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Judge OKs Wells' suit settlement; Citizens buying mortgage assets for $511M

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Judge OKs Wells' suit settlement; Citizens buying mortgage assets for $511M

In what San Francisco District Judge Vince Chhabria called as "rough justice" and "an imperfect solution," Wells Fargo & Co.'s proposed $142 million settlement for a class-action lawsuit over its fake accounts scandal is set to receive the judge's final approval, Bloomberg News reports. Under the settlement, each customer affected by the scandal will receive an average of $35 from the bank.

In other banking news, Bank of America Corp. Chairman and CEO Brian Moynihan is seeing commercial clients using credit lines and pursuing new loans to finance expansion plans following tax reform. He added that loan growth, coupled with higher interest rates, could boost BofA's net interest income by about $2 billion in 2018 when compared with a year earlier.

Goldman Sachs Group Inc. is developing an app, to be called Jupiter, which aims to help companies assess their susceptibility to activist investors, Bloomberg News reports.

Meanwhile, Joseph Jiampietro, a former managing director at Goldman Sachs, is suing the Federal Reserve for allegedly taking a lot of time to issue a decision over his possible lifetime ban from the banking industry, Reuters reports.

On the deal front, Providence, R.I.-based Citizens Financial Group Inc. is buying the assets of Franklin American Mortgage Co. Inc. of Tennessee for $511 million in cash. The assets have a net book value of around $488 million. Eric Schuppenhauer, the current president of Citizens' Home Mortgage, will lead the combined mortgage business. Scott Tansil, CFO and COO of Franklin American Mortgage, will lead the acquired correspondent and wholesale origination businesses.

Asset management firm Trius Investments Inc. is selling its unit, TRU Investments LLC, to PVR Holdings LLC for $725,000. Trius Investments expects to call a shareholder meeting on or about July 30 to approve the sale.

Santander Consumer USA Holdings Inc. saw its stock decline 6.50% to $17.85 on Wednesday, May 30, following news that the auto lender may lose one of its biggest customers. Bloomberg News, citing unnamed sources familiar with the matter, reported that Fiat Chrysler Automobiles NV is planning to set up its own finance unit in the U.S.

Meanwhile, auto loans for U.S. banks and thrifts increased 2.3% year over year to $450.22 billion during the first quarter, with Ally Financial Inc. leading the group as the largest auto lender. Wells Fargo, meanwhile, went from being the nation's largest auto lender a year ago to the third-largest lender as of March 31.

Legg Mason Inc. has set aside $67 million related to the resolution of a probe on the activities of its former Permal business that managed assets of Libyan governmental entities. The investment management firm said that it expects to shortly complete a settlement with the U.S. Department of Justice and the Securities and Exchange Commission.

And in fintech news, nine credit unions, including Raleigh, N.C.-based Coastal FCU, along with four service providers, have invested in building a fintech company that will enable the credit unions to provide digital financial services. Constellation Digital Partners LLC is already in the heavy software development stage, and is expected to have live users by July or August, CUInsight.com reports.

In other parts of the world

Asia Pacific: Hong Kong OKs virtual banks; Indonesia hikes rate; ICICI Bank to probe CEO

Europe: Deutsche Bank commits to US amid cuts; Italy crisis may delay RBS stake sale

Middle East & Africa: Mizrahi-Union Bank merger blocked; NCB has new CEO; Allianz buys Africa Re stake

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng was up 1.37% to 30,468.56, while the Nikkei 225 rose 0.83% to 22,201.82.

In Europe, around midday, the FTSE 100 rose 0.13% to 7,699.53, and the Euronext 100 gained 0.27% to 1,056.77.

On the macro front

The jobless claims report, the Bureau of Economic Analysis' personal income and outlays report, the Chicago PMI, the pending home sales index, the Energy Information Administration's natural gas and petroleum status reports, the Federal Rreserve balance sheet and the money supply report are due out today.

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