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BofA faces suit; FDIC chair eyes community bank deposits; CFPB settles with BSI

Minneapolis-based U.S. Bancorp filed a lawsuit against Bank of America Corp. alleging breach of contract pertaining to mortgage-backed securities, the Charlotte Business Journal reports. According to the complaint, First Franklin Financial Corp., which was acquired by Merrill Lynch & Co. Inc. in 2006, sold defective mortgages to a residential mortgage-backed securities trust in 2007, but failed to make disclosures to U.S. Bancorp, which was acting as trustee. BofA had acquired Merrill Lynch in 2008. U.S. Bancorp is seeking compensation for the defective loans and the alleged breach of contract, according to the report.

Also, Troy, Mich.-based Flagstar Bank FSB is suing the head of the now-defunct Live Well Financial Inc. for unpaid loans worth over $82 million, the Richmond Times-Dispatch reports. Flagstar seeks to have Live Well founder and CEO Michael Hild pay for the amount covering a commercial loan signed in 2017 and a warehouse loan signed in 2016, the report says, citing the federal suit Flagstar filed in the Michigan court.

Florida CFO Jimmy Patronis asked Ronald Rubin, commissioner of Florida's Office of Financial Regulation, to resign after a report by the Office of Inspector General's detailed sexual harassment allegations against him, American Banker reports. Rubin denied the allegations and countered that the CFO is punishing him for refusing to appoint an unqualified candidate identified by the CFO to the role of general counsel for the banking commission. Rubin was put on administrative leave on May 11 following the sexual harassment claim against him.

The Consumer Financial Protection Bureau established that Servis One Inc., conducting business under BSI Financial Services, violated several acts through the provision of incomplete or inaccurate information while handling mortgage servicing transfers, among other things. The regulator also found that the loan servicing providing firm gave inaccurate information about mortgage loans to its consumers. The company has been ordered to pay a civil money penalty of $200,000 and restitution of at least $36,500.

In M&A news, Mitchell, S.D.-based CorTrust Bank NA is acquiring Minnetonka, Minn.-based First Minnesota Bank, according to the (Sioux Falls, S.D.) Argus Leader. The transaction is expected to close by Sept. 30. CorTrust Bank had $886.2 million in assets, while First Minnesota Bank had assets of $347.3 million as of March 31, per S&P Global Market Intelligence data.

Jelena McWilliams, chair of the Federal Deposit Insurance Corp., said community banks should be cognizant of how they are managing deposit portfolios since the competitive environment for deposits is pushing up interest rates on certificates of deposits, savings accounts and other products and services.

San Francisco-based startup Brex Inc. is close to acquiring new funding that will boost its valuation to more than $2 billion, sources told Bloomberg News. Brex, which provides corporate credit cards to tech companies, raised funds at a $1.1 billion valuation in 2018.

In other parts of the world

Asia Pacific: ANZ Bank New Zealand names interim CEO; Bandhan Bank to open 16 branches

Europe: UK slams EU plan on share trade; funds eye Sabadell unit; Amundi's Germany plans

Middle East & Africa: Hapoalim Q1 profit up; Israel faces snap election; Liberia revamps central bank

Now featured on S&P Global Market Intelligence

International expansion next for Global Payments after $22B merger: The $22.14 billion deal indicates a global land grab is on in the merchant acquiring industry as markets open their borders to international companies, making scale more important than ever for firms that process payments for retailers and merchants.

Politics likely to derail Senate Republicans' CECL-delay bill: A recently introduced bill that would effectively delay the implementation of the current expected credit loss accounting standard is expected to sputter given the caustic party-line divide in Washington, political analysts said.

The day ahead

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

In Asia, Hang Seng lost 0.44% to 27,114.88, while the Nikkei 225 dropped 0.29% to 20,942.53.

In Europe, around midday, the FTSE 100 rose 0.51% to 7,221.79, and the Euronext 100 was up 0.47% to 1,027.79.

On the macro front

The GDP report, the international trade in goods report, the jobless claims report, the corporate profits report, the retail inventories [Advance] report, the wholesale inventories [Advance] report, the pending home sales index, the EIA natural gas report, the EIA petroleum status report, the Fed balance sheet and the money supply report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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