Women in Banking

A new female CEO at a top 50 bank and an unexpected exit at BofA

More have-nots: Though consumers in general are doing well enough to keep up with their monthly bills, the growth of economic inequality is a worrisome trend, Synchrony Financial’s president and chief executive, Margaret Keane, said during an event the Economic Club of New York hosted Tuesday. Describing her white-label credit card company as a lender “to the spectrum of America,” Keane said she has observed that lower-earning consumers aren’t sharing in the benefits of an improved economy. “I do think there is a bit of a have-and-have-not in the economy,” she said, adding that an increase in “people on the edge” is reflected in the calls that Synchrony receives. “It’s someone calling up and asking, ‘How much is the open line on my credit card?' because it means they’re trying to get to their next paycheck.”

Margaret Keane, president and CEO of Synchrony Financial

Pay is a pain point: Goldman Sachs analyzed the U.S. gender pay gap in a new 41-page report that suggests strategies for companies to implement as they pursue parity. These include adding women to company boards and looking at ways women can “upshift” their careers to keep the pipeline from thinning out (such as programs that facilitate re-entering the workforce after an absence). Based on U.S. Census Bureau data, women on average earn 20% less than men and, the Goldman report said, 17.5 percentage points of that cannot be explained by measurable factors captured in labor-market studies, like levels of education and experience. The report concludes that bias plays a role not only in the pay gap but in the lack of women in senior roles. Though “downshifting” is a factor (where employees scale back work, seek more flexibility in their hours or ask for reduced travel requirements, often due to family responsibilities), these moves can be involuntary, according to the report, which was written by six female analysts in the investment research division. "Without making the decision themselves, mid-career women may find themselves steered toward lower-visibility, lower-reward positions," the analysts wrote. "The motivation behind this may be difficult to pinpoint, but one reason could be the phenomenon of statistical discrimination that we discussed earlier, or the reliance on gender-biased definitions of success. And of course another reason could simply be bias against women, whether conscious or unconscious."

On the regulatory front

A new innovation hub: The Securities and Exchange Commission now has a Strategic Hub for Innovation and Financial Technology, or FinHub for short. The hub, which is being led by the SEC’s crypto czar, Valerie Szczepanik, is a way for the industry and the public to engage with the agency on fintech-related issues, such as distributed ledger technology, automated investment advice, marketplace lending, and artificial intelligence. The SEC also plans to host events on these topics, starting with a FinTech Forum focused on distributed ledger technology and digital assets in 2019. “The SEC is committed to working with investors and market participants on new approaches to capital formation, market structure, and financial services, with an eye toward enhancing, and in no way reducing, investor protection,” SEC Chairman Jay Clayton said in a press release. Szczepanik’s formal title at the SEC is senior adviser for digital assets and innovation and associate director for its Division of Corporation Finance, as we noted here in June.

And not to be outdone: To encourage banks to experiment more, the Federal Deposit Insurance Corp. will set up an office of innovation, Chairman Jelena McWilliams said. Most of the innovation happening in the banking sector is coming from nonbanks, and McWilliams blamed regulators for that. "We have created the regulatory framework where we have actually discouraged banks from innovating for a number of years,” she said at the recent American Bankers Association conference. Other topics she discussed include the rulemaking process and efforts to revise the Community Reinvestment Act.

Wary of Liang: The nomination of Nellie Liang to fill a Federal Reserve board seat is said to be in trouble. Some Republicans worry Liang, a former Fed official who played a role in strengthening bank regulations after the financial crisis, could impede the current deregulatory agenda. Liang had helped usher in reforms such as stress testing and living wills while head of the Office of Financial Stability Policy and Research. The fate of President Trump’s two other Fed nominees, economist Marvin Goodfriend and Kansas banking commissioner Michelle “Miki” Bowman, is also uncertain, with midterm elections coming. Though Trump has publicly criticized the Fed – the first time a sitting president has done so since 1992 – his “pragmatic” nominees suggest he isn’t pushing for major change, according to this analysis by the Wall Street Journal. But after the elections, the White House will need to renominate any candidates that were not fully confirmed, raising the question of whether the administration might swap in one or two new ones.

Role Call

Kelly Coffey is leaving JPMorgan Chase, where she is CEO of its U.S. private bank, to become CEO of City National Bank in Los Angeles. That’ll add one more female CEO at a top 50 bank, as Coffey joins KeyCorp’s Beth Mooney and Bank of the West’s Nandita Bakhshi in an exclusive club. Coffey succeeds Russell Goldsmith as City National’s CEO on Feb. 1, though Goldsmith will retain his chairman title. City National has $49 billion of assets and manages another $67 billion of client’s investment assets. It is owned by the Royal Bank of Canada, where it is part of the wealth management unit. Coffey is a repeat honoree in our ranking of Most Powerful Women.

Kelly Coffey

Bank of America’s head of digital banking, Michelle Moore, is leaving her job at yearend. Moore wanted “to shift her focus to her family and her two sons, now ages 8 and 9,” according to an internal memo. David Tyrie, BofA’s head of consumer products, will replace Moore. His new title will officially be head of advanced solutions and digital banking, as he retains some of his duties, such as overseeing rewards programs. April Schneider, who has been in charge of BofA’s deposit and savings products, will take on Tyrie’s current role. Her title will be head of consumer and small-business products. (Moore was our Digital Banker of the Year in 2017.)

Beyond banking

His and hers pay scales: The new CEO of J.C. Penney, Jill Soltou, has a pay package that is $3 million less than her male predecessor received when he started at the company. This, though Marvin Ellison did not even have the CEO title when he first arrived. Soltou comes with more experience too, including three and a half years as a CEO. The difference in compensation is attributable to Soltou receiving significantly less in J.C. Penney stock than Ellison did, Barrons reported.

A pattern of awful behavior: Google engineers are planning a walkout on Thursday to protest the company’s protection of executives accused of sexual misconduct, particularly Android creator Andy Rubin. “Personally, I’m furious,” one Google employee who requested anonymity told BuzzFeed. “I feel like there’s a pattern of powerful men getting away with awful behavior towards women at Google‚ or if they don’t get away with it, they get a slap on the wrist, or they get sent away with a golden parachute, like Andy Rubin. And it’s a leadership of mostly men making the decisions about what kind of consequences to give, or not give.” The protest follows a story by the New York Times last week that looked at the alleged misbehavior of Rubin and other Google executives past and present. Google gave Rubin a reported $90 million exit package in 2014, following an investigation of a claim that he had coerced another employee to perform oral sex on him. Rubin called the allegation — which the investigation reportedly found credible — part of a “smear campaign.”

One year later: Since the Harvey Weinstein exposé was published in October 2017, at least 200 prominent men have lost their jobs following public allegations of sexual harassment, according to a detailed New York Times analysis. Of the men who have been replaced, 43% were succeeded by women, a statistic displayed in a dramatic data visual. “We’ve never seen something like this before,” said Joan Williams, a law professor who studies gender at the University of California, Hastings. “Women have always been seen as risky, because they might do something like have a baby. But men are now being seen as more risky hires.”

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Equal pay Diversity and equality Fintech regulations Sexual harassment Consumer banking Women in Banking
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