On the shoulders of giants at JPM; lessons to learn at Morgan Stanley
Living the dream: Thasunda Duckett is the chief executive officer of consumer banking at the largest U.S. bank by assets, JPMorgan Chase. It’s an opportunity that, just one generation ago, wasn’t available to African-Americans, she said at an awards dinner hosted by the Women’s Bond Club of New York. "It was the janitors, it was the cooks, it was the secretaries who put little cracks in the door that created the space over time to say, ‘I am a CEO,'" she said. “When I’m on the 50th floor at 270 Park Avenue, and I see the history of the bank displayed going back to Rockefeller, I think, ‘There is no way he could have imagined me.’ You see, I am on shoulders of giants. I am my ancestors’ wildest dreams.” Duckett, who was No. 2 in our list of Women to Watch last year, also said in her speech that companies have a responsibility to foster diversity and create opportunities for minorities and people from marginalized communities. BlackRock’s Anne Ackerley, managing director and the head of U.S. and Canada defined contribution plans, and Morgan Stanley’s Eve Ellis, a financial adviser and portfolio manager, were among the many other women honored at the event.
Key issues ahead: Trump-appointed regulators are making headway on easing regulations but there's one critical voice missing: that of the Federal Deposit Insurance Corp., which awaits the imminent Senate confirmation of its next chair, Jelena McWilliams. The FDIC historically has been at odds with fellow regulators regardless of the party in power. But it remains to be seen what positions McWilliams will take as she weighs in on key issues. These include what changes to make to the Community Reinvestment Act, whether fintech companies should be let into the banking system through a federal charter, whether to allow banks to offer certain small-dollar short-term loans again, how to streamline anti-money-laundering laws, and how to change the Volcker Rule. McWilliams, a top executive at Fifth Third Bank, suggested during recent congressional testimony that she would be in favor of a lighter regulatory burden for the non-megabanks. “Nonetheless, they have to do compliance, which, I can tell you, for a bank of the size of my current employer, is quite comprehensive,” she said.
Assets and liabilities: Morgan Stanley, one of the latest companies to get caught in the crosshairs of the #MeToo movement, has a lesson to learn from the former Citibank CEO John Reed about taking action, says Mark Lipton, a graduate professor of management at The New School in New York. Back in the 1990s Reed warned a dozen “errant rainmakers” about their unseemly behavior and offered executive coaching. But they arrogantly assumed their value to the bank guaranteed immunity, “since nothing consequential had ever happened when they broke code-of-conduct rules before.” When their behavior did not change, Reed fired all of them. “This made a powerful statement about the lengths he was willing to go to enforce civil behavior and change the informal, emergent norms that were out of step with Citi’s formal rules,” Lipton wrote in a BankThink piece. “While it goes back to the 1990s, and the lesson is little known decades later, it still serves as the model for taking action.”
Not letting it go: Lawmakers are upping the pressure on the Federal Reserve to make its leadership more diverse. Legislation introduced by Sen. Kamala Harris would compel the 12 regional banks to interview at least one woman and one minority candidate when they search for a new chief. It was the New York Fed that prompted the most recent backlash over the white maleness of the leadership at the central bank, as we have noted here previously.
Funding for some overlooked founders: Backstage Capital is launching a $36 million fund that will target the companies of black female founders. Arlan Hamilton, the founder of Backstage, which is committed to backing women, people of color, and LGBT founders, is still raising money for the fund, but plans to invest in two or three companies by the end of this year and 15 to 20 companies total. Half the fund will be set aside to help support founders’ subsequent funding rounds, she said. “They're calling it a ‘diversity fund,'” Hamilton tweeted. “I'm calling it an IT'S ABOUT DAMN TIME fund.” Backstage has supported more than 80 companies led by underrepresented founders.
New venture: Payments industry veteran Juli Spottiswood has a new venture with backers that include Bain Capital, Silversmith, MissionOG, and Nyca. The purpose of Syncapay, a Dallas-based holding company led by Spottiswood, is to acquire payments technology innovation. It is focused on B2B and B2C payments, and made its first acquisition, of Swift Prepaid Services, last year. "The U.S. payments industry continues its rapid growth, but few opportunities exist for high-potential customers to leverage industry knowledge or shared services and tackle the market together," Spottiswood said. Previously, Spottiswood founded Parago before selling it to Blackhawk Network.
Should postal banking be a dead letter?: New legislation by Sen. Kirsten Gillibrand would allow banking services to be provided by each of the 30,000 U.S. post offices. That would be a dangerous use of government resources, argues Rebeca Romero Rainey, president and CEO at the Independent Community Bankers of America. “The proposal would put the livelihoods of many Americans in the hands of a government agency with zero experience in underwriting loans and that cannot even balance its own books,” she wrote in a BankThink piece. The U.S. Postal Service reported a net loss of $5.6 billion in fiscal 2016, its 10th consecutive year of net losses, she pointed out. “If the money-hemorrhaging Postal Service can’t efficiently operate its primary business, then we shouldn’t expect it to take this broken model into the banking sector — at least not successfully.” (Read more about Gillibrand’s proposal here.)
Wells Fargo has hired Amanda Norton as its next chief risk officer. She will oversee risk management and compliance. Norton previously served in the same role at JPMorgan Chase within the consumer and community banking division.
JPMorgan Chase has tapped Manuela Veloso, head of Carnegie Mellon University’s machine learning department, to lead its AI research team, starting in July. In this newly created role for investigating the use of artificial intelligence, Veloso will work with the bank's data analytics and quantitative research teams and lead partnerships with universities and research institutions.
JPMorgan Chase also has named Janis Bowdler to lead its philanthropic investment strategy as president of the JPMorgan Chase Foundation. She has been with the firm since 2013.
U.S. Bancorp is searching for a new chief human resources officer, because Jennie Carlson plans to retire at the end of the month. Carlson has served as top HR executive for 15 years. She was previously general counsel at Firstar and Star Banc Corp., predecessor companies to U.S. Bancorp.
WSFS Bank in Wilmington, Del., has named Lisa Brubaker as its chief technology officer and Peggy Eddens as its chief associate and customer experience officer. Brubaker, who has been with WSFS for 31 years, was previously director of retail strategy. Eddens joined in 2007 and was previously its chief human capital officer.
Lorie Shannon has joined Customers Bank in Wyomissing, Pa., as director of mortgage lending. She will lead the residential mortgage division and expand jumbo loans offerings aimed at its commercial clients. Shannon, who joined in January from SunTrust Banks, has hired six employees, bringing the division's total to 35.
M&T Bank has promoted administrative vice presidents Ann Woloszynski and Kelly Close to group vice presidents. Woloszynski manages banking controls in the operations division, including accounting and risk management, and Close is the manager of enterprise credit risk reporting.
Farmers Bank in Frankfort, Ind., has appointed Donna Lehman, an accountant, to its board of directors.
Rosemary Berkery, who recently retired from her vice chairman role at UBS, has joined the board of directors of the Mutual of America Life Insurance Co.
In case you missed it
As bad as it gets: In the past 18 months the #MeToo movement has roiled industries like entertainment and media, but the financial services industry has been slow to follow. This raises the question: If it’s so bad, why haven’t more women come forward? Someone recently asked that of Lauren Bonner, the internal recruiter at Steven Cohen’s Point72 Asset Management who filed a gender discrimination lawsuit in February. “My response is, more women haven’t come out because it is as bad as it is – that’s why,” she said. “It’s a small club, and it’s an all-boys club, and people are terrified of not getting another job. When you’re paid less than someone who’s doing the exact same job, and probably at the same performance level as well, women start to develop a sense of, ‘I’m lucky to have this job. If I’m not paid as much, God, I’m lucky to even be here.’” (For a refresher on that, click here.) Bonner has continued to report to work every day since filing the lawsuit.
A legitimate expense: The Federal Election Commission will allow a first-time female candidate to use a portion of her campaign funds to pay for child care. The request was made by Liuba Grechen Shirley, who is running in New York's 2nd District against 13-term Republican incumbent Pete King. "Our babysitter is just as important as my campaign manager or my finance director," Grechen Shirley told Newsweek. "She's just as integral, and she's paid as staff. I couldn't run my campaign without her."
Not so fast: There’s a set of “assumed differences” repeatedly referenced to explain women’s failure to achieve parity with men: They don’t negotiate as well, if they negotiate at all; they’re inherently less confident and more risk-averse; and they are not as likely to want to work long hours because they prioritize raising their children. But none of this is actually supported by data, according to Catherine Tinsley, faculty director of Georgetown University’s Women’s Leadership Institute, and Robin Ely, a professor at Harvard Business School and the faculty chair of the HBS Gender Initiative. Au contraire, meta-analyses show the sexes are far more similar in their inclinations, attitudes, and skills, on average, than popular opinion dictates. “Emphasizing sex differences runs the risk of making them seem natural and inevitable,” the two women wrote in the Harvard Business Review. “As anecdotes that align with stereotypes are told and retold, without addressing why and when stereotypical behaviors appear, sex differences are exaggerated and take on a determinative quality. Well-meaning but largely ineffectual interventions then focus on ‘fixing’ women or accommodating them rather than on changing the circumstances that gave rise to different behaviors in the first place.”
If you’d like to be in our ranking of the Most Powerful Women in Banking and Finance, this is your last chance to apply. Any applications started before midnight tonight can be submitted one extra day beyond the official deadline.
And if you’d like to sign up for a digital or print subscription to American Banker Magazine, which publishes the annual ranking, please send an email.