Wanting more The head of the Consumer Financial Protection Bureau believes Wells Fargo has far to go to meet the terms of a 2018 consent order. “I am not satisfied with the bank’s progress to date and have instructed staff to take all appropriate actions to ensure the bank complies with the consent order and Federal consumer financial law,” CFPB Director Kathy Kraninger wrote in a letter to Democrat senators Elizabeth Warren and Sherrod Brown. “Broadly speaking, I consider all options on the table for enforcing Bureau consent orders.” Kraninger’s letter raises “the prospect of potential future penalties or other sanctions against the bank.”
CFPB Director Kathy Kraninger
Andrew Harrer/Bloomberg
Similar letters were sent by Federal Reserve Chairman Jerome Powell and Comptroller of the Currency Joseph Otting, American Banker reports.
A new name and a rebranding, as well as replacing "culpable senior management" and its board, are needed to salvage Wells Fargo, Kenneth H. Thomas, president of Community Development Fund Advisors, says in this BankThink article. But it will not be easy to accomplish.
Going up Bank of America said it will raise its minimum wage to $20 an hour by 2021. The first hike will be on May 1, when the bank’s minimum pay will increase to $17 an hour from $15. The bank said it expects “tens of thousands” of employees to benefit from the increase.
The move by BofA “is another example of how big banks are trying to deal with shifting political winds in Washington, where they face new scrutiny under the Democrats, who now control the House of Representatives,” the New York Times comments.
It comes “a day before banking industry leaders are scheduled to be grilled on Capitol Hill on their record profits a decade after the financial crisis,” the Washington Post notes.
Wall Street Journal
Failure to communicate UBS fired a senior investment banker in December after “he allegedly failed to apprise his managers of details of a leveraged-buyout loan, highlighting the pressure Wall Street firms are under to keep a lid on risk in the lucrative business.” The paper says the bank dismissed James Boland, the head of its leveraged-finance group in the Americas, and one of his aides for “not informing superiors and the bank’s compliance officials that they had reclassified a bond the firm was underwriting as a loan. That matters because bank loans are subject to government guidelines aimed at curbing excessive risk, while bonds aren’t, and firms that flout the will of regulators risk sanctions including potential fines.”
Dwindling odds Senate Republicans are sounding “increasingly doubtful” about Herman Cain’s chances of being confirmed as a member of the Federal Reserve Board. “Privately, some Senate members and aides expressed skepticism that the White House would formally nominate Mr. Cain for the Fed board. Even if that happens, it could be months until his confirmation would come to the Senate floor for a vote.”
Retrenching Société Générale said it plans to cut nearly 1,600 jobs following “a slump in investment banking revenue in the fourth quarter, retrenching to its core businesses as choppy markets hobble Europe’s banks.” European investment banks “endured a particularly tough first quarter with a slew of economic and political challenges leaving companies reluctant to pursue deals or raise money.”
Quotable
“If you get a job at Bank of America, you’ll make $41,000 [a year]. With the success our company has [had] we have to share that success with our teammates.” — CEO Brian Moynihan, announcing that the bank will raise its minimum wage to $20 an hour by 2021.
Chris Gorman and four other high-ranking KeyCorp executives have been granted a combined $16.7 million in performance-based equity awards that will vest in two years, as long as the Cleveland-based company meets certain capital requirements and earnings goals.
Arrow Financial in Glens Falls kept busy in December, consolidating its two subsidiary banks, expanding its board and restructuring its securities portfolio.
A recent industry survey finds most participating banks predict asset growth for 2025; Frax Finance launches a new stablecoin backed by BlackRock; Camden National closes its acquisition of Northway Financial; and more in this week's banking news roundup.
