Weekly Topic Update (Feb 18 to Feb 24)

Weekly Briefing

Sen. Warren questions Wells Fargo over 'error-riddled' refund efforts


Wells Fargo’s failed efforts to repay customers hurt by improper fees on car loans and home mortgages are coming under congressional scrutiny. In a Feb. 13 letter to Wells Fargo CEO Timothy Sloan, Democratic Senator Elizabeth Warren posed a dozen questions about the bank’s troubled customer-remediation programs, requesting a response by Feb. 28. She also gave the bank that deadline to meet its vow to take care of the customers who were victims of the several scandals plaguing the company.

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Source: Wall Street Journal

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U.S. Bank to pay $613M for faulty money laundering program

Law360 (sub. req.) • AML BSA CTF • Industry News

Minneapolis-based U.S. Bank, the national banking subsidiary of U.S. Bancorp, will pay a total of $613 million, including $528 million in a deferred prosecution agreement with the U.S. attorney in Manhattan. The U.S. attorney charged the bank with two felony violations of the Bank Secrecy Act for failing to bolster its anti-money laundering efforts and attempting to hide that from regulators.

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House passes changes to CFPB, SEC disclosure rules

Law360 (sub. req.) • Mortgage Lending • Industry News • Regulation

The House passed a package of bills altering CFPB mortgage disclosure rules, SEC oversight rules and companies’ disclosure requirements, with backers saying the legislation would help encourage growth in the markets. Passing 271-145 and now headed over to the Senate, the TRID Improvement Act includes the Fostering Innovation Act, Protection of Source Code Act and National Securities Exchange Regulatory Parity Act. Supporters claim the changes would help companies accrue capital faster and make the markets more efficient, while opponents criticize provisions that would change the standards allowing the agency to keep a close eye on algorithmic trading.

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Pew releases recommendations to make small-dollar loans profitable for banks and safe for consumers

American Banker • Lending • Industry News • Whitepaper

The Pew Charitable Trusts, seeking a compromise that benefits both depository institutions and cash-strapped consumers, released a set of ten recommended standards for banks and credit unions that want to offer small-dollar loans to subprime customers. Pew favors installment loans that include multiple payments over lump-sum products that often lead to a debt cycle. Among its proposed criteria: payments should not exceed 5% of the borrower’s paycheck; annual percentage rates should be below 100%; and the loans should be available quickly through digital banking channels. According to Pew, the proposal could save U.S. consumers $10 billion annually in fees, while also allowing banks and credit unions to earn sufficient profits.

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Amazon partners with Bank of America for its lending program

CNBC • Lending • Industry News

Amazon reportedly partnered with Bank of America Merrill Lynch to provide loans to merchants. Amazon Lending is an invitation-only program that makes loans of $1,000 to $750,000 for companies that may have difficulty landing traditional business loans. Partnering with Bank of America allows Amazon to reduce its risk and access capital specifically to provide credit to more merchants so they can acquire inventory. Amazon Lending's total loan balance growth grew only slightly last year after almost doubling in 2016.

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