a step toward transparency in the notoriously opaque and volatile market.” The Virtual Commodity Association “will meet in September to begin setting goals for the association, including rules for the marketplaces and guidelines for members.”
Costly conflict: Merrill Lynch agreed to pay $8.9 million to settle Securities and Exchange Commission charges that it failed to disclose a conflict of interest in selling third-party products managed by the American subsidiary of a foreign multinational bank. More 1,500 Merrill customers had about $575 million invested in the products. Wall Street Journal, Financial Times
Wall Street Journal
Fed up: President Trump heaped more criticism on the Federal Reserve’s monetary policy tightening at a fundraiser in Long Island last Friday. “That can only happen to Trump,” the president said in reference to the recent increases, which he is concerned will cool the economy. “The president’s growing discontent could become a precursor to clashes between the White House and the central bank as the Fed proceeds with long-planned increases in short-term rates,” the paper says.
Separately, the Fed said David Wilcox, its director of research and statistics, “one of the most important roles at the central bank outside the committee that votes to set interest rates,” is retiring at the end of the year. His retirement after 30 years at the Fed “would be the most significant change in a senior staff position since Chairman Jerome Powell took office in February.”
Financial Times
Under pressure: The “blockbuster” initial public offering of Ant Financial, the giant Chinese payments company, “has again been put on the back burner as it continues to burn cash and come under pressure from Beijing’s crackdown on non-traditional financial institutions.” Bankers had speculated the IPO could come sometime this year, but it now may not come until well after 2019. The company’s “battle for China market share with the payments arm of rival Tencent has [also] erased profitability.”
Really old money: Esra Turk,a Barclays managing director and visiting researcher in classics at the University of London, had to go back to ancient times to find out “what makes a really long-lasting financial institution.” She found one in the Artemision in Ephesus, which survived from the seventh century B.C. to about 400 A.D.
“What was the secret of its longevity? The starting point was proximity to great wealth, combined with a banking culture that blended trust with fear. This was a holy sanctuary, and you messed with the gods at your peril.”
Quotable
“I got too caught up in the fear of missing out and trying to make a quick buck. The losses have pretty much left me financially ruined.” — Cybercurrency investor Pete Roberts, who says the $23,000 he invested in digital currencies is now worth about $4,000.
The Jackson, Mississippi, company will use proceeds from the sale of its Fisher Brown Bottrell Insurance unit to restructure its investment portfolio, moving $1.6 billion of low-yield securities off the balance sheet.
The store-branded card issuer is raising annual percentage rates and adding fees for paper statements to compensate for lost revenue. The Consumer Financial Protection Bureau's new regulation is scheduled to take effect on May 14.
At the banks' annual meetings, shareholders at both companies struck down proposals that would have split the board chair and CEO roles. Two other proposals also failed to win shareholder support, one concerning energy financing and another on pay gap analysis.
Congressional Review Act resolutions are ramping up ahead of the 2024 election cycle. Experts say that, although none are likely to become law, the resolutions are still powerful messaging and political tools.
The ABA is testing an information-exchange network to allow banks to share their fraud data with each other. Companies including Baselayer are also building solutions.
Republicans on the House and Senate Small Business committees are accusing the SBA of being irresponsible in granting Funding Circle permission to participate in its flagship loan-guarantee program.
