Latest banking news

January 13, 2023 3:19 PM

Scroll through to see what you might have missed this week in banking, payments, credit unions and more.

Crypto.com cuts global workforce 20% as industry woes deepen

Erhan Demirtas/Bloomberg

The digital-asset exchange Crypto.com is reducing its global workforce by about 20%, the latest retrenchment in the sector following a collapse in virtual-coin prices. Kris Marszalek, the firm's CEO, said in a statement Friday that the "difficult" decision was made amid a focus on "prudent financial management" and "to position the company for long-term success." Crypto businesses collectively have shed more than 1,600 jobs in the first two weeks of 2023, shaken by the rout in token prices. The collapse of the FTX exchange is also rippling through the industry and dimming its outlook. Crypto.com previously made layoffs in the middle of last year. Those reductions "did not account for the recent collapse of FTX, which significantly damaged trust in the industry," Marszalek wrote in the statement. The company didn't immediately respond to a request for the specific number of jobs lost in the latest round. — Suvashree Ghosh, Bloomberg News

VyStar completes acquisition of fellow Florida credit union

VyStar Credit Union branch Orange City Florida

VyStar Credit Union in Jacksonville, Florida, closed its acquisition of First Coast Federal Credit Union in Jacksonville. "As part of our long-term growth plan, we will continue to look for strategic opportunities that bring additional benefits and convenience to our growing membership and communities," Brian Wolfburg, president and chief executive of the $13.2 billion-asset VyStar, said in a press release. The deal for the $11.3 billion-asset First Coast was announced in April 2022. — Frank Gargano

Crooks spied on Experian's consumer-credit files, researcher reports

Hackers until recently were exploiting a crack in the defenses of credit reporting bureau Experian enabling them to see consumers' credit reports, according to Brian Krebs of the website KrebsOnSecurity. A security researcher in Ukraine discovered the scheme through identity thieves marketing stolen consumer data online, and Krebs tested the hack to bypass controls and directly view consumer credit reports within Experian's website. Experian has since blocked the scheme with a patch, Krebs said. — Kate Fitzgerald

Ex-Coinbase manager's brother gets 10 months in crypto fraud

Coinbase Sued Over XRP Commissions After SEC Pursues Ripple

Tiffany Hagler-Geard/Bloomberg

The brother of a former Coinbase Global product manager was sentenced Tuesday to 10 months for his role in a scheme to trade on confidential information about when the cryptocurrency exchange was going to list new tokens. Nikhil Wahi, 26, pleaded guilty in September to a count of conspiracy to commit wire fraud. Prosecutors claim tips from his brother enabled Wahi and a friend, Sameer Ramani, to make more than $1 million on trades. Prosecutors had asked U.S. District Judge Loretta Preska in New York to sentence Wahi to as much as 16 months in prison. At the time of his guilty plea, the government said it was a milestone in efforts to police cryptocurrency markets. Wahi and his brother, former Coinbase employee Ishan Wahi, were both arrested in July. Ishan Wahi has pleaded not guilty. Ramani was not in US custody at the time and has not made an appearance in the case. Coinbase, the largest U.S. trading platform for digital currencies, allows users buy and sell more than 150 tokens, which can often see a rush of interest immediately after they are included on the exchange. Prosecutors claim that, between July 2021 and May 2022, Nikhil Wahi used anonymous Ethereum wallets to take advantage of his brother's tips and buy cryptocurrencies before Coinbase announced they were to be listed on the exchange. The case is U.S. v Wahi, 22-cr-392, U.S. District Court, Southern District of New York (Manhattan). — Bob Van Voris, Bloomberg News

PayPal, Visa expand real-time remittances

David Paul Morris/Bloomberg

Xoom, PayPal's international transfer service, has launched Debit Card Deposit, which allows Xoom customers in the U.S. to make remittance payments directly to Visa debit cards in more than two dozen countries. The feature will support instant access to funds, a much shorter window than international wire transfers, which can take as much as five business days to settle. The initial markets include Bosnia and Herzegovina, Bulgaria, Costa Rica, Croatia, Czech Republic, the U.K., Greece, Guatemala, Hungary, Indonesia, Israel, Italy, Jamaica, Lithuania, Malaysia, Pakistan, Philippines, Romania, Singapore, Slovakia, Spain, Sri Lanka, Thailand, Ukraine and Vietnam — with additional countries scheduled to come on board later in 2023. PayPal acquired Xoom in 2015. Xoom's network includes more than 160 countries. Remittances grew 5% to more than $626 billion in 2022, according to the World Bank. — John Adams

Standard Chartered to explore sale of aviation unit

Signage for Standard Chartered is displayed outside a bank branch in Hong Kong.

Standard Chartered is considering selling its aviation finance business as part of its strategy to cut costs and improve shareholder returns. The lender "intends to explore alternatives for the future ownership of its aviation finance business," it said in a statement Wednesday. The unit, which leases and finances planes to airlines and financial institutions, represents around 2% of total income and around 1% of risk-weighted assets. Standard Chartered bought aircraft-leasing firm Pembroke Group in 2007 as it looked to broaden its product range. The bank's Dublin-based aviation business manages over 230 aircraft and offers other services such as jet fuel hedging, debt financing and remarketing unneeded planes. "A new owner can drive the next phase of growth whilst we continue to focus on our commitment to improve shareholder returns and delivering on our 2024 targets," said Simon Cooper, chief executive of corporate, commercial and institutional banking and Europe and Americas. Last February, the bank said it aimed to cut $1.3 billion of costs through 2024 to create more room for investments and boost returns. The aviation announcement comes a few days after First Abu Dhabi Bank said it had explored but would not pursue a potential bid for Standard Chartered. — Tom Metcalf and Harry Wilson, Bloomberg News

Fed's Collins leans toward downshifting to quarter-point hike

General Views of Boston as U.S. Productivity Rebounds

Bloomberg News

Federal Reserve Bank of Boston President Susan Collins said she's leaning toward supporting a quarter-point interest rate hike at the central bank's next meeting ending Feb. 1 as officials near a peak in borrowing costs. Downshifting to a smaller move from the more aggressive rate increases the Fed rolled out last year would give officials more time to see how their actions are affecting the economy, Collins said Wednesday in an interview with The New York Times. The Fed raised its main rate by 50 basis points at the last meeting in mid-December, slowing down following four straight 75-basis-point increases. Inflation data due Thursday have the potential to make a quarter-point move more certain, if price gains continue to slow.
"I think 25 or 50 would be reasonable; I'd lean at this stage to 25, but it's very data-dependent," Collins said. "Adjusting slowly gives more time to assess the incoming data before we make each decision, as we get close to where we're going to hold. Smaller changes give us more flexibility." Policymakers rapidly lifted interest rates last year from near zero levels in March to a range of 4.25% to 4.5% in December, quickly hiking borrowing costs in an effort to tame the strongest inflation in a generation.
Collins, who does not vote this year in monetary policy decisions but will take part in deliberations, told the Times she backs raising interest rates to slightly above 5% this year, potentially by approving quarter-point rate increases in February, March and May. — Jonnelle Marte, Bloomberg News

Climate First Bank partners with an LGBT+ nonprofit

Climate First Bank building in St. Petersburg, Florida

Climate First Bank in St. Petersburg, Florida, offers specialty deposit and loan products that revolve around sustainability. Another checking account will benefit the LGBT+ community. On Tuesday the $250 million-asset bank announced that opening a Pride Checking account through the end of June would trigger a $100 donation to the Center Orlando, a nonprofit that advocates for the LGBT community in Central Florida. (First, the user must set up a recurring direct deposit of $750 or more within 90 days.) Customers can also request their preferred names be printed on their debit cards. — Miriam Cross

Morgan Stanley names 184 to managing director in smaller class

Victor J. Blue/Bloomberg

Morgan Stanley elevated 184 employees to managing director, a smaller number of promotions to the firm's top rank from last year. A record 38% are women, pushing the share of female MDs at the New York-based firm up to 24%, according to a person with knowledge of the matter. Of the U.S.-based employees who were promoted, 5% are Black, 2% Hispanic and 21% Asian, the person said. Morgan Stanley's leadership has been mostly male and white for decades, as has been the case across Wall Street. In the U.S., 30% of the firm's new managing directors are considered ethnically diverse. The managing director class is smaller than it was last year, when 199 employees were made MD in Morgan Stanley's biggest batch of promotions to the role in a decade. A Morgan Stanley spokesperson declined to comment. The promotions were reported earlier Thursday by Insider. — Daniel Taub, Bloomberg News, with assistance from Sridhar Natarajan

Pennsylvania credit union TruMark names risk chief

TruMark Financial Credit Union in Fort Washington, Pennsylvania, named Marianne Drumm as its next chief risk officer. Drumm, who joined the $2.9 billion-asset credit union in June 2020 as vice president and general auditor, according to her LinkedIn profile, will help cultivate its enterprise risk management program. "Marianne is a pragmatic business leader, whose intellect is only matched by her dedication and compassion," Kelly Botti, TruMark's chief executive, said in a press release. — Frank Gargano