Receiving Wide Coverage ... Goodbye to you: Federal Reserve Chair Janet Yellen’s much-anticipated speech Friday from the Fed symposium at Jackson Hole, Wyo., dwelt not on monetary policy or interest rates but on a defense of the bank regulations passed in the wake of the financial crisis in what many saw as a farewell speech of sorts. “Because of the reforms that strengthened our financial system, and with support from monetary and other policies, credit is available on good terms, and lending has advanced broadly in line with economic activity in recent years, contributing to today’s strong economy,” she said. Wall Street Journal, Financial Times, New York Times
Yellen did open the door to simplifying the Volcker rule, which many think is overly complex. Fixing the rule “could have mildly positive implications for investors in bank stocks,” the Journal’s Heard on the Street column suggests.
Janet Yellen, chair of the U.S. Federal Reserve, arrives for a dinner during the Jackson Hole economic symposium, sponsored by the Federal Reserve Bank of Kansas City, in Moran, Wyoming, U.S., on Thursday, Aug. 24, 2017. Two Federal Reserve officials took opposite sides of the central bank's ongoing debate over how to respond to disappointingly low inflation figures, as policy makers gathered for their annual symposium in Jackson Hole, Wyoming. Photographer: David Paul Morris/Bloomberg
David Paul Morris/Bloomberg
Nevertheless, insiders at the six biggest American banks have sold more than nine million shares of their stock since the beginning of the year, with sales outnumbering purchases by about 14 to one, according to a Financial Times analysis, . “That is an unusually long streak of net sales,” the FT comments.
Wall Street Journal Betting against the house: Rising home prices are fueling an increase in home equity lines of credit and cash-out mortgage refinances following years of consumer reluctance to borrow against their homes. Heloc originations rose 8% versus a year ago to nearly $46 billion in the second quarter, their highest level since 2008, while cash-out refis rose 6% to $15 billion.
“If customers feel like their home values are stable or increasing, and if they feel like their job prospects are good, then they will start to take out more home-equity lines. That is what we are starting to see,” said Mike Kinane, head of U.S. consumer lending products at TD Bank.
Toned down: The Consumer Financial Protection Bureau is expected to reduce the scope of its proposed rule on payday lending before President Trump can name a replacement for current director Richard Cordray, who is expected to resign soon to run for Ohio governor. “The rule is now expected to focus on short-term payday loans that are typically due in two weeks, or the borrower’s next payday, with annual interest rates of as much as 390%,” the Journal reports. “To be excluded are high-cost installment loans lasting 45 days or longer.”
What’s the tax on that?: Wondering what you may owe on taxes following the recent runup in digital currency prices, especially as it pertains to the split between original bitcoin and Bitcoin Cash? Good question. Tax experts don’t seem to know, and the IRS hasn’t issued any guidance.
Financial Times Not to worry: Canada’s biggest banks say they can weather any downturn in home prices which may result from recent regulatory attempts to stop “rampant” house price growth, the paper reports. Last week executives at two of the country’s six big banks, Royal Bank of Canada and Canadian Imperial Bank of Commerce, “dismissed fears of the effects of a sharp correction, saying that they had built defenses able to withstand a serious slump.”
New York Times Loyal to the core: “If Jes Staley were a character from classical literature, his fidelity would be his tragic flaw. Friends and colleagues said he reacts to problems quickly and sometimes impulsively, with dogged loyalty,” the Times writes in a profile of Barclays’ CEO, who is under pressure from some shareholders to resign in light of recent stumbles. “His current quandary is an outgrowth of Barclays’s transformation from a three-century-old British commercial and retail lender, with Quaker roots, into a global banking and trading powerhouse.”
Quotable “The balance of research suggests that the core reforms we have put in place have substantially boosted resilience without unduly limiting credit availability or economic growth.” — Federal Reserve Chair Janet Yellen speaking at the Jackson Hole symposium Friday.
From the early uncertainty and illness associated with Covid-19, to subsequent wars, supply chain issues, rising prices, inflation and layoffs, there has been a lot to deal with. And workers are in the doldrums right now.
The Office of the Attorney General in New York says the bank violated the state's Exempt Income Protection Act, illegally transferring customers' money to debt collectors.
The Providence, Rhode Island, company is having discussions with private wealth management teams elsewhere as it seeks to expand its fledgling private bank. In just three months, private banking deposits doubled to $2.4 billion.
After the Minneapolis-based company reported stubbornly high commercial deposit costs, it reduced its full-year forecast for net interest income by $200 million-$500 million.
The CFPB has dissolved the Office of Supervision, Enforcement and Fair Lending and eliminated the job of associate director in a move that impacts how it designates nonbanks for supervision.
Rising deposit costs have plagued banks in general, and the Tennessee bank had to pay up to bolster liquidity after its failed merger with TD. But First Horizon retained customers in the first quarter while not paying them the special rates they got last year.
