DIRS.INFO The most relevant business & tech news

☆ JPMorgan Fined $348 Million for Lapses in Trade Monitoring
▼ + stars: | 2024-03-14 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

Those lapses are costing it more than $348 million in fines — and more could follow. On Thursday, the bank’s main federal regulator, the Office of the Comptroller of the Currency, fined the JPMorgan $250 million over the omissions. The action followed a $98.2 million penalty from the Federal Reserve on March 8. Brian Marchiony, a JPMorgan spokesman, said the bank found the problems on its own and notified regulators. JPMorgan did not expect any services to customers to be disrupted as it works to fix the problems, he said.

Persons: JPMorgan Chase, Brian Marchiony Organizations: JPMorgan, Currency, Federal Reserve Locations: trillions

☆ Banks Sue Regulators Over Anti-Redlining Rule
▼ + stars: | 2024-02-05 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

Some of the banking industry’s most powerful trade groups sued the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency on Monday, claiming that the regulators overstepped their authority in updating a law meant to reverse the effects of redlining. In October, the regulators imposed new frameworks for assessing whether banks are abiding by the 1977 Community Reinvestment Act, which requires banks to do business in neighborhoods made up largely of racial minorities or low-income households that they typically shunned. The lawsuit said the rule was “a complicated and burdensome regime” and might “ultimately result in reduced lending to the very populations that the C.R.A. was designed to benefit.”The suit was filed by the American Bankers Association, the Independent Community Bankers of America and the U.S. Chamber of Commerce, trade groups that represent virtually all U.S. banks. Several Texas groups joined as plaintiffs, allowing the Washington-based groups to sue in federal court in that state, where they have already won favorable rulings against the regulators.

Persons: “ Organizations: Federal Reserve, Federal Deposit Insurance Corporation, American Bankers Association, Independent Community Bankers of America, U.S . Chamber of Commerce, Texas Locations: Washington

☆ Citi Is Sued Over Sex Abuse. Before 2022, It Would Have Been a Secret.
▼ + stars: | 2023-11-29 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

Ardith Lindsey, a managing director at Citi, alleged that her 15-year career at the bank had increasingly become a “traumatizing” experience, especially after she ended a relationship with a former supervisor. The supervisor, Mani Singh, then sent her dozens of threatening text messages, according to her lawsuit. Mark Costiglio, a Citi spokesman, said the bank had opened an investigation shortly after Ms. Lindsey disclosed the relationship in November 2022 and complained about Mr. Singh’s alleged conduct and messages. “When she reported the vile text messages to us, she described the relationship as having been consensual,” Mr. Costiglio said. He added that years earlier, Citi had investigated a personal financial transaction between the two, and that Ms. Lindsey described Mr. Singh as a friend at the time.

Persons: Ardith Lindsey, Mani Singh, Lindsey’s, Mark Costiglio, Lindsey, Singh’s, Mr, Costiglio, Singh Organizations: Citigroup, Citi

☆ U.S. Case Details Binance’s Knowledge About Criminal Users
▼ + stars: | 2023-11-22 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

For years, the Binance founder Changpeng Zhao and other senior employees at the cryptocurrency exchange knew that some of its users were criminals. Yet, despite regular warnings from some of its own employees that some transactions on Binance.com were violating anti-money-laundering laws, the firm was reluctant to cut them off. Those allegations, which were made public on Tuesday in a sweeping federal case against Binance and Mr. Zhao, show how thoroughly he and his deputies understood that criminals were using their trading platform — and how little they did to stop them. Mr. Zhao and Binance pleaded guilty on Tuesday to violations of the Bank Secrecy Act and agreed to pay hefty fines. The Binance official acknowledged the report, then tried to persuade the tech company’s representatives to downplay Binance’s role in the transactions, according to the filing, which FinCEN posted on its website on Tuesday.

Persons: Changpeng Zhao, Zhao, Binance, FinCEN Organizations: Binance, Network, Treasury Department, FinCEN, Qassam

Customers from Iran, Cuba and Syria — all of which face sanctions — were able to access the Binance platform. In addition to the outlawed foreign transactions, Binance did business with firms based in the United States even though it was not supposed to have any U.S. customers on its Binance.com platform. Instead, a different platform, Binance.US, which Mr. Zhao also owned, was required to handle the business and abide by U.S. anti-money laundering laws. But Mr. Zhao and other Binance employees believed it would be better for the main cryptocurrency exchange to handle big U.S. customers, the court filings state. At times, Binance has processed two-thirds of all digital currency trades, making it a vital power broker and intermediary in the crypto world.

Persons: Zhao, Binance, —, ” Locations: Iran, Cuba, Syria, United States

☆ Citigroup Discriminated Against Armenian-Americans, Regulator Says
▼ + stars: | 2023-11-08 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

According to the regulator, Citi employees pegged the community, in Glendale, Calif., as a group whose members were likely to rack up huge debts and then flee the country. They warned new hires not to give credit card applicants with Armenian-sounding last names that ended in “ian” or “yan” the same rates that other customers received, and in some cases urged them to reject these applicants altogether. The people affected by the bank’s practice were not applying for Citigroup-branded cards; they were seeking cards offered by retailers, like Home Depot and Best Buy, that were underwritten by the bank. Eric Halperin, the consumer bureau’s enforcement director, said during the news conference that Citigroup was still trying to identify how many people were affected by the discrimination, but so far regulators had identified “hundreds.”Karen Kearns, a spokeswoman for Citigroup, said in a statement that the bank had been “trying to thwart a well-documented Armenian fraud ring operating in certain parts of California,” and that “a few employees took impermissible actions.”According to regulators, Citi managers knew excluding Armenians was illegal and warned employees “not to discuss it in writing or on recorded phone lines.” Even so, regulators found evidence of Citi employees discussing over email how to cover up their denial of applicants from Glendale. “It’s been a while since I declined for possible credit abuse/YAN — gimme some reasons I can use,” one employee wrote to another in 2016, seeking advice on how to tell a potential customer that a credit card application had been denied without revealing the real reason, according to the consumer bureau.

Persons: Eric Halperin, ” Karen Kearns, “, “ It’s, YAN Organizations: Citi, Citigroup Locations: Glendale , Calif, California, Glendale, “

☆ Frustrated With New Rules, Bank Lobbyists Are Making Their Fight Public
▼ + stars: | 2023-11-02 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

Banks have become increasingly frustrated with their federal regulators and, in a break with tradition, have brought the battle out into the open. In an effort to overturn new rules and challenge the legitimacy of regulators’ powers, bank lobbyists have added legal threats and public attacks to the more usual lobbying efforts that once took place behind closed doors on Capitol Hill. In recent months, trade groups representing banks of all sizes, including the American Bankers Association, the Independent Community Bankers of America and the Bank Policy Institute, have accused federal regulators like the Consumer Financial Protection Bureau and the Federal Reserve of regulatory overreach. Cam Fine, a former longtime president of the community bankers group, said the cultural shift leading to the lawsuits was notable. In his 18 years at the group, he said, he could remember going to court only twice.

Persons: Banks, Cam Fine Organizations: American Bankers Association, Independent Community Bankers of America, Bank Policy Institute, Consumer Financial Protection Bureau, Federal Reserve

☆ Seeking the ‘Right’ Customers, an Insurer Is Accused of Discrimination
▼ + stars: | 2023-10-30 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

A spokesman for the Maryland Insurance Administration declined to comment. The dispute reveals how a long-used insurance industry technique, ostensibly aimed at managing risk, can open the door to bias. As they evaluate a customer, agents are expected to decide whether a potential customer seems honest or reliable, or judge how tidy or well maintained their home is. “There are all kinds of conscious and unconscious biases involved.”Insurers have also been accused of discriminating against Black and Hispanic customers in other ways. But the accusation against Erie is that its policies kept Black and Hispanic homeowners out of its customer rolls in the first place.

Persons: Matthew Cummings, ”, Daniel Schwarcz Organizations: Maryland Insurance, University of Minnesota Law School, State Farm, Erie Locations: Erie, Chicago

Yelling at Michael Barr, the Federal Reserve’s top banking regulator, has never been particularly effective, his friends and co-workers will tell you. That hasn’t stopped America’s biggest banks, their lobbying groups and even his own colleagues, who have reacted to his proposal to tighten and expand oversight of the nation’s large lenders with a mix of incredulity and outrage. The proposal would push up the amount of easy-access money that banks need to have at the ready, potentially cutting into their profits. Lawmakers sent worried letters to the Fed and peppered its officials with questions about what the proposal would contain. The Bank Policy Institute, a trade group, recently rolled out a national ad campaign urging Americans to “demand answers” on the Fed’s new capital rules.

Persons: Michael Barr, hasn’t, Kevin Fromer, Barr, Lawmakers Organizations: Federal, Financial Services, Mr, BNP Paribas, HSBC, TD Bank, Hill, Bank Policy Institute, Fed

☆ Federal Court Says Consumer Watchdog Can’t Check Banks for Discrimination
▼ + stars: | 2023-09-11 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +2 min

“A longstanding and straightforward federal law prohibits unfair acts and practices, stating that financial firms cannot subject consumers to substantial and unavoidable harm, Mr. Gilford said. Banks have long tried to limit the ways regulators can penalize them. The trade groups behind the lawsuit had originally stressed that their main impetus for suing the C.F.P.B. The regulator had added “discrimination” to a manual provided to financial firms explaining how to prepare for the agency’s periodic checks on their operations. Officials should have given them more warning, the groups argued, and a chance to submit public comments on the matter before finalizing the change.

Persons: ”, Sam Gilford, Gilford, “, Banks, George Floyd’s, Wells, Trump, Obama Organizations: Bank of America Locations: Wells Fargo

This spring, Clive Kabatznik, an investor in Florida, called his local Bank of America representative to discuss a big money transfer he was planning to make. Rather, a software program had artificially generated his voice and tried to trick the banker into moving the money elsewhere. Mr. Kabatznik and his banker were the targets of a cutting-edge scam attempt that has grabbed the attention of cybersecurity experts: the use of artificial intelligence to generate voice deepfakes, or vocal renditions that mimic real people’s voices. The problem is still new enough that there is no comprehensive accounting of how often it happens. Another large voice authentication vendor, Nuance, saw its first successful deepfake attack on a financial services client late last year.

Persons: Clive Kabatznik, Kabatznik Organizations: Bank of America Locations: Florida

Bigger insurers might not feel squeezed immediately in Hawaii, as the state has been historically lucrative for them. Insurers are primarily concerned with two factors when deciding how much coverage to offer and where: the frequency of claims and the severity of those claims. The Maui fires are another data point of losses for insurers. Since the start of the year, insurers have paid out more than $40 billion in damage claims, on a pace for a record in yearly losses. The insurers for insurance companies, also known as reinsurers, are an important part of the equation.

Persons: Ge, they’ve Organizations: New York University, underwriters, Farm, Allstate Locations: Hawaii

☆ How a Small Group of Firms Changed the Math for Insuring Against Natural Disasters
▼ + stars: | 2023-08-16 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

As disasters like the wildfires that devastated the Hawaiian town of Lahaina and the storms that tore apart roofs from Alabama to Massachusetts last week intensify, insurance companies have pulled back from offering coverage in certain areas or cut the kinds of damage they will pay to repair. A little-noticed slice of the financial industry that provides insurance to insurers, called reinsurance, has helped drive the changes. These companies promise to step in with cash — usually huge amounts — when something like a hurricane, wildfire or other big disaster creates damage that is too costly and widespread for insurance companies to pay for on their own. And at the beginning of the year, nearly all of them raised prices. That led to a flurry of tense negotiations between those insurers and firms, like Swiss Re, Odyssey Re and other reinsurers, many of whom are headquartered outside of the United States.

Persons: reinsurers Organizations: Farmers, Swiss Locations: Lahaina, Alabama, Massachusetts, United States, Canada

☆ Citigroup Says Its Predecessors Likely Benefited From Slavery
▼ + stars: | 2023-07-27 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

A new review of historical documents has led Citigroup to acknowledge that slavery and slave labor most likely enriched the banks and other companies that eventually formed the present-day financial giant. The benefits were likely to have come to Citi’s predecessors “through financial transactions and relationships with individuals and entities located or operating in the United States before 1866,” the bank’s public affairs head, Edward Skyler, wrote in a blog post on Thursday. Mr. Skyler said the review also “reaffirmed our previous research in that it did not identify any records showing that Citi or a predecessor institution directly purchased, sold or held enslaved persons.”Citi hired an independent historical research firm to carry out the review as part of a racial equity pledge it made in 2020 after George Floyd, a Black man, was murdered by a white Minneapolis police officer. In the weeks after Mr. Floyd’s murder, American companies and the public grappled with a fresh reminder of the vast injustices that Black Americans had been experiencing since the United States began taking shape as a country.

Persons: Edward Skyler, Skyler, ”, George Floyd, Floyd’s Organizations: Citigroup, Citi, ” Citi, United States Locations: United States, Minneapolis, United

☆ How Regional Banks Got Healthy Again
▼ + stars: | 2023-07-26 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

After depositor runs led to the collapse of Silicon Valley Bank and Signature Bank this spring, investors and onlookers wondered how similarly sized institutions would fare. Would they have to merge with bigger banks? Then, when a third lender, First Republic Bank, flirted with destruction for weeks before being bought by JPMorgan Chase in May, it was hard to see how depositors would ever feel comfortable trusting midsize banks again. Quarterly earnings reports released this month detailing midsize banks’ performance from April through June have shown that their balance sheets look healthier than they did last quarter, with higher-quality loans and more money set aside to cover surprise losses. The KBW Nasdaq Regional Banking Index, a proxy for the industry, is rebounding after plunging 35 percent during the crisis.

Persons: depositor Organizations: Silicon Valley Bank, Signature Bank, First Republic Bank, JPMorgan Chase, Nasdaq, Banking Locations: Silicon

☆ Insurer’s Retreat in Florida Signals Crisis With No Easy Fix
▼ + stars: | 2023-07-14 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

Insurers are trapped in a riddle: In a world where the risk of costly disasters is rising but high premiums are squeezing policyholders and angering state regulators, how can they continue to make money? Farmers, one of America’s biggest home insurers, didn’t say what specifically led to its decision. Was the cost of payouts too high in recent years, which saw record-setting numbers of billion-dollar disasters, just as rates charged by reinsurers, which sell insurance to insurers, were rising? Or is Farmers playing a game of chicken with state regulators, hoping that walking away now will give it leverage to charge customers more in the future? “A lot of insurers have been losing a lot of money in Florida and they’ve been threatening to leave for years,” said Daniel Schwarcz, a professor at the University of Minnesota Law School who specializes in insurance.

Persons: they’ve, ”, Daniel Schwarcz Organizations: Farmers Insurance, reinsurers, Farmers, University of Minnesota Law School Locations: Florida

☆ Bank of America Fined $150 Million Over ‘Junk Fees’ and Fake Accounts
▼ + stars: | 2023-07-11 | by ( Emily Flitter | More About Emily Flitter | ) www.nytimes.com time to read: +1 min

“These practices are illegal and undermine customer trust,” Rohit Chopra, the director of the consumer bureau, said in a statement. will be putting an end to these practices across the banking system.”Regulators said that Bank of America imposed improper overdraft fees by double-charging customers over the same transaction. The first charge would be a $35 “insufficient funds” penalty levied against a customer who tried to pay for something by check or automated transaction without having the funds necessary to do so. A Bank of America spokesman said the bank had “voluntarily” reduced overdraft fees from $35 to $10 in early 2022 and had eliminated its $35 “insufficient funds” penalty. In addition to the action on overdraft fees taken together by the two regulators, the consumer bureau said it had discovered two other areas where it said the bank was mistreating customers.

Persons: ” Rohit Chopra, “ Organizations: Regulators, Bank of America, of America

The overhaul would require the largest banks to increase their holdings of capital — cash and other readily available assets that can be used to absorb losses in times of trouble. Mr. Barr predicted that his tweaks would be “equivalent to requiring the largest banks hold an additional two percentage points of capital,” if they are implemented. “The beauty of capital is that it doesn’t care about the source of the loss,” Mr. Barr said in his speech previewing the proposed changes. If the Fed Board votes to institute them, their implementations will involve transition time. But the sweeping set of changes that he set out meaningfully tweak both how banks police their own risks and are overseen by government regulators.

Persons: Michael S, Barr, ratcheting, Mr Organizations: Federal, Monday Locations: ”

Search resuls for: "More About Emily Flitter"

18 mentions found