Receiving Wide Coverage ... Blockchain update: R3, the consortium of banks looking to build a blockchain platform for the financial services industry, secured $107 million in its largest fundraising to date. About half of the money came from 43 financial institutions — including Barclays, Bank of America Merrill Lynch, Credit Suisse, UBS and HSBC — as well as Temasek, the Singaporean state investment company, and Intel Capital, the technology giant's venture capital arm.
Employees of Fidelity, the mutual fund giant, can now use bitcoin to pay for their lunch in the company cafeteria, "a mark of the determination of Abigail Johnson, the company's chief executive, to position the asset manager as a digital currency pioneer," the FT said. Speaking at Consensus, a bitcoin-themed conference in New York, Johnson said the company has made investments in several startup bitcoin businesses and partnered with various universities to explore possible uses of blockchain.
A bitcoin token sits next to the image of George Washington on a U.S. one dollar bill in this arranged photograph in London, U.K., on Wednesday, Jan. 4, 2017. The electronic coin that trades and is regulated like oil and gold surged 79 percent since the start of 2016 to $778, its highest level since early 2014. Photographer: Chris Ratcliffe/Bloomberg
Chris Ratcliffe/Bloomberg
Virtual currencies are also gaining increasing popularity in Japan, where you can pay your gas bill or buy restaurant meals with bitcoin. Some 300,000 stores are expected to start accepting the virtual currency this year, reports the Nikkei Asian Review.
Ready to roll: The so-called fiduciary rule on retirement savings accounts that requires brokers to put the interests of their clients first, is now slated to go into effect next month as scheduled after Labor Secretary Alexander Acosta recommended against a further delay in the rule. But lobbyists for the industry are vowing to continue to try to roll it back. Wall Street Journal here and here, Financial Times
Trust but verify: American International Group may depend on algorithms to figure out how much to charge its business customers for insurance, but still uses human beings to check on what the computers are doing. "As part of an approach it started rolling out last year, the global insurance conglomerate pairs its models with human underwriters," the Journal says. "The approach reflects the company's belief that human judgment is still needed in sizing up most of the midsize to large businesses that it insures."
Financial Times Tailor-made: In a move that the FT is calling "a sign of the future direction of banking," BBVA has become one of the first international banks to offer "open banking," in which it shares customer data, with permission, with third parties such as retailers to offer personalized products and services.
Sued: A U.S.-based credit card company is suing Barclays for allegedly improperly selling payment protection insurance at a subprime lending business it bought from the British bank 10 years ago. The suit was brought by CCUK Finance, the British subsidiary of the former CompuCredit, which bought Barclays' subprime credit card business, called Monument, 10 years ago. The suit, which seeks £1 billion in compensation, including interest, and an additional £600 million in punitive damages, is one of the biggest such claims every filed in London's High Court, the FT said.
New York Times Banned: Fannie Mae said it stopped selling homes to Vision Property Management, one of the biggest firms in the rent-to-own business. Fannie also said it will impose restrictions on sales of foreclosed homes to firms that it says engage in abusive forms of seller financing, including rent-to-own leases or contracts for deed.
"The policy change by Fannie could put a big crimp in the business model of certain investment firms that have sprouted up since the financial crisis," the Times said. "These firms buy foreclosed homes on the cheap and sell them to people unable to qualify for a conventional mortgage."
Quotable "I am in a traditional financial services business — but we at Fidelity can see that the evolution of technology is setting our industry up for disruption. What if this technology could do for the transfer of value what the internet did for the transfer of information?" — Abigail Johnson, Fidelity's CEO.
The North Carolina-based bank rolled out a multiyear program to provide loans, investments and philanthropic support to communities in the western part of the state.
Consumer Financial Protection Bureau Director Rohit Chopra said the FICO credit-scoring model has drawbacks in price, predictiveness and market competition, and stakeholders should develop a more open-sourced model that uses artificial intelligence.
Analysts say lenders' shares could rally on deregulation, lighter tax burdens and a resurgence of M&A. Declining interest rates and lower loan losses could further bolster bottom lines and attract investor interest.
The contract gives the nation's oldest bank access to more than $3 billion in deposits a month. Comerica, the current administrator, has received a three-year extension of service to help with the transfer.
