Cheers to a very good year: Two women — Ellen Alemany and Sandie O’Connor — made our list of those who rocked 2017. Alemany, CIT Group’s chairman and chief executive, has been successfully transforming a commercial finance company with a spotty history into a profitable, middle-market bank. O’Connor, chief regulatory affairs officer at JPMorgan Chase, led the Federal Reserve committee this year in creating an alternative to the London interbank offered rate. The Fed will begin publishing the new rate next year. Check out the rest of our list of 10 who had a good year here. We also have a list of 10 who had a rough year, but there are no prominent women to highlight on that one. (As a reminder, Alemany and O’Connor are also among our Most Powerful Women in Banking, with both ranking in the top 10 this year.)
Full disclosure: Pressure is mounting on banks to be more forthcoming about the gender pay gap. A new U.K. rule requires firms to disclose their pay practices, so U.S. banks operating there will have to comply. That, combined with the increased attention on women's workplace issues in general, is giving the Boston investment firm Arjuna Capital hope that, in 2018’s proxy season, it will have more “productive dialogues” with big banks on the resolutions it has proposed to address the gender pay gap, according to managing director Natasha Lamb. As noted here previously, Arjuna filed shareholder resolutions with the nation’s four largest banks earlier this year, asking them to disclose data on the difference in pay between male and female employees — only to be rejected in every case. Shortly after that, Lamb wrote an op-ed criticizing U.S. banks for falling behind their global counterparts on addressing gender issues.
From disclosure to action: The U.K.’s Clydesdale and Yorkshire Banking Group has lifted its minimum salary 11%, to $22,700. The result is a pay increase for about 600 women and 200 men in its workforce of 5,813 people. The Glasgow-based company revealed its male staff members had been paid 37% more per hour on average than equivalent female staff members. The pay disparity was reported in a new gender pay gap section published in its annual report.
Credit extension: BankMobile, a digital-only subsidiary of Customers Bancorp in Wyomissing, Pa., is planning to offer its first credit product to the students it reaches through relationships with 800 universities. In judging the creditworthiness of those without a credit history to go on, “we hope to figure out what information is the most relevant and correlates to the best risk assessment,” said Luvleen Sidhu, president and chief strategy officer of BankMobile. “We’re not starting from scratch; we do have a relationship with these customers on the deposit front. We’re working with their schools and we can get more and more information from that deeper relationship over time.” She cited college major — which ties into future cash-flow potential — as an example of the type of information that might be useful to BankMobile.
Similar but different: Square is firing back at critics who say its bid for a charter to operate an industrial loan company would open the door to similar gambits by tech giants like Amazon and Facebook. Those companies have never even expressed interest in getting a charter, said Jacqueline Reses, Square's head of small-business lending. Square wants the charter to facilitate its small-business lending operation; it currently has to partner with a bank to make those loans. The rest of Square’s business is focused on offering hardware and software products, which would make it ineligible for a traditional banking license. “A full bank charter isn’t appropriate for Square, because we do have other predominant lines of business that are not products and services that require a banking license,” Reses said.
A crowded space: Personal finance management is probably the most well-known part of consumer fintech, but many platforms are having trouble monetizing their product offerings. “Consumers are fickle, and if you’re not providing them with extra value or some sort of insights the first couple of times, they just move on,” said Jillian Williams, an investment associate at Anthemis Group. “PFM companies have struggled to monetize,” even when customers really enjoy the offering. As the market for PFM becomes more competitive and banks add more PFM capabilities, the pressure to provide a differentiated offering for the customer will fall on third-party PFM apps. “Some will probably shut down,” Williams said. “It’s becoming a crowded space that’s unsustainable.”
Delays ahead: Mortgage lenders are bracing for big delays in the processing of mortgage applications, citing a problem with the Internal Revenue Service’s income verification system, which is designed to ensure the tax returns are not fraudulent. As a result, mortgage closings are going to be delayed by many months, said Anne Canfield, executive director of the Consumer Mortgage Coalition. "It is looking like a train wreck," Canfield said. "One possible solution would be to roll back the recent implementation and allocate sufficient time for the IRS and affected parties to evaluate and test proposed changes.”
Wells Fargo’s retail banking head, Mary Mack, has been given the additional role of head of consumer lending, which includes residential mortgages, auto loans and student loans. This puts another 45,000 employees under Mack's supervision, for a total of 115,000.
Goldman Sachs has hired Karen Seymour, a partner at Sullivan & Cromwell, as co-general counsel and partner. She’ll be a member of Goldman’s management committee as well.
Santander U.K. has appointed Lindsey Argalas as a nonexecutive director, beginning in January. Argalas joined Santander in September 2017 as chief digital and innovation officer. She previously worked for Intuit.
Morgan Stanley veteran Zoe Cruz has joined Ripple’s board of directors. Cruz, who worked at Morgan from 1982 to 2007, was co-president for institutional securities and wealth management in her final two years there; before that, she served as its global head of fixed income, commodities and foreign exchange.
She knew?: A series of posters with the tagline “She knew” are going up around Los Angeles accusing actress Meryl Streep up having previous knowledge of defamed movie mogul Harvey Weinstein’s alleged crimes and keeping silent. Is this because blaming things on women never goes out of style? Streep has said that she had no knowledge of Weinstein’s behavior toward women in the years they worked together.
A step in the right direction: Microsoft has eliminated forced arbitration agreements with employees who make claims of sexual harassment. Arbitration is a widespread practice across industries and helps perpetuate sexism and workplace inequality. Companies force their employees into silence with non-disparagement agreements, agreements not to participate in class actions and strict gag orders in settlements; they fire complainers and seal damaging documents that could end up in a public court file. Microsoft also said it’s supporting a federal law proposed last week that would widely ban forced arbitration agreements.
If you missed last week’s news scan — which featured items on Ally and USAA — you can find it here. Thanks for reading and happy holidays!