Banking news roundup

February 11, 2022 4:00 PM

Venture capitalist Peter Thiel is stepping down from the board of Meta, formerly Facebook, to focus on funding the midterm congressional elections for conservative candidates. TD Securities is using AI to help Canadian customers buy bullion. Truist Financial is buying a title insurance firm. Scroll through to see what you might have missed this week in banking, credit unions and fintech.

Thiel logs out of Meta

David Paul Morris/Bloomberg

The technology investor and PayPal co-founder Peter Thiel is leaving Meta's board of directors after 17 years, reportedly to focus on the upcoming midterm elections. Meta, formerly called Facebook, and Thiel did not publicly give a reason for the departure, but The New York Times says Thiel plans to support "Trump-aligned candidates." Thiel's past support for former President Donald Trump stirred controversy, forcing Meta CEO Mark Zuckerberg to defend Thiel's presence on Facebook's board shortly before the 2016 election. This week Zuckerberg said "Peter is truly an original thinker who you can bring your hardest problems to and get unique suggestions." — John Adams

Six years in federal prison for $20.6M bank-loan scammer

Department Of Justice Headquarters As Barr Tells Associates He May Quit Over Ongoing Trump Tweets

Bloomberg News

A Florida man, Loyd Tomlinson II, faces more than six years in prison after a federal judge sentenced him for scamming a bank out of $20.6 million he borrowed but did not repay. Tomlinson, who pleaded guilty in September, and his father, Loyd Tomlinson Sr., borrowed the money to prop up a company they owned, using “fake bank statements, inflated sales, accounts receivable, and inventory documents,” the Justice Department said. The pair also bilked private investors who lent them money for the business, the FBI found. Tomlinson Sr. is scheduled to be sentenced in March for his role in the scheme. — Chana R. Schoenberger

MidWestOne CEO to retire after 21 years

MidWestOne Financial Group's chief executive, Charlie Funk, plans to retire this year after the Iowa City, Iowa, company finds his successor. Funk has been with MidWestOne for 21 years and has been its CEO since 2008. During his tenure, the company’s assets have grown from about $500 million in 2000 to $6 billion at the end of 2021, with branches spanning its home state as well as Minnesota, Wisconsin, Colorado and Florida. Funk, 67, will remain with MidWestOne until a successor is chosen. He will continue to serve as a director. — Jim Dobbs

Reed to head sales at KeyCorp private bank

Ty Wright/Bloomberg News

KeyCorp’s private bank hired Jamie Reed, a former JPMorgan Chase executive, as its national head of sales. Reed, who will be based in Columbus, Ohio, is tasked with increasing the Cleveland company’s market share among high-net-worth clients. He’ll report to Joe Skarda, the president of Key Wealth Management. Reed was a regional director in JPMorgan’s wealth management business, where he was in charge of the Ohio, Kentucky, Indiana and West Virginia territory. — Kevin Wack

Truist Financial buys Kensington Vanguard for title insurance combo

Truist Financial’s insurance brokerage arm is expanding in the title insurance market with an acquisition. The deal for Kensington Vanguard National Land Services was announced Tuesday and is expected to close in the first quarter. Financial terms were not disclosed. Truist, of Charlotte, North Carolina, said it will integrate its existing title insurance operation, BridgeTrust Title, into the platform of the company it is acquiring.

"Kensington Vanguard has grown considerably over the past 15 years through a successful strategy built around geographic expansion, talent recruitment, and acquisitions," John Howard, chairman and chief executive of Truist Insurance Holdings, said in a press release. "Its industry-leading expertise in both the commercial and residential title sectors will enable us to offer title and real estate services across the full market spectrum.” — Kevin Wack

Digital asset advisory council for PayPal

David Paul Morris/Bloomberg

PayPal has established an advisory council to provide guidance as the payments company seeks ways to support digital assets such as blockchain, crypto and other digital currencies.

The council's members cross several disciplines, such as technology investors and academia, with expertise including regulation and the distributed technology models that underpin digital assets. The Massachusetts Institute of Technology, which is conducting research into central bank digital currencies, is represented on the council.

PayPal's support for cryptocurrency includes enabling users to buy, sell and hold crypto, as well as products such as Checkout with Crypto, which allows consumers to spend crypto stored in their PayPal accounts. — John Adams

Oregon credit union receives CDFI status

Josh Partee

Rivermark Community Credit Union in Beaverton, Oregon, has been certified as a community development financial institution. “This certification will allow us to secure grants to build on our strategic pillars, including opportunities to support home ownership and low-cost loans for local veteran, women and minority owned businesses,” Seth Schaefer, president and CEO of the $1.3 billion-asset Rivermark, said in a press release. — Frank Gargano

Ballard Spahr names new leaders for consumer financial services, fintech and payments practices

Ballard Spahr has named John Socknat and Daniel McKenna co-leaders of its consumer financial services group. The Philadelphia law firm also promoted Judy Mok to co-lead its fintech and payments practice alongside Ron Maske. Besides representing a number of banks, Ballard Spahr’s consumer financial services group publishes Consumer Finance Monitor, a blog covering related regulatory and legal issues. — John Reosti

Greater Nevada Credit Union named a CFDI

Greater Nevada Credit Union in Carson City has been certified as a community development financial institution. The $1.6 billion-asset credit union announced it had received its designation as a CDFI on Jan. 10 after initially applying Sept. 28. In seeking the CDFI status, Greater Nevada partnered with CU Strategic Planning, an advisory firm Tacoma, Washington. CU Strategic Planning also helped the $2 billion-asset Kitsap Credit Union in Bremerton, Washington, and the $3.6 billion-asset Truliant Federal Credit Union in Winston-Salem, North Carolina, with obtain their certifications. — Frank Gargano

TD Securities uses AI to help sell bullion

Inok - stock.adobe.com

TD Securities, the Canadian investment bank under the Toronto-Dominion Bank umbrella, announced Feb. 9 that it is using IBM’s artificial-intelligence-based virtual assistant for an unusual purpose: to answer the questions of investors and collectors who come poking around the TD Precious Metals digital store, which sells physical gold, silver and platinum bullion and coins. The virtual assistant, built using IBM Watson Assistant, can answer routine questions, such as how prices are determined and what delivery options are available. Authenticated TD customers will get a better price when paying from their TD bank accounts, but purchase and shipping is available to Canadian residents only. — Miriam Cross

Louisiana bank selects new leaders

Metairie Bank & Trust Co. named John LeBlanc CEO and Michael Gennaro president. The two executives succeed Ron Samford Jr., who died on Jan. 31. He had helmed the $617 million-asset bank, a subsidiary of MBT Bancshares in Metairie, Louisiana, since 2013. “Mike and I are following in the footsteps of a great leader and mentor,” LeBlanc said in a press release. “Together with the entire Metairie Bank team, we will do Ron proud.” LeBlanc most recently was chief operating officer at Hibernia Bank in New Orleans. Gennaro was chief commercial lending officer at Metairie Bank.

Citizens State Bank buys two branches in northwest Illinois

In a move that will expand its reach in Jo Daviess County, Lena-based Citizens State Bank has agreed to buy two branches from Illinois Bank and Trust in Rockford for an undisclosed sum.The $310 million-asset Citizens currently maintains one branch in Jo Daviess, located in Illinois’ northwest corner, in Stockton. The deal, involving offices in Stockton and Elizabeth, is expected to close in the second quarter.The $1.7 billion-asst Illinois Bank & Trust plans to consolidate its Jo Daviess operations in a newly renovated $3 million branch in Galena. — John Reosti

Fed expected to go big in March interest rate meeting

The Chicago Mercantile Exchange reported that markets are expecting the Federal Reserve’s Federal Open Markets Committee to raise interest rates to between 50 and 75 basis points during its next meeting on March 16. CME’s FedWatch tool showed that 62% of Federal Funds Rate futures contracts trading on Feb. 11 anticipated the Fed’s interest rate would be between 50 and 75 basis points after the meeting, up from the current target rate of between 0 and 25 basis points. Another 37% of contracts anticipated the FOMC setting interest rates between 25 and 50 basis points.
Recent data showing inflation rising more than 7% in January — the largest jump in almost 40 years — has solidified expectations that the Fed will have to raise rates more aggressively than it has in recent years. Since 2008, the Fed has only raised rates in 25 basis point intervals, and the Federal Funds Rate has been at or near zero for all but four of the last 14 years.

FTC wraps up $425M Equifax settlement over 2017 data breach

A monitor displays Equifax signage on the floor of the New York Stock Exchange.

Michael Nagle/Bloomberg

The Federal Trade Commission recently finalized its settlement with Equifax over its 2017 data breach that compromised personal information of 147 million people. Equifax’s agreement with the FTC, the Consumer Financial Protection Bureau, and 50 U.S. states includes up to $425 million to help people affected by the data breach. Victims can ask to be reimbursed for expenses they’ve incurred as a result of the breach and they can apply for free credit monitoring for four years. — Penny Crosman

Tech staffers fall victim to phishing scams just as often as everyone else: Study

IT security company F-Secure released a study at the end of January in which they simulated phishing scams at four firms, targeting 82,402 individuals in total. One of the firms was a financial institution, but F-Secure did not release the names of any of the companies involved. Two of the primary findings: Employees in technical (DevOps or IT) roles clicked the link in the faux phishing message just as often as their colleagues, and employees spotted and reported the attack more often when they had access to a simple reporting method — like a button in their email client. — Carter Pape