Oct. 1, 2014, 3:58 PM
- The suit - which is seeking class action status - claims Wells Fargo (NYSE:WFC) and Citigroup's (NYSE:C) CitiMortgage violated federal law by falsely notifying credit reporting agencies that thousands of homeowners went through bankruptcies or foreclosures (Experian is also a defendant).
- The lawsuit claims the mistakes were made after mortgage customers of the two banks sold their homes in a short sale, which is very much not a bankruptcy or foreclosure. The banks, says the plaintiffs, nevertheless reported bankruptcies and foreclosures to credit bureaus and correct their mistake when notified.
- In other Citi news, a Delaware court has ordered the bank to turn over records related to its Banamex unit to a Oklahoma pension fund which wants to know what Citi executives knew and when they knew it.
Sep. 25, 2014, 3:09 PM
- Today's resignation of Attorney General Eric Holder could mark the beginning of the end of the Justice Department’s push to hold big banks accountable for their conduct leading up to the financial crisis.
- Several big banks, including Goldman Sachs (GS -2.1%) and Wells Fargo (WFC -1.1%), are still under investigations by the Justice Department for their sale of flawed mortgage securities before 2008, but settlements in those cases are expected to be much smaller than the big sums extracted from Bank of America (BAC -1.8%), JPMorgan Chase (JPM -2%) and Citigroup (C -2.2%).
- Another sign that the big bank cases may be winding down: Tony West, who was Holder’s point man in the bank settlement talks, recently left the Justice Department to join PepsiCo as its general counsel.
Sep. 18, 2014, 12:53 PM
- Banks, insurers, brokerages and anything else starved for yield continue to gain following yesterday's FOMC news. Among the gainers are Bank of America (BAC +1.9%) - which breaks above $17 for the first time since April - Citigroup (C +2.7%), Wells Fargo (WFC +1.1%), PNC (PNC +1.1%), Fifth Third (FITB +1.7%), SunTrust (STI +1.2%), Schwab (SCHW +2.3%), Prudential (PRU +2.5%), and Lincoln National (LNC +2.4%).
- The XLF +1.2%, KBE +1.5%, and KRE +2%.
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, KRS, FINZ
- Lit up bright red is the utility sector (XLU -1%), led by Southern Company (SO -1.1%), Dominion Resources (D -1.2%), Duke Energy (DUK -1.4%), and Pinnacle West (PNW -1.9%).
- Utility ETFs: XLU, IDU, VPU, UPW, RYU, FUTY, PUI, FXU, SDP, PSCU
Sep. 11, 2014, 7:08 PM
- After moving back above the $100/share level, Apple (NASDAQ:AAPL) is back over the $600B mark in market cap, pushing it nearly $200B above Exxon Mobil (NYSE:XOM), the next largest company in the U.S.
- XOM is still valued at more than $400B, but Google (NASDAQ:GOOG) at $397B and Microsoft (NASDAQ:MSFT) - which has surged in 2014, adding $74B in market cap to $386B - are closing the gap.
- Berkshire Hathaway (NYSE:BRK.B) completes the top five with a $339B market cap; no other companies are worth more than $300B.
- Rounding out the top 20 market caps: JNJ, WFC, GE, WMT, CVX, PG, JPM, FB, VZ, IBM, PFE, KO, ORCL, T, MRK.
Sep. 10, 2014, 8:03 AM
- It's my favorite slide, says Wells Fargo (NYSE:WFC) CFO John Shrewsberry, presenting at the Barclays Financial Services Conference. He's referring to page 23 of his presentation which shows Wells' performance across certain key metrics vs. its peers.
- Whether its ROA, ROE, efficiency ratio, or payout ratio, Wells Fargo ranks near the top, whether compared against the TBTFs or against regional players (though USB consistently ranks higher ... kudos).
- As for the proposed tough capital rule which made news yesterday, Shrewsberry says regulators have been talking about it for some time, he believes they're serious, the tougher ratios will come to pass, and his bank is prepared.
- Echoing his CEO John Stumpf from a couple of weeks ago, Shrewsberry says the current mortgage regime - where GSEs threaten to put back to lenders any mortgages which don't perform, no matter how many years have gone by - is not a viable business model for the bank.
Sep. 9, 2014, 12:24 PM
- The Fed intends to impose a capital surcharge on banks tougher than the international standard, according to Fed Governor Daniel Tarullo's prepared remarks for the Senate Banking Committee. Those banks with heavier reliance on short-term funding like overnight loans - i.e. Goldman Sachs (GS -1%) and Morgan Stanley (MS -1.8%) - will likely face even more rigorous requirements.
- Officials haven't yet decided on a number, but reportedly are considering as much as 200 basis points more than the top range of 2.5% of risk-weighted assets agreed to by international regulators.
- What's not yet clear is who would need to raise capital to meet the new, tougher standard.
- Citigroup (C -1%), Bank of America (BAC -0.6%), JPMorgan (JPM -1.3%), Wells Fargo (WFC -0.4%), State Street (STT -1.1%), Bank of New York Mellon (BK -0.9%)
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Sep. 4, 2014, 3:18 AM
- U.S. regulators have approved of the proposed liquidity rules to safeguard banks in case of a financial crunch.
- The rules are requiring large U.S. banks to load up on ultra-safe assets to ensure enough cash and securities to fund their operations for 30 days. Separate liquidity rules for foreign banks will be drawn up at a later date.
- Big banks will need to hold a total of about $2.5T in easy-to-sell assets by 2017, which would result in a $100B shortfall if the threshold applied today.
- Related tickers: JPM, C, BAC, WFC, GS, MS, BK, STT, ZION
- Previously: Bank regulators to vote on new liquidity rules
Sep. 3, 2014, 2:39 AM
- Bank regulators are expected to finalize rules today that would require banks to hold capital against every asset on their books, and approve of a "liquidity-coverage ratio", which would require large banks to load up on ultra-safe assets to fund their operations for 30 days.
- The new rules have Wall Street concerned due to the likely harm to earnings and lending restrictions, although regulators say the policies will create a safer financial system.
- Related tickers: JPM, C, BAC, WFC, GS, MS, BK, STT, ZION
Aug. 28, 2014, 8:04 AM
- Maybe not wanting competition for federal government debt, U.S. regulators are set to approve a final liquidity rule next week reportedly excluding municipal bonds from being among banks' high-quality, highly liquid assets. Treasurys and balances held at the Fed, of course, would be allowed.
- Wells Fargo (NYSE:WFC) - with $47.3B - is the largest holder of municipals among the four largest U.S. banks. It hasn't said how much of that amount is included in its liquidity tally, but did say it was compliant with the international rule and awaiting the final U.S. version.
- Both banks and local governments had naturally argued to include munis in the final rule. "[This] will almost certainly decrease liquidity in asset markets disfavored by the rule," says ABA President Frank Keating.
- Muni ETFs: MUB, PZA, TFI, XMPT, PRB, PVI, VRD, RVNU, FMB
- Financial sector ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, FNCL, FINU, RWW, RYF, FINZ
Aug. 26, 2014, 1:25 PM
- "We're just not going to make those loans and there's going to be a whole bunch of Americans that are underserved in the mortgage market," says Wells Fargo (WFC +0.2%) chief John Stumpf, warning (in an FT interview) the GSEs to stop being so quick to accuse banks of faulty underwriting and then forcing them to repurchase soured loans.
- Fighting the last war, regulators are demanding more rigorous underwriting and tighter lending criteria, but evidence is beginning to grow (especially if you ask banks!) that the pendulum has swung too far.
- Stumpf: "If somebody makes a payment for - let’s say - three years, the risk ought to transfer then to the insurance company ... If you’re going to pick through each one looking for a technical fault not to pay your insurance policy we’re not going to be in that business.”
- Jamie Dimon (JPM +0.8%) last month: "We want to help consumers there, but we can’t do it at great risk to JPMorgan ... We’re going to be very very cautious in that line of business.”
Aug. 21, 2014, 9:26 AM
- "It's definitely politics," Dick Kovacevich says of Bank of America's $16.65B mortgage settlement. "It has nothing to with justice or restitution to the innocent victims. In fact, more of the money is going to the coffers of the states and various departments than the victims."
- Wells Fargo (NYSE:WFC) shareholders who remember the legal onslaught brought upon JPMorgan when Jamie Dimon dared to question U.S. regulators, can be thankful Kovacevich is a former chairman and CEO of their bank.
- Kovacevich: "[Neither] JPMorgan or its employees [nor] Bank of America or its employees did anything wrong here. They just bought companies that did wrong ... Why are we charging the stock holders instead of going after the people who did wrong? Corporations don't engage in criminal behavior. They don't take advantage of innocent people. People do."
Aug. 20, 2014, 9:14 AM
- The Wells Fargo Startup Accelerator will be a semiannual "boot camp" for tech startups in the areas of payments, deposits, fraud, operations, and other financial services areas. Wells Fargo (NYSE:WFC) will make a direct equity investment of $50K to $500K in each selected startup.
- Applications are being accepted through October 1. "We need to expand our access to new ideas at the edges of our industry," says Steve Ellis, head of Wholesale Services at the bank. Three companies have already been selected and funded.
- Press release
Aug. 19, 2014, 3:09 PM
- Known internally as the "Big Hairy Audacious Goal," Wells Fargo (WFC +0.2%) aims to double the size of its asset-management operation to more than $1T of AUM over the next decade through (small) acquisitions and aggressive selling to big-fish investors, reports the WSJ.
- The move comes as other parts of Wells' business - notably mortgages - stagnate (bank revenue fell 1.5% Y/Y in Q2), and major acquisitions are pretty much verboten in today's regulatory environment.
- Investors may be steering away from mutual funds and toward passive products like ETFs and index funds, but it hasn't stopped JPMorgan from racking up $17B of inflows in 2013, and another $17.5B so far this year. Wells, on the other hand, saw $1.6B of outflows in 2013 and another $1B YTD. Goldman Sachs - the only other of U.S. banks ranking among the top 50 asset managers - like JPMorgan, also saw sizable inflows during this period.
Aug. 14, 2014, 11:34 AM
- Loan officers' top commission rate rose to 70 basis points from 63, according to Bloomberg, and the new policy - which took effect on July 1 - also merges two lower tiers into one that pays 65 bps instead of 48 or 58.
- “By adjusting those tiers we created a lot of desire for the loan officers to go out and get that extra production,” says Franklin Codel, who oversees mortgage origination for Wells (WFC +0.7%). “This creates that little extra incentive.”
- With the refinancing boom finished, lenders are trying to find business by funding new home purchases, but those deals usually require more effort than a refi, and the big players are losing talent to smaller firms with better pay packages and shorter turnaround times for closing deals.
Aug. 13, 2014, 3:14 AM
- Bank officials, trade groups and lawmakers are quietly pressing the Federal Reserve for a delay of up to seven years regarding the rule that limits their investments in private-equity and venture-capital funds
- The "Volcker rule," part of the Dodd-Frank legislation, restricts banks' ownership stake in hedge funds and private equity funds, and prohibits banks from making speculative bets with their own money.
- Regulators finalized the rule in December but agreed not to enforce it until 2015.
- Related tickers: JPM, C, BAC, WFC, GS, MS, BK, STT, ZION
Aug. 8, 2014, 3:15 PM
- Notably missing from the list of major banks whose "living wills" were stingingly rebuked by the FDIC and the Fed earlier this week is Wells Fargo (WFC +0.4%), writes the WSJ's David Reilly.
- "Size alone doesn't make a firm a [systemic] threat," says Reilly, noting Wells' $1.6T in assets is nearly double that of Goldman Sachs and Morgan Stanley. Wells, however, was not included int he so-called first-wave banks initially having to submit resolution plans because its non-bank assets aren't greater than $250B.
- "In banking today," writes Reilly, "simplicity is a virtue, no matter your size."
- Previously: Feds reject "living wills" of 11 major lenders
WFC vs. ETF Alternatives
Wells Fargo & Co is a diversified financial services company. It provides retail, corporate and commercial banking services through banking stores and offices, the internet and other distribution channels to individuals, businesses and institutions.
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