Wells loses key player; credit scores get a boost
Wall Street Journal
Farewell: Mark D’Arcy, Wells Fargo’s chief operational risk officer, whose job includes oversight over regulatory reviews, annual stress tests and living wills, is leaving, effective next Tuesday, after about a year and a half with the bank. Mark Weintraub, the bank’s chief auditor for consumer banking will take over. “The job of operational risk officer is key as the bank works to change its risk management framework to catch and prevent problems as part of the Federal Reserve’s enforcement action,” the paper says.
It all adds up: Millions of consumers' credit scores rose by an average 11 to 14 points following a move by the major credit bureaus to remove non-loan related collections from credit reports, according to the Federal Reserve Bank of New York. The collections included such things as gym memberships, library fines and traffic tickets, which “some have said are prone to error and unfairly drag down credit scores.”
Don’t panic?: The New York Fed said in a separate report that U.S. household debt grew for the 16th consecutive quarter, climbing to $13.3 trillion in the second quarter. That puts the total above where it was before the financial crisis and nearly 20% higher than five years ago. Still, the total debt number accounts for only 65% of GDP, compared to 87% in 2009. It also “comes against a backdrop of improving delinquency and foreclosure rates. Overall delinquency rates came down slightly.” But, American Banker warns, the debt is still there, it's just not reported the same way.
Tumbling dice: The value of all cryptocurrencies in circulation has fallen below $200 billion — the first time its been under that level this year — 70% off its January high, following “indiscriminate” and “widespread” selling. The retreat “reflects user frustration over their modest inroads into commerce and a general shakeout in speculative investments.”
How bad are things? A company that gave away digital tokens in an initial coin offering has been charged by the Securities and Exchange Commission with wrongdoing. The agency said giving away tokens still constitutes an “offer” of securities. “The case highlights the SEC officials’ continuing effort to make examples of individuals they believe are bad actors in the coin-offering market.”
Not feasible: Rising interest rates are discouraging builders from constructing more affordable housing, “creating larger funding gaps for an industry already grappling with cuts in government subsidies and rising construction costs.”
“It makes the difference between feasibility and infeasibility,” said a large developer.
Popularity contest: Royal Bank of Scotland was ranked the least popular bank in the U.K. by the government Competition and Markets Authority. HSBC’s First Direct and Metro Bank were the most popular personal banking providers, while Sweden’s Handelsbanken was ranked the most popular business bank. Starting Wednesday banks will be required to show how likely people would be to recommend their services.
“While overall delinquency rates have remained stable at relatively low levels, transition rates into delinquency have fallen noticeably for student debt over the past year, reflecting an improved labor market and increased participation in various income-driven repayment plans.” — Wilbert van der Klaauw, senior vice president at the New York Fed.