Wells faces lawsuits; Bitcoin tops $4,000

Receiving Wide Coverage ...
More legal woes: Wells Fargo has been hit with yet another accusation of cheating its customers. CNN Money reported Friday the bank is being sued by some of its small business clients for allegedly overcharging them for processing credit card transactions over several years. According to the suit, a joint venture that is 60% owned by Wells Fargo and 40% by First Data charged “massive early termination fees” to small businesses who tried to leave.

Amid the wave of new scandals at Wells, “now seems an odd time” for the Federal Reserve to suggest lightening the load on bank boards of directors and “to reduce communications between regulators and bank boards,” New York Times financial columnist Gretchen Morgenson writes.

“While some Wells Fargo shareholders are urging the bank’s directors to sharpen their scrutiny in the wake of continuing misconduct, it’s noteworthy that new regulatory guidance put forward by the [Fed] would go in the opposite direction,” she says. “Intended to lighten a regulatory burden, the Fed’s idea could result in less information for directors about problems that government overseers have uncovered at an institution.”

Bitcoin bounce: The price of bitcoin jumped over the $4,000 mark over the weekend for the first time in its nine-year history. The price of the digital currency is up more than 25% so far this month and has more than quadrupled so far this year, even as other digital currencies have tanked. Many of those currencies were issued this year in initial coin offerings by tech startups.

“But while the meteoric rise is good for speculators, it is extremely bad news for people who wish to see Bitcoin’s adoption as a functional currency,” says Ethan Wolff-Mann, a Yahoo Finance columnist. “Bitcoin has been behaving much more like a long-term, buy-and-hold investment than a currency for daily use. For Bitcoin to gain traction, it has to achieve at least a semblance of steady value.”

Wall Street Journal
Making progress: While President Trump’s legislative agenda seems to be bogged down in Congress, his administration “has begun laying the groundwork to change some of the myriad rules that Wall Street has sought for years to overturn or water down,” the paper reports. “Just over six months into the Trump administration, regulators are setting the stage for a wave of eased rules.”

Andrew Harrer/Bloomberg

“On most topics, we are still awaiting the approval of appointees, but it is encouraging that there are some issues, some of which are technical but incredibly important to running a bank, where some progress is being made,” Greg Baer, president of the Clearing House Association, told the paper.

Being flexible: Balancing "the desire of IT staff to participate in open-source groups with the bank’s need to protect sensitive projects and plans,” can be tricky. according to Antoine Shagoury, State Street’s global chief information officer. He discusses the situation in the CIO Journal column. “We have to sell them on the opportunity to work here,” Shagoury said. “We’re looking at how to seed innovation.”

Financial Times
Bad mix: Performance pay for bankers generates no positives, city editor Jonathan Ford writes in an op-ed. “In the 10 years since the financial crisis, much of the debate about bankers’ bonuses has fixated on the scale and structure of these controversial payments,” he writes. “What is less discussed is whether they serve any beneficial purpose and, indeed, whether commercial bankers should receive performance-related pay at all.”

Quotable
“We used to be told to go out and club the baby seals: mom-pop-shops that had no legal support.” — A former Wells Fargo Merchant Services employee who said the bank overcharged small business customers.