Daily Archives: December 24, 2016

On this day in history:Federal Reserve Act

 

President Wilson signed the Federal Reserve Act into law on Dec. 23, 1913, creating an entity dedicated to monopoly private bank profits.

Wells Fargo Reaches Deal With ResCap Over Toxic Mortgages

Wells Fargo & Co. has reached a settlement tied to bad real-estate loans that officials at Residential Capital LLC claim helped push the subprime mortgage lender into bankruptcy, said people familiar with the matter.

The bank reached the agreement with the trust overseeing ResCap’s liquidation, according to court documents and the people familiar. The settlement punctuates a forgettable 2016 for Wells Fargo, which has suffered through a scandal around its creation of bogus customer accounts and new regulatory sanctions over the rejection of its so-called living will.

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Former Wells Fargo branch manager in S.A. says he was fired for opposing sales tactics

Wells Fargo Bank’s mounting legal woes over its illegal sales tactics now includes a lawsuit filed in Bexar County District Court by a former San Antonio branch manager.

Alex Leal, who was a local Wells Fargo branch manager for more than 15 years, accuses the San Francisco lender of discriminating against him and ultimately firing him for opposing the bank’s “unethical and illegal sales practices.”

Leal, 48, says he was a victim of age discrimination because Wells Fargo sought to hire younger, less-experienced workers who would “buy into (its) scheme of cross-selling items to bank customers that they did not request or need, particularly … credit cards.” He says he was replaced by a 29-year-old.

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DOJ orders whistleblower to testify in Wells Fargo probe

The U.S. Department of Justice has subpoenaed a high-profile whistleblower in its criminal investigation into Wells Fargo & Co’s (WFC.N) opening of accounts without customer permission.

U.S. prosecutors in San Francisco have asked Wells Fargo banker Yesenia Guitron, who lost a private lawsuit against the fourth-largest lender, to testify before a grand jury in San Francisco on Tuesday, according to a subpoena dated Dec. 12, which was seen by Reuters.

A Wells Fargo spokesman declined to comment.

Guitron is among at least five Wells Fargo employees who sued the bank or filed complaints with regulators alleging that they were fired after reporting the opening of customer accounts without their permission, according to a Reuters review of lawsuits and complaints to the U.S. Labor Department.

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Embattled JPMorgan Chase CEO uses Detroit as backdrop in Bloomberg puff-piece

What does an embattled CEO of a multinational bank do when he needs his image refurbished? Why, sit down for a nice fireside chat with Bloomberg Businessweek, of course — using Detroit “the comeback city” as a backdrop.

On Thursday morning, the weekly business magazine posted a sprawling, puffy Q&A with Jamie Dimon, CEO of JPMorgan Chase Bank — the conglomerate that tops the list of largest banks in the U.S., with trillions of dollars in assets.

See, Dimon and JPMorgan have a bit of an image problem, following the 2012 trading debacle that resulted in more than $6 billion in losses (and drawing the ire of Michigan Senator Carl Levin, then the Chairman of the U.S. Senate’s Permanent Subcommittee on Investigations, who said JPMorgan “piled on risk, hid losses, disregarded risk limits, manipulated risk models, dodged oversight, and misinformed the public.”)

JPMorgan Chase has also topped out in a study done by the U.S. Treasury’s Office of Financial Research (OFR), that sought to rank banks based on the systemic risk they posed to the global financial system. JPMorgan came in with the most dangerous score of 5.05 for U.S. mega-banks.

But you won’t hear any of that in the Bloomberg Q&A, which was packaged along with a seven-minute video that amounts to little more than a feel-good advertisement for the bank’s $100 million investment in Detroit.

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Trump May Have a $300 Million Conflict of Interest With Deutsche Bank

For years, Donald Trump has used a powerful tool when dealing with bankers: his personal guarantee.

Now that guarantee — employed to extract better terms on hundreds of millions of dollars of loans to the Trump Organization — is at the center of a delicate loan-restructuring discussion at Deutsche Bank AG, which is under investigation on several fronts by the U.S. Department of Justice.

The bank is trying to restructure some of Trump’s roughly $300 million debtas part of an attempt to reduce any conflict of interest between the loan and his presidency, according to a person familiar with the matter. Normally, the removal of a personal pledge might lead to more-stringent terms. But there is little normal about this interaction. Trump’s attorney general will inherit an investigation of Deutsche Bank related to stock trades for rich clients in Russia — where Trump says he plans to improve relations — and may have to deal with a possible multibillion-dollar penalty to the bank related tomortgage-bond investigations.

Whatever terms a restructured loan might include, they will reflect the complex new relationship spawned between Germany’s largest bank and its highest-profile client. Ethicists say this concerns them.

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Something nice from all this mortgage relief funding! Oh, it was the invitees to a $52,000 steak dinner

To show appreciation for lenders who work with low-income borrowers, Florida’s housing agency hosted a $52,000 dinner that featured filet mignon, broiled lobster tails and a bar stocked with “deluxe brand liquors.”

At a reception for its own board members, the agency spent $300 for a bartender, $425 for a pork carving station and $420 for a “Spanish charcuterie station.”

And a time when thousands of Floridians were waiting for help in saving their homes, the agency awarded a total of nearly $443,000 in bonuses to its employees.

Those are among the findings in a critical state audit of the Florida Housing Finance Corp. Released this month, the report cites several areas in which it said the organization needs to better account for its spending, improve controls over electronic fund transfers and ensure the security of confidential personal information.

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