General
Florida Financial Regulator Has History of Alleged Misconduct Lydia Beyoud, Bloomberg Law
A pattern of allegations of inappropriate behavior toward female colleagues and inconsistencies regarding his employment history are raising questions about how well Florida officials vetted Ronald Rubin before naming him the state’s chief financial services regulator. After less than three months in the job, Rubin was placed on administrative leave May 10 by Florida Chief Financial Officer Jimmy Patronis following allegations of workplace sexual harassment.
He’s One of the Biggest Backers of Trump’s Push to Protect American Steel. And He’s Canadian. Eric Lipton, The New York Times
Barry Zekelman, a Canadian billionaire whose business is mostly in the United States, is not a guy who likes to lose — or go slow. On days off, he likes to race his Ferrari 488 sports cars. Or he might climb aboard his Gulfstream IV jet to fly to the Bahamas to visit his 121-foot superyacht, which he named “Man of Steel” in a nod to his role as chief executive of Zekelman Industries, North America’s largest steel-tube manufacturer.
China Warns About ‘Unwavering Resolve’ to Fight U.S. ‘Bullying’ Natalia Drozdiak et al., Bloomberg
China could retaliate against the U.S. after President Donald Trump blacklisted Huawei Technologies Co., the Chinese ambassador to the European Union said. Trump upped the ante in his trade dispute with China last week, announcing moves to curb Huawei’s business that are starting to have ramifications for other companies around the world.
Pence calls for USMCA approval ‘this summer’ Doug Palmer, Politico
Vice President Mike Pence on Monday called upon Congress to pass the new trade agreement with Canada and Mexico by the end of this summer, putting pressure on House Democrats now holding up a vote on the pact. “The president has done his job. It’s time for the Congress to do its job and pass the USMCA this summer,” Pence said in a speech in Jacksonville, Fla., using the abbreviation for the new U.S.-Mexico-Canada Agreement.
Democrats Cozy Up to Wall Street While Shunning Corporate Cash Max Abelson, Bloomberg Businessweek
In February, Pete Buttigieg stepped into the Manhattan office of Wall Street veteran Charles Myers to talk politics over deli sandwiches. Citigroup Inc. Managing Director Yann Coatanlem hosted a fundraiser in March for Kamala Harris at his Fifth Avenue apartment, where she shook the paw of the banker’s labradoodle.
Bloomberg’s economic forum invited to Beijing Andrew Edgecliffe-Johnson, Financial Times
Michael Bloomberg’s New Economy Forum, a conference launched by the billionaire to debate how the shifting balance of power between the US and China affects business, has been invited to Beijing, months after the trade war between the two countries forced the inaugural event to relocate to Singapore. “The fact the meeting is taking place in Beijing is a positive sign and a sign China remains interested in a dialogue,” said Henry Kissinger, an adviser to the event.
U.S. Futures, Europe Stocks Advance as Bonds Drift: Markets Wrap Yakob Peterseil, Bloomberg
U.S. equity futures climbed with European stocks following a mixed session in Asia on Tuesday as the trade-war driven turbulence that has dominated markets this month showed few signs of abating. The dollar strengthened while Treasuries were steady.
Banking
Fingerprints and finances: next Wells Fargo CEO will be under regulatory microscope Pete Schroeder, Reuters
From submitting their fingerprints to giving up their tax records, Wells Fargo & Co’s next chief executive will go through a vetting process that could rival that of top U.S. government officials. Comptroller of the Currency Joseph Otting said last week he would invoke a little-known law to review Wells Fargo’s board pick to replace Tim Sloan, who in March became the second CEO to leave the bank amid a series of customer abuse scandals.
The One Place in Banking That Needs More Men Jeremy Kahn and Lananh Nguyen, Bloomberg
Finance is a male-dominated realm. But there’s one corner where women are everywhere: the virtual world of digital assistants.
Pastor sues Wells Fargo, says negligence led to forgery charge Penny Crosman, American Banker
A New Jersey pastor has filed a lawsuit accusing Wells Fargo of erroneously linking him to a case of check forgery, an action that led to his interrogation and arrest as well as his photo being posted on a state police Facebook site. The Rev. Jeff Edwards, who has led United Methodist Church of Parsippany for 29 years, is seeking compensatory and punitive damages as well as reimbursement of legal fees and costs, according to his suit filed in March in the Superior Court of New Jersey.
Goldman moves beyond Big Four by selecting Mazars as auditor Madison Marriage and Stephen Morris, Financial Times
Goldman Sachs has selected Mazars to audit its European operation, marking the first time the US bank has gone beyond a “Big Four” accounting firm to vet its books. The decision is a coup for Mazars, the UK’s eighth-largest auditor by revenues, which has struggled to break into Britain’s prestigious FTSE 350 audit market.
North Carolina has first new bank since the financial crisis Paul Davis, American Banker
American Bank & Trust in Monroe, N.C., has become the first bank to open in North Carolina since the financial crisis. The bank opened on Monday after organizers raised $22.5 million. The group plans to keep selling shares of common stock through June 30.
States could solve beneficial ownership issue: OCC’s Otting Kate Berry, American Banker
Banks face increased challenges in complying with anti-money-laundering laws that could be mitigated if states mandated the collection of accurate information on owners when a corporation first registers as an LLC, Comptroller of the Currency Joseph Otting said Monday. Otting called for the creation of a database that would allow financial institutions to obtain and validate information on the beneficial ownership of shell corporations.
Financial Products and Investments
Inquiries Into Reckless Loans to Taxi Drivers Ordered by State Attorney General and Mayor Brian M. Rosenthal, The New York Times
The New York attorney general’s office said Monday it had opened an inquiry into more than a decade of lending practices that left thousands of immigrant taxi drivers in crushing debt, while Mayor Bill de Blasio ordered a separate investigation into the brokers who helped arrange the loans. The efforts marked the government’s first steps toward addressing a crisis that has engulfed the city’s yellow cab industry.
Housing and GSEs
Fannie, Freddie need to raise capital before privatization: FHFA’s Calabria Richard Leong, Reuters
The Trump administration is pressing to release the two government-sponsored enterprises (GSEs) from federal control, which went into effect in October 2008 in the wake of heavy losses that Fannie and Freddie suffered on home loans that soured during the subprime mortgages crisis. “It was insufficient capital that triggered the conservatorship, and it’s going to be sufficient capital that triggers an exit,” said Mark Calabria, director of the Federal Housing Finance Agency.
Fannie Mae and Freddie Mac are refinancing fewer mortgages than at any point since the crisis Ben Lane, HousingWire
Recently released data from the Federal Reserve Bank of New York’s Center for Microeconomic Data revealed that the first quarter of this year was the mortgage business’ worst quarter in more than four years, but a deeper dive into the data shows that on the refinance side of things, it may have been the worst quarter since the financial crisis. The Fed report, which looks at mortgage originations as appearances of new mortgage balances on consumer credit reports and includes refinances, showed that the first quarter had the lowest dollar amount of mortgage originations in any quarter since the third quarter of 2014.
Taxes
Tuesday Could Be the Beginning of the End of Philadelphia’s Soda Tax Andrew Jacobs, The New York Times
Jeff Foster, 58, a retired security guard with an abiding sweet tooth and a generous paunch, scowled as he considered the cornucopia of refrigerated soft drinks at his local convenience store. “It’s just not right,” he said, complaining that prices on his favorite brands had nearly doubled since a tax on sweetened beverages went into effect here two years ago.
Blue States Warned of a SALT Apocalypse. It Hasn’t Happened Martin Z Braun, Bloomberg
To listen to New York Governor Andrew Cuomo, the 2017 Republican tax overhaul that limited state and local deductions to $10,000 was a devastating blow. The rich would flee, the middle class would suffer and blue state budgets would bleed.
U.S. Business Contributes Smallest Share of Taxes in Generation Alexandre Tanzi, Bloomberg
U.S. corporations are contributing the smallest share of federal tax revenue in a generation. That’s one of the findings in the Data Book for 2018, released by the Internal Revenue Service on Monday.
Financial Technology
Computer Models Won’t Beat the Stock Market Any Time Soon Richard Dewey, Bloomberg Businessweek
We’ve come to expect a lot from intelligent machines: Spotify picks songs for your playlist. Your phone has learned to recognize your face, even on a bad hair day.
Community banks in the US could get a technology boost from German fintech Raisin John Detrixhe, Quartz
A German fintech started a service in 2013 that helps Europeans shuffle their money around the continent to the highest-yielding savings account. Now, the company plans to bring its technology to the US within the next six to 12 months, which could provide a boost to community banks by connecting them to a bigger pool of savers around the country.
Opinions, Editorials and Perspectives
It’s Time to Hold American Elites Accountable for Their Abuses Rahm Emanuel, The Atlantic
Normally, a scandal centered on how rich parents used bribes to win their children’s admittance into elite colleges wouldn’t play so heavily in the national news. No one much cared when Donald Trump promised large donations as his children enrolled at Penn.
On Trade, Where Are My Fellow Democrats? Don Bonker, The Wall Street Journal
President Trump’s latest round of punishing tariffs on China, with threats of more to come, will have a devastating effect on the world’s two largest economies. His actions are contrary to the Republican Party’s usual doctrine of free trade, and they have alarmed business leaders, farmers and the American sectors and regions that will most acutely feel the pain of the tariff increases and China’s targeted retaliation.
The Economy Is Strong. So Why Do So Many Americans Still Feel at Risk? Jacob S. Hacker, The New York Times
President Trump is running for re-election on the strength of the economy, and why not? The unemployment rate is lower than it’s been in five decades.
Research Reports
How Has Germany’s Economy Been Affected by the Recent Surge in Immigration? Matthew Higgins and Thomas Klitgaard, Liberty Street Economics
Germany emerged as a leading destination for immigration around 2011, as the country’s labor market improved while unemployment climbed elsewhere in the European Union. A second wave began in 2015, with refugees from the Middle East adding to already heavy inflows from Eastern Europe.
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