Differing Takes
Bryan Carson of Huntington Bancshares Inc. was caught in a tough spot during a presentation last week at the Underbanked Financial Services Forum in New Orleans.
Huntington's director of consumer deposits and fees was asked for his opinion of Bank of America Corp.'s hotly debated decision to eliminate overdraft fees on debit card purchases. (The decision was a response to new rules that require banks to get customer permission to provide them overdraft coverage.) He was also asked whether Huntington might consider a similar move. He handled the situation as diplomatically as possible.
"To give customers a choice is a very good thing," he said, speaking alongside Matt Boss, Bank of America's mass market segment solutions executive. "I think Bank of America's choice was [long pause] really gutsy. And it's working out for them."
Carson went on to say that at Huntington, "We learned there's a lot of people who will take that 24 hours if you give it to them." He was referring to the Columbus, Ohio, bank's grace period that it implemented in September. It allows customers to overdraw their accounts without penalty if they replenish the funds by the end of the next business day.
Boss said B of A is happy with its new policy.
He acknowledged that when Bank of America made the decision in March of last year to deny debit card purchases at the point of sale when accounts had insufficient funds, even some B of A executives questioned whether customers might leave because they were used to having an overdraft buffer.
But that has not been the case, boss said.
"We're seeing very little attrition," he said. "We've seen customers change their behaviors."
Diversity Dig
Boards of directors of big banks: Still 80% white, 80% male.
That's the conclusion of a study from the Greenlining Institute, a California nonprofit that promotes the provision of responsible financial services in less affluent neighborhoods. The data came from a review of large banks operating in the group's home state.
The lack of diversity amounts to poor business management, argues Preeti Vissa, Greenlining's community reinvestment director. More diverse boards do better at steering their companies away from predatory lending, and they're more in tune with the financial needs of the communities banks serve. "Diverse leadership can help financial institutions tap into this enormous market," Vissa argued in a press release accompanying the study.
One entity that's already ahead of the curve: Citigroup Inc. Among the nine institutions that group reviewed, its board was by far the most diverse. Minorities comprise one third of the directors. In second and third place were Wells Fargo & Co'.s and Comerica Inc.'s boards, at which one fifth of the seats on are filled by minorities. The proportions dropped off sharply after that. Of the big four banks, JPMorgan Chase & Co. had the lowest ratio, with just 9% minority representation.
Incoming!
This time, Gary Keogh's criticism of bank executives landed off the mark.
Keogh, a Dublin pensioner who rose to fame in 2009 for pelting the Bank of Ireland's CEO with eggs at the time of its collapse and government rescue, took aim at a new crop of bank leadership this week.
This time, the executives — Chairman Pat Molloy and Chief Executive Richie Boucher — proved more nimble, dodging the eggs. Keogh, who was thrown out of the meeting, then held an impromptu press conference in which he described the bank's management as "lower than bottom-pond insects."
Assuming that Bank of Ireland doesn't beef up its security, expect to see repeat performances.
Teamwork
The International Swaps and Derivatives Association has announced a pair of new leaders of its industry governance committee.
Athanassios Diplas of Deutsche Bank and Charles Mulhern of Wellington Management Co. LLP will jointly succeed Stephen O'Connor, who has stepped down following his election as chairman of the ISDA board in April.
The committee the two men will oversee is the top self-governance entity of the over-the-counter derivatives market, responsible for overseeing market practice and post-trade issues.
Diplas is the global head of the systemic risk management group at Deutsche Bank. Charlie Mulhern is the director of investment data and derivatives services within investment administration at Wellington.
