Daily Archives: November 9, 2015

Wells Fargo CEO stands by employee pay

John Stumpf discussed 2014 letter from employee who proposed raise for all Wells workers

Stumpf says Wells monitors what other banks pay to make sure it is competitive

On income inequality: ‘I have family members on every rung of the economic ladder’

It was a year ago last month that then-Wells Fargo employee Tyrel Oates went from obscurity to national headlines thanks to a letter he wrote asking CEO John Stumpf to give every Wells employee a raise.

I got the chance to ask Stumpf about that letter last week while he was in town to visit with employees and customers of the San Francisco-based bank. The CEO since 2007 defended the bank’s compensation practices.

“To get the best team, you have to be competitive in your compensation, your benefits, in the work that people do, in their advancement opportunities,” Stumpf said. “And we think we do all of that. In fact, when we open jobs up and look for team members, we are oversubscribed in a big way.”

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When it comes to pay, Wells Fargo already takes steps to be competitive, he said, noting that the bank monitors what other financial services companies pay in salaries. Last year, 40,000 Wells employees received promotions of various types that came with increased compensation and responsibilities, he said.

“We think that makes sense, as opposed to a carte blanche deal where it’s unrelated to performance, merit and really not keeping with our comp policies and paying for market rates for people,” Stumpf said.

Big banks are firing out a warning shot to personal-finance startups

Some of Bank of America’s customers say the lender restricted their account access through programs like Quicken and Mint last month.

The service seems to have been restored, but the restrictions described are similar to steps taken by other lenders.

The Wall Street Journal reportedlast week that JPMorgan and Wells Fargo were “throttling” data feeds to Mint, which lets its customers monitor several investment and and savings accounts on one screen.

These types of software providers have grown quickly in a short space of time, but now it seems banks are pushing back.

Read on.

Banking Giants Learn Cost of Preventing Another Lehman Moment

Seven years after the collapse of Lehman Brothers jolted the global economy, the world’s biggest banks may need to raise as much as $1.2 trillion to meet new rules laid down by financial regulators.

After years of work, the Financial Stability Board, created by the Group of 20 nations in the aftermath of the crisis, published its plan for making sure giant lenders can be wound down and recapitalized in an orderly way, without taxpayer bailouts.

Under the rule for total loss-absorbing capacity, or TLAC, most systemically important banks must have liabilities and instruments “readily available for bail in” equivalent to at least 16 percent of risk-weighted assets in 2019, rising to 18 percent in 2022, the FSB said on Monday. A leverage ratio requirement will also be imposed, rising from 6 percent initially to 6.75 percent. The banks’ shortfall under the 18 percent measure ranges from 457 billion euros to 1.1 trillion euros ($1.2 trillion), depending on the instruments considered, according to the FSB.

Read on.

Call a wrong number? You might be asked to take a survey

Be careful the next time you dial a wrong number. You might be asked to answer a market research survey. Instead of somebody spamming you, it’s now you spamming them. For the greater good of science and research.

It’s the future of telecom, marketing and research. And that future is now.

Outbound dialing, what you’re most familiar with, has been a headache for all Americans: Those spam phone calls — or “robocalls” — are so jarring, annoying and unnecessary. Think of the example when a stranger calls you in the middle of dinner to sell you a new subscription or have you fill out a poll.

Gradually that approach is going away. That’s because of increased regulation, telemarketers’ difficulty getting your number, and people not answering their phones anymore.

The new method is for a company to own a large set of phone numbers, and if you happen to call any of them, you’ll be asked to answer a survey. Instead of you getting a call at some random time, they’re just sitting back waiting for you to call them.

Read on.

Cyber attacks increase for financial services industry

In the third quarter of 2015, the DDoS (Distributed Denial of Service) trends report numbers were at the highest quarterly levels in the last two years, with the financial and payments sector representing 15% of all Verisign mitigations, according to Verisign. Per Credit Union Times:

Earlier this week, the Federal Financial Institutions Examination Council issued a statement, “Cyber Attacks Involving Extortion,” alerting financial institutions of the increasing frequency and severity of this particular breed of cyber attacks.

Cybercriminals and activists used a variety of strategies, including ransomware, distributed denial of service, and theft of sensitive business and customer information to extort payment or other concessions from victims, according to the alert. In some cases, these attacks had significant effects on businesses’ access to data and ability to provide services. Some businesses suffered serious damage through the release of sensitive information.

One of the bigger DDoS cases to hit housing turned out to not be true.

Back in March 2014, the loan origination system for Ellie Mae (ELLI) stopped working. The outage took place on March 31, just as lenders were trying to finish closing their loans for the month.

The outage of Encompass360, Ellie Mae’s LOS, was originally thought to be the result of cyber attack. But as it turns out, further investigation revealed that it wasn’t.

The company, a leading provider of on-demand automated solutions for the residential mortgage industry, announced that after investigating the outage, it determined that the cause of the outage was not a malicious attack but rather due to a “confluence of factors involving network, hardware, software and demand for service.”

But, still, the false alarm was still an alarm for mortgage finance companies, nonetheless.

When asked about escalated risk priorities for 2016 for a recent survey by Wolters Kluwer Financial Services, 66% of industry respondents cited cybersecurity as their top concern. Increased cybersecurity anxiety was followed by regulatory change management (49%), third-party risk (30%), and fair lending compliance (29%) as top levels of concern.

How does your state rank for integrity?

Well, none of the 50 states were ranked an A or a B! Three states were ranked a C!

The 2015 State Integrity Investigation finds it doesn’t look good

How does each state rank for transparency and accountability? The State Integrity Investigation used extensive research to grade the states based on the laws and systems they have in place to deter corruption. Use the interactive to see how states scored overall and explore how they performed in each of the 13 categories.

Read on.

On the House: Mortgages are the top consumer finance complaint

Maybe it’s my sense of humor, but this recent comment by Richard Cordray, director of the Consumer Financial Protection Bureau, made me chuckle:

“Despite strong protections that have been put in place to protect homeowners, this month’s complaint report shows consumers are still having problems when dealing with their mortgages.”

I’d like to think that all the federal government has to do is snap its collective fingers and all our problems will go away, but I wasn’t born yesterday.

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The complaint report to which Cordray refers is published monthly by the bureau and has been since 2011, when, if memory serves, the agency really got up and running.

Since then, it has received more mortgage-related complaints than complaints related to any other type of financial product.
Read more at http://www.philly.com/philly/business/real_estate/residential/20151108_On_the_House__Mortgages_are_the_top_consumer_finance_complaint.html#1Zti6UXhWdKxgl1T.99