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Senators want DOL to probe Wells Fargo; Stumpf resigns from Fed advisory panel


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Commercial Banking: June 22nd Edition

Senators want DOL to probe Wells Fargo; Stumpf resigns from Fed advisory panel

's unauthorized accountscandal continues to be in the spotlight.

A group of senatorsis calling for the Department of Labor to launch an investigation, including a "comprehensive inquiry"into the bank's approach to overtime pay. 

Goldman Sachsanalysts estimate that the beleaguered bank is facing lessthan $50 million in possible damages if it were to reimburse customers withharmed credit scores resulting from its wrongful sales practices, Bloomberg Newsreports.

Meanwhile, Chairmanand CEO John Stumpf resignedyesterday from an advisory council to the Federal Reserve. Wells Fargo spokesmanMark Folk has called Stumpf's resignation a "personaldecision" in an email to Reuters. Same day, five senators, including ElizabethWarren, sent a letter to San Francisco Fed Chairman Roy Vallee asking the boardnotto reappoint Stumpf to the council for a third one-year term in January 2017.

A CNBC reportpoints out that Stumpf is likely to leave the bank in 2018,the year he turns 65, which is the bank's mandatory retirement age for senior executives.But, if he resigns, it would not be an easy task to elevate an insider to the toppost now, an industry source says. Rafferty Capital's Dick Bove suggests that 's corporateand investment bank CEO Daniel Pinto or consumer and community banking CEO GordonSmith could be possible candidates for the CEO role at Wells when Stumpf eitherretires or resigns.

In other Wellsnews, Richard Cooley — who served as its president and CEO in 1966, then chairmanand CEO in 1978 — diedSept. 21. Cooley, 92, retired from the bank in 1982, the Puget Sound Business Journal reports.

In other banking news, JPMorgan, said to be closeto resolving the SEC's probe into its hiring practices in Asia, may be in settlementtalks with other regulators as well. Said to be possibly on the hook for up to $200million in the SEC settlement, The New YorkTimes has added the Fed wants to fine the bank a separate , while the OCC looks to imposeits own penalty.

Separately,JPMorgan, which recently hired its first chiefinformation officer for cloud services, is planning to run proprietaryapplications on the public cloud by the second half of 2017. The bank is also buildinga modern internal cloud called Gaia,American Banker reports.

Southern Pines,N.C.-based First Bancorpunit First Bank terminatedall its existing loss-share agreements with the FDIC ahead of schedule, paying in the process to theagency.

On enforcement actions, Wilmington Savings Fund Society FSB is paying a civil penaltyof $375,000 in connectionwith the bank's registered transfer agent services.

Newark, Ohio-basedPark National Corp. willpay the SEC a civil money penalty of $500,000in connection with the understatement of a previous subsidiary's allowance for loanlosses in 2010 and 2011.

On the M&A front,CVB Financial Corp. ($8.31billion) is acquiringValley Commerce Bancorp($416.1 million) in California for $57.5 million.

is trading technology company REDI Holdings.

is Bats Global Markets Inc., sources told Bloomberg.

Conway, Ark.-basedHome BancShares Inc. disclosedthat earlier this September, it entered into a nonbinding letter of intent to buy a bank holding company based in Florida,with total assets of about $400 million. Home BancShares is offering a purchaseprice of $88.5 million — 20% in cash and 80% in stock.

In the asset management scene, Impartner, a SaaS-basedpartner relationship management solution provider, received $8 million in growth capital financing from ORIX Growth Capitaland Silicon Valley Bank.

Online lender IOU Financial Inc. will begin a restructuringplan this month reflecting its long-term outlook for loan origination growthof 25% to 30% annually.

In fintech news, Apptio Inc., a technologybusiness management software provider, pricedits IPO of 6 million class A common shares at $16.00 per share.

In other parts of the world

Asia-Pacific:FSC to reveal Mega Bank's NY branchaccounts; China to crack down on fake overseas M&A

Middle East& Africa: Egypt, South Africahold rates; Ugandan banks in insurance foray


The day ahead

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

In Asia, the Hang Seng dropped 0.31% to 23,686.48, and the Nikkei225 fell 0.32% to 16,754.02.

In Europe, around midday, the FTSE 100 was up 1.06% to 6,903.52,while the Euronext 100 was down 0.41% to 886.84.

On the macro front

The PMI Manufacturing Index Flash and the Atlanta Fed BusinessInflation Expectations report are due out today.

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