Changing Behavior
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WEDNESDAY MAY 12, 2021 VOL. 186 No. 90 AMERICANBANKER.COM Follow us on Twitter @AmerBanker Umpqua Bank fined 5 $1.8 million over leasing unit’s collection practices Changing behavior The FDIC said Financial Pacific Leasing, The percentage of new loans at OneMain Financial that are a subsidiary of the Oregon bank, charged closed without a visit to a branch has soared since the early undisclosed fees to borrowers, made days of the pandemic excessive collection calls and disclosed information about customer debts to third parties. Page 6 See story on page 5 % of new loans Sterling Bancorp is moving 6 past its mortgage woes 50% Less than two years after shutting down its biggest business amid fraud allegations, 46% 40% 44% the Michigan company has sold branches, settled a shareholder lawsuit and returned 30% to profitability under turnaround specialist 34% 33% Thomas O’Brien. Page 6 20% Amex pushing beyond cards 10% 7 to woo small businesses 13% 11% American Express is trying to differentiate 9% 0% itself from other card networks by making loans through its bank and incorporating 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 accounts payable services and lending Source: The company technology it inherited with its acquisitions of Acompay and Kabbage. Page 7 Credit card companies bringing dailybriefing Small banks building 8 back huge points offers 3 bitcoin services The country’s largest banks are pulling out to keep customers all the stops to lure customers to take on new It’s not 2008, but bank CEO First Foundation and Suncrest are among credit cards again, after retreating from such 1 hearings could still get testy the community banks developing platforms deals during the COVID-19 pandemic. Page 8 The heads of the biggest banks have a that let clients buy, sell and hold increasingly chance to tout the industry’s community popular digital assets. The goal is to JPMorgan, Deutsche Bank said outreach during the pandemic. But they avoid losing business to cryptocurrency 9 among firms sued by 1MDB can also expect tough questions about the exchanges. Page 4 Malaysia’s 1MDB and a former unit have Paycheck Protection Program as well as filed suits against firms including JPMorgan what banks are doing to address climate Storefront lender Chase and Deutsche Bank as the nation change, racial inequities and other hot- 4 OneMain pushes seeks to recover assets worth more than $23 button issues. Page 2 further into digital billion linked to the scandal-plagued state- After more than 100 years of mostly in- owned investment fund. Page 9 New OCC head signals person operations, the subprime installment 2 focus on climate risks, lender is seeking to adapt to changing Distinguishing between ‘technological change’ consumer preferences — launching 10 maternity and paternity Acting Comptroller of the Currency Michael an online loan platform just before the leave is outdated Hsu said he plans to prioritize “solving pandemic and recently striking a deal to Banks’ family leave policies need to evolve urgent problems and addressing pressing acquire a financial wellness app. with a new workforce that increasingly views issues” until the Biden administration selects (See chart above.) Page 5 fathers as equal caregivers, Karsten Vagner a permanent head of the agency. Page 3 of Maven writes. Page 10 WEDNESDAY MAY 12, 2021 AMERICANBANKER.COM PAGE 2 Administration to distribute Paycheck Senate and House committees, respectively, ESG Protection Program loans and taking other have made clear they intend to keep the heat steps to mitigate the economic impact of on the industry. COVID-19, some observers said the executives At a recent conference with community It’s not 2008, have a positive story to tell about the industry’s bankers, Brown said, “People just don’t trust role in the pandemic. the largest banks.” He echoed that sentiment but bank CEO Regulators and lawmakers have in a statement to American Banker, saying, acknowledged that banks were well capitalized “For too long, this committee has done the ahead of the coronavirus pandemic that put bidding of Wall Street instead of doing its job of hearings could them in a better position to handle a distressed overseeing the banking industry.” economy. “We are going to take a close look at the risks still get testy “I don’t think there’s any doubt that they’re these megabanks pose to the economy, how in a better place than they were obviously right their influence affects the dignity of work, and By Neil Haggerty after the [2008] crisis,” a former congressional what Congress needs to do to make sure these May 11, 2021 staffer said. banks are fighting systemic racism, inequality, WASHINGTON — The industry’s track Ed Mills, a policy analyst with Raymond and climate change — rather than driving record helping consumers and the economy James, agreed that chief executives can them.” navigate the pandemic, and individual banks’ emphasize that they were part of the solution Waters said in a statement that the House policies addressing climate change and social to the coronavirus pandemic. Financial Services hearing is meant to justice issues, are expected to take center stage “During a significant shock to the system, “scrutinize banks’ response to the pandemic when CEOs from the six largest institutions the banks kind of were able to be leaned upon crisis, their diversity and inclusion results, testify before Congress later this month. to support rather than the area that is being policies and practices, their wage and It has been over two years since lawmakers bailed out,” Mills said. “It is just fundamentally compensation policies, their efforts to reach held a public hearing with big-bank executives. a different place for them.” underserved communities, their response to The world is considerably different since then Still, Democrats have expanded their power climate risks, and other important issues.” thanks to the global COVID-19 crisis and in Washington since the last round of big-bank To some extent, the CEOs could find a sharper focus on racial equity following CEO hearings in 2019, taking control of the themselves caught in the middle of partisan national protests over policing. Senate in addition to the House. bickering between Democrats and Republicans The banking sector is no longer the Some lawmakers have criticized banks over companies’ focus on environmental, punching bag it was for Congress in the wake over allegations that they were providing social and corporate governance. of the 2008 financial crisis. But the CEOs of concierge services to wealthy customers when Just as progressives have applied pressure Citigroup, Wells Fargo, JPMorgan Chase, Bank distributing PPP loans, and concerns continue on banks to institute changes addressing of America, Goldman Sachs and Morgan to grow about whether mortgage servicers will climate change and the racial wealth gap, Stanley are still expected to come under work cooperatively with struggling borrowers Republicans have harshly criticized banks sharp scrutiny on issues such as the Paycheck on workout options as they near the end of when they do take a position on politically Protection Program, whether they have made their forbearance periods. charged issues. Specifically, recent decisions progress on diversity and inclusion goals, and Sen. Sherrod Brown, D-Ohio, and Rep. by certain large institutions to reduce their Republican-criticized decisions by certain Maxine Waters, D-California, who chair the business with disfavored industries like guns banks to curb lending to gun and fossil fuel companies. “This isn’t a beloved industry, and there will Established 1836 One State Street Plaza, 27th floor, New York, NY 10004 always be issues and topics that will provide for Phone 212-803-8200 AmericanBanker.com attacks in public settings like this hearing,” said Isaac Boltansky, director of policy research at Editor in Chief Alan Kline 571.403.3846 Copy Editor Neil Cassidy 212.803.8440 Compass Point Research & Trading. Managing Editor Dean Anason 770.621.9935 The six CEOs — Jane Fraser of Citi, Brian Reporters/Producers Moynihan of BofA, Charlie Scharf of Wells Executive Editor Bonnie McGeer 212.803.8430 Laura Alix 860.836.5431, Kate Berry 562.434.5432 Fargo, Jamie Dimon of JPMorgan Chase, Washington Bureau Chief Joe Adler 571.403.3832 David Solomon of Goldman Sachs and James Executive Editor, Technology Miriam Cross 571.403.3834 Gorman of Morgan Stanley — will testify before Penny Crosman 212.803.8673 Jim Dobbs 605.310.7780 the Senate Banking Committee on May 26 and BankThink Editor Rachel Witkowski 571.403.3857 the House Financial Services Committee on John Heltman 571.403.3847, Allissa Kline 716.243.2679 Community Banking Editor Paul Davis 336.852.9496 May 27. Hannah Lang 571.403.3855 After spending the past year facilitating Contributing Editor Daniel Wolfe 212.803.8397 John Reosti 571.403.3864, Gary Siegel 212.803.1560 government-mandated loan forbearance Digital Managing Editor requests from borrowers facing financial Christopher Wood 212.803.8437 Kevin Wack 626.486.2341 hardships, working with the Small Business For up to date and complete coverage go to AmericanBanker.com WEDNESDAY MAY 12, 2021 AMERICANBANKER.COM PAGE 3 and fossil fuels drew a GOP outcry. narrative to tell about the customers who were The CEOs could also face new pressure to able to keep their businesses open or stay in OCC weigh in on voting reform laws advanced by their homes as a result of the industry’s efforts. states such as Georgia that critics say will make “The banks have been a key source of it difficult for Black voters and other minorities support to the economy during this time,” New OCC to cast ballots. said Kevin Fromer, president and CEO of the “The whole ‘woke CEO’ issue has become a Financial Services Forum.