Yet another Wells scandal; bitcoin exchange busted

Receiving Wide Coverage ...
Lower the bar: Treasury Secretary Steven Mnuchin told Congress on Thursday that he will be discussing regulatory relief measures at a meeting of the Financial Stability Oversight Council on Friday, including the Volcker rule and determining which financial firms are considered too big to fail.

"The biggest problem with the Volcker rule is its complexity and regulatory overlap," Mnuchin told the House Financial Services Committee. He also urged Congress to raise the current $50 billion threshold for labeling banks as "too big to fail." Wall Street Journal, American Banker

More transparency: On the other side of Capital Hill, Randal Quarles, President Trump's nominee to be vice chairman of supervision at the Federal Reserve, told the Senate Banking Committee that he favored making the Fed's bank stress tests more transparent. "The remarks suggested Mr. Quarles, if confirmed, would be willing to go further than his predecessor, former Fed governor Daniel Tarullo, in publishing more information about how the tests are run," the Wall Street Journal said. He also endorsed simplifying the Volcker rule. Wall Street Journal, Financial Times, New York Times, American Banker

The Journal also provides an in-depth profile of Quarles.

Black market bitcoin: The U.S. Justice Department charged a Russian man with running a bitcoin exchange that helped launder more than $4 billion of stolen money. The man, Alexander Vinnik, who was arrested in Greece on Tuesday, was also charged with ransomware fraud, identity theft, drug trafficking and public corruption. The exchange, known as BTC-E, allegedly converted virtual currency that criminals stole or extorted from their victims into traditional currency, mostly American dollars and Russian rubles. Wall Street Journal, New York Times, American Banker

A look back at Libor: The Wall Street Journal and the Financial Times look back at the long and sometimes wild ride of "the world's most important number," Libor, which is being phased out over the next five years. "Its legacy—distrust in banks and doubts about regulators' ability to police the industry—is likely to linger," the Journal said. Wall Street Journal, Financial Times

New York Times
Wells auto scandal: Wells Fargo forced more than 800,000 auto loan customers to take out collision insurance they didn't need, the extra expense of which pushed about 274,000 of them into delinquency, according to an internal report obtained by the Times. The issue resulted in almost 25,000 wrongful repossessions, according to the report. Wells officials confirmed that the practices took place and said they "would make impacted customers whole" (Wells, in its press release, came to a different conclusion than the 800,000 number the Times cited from the internal report, saying that only about 570,000 customers were affected).

Ron Antonelli/Bloomberg

Wall Street Journal
Secured loans?: Wall Street brokerage firms are aggressively urging their customers to take out loans backed by their securities portfolios. "For brokerages, these so-called securities-backed loans have become a reliable source of revenue in the years since the financial crisis," the Journal said, but pose risks for borrowers if the value of their collateral drops.

Master the moment: Mastercard reported better-than-expected earnings and revenue for the second quarter, with profits up 20%. CEO Ajay Banga also said that Kroger, the country's largest traditional grocery chain, plans to switch its co-branded credit card to Mastercard from Visa.

Struggles continue: Deutsche Bank beat second-quarter expectations but revenue fell in all three of the bank's business divisions. The German bank also reached an agreement with 11 former senior executives who voluntarily agreed to forfeit €38.4 million ($45 million) in frozen bonus payments.

Quotable
"I do think the Fed can look at being more transparent about those activities and do it in a way that doesn't reduce the effectiveness of those tests." — Randal Quarles, President Trump's nominee to be vice chairman of supervision at the Federal Reserve, on the need to make the Fed's stress tests less opaque.