Wells Fargo data goof; Trump-CFPB war widens

Receiving Wide Coverage ...
Does it matter?: Trump administration regulators are looking to put the kibosh on trying to regulate Wall Street pay, but it may be pointless anyway, the result of Dodd Frank as well as "changes in the economics of the banking industry [that] have already resulted in tighter compensation controls," the Wall Street Journal reports. "Big banks already have made moves to rein in pay, pressured by shareholders seeking higher dividends and stock buybacks and as they work under higher capital requirements that have pressured profitability and squeezed the amount of money available for compensation." Wall Street Journal, American Banker

Indeed, the average compensation for the top 20 Wall Street CEOs last year was about $12.5 million, down from $14.2 million in 2015, according to the Financial Times. Still, some bankers did really well, thanks to stock market gains. Both JPMorgan Chase CEO Jamie Dimon and Lloyd Blankfein of Goldman Sachs saw the value of their stock and options increase by $150 million following Donald Trump's election.

Still, American bank CEOs make on average twice as much as European chiefs, and investors want to keep it that way.

Wall Street Journal
The war widens: The Trump administration wants to make the Consumer Financial Protection Bureau's customer complaint database private, opening a new front in the war between the White House and the agency. "One of the most frequent criticisms of the database is that, because it does not verify complaints or provide sufficient context regarding the related market and industry practices, it subjects companies to unwarranted reputational risk," the Treasury Department said in a recent report on financial regulation. Opponents of such a move say it "would weaken a tool for consumers and businesses to resolve disagreements," the Journal said.

End of the American dream?: Big investors are betting that the homeownership rate will remain low, rents will continue to rise, and many people will "no longer see owning a home as an essential part of the American dream," the Journal reports. So far, institutional investors have shelled out $40 billion buying 200,000 houses, renovating them and renting them out.

"The rental stigma has really subsided," said the operations chief of one such company. "People are realizing that houses are not necessarily the best places to store wealth."

Career capper?: The Journal profiles AIG's new CEO Brian Duperreault, who recently returned to the insurance giant, where he started his career an actuarial trainee in 1973 before leaving in 1994.

"It would be hard to find anyone in insurance with a longer resume" than Duperreault, the Journal notes. "Over the past 23 years, he has turned one niche offshore insurer into a large and diversified company, become CEO of a big industry brokerage and co-founded his own insurance firm. In returning to AIG, his plan is straightforward: Grow AIG."

Easy does it: U.S. financial regulators told foreign-owned banks that they won't enforce the so-called Volcker rule as they review the regulation over the next year. "The move shows the five U.S. agencies in charge of enforcing the rules are willing to be flexible during the review," the Journal reported. Congress also is looking at changing the regulation, which basically bars banks from trading for their own account.

RIP: Carl Reichardt, the former CEO of Wells Fargo from 1983 to 1994, died July 13 after a long illness. He was 86.

"Not for him were other bankers' palatial offices or private-jet jaunts to mingle with princes and pop stars," the Journal said. Reichardt "declared war on costs in ways big and small. He sold the corporate jet and at one meeting demanded to know why it was necessary to put the documents being discussed into ring binders when paper clips would do. He banished potted plants and underperforming employees. Warren Buffett's Berkshire Hathaway became a major shareholder on his watch."

New York Times
Oops!: An outside attorney for Wells Fargo inadvertently sent sensitive financial information on at least 50,000 customers of the bank's high net-worth unit to the attorney representing a former Wells employee who is suing another bank employee — who happens to be his own brother — for defamation.

Peter Foley/Bloomberg

In answer to a subpoena from the former worker, Wells' lawyer mistakenly sent "a vast trove of confidential information about tens of thousands of the bank's wealthiest clients."

"Obviously this was done in error and we would request that you return the CD asap so that it can be properly redacted," the attorney for Wells — which is not a party to the case — wrote to former employee's lawyer, who said he was evaluating what to do about the request.

The hunt is over: Federal prosecutors have decided to drop the case against two JPMorgan Chase employees involved in the so-called London Whale scandal, which cost the bank more than $6 billion in trading losses. The prosecutors said that recent statements by Bruno Iksil — the whale himself — threw doubt into his reliability as a witness.

Quotable
"At this point, restrictions on comp may be superfluous. None of these firms want to pay people more than they have to." — Guy Moszkowski, banking analyst and managing partner at Autonomous Research, on banker pay.