Laboring for less: The Department of Labor is suing JPMorgan Chase and Oracle Corp., claiming both have been engaging in systemic pay discrimination against women. The Obama administration filed a lawsuit against JPM on Wednesday, alleging that over the past five years the company has paid at least 93 female technology workers in its investment bank less than their comparable male coworkers and has neglected to maintain adequate data to determine whether it was engaging in discrimination. The Labor Department asked an internal administrative judge to cancel JPM’s government contracts and prevent the bank from entering future federal contracts if it doesn't provide relief. The company has disputed the claims and pledged to fight. The claims against Oracle are similar, and it could cost the company hundreds of millions of dollars in federal contracts. Oracle also vowed to fight, charging that the government’s actions are “politically motivated.”
Financial feminism: Let Sallie Krawcheck remind you how important financial equality is for gender equality. “We have, as women, a number of money gaps,” says the CEO of Ellevest, an online investing platform aimed at women. “We don't invest as much as men do… we don't make the money men do, we aren't as advanced at work as men are, things actually cost us more. We have a gender debt gap. We have lots of resources and lots of power, but we don't yet have as much money as the men do and we’re not going to be equal until we’re financially equal.” Krawcheck, a banking industry veteran turned fintech entrepreneur, made these comments in a promotional interview for her new book, “Own It: The Power of Women at Work.”
Mnuchin vs. Warren: On Wednesday Sen. Elizabeth Warren, D-Mass. convened a panel of women who were victimized by OneWest Bank’s aggressive foreclosure operation, in anticipation of Treasury nominee Steven Mnuchin’s confirmation hearing, scheduled for today. Mnuchin, dubbed the “Foreclosure King” by critics, ran OneWest for six years starting in 2009, after he and other investors bought the assets of the failed Pasadena savings and loan IndyMac and renamed it OneWest Bank. Some observers have said, in Mnuchin’s defense, that the portfolio of IndyMac loans was very weak and that even the Federal Deposit Insurance Corp. had to foreclose on some borrowers before it sold off the loans to Mnuchin’s investment group. But Warren isn’t so understanding. "The OneWest model was terrible for homeowners, but it was great for Mr. Mnuchin," Warren says. So, at today’s hearing, “he will have the opportunity to explain why his years of grinding families into the dirt at OneWest Bank does not disqualify him from becoming the nation's top economic official.” Warren also claims Mnuchin pocketed more than $200 million from OneWest’s $3.4 billion sale to CIT Group in the summer of 2015.
New York vs. the OCC: New York’s Financial Services Superintendent Maria Vullo spoke out against the Office of the Comptroller of the Currency’s proposal to issue limited-purpose charters for fintech companies. She contends that a federal charter will do more to hamper innovation than foster it, and that the state regulatory landscape functions just fine. "We oppose the imposition of an entirely new regulatory scheme on an already fully functional and deeply rooted state regulatory landscape that is working," she said at an Exchequer Club luncheon. She argued the OCC has not taken into account states' work to regulate fintech companies and that a national charter would put local laws at risk because of preemption. "What happened to federalism and a state's right to police the activities within its own borders? There's not even lip service given to state rights in the proposal,” she said. Vullo’s comments came a day after she wrote a comment letter for her department to the OCC expressing strong opposition to the charter plan. Read it in full here.
Women in governance: The corporate governance heads at seven of the 10 largest institutional investors in stocks are now women, and they oversee $14 trillion in assets. This very interesting article from the New York Times explores how these women — including T. Rowe Price’s Donna Anderson, BNY Mellon’s Christina Maguire and J.P. Morgan Asset Management’s Eileen Cohen — wield influence over corporate America in a very different way than the brash activist investors who generally happen to be male.
Return on equ-al-ity : Typically those that engage in gender-lens investing support businesses that are led by female CEOs and that promote gender diversity. But a new report from BNY Mellon and the United Nations Foundation, titled “Return on Equality,” argues that there is a growing need to focus on a less common type of investing: Supporting companies that advance gender equality through their products and services will go a long way toward helping close the global gender gap. The report, released at Davos, calls on asset management firms to create investment vehicles that allow institutions and individuals to put their money in companies that offer such products and services as contraception, child care and water. Yes, water. “Every day, women around the world spend 200 million hours collecting water to sustain their families due to inadequate infrastructure — hours they could otherwise invest in education, gainful work or leisure,” the report says.
The SEC’s double bind: Outgoing Securities and Exchange Commission chair Mary Jo White is concerned about plans by the Trump administration to weaken or reverse the reforms she and her fellow regulators have implemented since the financial crisis. "Continuing to build an effective post-crisis market regulator will mean imposing measures that sometimes draw sharp outcry from interest groups,” says White, who is scheduled to step down when Trump takes office tomorrow. White has a lot of experience with sharp outcry. She pointed out that she has felt a backlash from all sides frequently. Under her leadership the SEC was criticized by Republicans and Democrats "of both gutting regulation and suffocating the market with too much of it," she says. "A few have attacked us for letting the crooks off with a slap on the wrist, while others say we are too tough or have targeted others simply to pump up our numbers.” (Women in general often experience the double bind.)
Role Call
TriState Capital Holdings in Pittsburgh has added Kim Ruth to its board of directors, as a replacement for the retiring Richard Zappala. Ruth was previously chairman of the Houston region for Bank of Texas, a division of BOK Financial, and before that served as a state president for Bank of America in Texas.
Goldman Sachs has named Sarah Smith as its head of global compliance, replacing Alan Cohen. Smith had been Goldman’s chief accounting officer and controller before the promotion. Cohen, who is stepping down after 13 years in the role of compliance head, will be a senior adviser to Goldman’s executive office.
In the U.K., Goldman Sachs’ international chief of staff Michelle Pinggera, the executive coordinating the bank’s Brexit plan, is stepping down at the end of March, around the time Prime Minister Theresa May triggers Article 50. Pinggera will retain an advisory director role at Goldman, where she has worked for 28 years.
In Case You Missed It
Start at the beginning: If you want to see more gender diversity, “ungender” the environment for children early, says Leda Glyptis, chief innovation officer at Qatar National Bank and former director at Sapient Global Markets. “If you tell your son you’ll teach them how to fix their bike, but fix your daughter’s bike for her, you create expectations among both your boys and girls,” she says. “You start off on the back foot.” That’s why there tends to be fewer women studying and working in STEM fields, she argues. “Things get a little harder when you get into the workplace. … Being a woman doesn’t necessarily close doors, but it makes being in the room harder. It is on you as a woman to do something about things that (A) shouldn’t be happening, and (B) shouldn’t be your problem. I would say the thing that holds women back is the daily decision of ‘should I let this one slide?’ It’s that daily war of attrition.” Glyptis’ comments are part of a wide-ranging interview with 11FS, in which she also discusses unconscious bias, APIs and open banking, the aftermath of Brexit and Europe’s revised Payment Services Directive.
Parental advice: If you scroll down to the middle of this story about JPMorgan Chase’s earnings, there’s a short video clip with some advice from Jamie Dimon for working parents: Take care of your health. If you work at a company that isn’t supportive of you having time for a home life, then leave. And men, give up some of the football and golf to spend more time with your children. “If you play golf every weekend, I call that child neglect,” says Dimon, who made the comments at the Wall Street Journal’s “Women in the Workplace” event in September. (Talking about work-life balance shortly after the birth of her twins, JPM’s Chief Financial Officer Marianne Lake didn’t make it sound so hard.)
Beyond Banking
Gender and politics: Simple questions have complex answers, Alison Smale points out in her article exploring why there aren’t more women in political power in the U.S. “Put bluntly, is it sexism or the system that has so far prevented a woman from becoming president of the United States?” she asks, and finds it’s many things. Deeply ingrained sexism in the country is one. How the U.S. chooses candidates requires a lot of self-promotion, expense and time away from family, all things that are not so appealing to women. Further, the basic act of asking for money is a much more comfortable experience for men than women. Meanwhile, European political bids are subsidized by government funds.
The promises you keep: Want a real fiscal stimulus with long-term payoffs? Close the gender wage gap. Throughout Trump’s presidential campaign, he and daughter Ivanka pledged to fight for equal pay for equal work, a guarantee of six weeks of paid maternity leave and tax credits for child care expenses. He should follow through, argue U.S. Rep. Carolyn Maloney, D-NY, and Heidi Hartmann, an economist and president of the Institute for Women's Policy Research. “If working women were paid the same as comparable men — men who were of the same age, had the same level of education, worked the same number of hours and lived in similar geographic areas — women’s average annual earnings would have been $482 billion higher in 2014,” says a Time essay they co-wrote. “Closing the pay gap would yield an average benefit of $6,551 per working woman — real money that could have helped families make ends meet and jumpstarted the economy.” (Maloney is also pushing for the Smithsonian to build a national women’s museum in Washington.)
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Bonnie McGeer contributed to this report.
