Showdown at the CFPB; Westerman bolts HSBC

Receiving Wide Coverage ...
See you in court: While most people were enjoying the long Thanksgiving weekend, the White House and the Consumer Financial Protection Bureau were engaged in a heated war over who has the right to select an acting director for the agency. Richard Cordray, who left the CFPB on Friday, named his chief of staff Leandra English to succeed him. That didn’t sit well with President Trump, who earlier had selected Mick Mulvaney, the head of the Office of Management and Budget, to head the agency until a permanent replacement is named.

Drew Angerer/Bloomberg

On Sunday, American Banker broke the news that English was about to file a lawsuit in federal court in Washington to block Mulvaney from taking control of the agency, which she later did. “In doing so, she touched off a legal fight that will trigger court interpretations on how different statutes regarding succession apply to the unusual struggle over control of a federal agency,” the Wall Street Journal says.

“Lawyers said both officials had a claim to the position before the White House secured Senate approval for a permanent replacement, in part because of a lack of clarity in the post-crisis Dodd-Frank legislation that created the agency,” the Financial Times notes. Wall Street Journal here and here, Financial Times here and here, New York Times here and here, Washington Post here, here and here, American Banker here and here

That was quick: Matthew Westerman, HSBC’s co-head of global banking, is leaving after a “turbulent 18 months” at the bank. Westerman was hired away from Goldman Sachs in February 2016 by departing CEO Stuart Gulliver in what was “regarded as a trophy hire and expectations were high that Mr. Westerman would push HSBC to raise its game in areas of investment banking where it long had lagged behind rivals,” the Wall Street Journal says. No reason was given why he left.

“His departure marks another change of course by HSBC in its faltering attempts to break into the top ranks of global investment banks,” the FT comments.

Wall Street Journal
Shoo-in?: Federal Reserve Chair-designate Jerome Powell “is likely to sail through” his confirmation hearings that begin Tuesday before the Senate Banking Committee, the Journal reports. “Even though the process of filling Fed positions has grown increasingly politicized,” it says, Powell has won support from both sides of the aisle, “giving him a strong chance of approval without much drama.”

Weird science: Indian banks are using data from customers’ smartphones to judge their creditworthiness for getting loans, “testing out cutting-edge but controversial technology in what is potentially a huge market for such products.” The banks are looking at “everything from Facebook connections to online shopping habits to rate potential borrowers.”

“This is not an exact science, but actually it is a much better science than looking at static data,” said Rajeev Ahuja, executive director at RBL Bank.

Financial Times
Free data: New regulations set to take effect next year in Europe will force British banks to share their customers’ spending data with other companies, including technology firms and retailers, the paper reports. “The changes mean people browsing for goods online or through an app could see their bank balance on the same screen and buy items without having to type in their payment details. They could also enable retailers to access the information needed to offer customers an instant loan to fund a purchase.”

The changes also “threaten to loosen the stranglehold of the banking oligopoly — HSBC, Barclays, Royal Bank of Scotland, Lloyds Banking Group and Santander — in the U.K.,” the paper says.

Elsewhere
Political advice: Stepping into presidential politics, JPMorgan Chase CEO Jamie Dimon said Donald Trump could be a one-term president but only if the Democrats “come up with a reasonable candidate” against him. Asked at an Economic Club of Chicago luncheon, Dimon said the Democrats need to come up with a “pro-free enterprise” agenda if they hope to beat Trump, otherwise he will win again.

Quotable
“Ms. English has a clear legal entitlement to the position of acting director of the CFPB. The president’s purported or intended appointment of defendant Mulvaney as acting director of the CFPB is unlawful.” — Leandra English’s lawsuit claiming she has the legal right to succeed agency director Richard Cordray.

“The law is clear: Director Mulvaney is the acting director of the CFPB.” — White House spokeswoman Sarah Huckabee Sanders.