Regulators Reject ‘Living Wills’ of Five Big U.S. Banks – By Ryan Tracy Updated April 13, 2016 10:48 a.m. ET


Fed, FDIC rebuke bankruptcy plans of J.P. Morgan, Wells Fargo, Bank of America, Bank of New York, State Street

Federal Reserve building in Washington, D.C.

Federal Reserve building in Washington, D.C. Photo: Reuters

WASHINGTON—Regulators ordered five big U.S. banks to make significant revisions to their so-called living wills by Oct. 1 or face potential regulatory sanctions, a stern warning that will fuel criticism the firms are “too big to fail.”

J.P. Morgan Chase & Co., Wells Fargo & Co., Bank of America Corp., Bank of New York Mellon Corp., and State Street Corp. were told by the Federal Reserve and the Federal Deposit Insurance Corp. that the regulators felt their plans for a possible bankruptcy don’t meet the legal standard laid out in the 2010 Dodd-Frank law, which requires that firms have credible plans to go through bankruptcy at no cost to taxpayers

They said those firms had until October to present plans regulators find acceptable, or the agencies or regulators could impose higher capital requirements, restrictions on growth or activities, or other sanctions.

Bank stocks, however, rallied in recent trading, led by J.P. Morgan, which reported smaller-than-expected declines in earnings and revenue for the first quarter despite difficult trading conditions.

The regulators split in their assessments of Goldman Sachs Group Inc. and Morgan Stanley. The FDIC said that Goldman Sachs’s plan didn’t meet the legal standard, while the Fed didn’t give that negative assessment.

The two regulators took the opposite stance on Morgan Stanley. The Fed “identified a deficiency” in Morgan Stanley’s plan that it said didn’t meet the legal standard, but the FDIC didn’t go that far, the agencies said in a news release.

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These are the 4 major things JP Morgan is warning clients about right now – Lianna Brinded April 7, 2016


fortune teller

Miriam Doerr / Shutterstock

There’s a lot to worry about in the markets right now.

You have tumbling oil pricesweak global growth and geo-political issues like Britain’s referendum in June about whether the UK will leave the European Union or not.

However, JP Morgan Asset Management released its quarterly “Guide to the Markets” report and outlined four key things that investors should be concerned about over the next three months.

According to JP Morgan Asset Management’s Chief Market Strategist for Europe, Stephanie Flanders, the world has changed a lot since January and investors need to refocus on the four key concerns above.

“With growth worries lingering on both sides of the Atlantic and the corporate earnings picture still subdued, the tradeoff between risk and reward is much less attractive now than in earlier stages of the cycle, at least for equities,” said Flanders in a statement sent to Business Insider.

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Big Banks Cut Back on Loans to Small Business – By RUTH SIMON Nov. 26, 2015 8:10 p.m. ET


Small businesses get fewer loans from banks, turning to alternative lenders that charge significantly higher rates

Jorge Rodriguez, owner of a Peruvian restaurant in Los Angeles, turned to other lenders when his bank rejected him for a loan.

Jorge Rodriguez, owner of a Peruvian restaurant in Los Angeles, turned to other lenders when his bank rejected him for a loan. Photo: Emily Berl for The Wall Street Journal

 

The biggest banks in the U.S. are making far fewer loans to small businesses than they did a decade ago, ceding market share to alternative lenders that charge significantly higher rates.

Together, 10 of the largest banks issuing small loans to business lent $44.7 billion in 2014, down 38% from a peak of $72.5 billion in 2006, according to an analysis of the banks’ federal regulatory filings.

Through August, banks this year originated 43% of business loans of up to $1 million, down from 58% for all of 2009, according to PayNet Inc., a tracker of small business credit.

The change has opened the door to higher-cost alternatives: Nonbank lenders increased their market share to 26% from 10%, with corporations that lend to their business customers or suppliers making up the balance.

“At least 60% of our borrowers would fall into classic bank lending criteria,” said Rob Frohwein, chief executive of online lender Kabbage Inc., which charges rates that average about 39%, versus the typical 5% to 6% or so that banks charge small firms with good credit.

At some big banks, the credit card has become the default loan source for small businesses. Rates on cards issued to small businesses average 12.85%, according to Creditcards.com.

Small business spending on credit and charge cards will total an estimated $445 billion this year, up from about $230 billion in 2006, according to First Annapolis Consulting Inc., a payments consulting firm.

At J.P. Morgan, the Ink small-business credit card accounts for more than 90% of loans to businesses with $1 million or less in revenue. One reason is that it costs the bank about the same to originate a $100,000 small business loan as it does for one of $1 million, the company said. Credit cards cost a lot less to issue.

“You have to figure out a way to make a $100,000 loan make economic sense,” said a J.P. Morgan spokeswoman, adding that a new, centralized loan operation is supposed to cut the cost and time of originating smaller loans.

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http://www.wsj.com/articles/big-banks-cut-back-on-small-business-1448586637

 

What Fine? Why JPMorgan Is Laughing All the Way to the Bank – Robert Scheer October 22, 2013


While $13 billion isn’t chump change, it represents just half of the megabank’s profits last year.


A sign is seen inside the JP Morgan building on Park Avenue in New York. (AP Photo/Bebeto Matthews)

This story originally appeared at Truthdig. Robert Scheer is the author of The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street (Nation Books).

“I am not a crook,” Jamie Dimon might as well have been insisting in his five telephone calls these past two weeks with US Attorney General Eric Holder, asking that a criminal investigation of JPMorgan Chase be dropped as part of a plea deal on what has turned out to be a $13 billion fine on civil charges.

Nope, said Holder, who finally has found the backbone to stand up to the CEO of the nation’s biggest bank who was also once a strong supporter of the president for whom Holder works. Friday night, Dimon folded and accepted the record-breaking civil settlement while the rare criminal investigation into the allegedly fraudulent claims at the heart of the mortgage based banking securities that have wrecked the economy proceeds.

About the Author

Robert Scheer
Robert Scheer, a contributing editor to The Nation, is editor of Truthdig.com and author of The Great American Stickup…

Although the $13 billion fine on the civil charges, which includes $4 billion in direct assistance to swindled homeowners, mostly in depressed inner city neighborhoods, is to be applauded, it represents about half of the profit JPMorgan garnered last year. The company’s stock price, which has increased by 23 percent since January despite a barrage of crises and fines, has not been damaged by the latest settlement.

But for the bank to admit that it committed a crime, as the Justice Department sought, was thought by Dimon to be far more threatening to JPMorgan’s legal position, and it was only Friday night that he agreed to go for the deal without the bank enjoying immunity on possible criminal charges.

Article continues: http://www.thenation.com/article/176769/what-fine-why-jpmorgan-laughing-all-way-bank

JPMorgan nears $13 billion deal with Justice Department October 19, 2013 4:07PM ET


Settlement would resolve a civil investigation into mortgage securities that the bank sold before the financial crisis JPMorgan
J.P. Morgan CEO Jamie Dimon (front) leaves the U.S. Justice Department after meeting with Attorney General Eric Holder, in Washington September 26, 2013.Gary Cameron/Reuters

JPMorgan Chase & Co has reached a tentative $13 billion agreement with the U.S. Justice Department to settle government agency investigations into bad mortgage loans the bank sold to investors before the financial crisis, a source said on Saturday.

The tentative deal does not release the bank from criminal liability for some of the mortgages it packaged into bonds and sold to investors, a factor that had been a major sticking point in the discussions, the source said.

As part of the deal, the bank will continue to cooperate in criminal inquiries into certain individuals involved in the conduct at issue, the source, who declined to be identified.

Officials at JPMorgan and the Justice Department declined to comment.

Article continues: http://america.aljazeera.com/articles/2013/10/19/jpmorgan-reaches13billiontentativedealwithjusticedeptartment.html