Daily Archives: November 29, 2016

Fed braces for Trump administration shake-up

From the article:

Outside of legislative action, who Trump appoints to the Fed will play a significant role in how the institution operates going forward. In particular, there is great focus on the vice chair of supervision, a position created specifically to monitor the Fed’s expanded powers as a financial regulator.

That position was created as part of the Dodd-Frank financial reform law as a focal point for new regulatory powers, but President Obama never nominated someone to fill it. That allows Trump to make a significant mark on how the Fed operates as a regulator with just one selection.

State senator blasts Wells Fargo for ‘bad faith’ as bank skips hearing

The chairman of the California Senate’s banking committee blasted Wells Fargoon Monday for failing to answer questions about the bank’s accounts scandaland for not sending Chief Executive Tim Sloan or another representative to a committee hearing.

Committee Chairman Steve Glazer (D-Orinda) said he called for Monday morning’s hearing only after the San Francisco bank failed to adequately answer questions he put to bank officials over the last six weeks.

Those questions, which echo inquiries by lawmakers on Capitol Hill, include when executives first knew about the creation of unauthorized customer accounts and why the bank’s board and investors were not notified about the practice sooner. Glazer said he invited Sloan to address those questions at Monday’s hearing, but neither Sloan nor any other Wells Fargo executive attended.

Read on.

Ex-Bank of America executive says ‘no truth’ in lawsuit’s racism claims

A former Bank of America Corp. executive accused of abusing one of the bank’s traders denied that he used racist language and said the allegations were “deeply upsetting.”

Anthony Dullaghan, the bank’s former head of short-term fixed income, said that claims he had referred to clients as “French rats” were untrue. The allegations were made in a witness statement released Tuesday in a racial discrimination lawsuit brought by Maurice Marco, an executive on the bank’s Euro Commercial Paper team.

“If I swore about clients it would be in frustration and was never racially motivated,” Dullaghan said in his own witness statement made public Thursday at a London employment tribunal. “I have now retired and it is deeply upsetting for me to be embroiled in this dispute when there is absolutely no truth in the allegations.”

According to Marco’s statement earlier this week, Dullaghan repeatedly referred to French clients as rats and called a Middle Eastern customer a derogatory term involving a camel. A lawyer for the Charlotte-based bank said Tuesday that Marco exaggerated and took his shirt off during a heated argument.

Marco told the employment tribunal that he had panic attacks after Dullaghan assaulted him during a trading floor disagreement when Dullaghan was “pushing the index fingers of both hands firmly” into his chest and asked Marco to “sort this out outside.”

Dullaghan denied assaulting Marco and said he “touched his shoulder” while Marco was screaming and shouting in an attempt to “indicate that he should turn around and leave the floor in order to defuse the situation.”

Citigroup ‘boys’ club’ disfavors women, lawsuit claims

A former Citigroup Inc financial adviser on Monday filed a lawsuit accusing the bank of running a “boys’ club” that favored men over women, treating her as a “glorified secretary,” and firing her in retaliation for whistleblowing activity.

Erin Daly is seeking double back pay, unpaid bonuses and punitive damages over the bank’s alleged harassment, hostile work environment and unlawful retaliation, according to her lawsuit filed in Manhattan federal court.

The resident of Manhattan’s Upper West side said Citigroup let her go less than two weeks after she complained that her manager demanded inside information from her work on restricted stock offerings, so that he could pass it to favored clients.

Daly said she also filed a complaint with the U.S. Equal Employment Opportunity Commission, and plans to add federal discrimination claims against the fourth-largest U.S. bank.

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CFPB Warns Banks About Risks of Sales Incentives

WASHINGTON-The Consumer Financial Protection Bureau on Monday warned banks about creating incentives tied to sales goals, underscoring its intention to keep a tight rein on banks in the aftermath of the phony-accounts scandal at Wells Fargo & Co.

In a special bulletin, the CFPB said incentives for employees and service providers “can pose risks to consumers, especially when they create an unrealistic culture of high-pressure targets.”

The watchdog agency laid out steps that banks should take to strengthen their compliance management systems to prevent and detect incentives that could lead to violations of the law.

The CFPB said that in addition to opening accounts without customer consent, banks could violate consumer financial law through behaviors caused by unchecked incentives, such as misrepresenting product benefits to customers or steering consumers toward less favorable products or terms.

Read on.

Sen. Warren slams Wells Fargo over arbitration position

Massachusetts Democratic Senator Elizabeth Warren on Monday criticized Wells Fargo & Co’s decision to require customers affected by its unauthorized accounts scandal to go through arbitration rather than allowing them to sue.

The San Francisco-based bank last week asked a U.S. court to uphold contract clauses that mandate arbitration, something financial firms often use to protect against litigation. Wells Fargo’s situation is unusual, though, because it opened accounts without customers’ permission, calling into question whether the contracts and their clauses are legitimate.

In a Facebook post on Monday, Warren, a frequent critic of the banking industry, said Wells Fargo’s promise to treat customers better in light of the scandal is “meaningless” as long as it is pursuing arbitration.

“After dozens of Wells Fargo customers sued the bank to recover fees they were charged from these fake accounts, Wells Fargo tried to boot the claims from court and into the closed-door, industry-friendly arbitration process,” Warren said.

“Unfortunately, there’s a real chance a court will let Wells Fargo shuffle these claims off to die in arbitration.”

A Wells Fargo spokesman said the bank has an arbitration clause in its customer account agreements.

Read on.