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Wells Fargo has appointed former JPMorgan executive Ed Olebe to lead its credit-card business as part of CEO Charlie Scharf's focus on growing this segment. Olebe will replace Ray Fischer, who is retiring but will provide consulting support during the transition. Scharf aims to expand Wells Fargo's credit-card offerings while evaluating the performance of co-branded programs like Bilt. Despite past regulatory challenges, Scharf sees credit cards as a resilient business for the bank. [Extracted from the article]

Major U.S. banks, including Morgan Stanley, Citi, and Bank of America, have recently withdrawn from the Net-Zero Banking Alliance, a coalition aimed at reducing carbon emissions by businesses. JPMorgan Chase, the last remaining major U.S. bank in the coalition, is also considering withdrawing. The withdrawals are seen as a response to political changes and backlash against environmental, social, and corporate-governance initiatives, with conservative groups pressuring companies to abandon such efforts. The broader climate-focused group, Glasgow Financial Alliance for Net Zero, is now being prioritized by some banks. [Extracted from the article]

Hawaiian Electric Industries has agreed to sell its community bank subsidiary, American Savings Bank, to a group of investors for around $405 million. This deal comes as the company resolves a nearly $2 billion settlement related to the Maui wildfires of 2023, which were caused by a downed power line. The sale of the bank is expected to help Hawaiian Electric strengthen its balance sheet after facing mass lawsuits and contribute to a joint settlement with the state of Hawaii and Maui County. American Savings Bank is one of Hawaii's largest banks, with nearly $10 billion in total assets, and operates around three dozen branches on various Hawaiian islands. [Extracted from the article]

The Federal Deposit Insurance Corp. has suspended pay bonuses for executives under investigation for misconduct following a Wall Street Journal investigation revealing a toxic workplace culture. The FDIC board unanimously approved the proposal to scrap bonuses if allegations are substantiated. The agency has faced criticism for its handling of harassment and discrimination issues, with one-third of employees reporting experiencing or witnessing harassment. The future of the FDIC and other bank regulators is uncertain, with discussions of potentially abolishing the FDIC and moving deposit insurance to the Treasury Department. [Extracted from the article]

Boston-based regional banks Berkshire Hills Bancorp and Brookline Bancorp are in talks to combine, with each having around $12 billion in assets. The potential merger could be finalized as soon as next week, pending successful negotiations. Both banks have exposure to commercial real estate loans, and the move reflects a trend among regional banks to address challenges by partnering up. Bank executives are hopeful that President-elect Donald Trump's administration will be more supportive of mergers in the industry. [Extracted from the article]

The article discusses how President-elect Donald Trump's immigration and trade policies could impact the construction industry, particularly in cities like McKinney, Texas, which heavily rely on immigrant labor and imported materials. The potential deportation of undocumented workers and proposed tariffs on imports from Mexico and Canada could lead to labor shortages, increased construction costs, and ultimately higher home prices. Industry experts are concerned about the impact on the housing market and are preparing for potential challenges, such as worker shortages and rising material costs. [Extracted from the article]

Wells Fargo is planning to sell its San Francisco headquarters at 420 Montgomery St. and shift its power base to the East Coast, with CEO Charlie Scharf and key executives now based in New York. The bank has hired Eastdil Secured as an adviser for the sale and will be moving to a new office at 333 Market St. in San Francisco. This move marks a shift away from San Francisco, where Wells Fargo has had a presence since the 1850s, but the city remains important to the bank. [Extracted from the article]

The article discusses how President-elect Donald Trump plans to shake up Wall Street regulators by potentially replacing SEC Chair Gary Gensler and other agency heads. Trump aims to ease oversight to support U.S. businesses, which could impact regulations on capital requirements, consumer protections, crypto, and bank consolidation. The article highlights potential candidates for key regulatory positions and the expected changes in regulatory approaches under the new administration. [Extracted from the article]

The U.S. housing market is facing challenges, with sales of existing homes on track for the worst two-year period since the mid-1990s. Despite hopes for a recovery in 2024, buyers are holding back due to high home prices and low inventory. The Federal Reserve's efforts to curb inflation have impacted the housing market, with rising mortgage rates contributing to the slowdown. The outlook for a housing market turnaround in 2025 remains uncertain, with factors like interest rates and the presidential election playing a role. [Extracted from the article]

Home builders are offering mortgage buydowns to attract buyers in the face of high home prices and rising mortgage rates. These buydowns have helped boost new home sales, but with rates now dropping, builders may need to consider other strategies like price reductions. While buydowns can be costly for builders, they have been effective in maintaining sales volumes and overall profits. The housing market is in a state of transition, with builders adapting to changing conditions to keep their businesses thriving. [Extracted from the article]

Freddie Mac is ending its blacklist of real-estate broker Meridian Capital Group after the broker made significant changes to its risk and control framework. The move by Freddie Mac could signal stricter requirements for the rest of the industry as regulators crack down on fraud. Meridian will resume business with Freddie Mac in January, more than a year after being banned due to allegations of falsifying client financials. Fannie Mae still has a blacklist on Meridian, but the firm remains hopeful that it will be lifted in the future. Meridian has implemented new measures, including requiring internal approval for certain deals and a credit approval committee for all Fannie and Freddie loans. The agreement with Freddie Mac also includes terms that could slow down the pace of deals in the real-estate brokerage industry. Meridian has also implemented a loan review system and made significant workforce reductions. Fannie Mae and Freddie Mac are conducting a wider probe into fraud allegations in the industry. Meridian has a close relationship with New York Community Bancorp. [Extracted from the article]

Insurance premiums for luxury homes in the United States have seen significant increases, particularly in areas prone to climate disasters. Major insurance companies have pulled back from these high-risk markets, leaving homeowners to seek coverage from specialty insurance companies. The rising costs of insurance, coupled with inflation and increased exposure to natural disasters, have made it difficult for luxury homeowners to sell their properties. Some homeowners have even chosen to drop insurance coverage altogether or self-insure. [Extracted from the article]

Former Trump administration figures and bankers are discussing plans to end U.S. government control of mortgage-finance giants Fannie Mae and Freddie Mac if Trump wins the presidential election. The government's stakes in Fannie and Freddie could be valued at hundreds of billions of dollars, allowing for a potential sale of over $100 billion of securities. The talks aim to ensure that the companies will be well capitalized and not pose a risk to the U.S. housing market. Privatizing Fannie Mae and Freddie Mac is seen as a way to reduce the country's deficit and return money to taxpayers, but opponents argue that it could decrease access to credit for home buyers and increase the risk for taxpayers. [Extracted from the article]

The article examines how credit-builder cards from fintech companies allow users to enhance their credit scores without traditional borrowing. Topics include the unusual credit reporting practices of fintechs, the challenges faced by traditional credit scoring systems, and the mixed responses from credit-reporting agencies.

Fannie Mae and Freddie Mac, government-backed entities that purchase and securitize loans in the U.S. mortgage market, are planning to implement stricter rules for commercial-property lenders and brokers. The move comes as regulators and prosecutors are cracking down on fraud in the multitrillion-dollar market. The new rules would require lenders to independently verify financial information related to borrowers for multifamily properties, confirm a borrower's cash adequacy and source of funds, and complete due diligence on property appraisals. These rules aim to address fraudulent mortgage schemes that have been exposed in recent years. [Extracted from the article]

Vernon Hill, the founder and CEO of Commerce Bank and Metro Bank, has a history of upending traditional banking practices. He kept his banks open on Sundays, threw extravagant parties, and stocked branches with dog treats and "Magic Money Machines." However, Hill's rule-breaking eventually caught up with him. He was fired from Commerce Bank due to conflicts of interest and left Metro Bank after an accounting scandal. His latest project, Republic First Bancorp, was seized by regulators after shareholders ousted Hill. The bank's rapid growth and risky investments led to its collapse. Despite his failures, Hill's influence can still be seen in TD Bank's slogan, "America's Most Convenient Bank." [Extracted from the article]

Regulators have seized Republic First Bancorp, a troubled Philadelphia bank, and sold it to regional lender Fulton Financial. This is the fourth high-profile bank failure since last spring. Republic First faced similar problems as the three regional banks that failed last year, including paper losses on bonds and high proportions of uninsured deposits. Fulton Financial's acquisition of Republic First will nearly double its size in the Philadelphia market. The failure of Republic First is not expected to spark a wider crisis in confidence, but regional banks are still on shaky ground due to higher interest rates and potential regulatory requirements. [Extracted from the article]

Regional banks in the United States are experiencing a decline in profits due to higher interest rates. The plain-vanilla business model of these banks, which involves taking deposits and making loans, has become less profitable as they face pressure to pay higher interest rates on deposits. In the first quarter, profit fell by more than a fifth at U.S. Bancorp, Truist Financial, M&T Bank, Citizens Financial Group, KeyCorp, and Huntington Bancshares. However, some regional banks have seen a rebound in fee businesses such as wealth management and investment banking. The Federal Reserve's indication of keeping rates high for longer poses a challenge for banks without much diversity and scale. Additionally, banks are under scrutiny due to high-profile failures and potential stricter capital rules. Many regional and community banks also hold high concentrations of commercial real estate, which could lead to losses if valuations decline. Despite recent stock market gains, bank stocks have not fully recovered from previous selloffs. [Extracted from the article]

Mortgage rates have risen to nearly 7%, which is a significant threshold that could impact the housing market's recovery. The increase in rates is due to shifts in expectations for the Federal Reserve. Higher mortgage rates make homeownership more difficult for many Americans, as even a small difference in interest rates can add significant costs over the life of a loan. The recent uptick in rates is not as sharp as last year, but it still poses challenges for buyers and sellers. [Extracted from the article]

Bank stocks, particularly New York Community Bancorp (NYCB), experienced a decline after signs of trouble at the lender and a smaller peer raised concerns about the stability of the sector. NYCB's credit rating was downgraded to junk by Fitch Ratings and Moody's Investors Service due to its exposure to commercial real estate loans that have fallen in value. Additionally, a deal to support Republic First Bancorp, another regional bank, collapsed after the bank revealed internal control issues. While regional banks have managed to avoid a full-blown crisis, they still face challenges such as high interest rates and upcoming commercial real estate loan maturities. [Extracted from the article]

New York Community Bancorp (NYCB) has faced significant challenges after making transformative acquisitions and crossing the $100 billion asset threshold. The bank reported a loss for the fourth quarter, reduced its dividend, and highlighted concerns about its property loan books. NYCB is considering selling assets and shrinking the bank to address these issues. While there are fears about the bank's stability, analysts and bankers believe that there is little evidence of an acute crisis, and the problems faced by NYCB are not systemic. NYCB customers are closely monitoring the situation, with some considering alternative banking options. [Extracted from the article]

Shares of New York Community Bancorp (NYCB) plunged 38% after the company reported a fourth-quarter loss and reduced its dividend. NYCB swung to a loss of $252 million, compared to a profit of $172 million in the same period the previous year. The bank's loan losses increased, and it set aside more money for potential future losses. The decline in NYCB's stock price raised concerns among investors, reminiscent of the bank crisis in early 2023 when several banks failed. NYCB's total assets surpassed $100 billion after acquiring the assets of Signature Bank and Flagstar Bancorp. The company's CEO stated that they are adjusting to the regulatory demands of being a large bank. [Extracted from the article]

Regional banks in the United States, including KeyCorp, Citizens Financial Group, PNC Financial Services Group, and Truist Financial, experienced a significant drop in profits in the fourth quarter of 2023. Midsize players like Comerica and Zions Bancorporation also struggled. The Federal Reserve's potential rate cuts offer some relief, but uncertainty surrounding the rate outlook has made it difficult for banks to forecast their net interest income for the year. Regional banks have faced challenges in absorbing the costs of higher interest rates and have had to shrink themselves back to health. [Extracted from the article]

Big banks are set to report their fourth-quarter earnings, which will show how their customers fared in a harsher interest rate environment. Despite higher borrowing costs, households have continued to spend and borrow, and businesses have hired at a healthy pace. The largest banks, including JPMorgan Chase, Wells Fargo, Bank of America, and Citigroup, are expected to collectively post over $21 billion in profits for the fourth quarter, although this is a more than 20% decline from the previous year. The banks will also face special fees related to the failures of Silicon Valley Bank and Signature Bank. [Extracted from the article]

Rural community banks in America are facing a banking crisis due to their large bond portfolios. Industry Bancshares, the parent company of six banks in eastern Texas, is currently underwater by over $75 million because of its investments in long-term bonds. The Federal Reserve's rapid interest rate increases have caused the value of these bonds to plummet. Many community banks, like Industry, are struggling to protect themselves from interest rate risks and are facing losses that have alarmed depositors, investors, and regulators. These banks typically focus on local lending and have been hit hard by the pandemic, as loan growth has been slow and deposits have been invested in securities that have lost value. Regulators are now closely scrutinizing banks with high concentrations of securities. Industry Bancshares is considering strategic options, including a capital raise and potential mergers or shrinking its balance sheet. The potential decline of community banks would have significant impacts on local economies, as they often provide essential credit and sponsorships for local events. [Extracted from the article]

The article discusses how the Federal Reserve's rate hikes have made it more difficult for Americans to buy homes. Homeownership has become increasingly unaffordable, with high home prices and rising mortgage rates causing many potential buyers to give up. Despite high mortgage rates, home prices continue to rise due to a lack of available homes. First-time and young buyers are particularly affected, with rents also increasing faster than the cost of buying a home. The article concludes by noting that traditional strategies, such as adjustable-rate mortgages, are no longer as effective in mitigating the impact of rising rates. [Extracted from the article]

Comerica, a Texas-based bank, is under investigation by regulators after a technology upgrade in May resulted in errors on transactions for trust clients. The bank's wealth-management unit was left short millions of dollars, and executives warned that they may have to write down any funds they couldn't recover. The issues primarily affected clients whose trust assets are administered by Comerica and managed by third parties. The bank has experienced difficulties in pulling in reimbursements, leading to a shortfall in its own funds. Comerica has halted wealth-management fees for some accounts and is concerned about potential litigation from trust clients. [Extracted from the article]

Citizens Financial Group, a regional lender based in Providence, Rhode Island, has launched a new private bank for wealthy customers, taking inspiration from the collapsed First Republic Bank. Citizens is spending millions of dollars to hire former First Republic staffers in an effort to crack the market for high-net-worth individuals. The bank aims to replicate the customer service and successful aspects of First Republic, which attracted wealthy customers with bureaucracy-free banking and low rates on loans. However, Citizens faces challenges in building this business, including higher interest rates and potential tougher regulations. [Extracted from the article]

Regions Financial, a bank based in Alabama, is taking steps to prepare for the impact of extreme weather events on its lending operations. The bank has a dedicated team, known as the "SWAT Team" or the "Weather Team," that monitors weather forecasts and sends out early-morning emails to colleagues to prepare for disasters. The bank has also changed its loan underwriting and monitoring processes to consider climate change risks, such as flood exposure and the availability of property insurance. While Regions has not made a pledge to become carbon neutral, it is taking steps to mitigate climate-related risks. [Extracted from the article]

Republic First Bancorp, a Philadelphia-based bank with $6 billion in assets, has reached a deal with an investor group to receive a $35 million infusion aimed at stabilizing its finances. The bank is also in talks to raise an additional $40 million to $65 million from other investors. Republic First has faced challenges including paper losses on bonds, large amounts of uninsured deposits, and a failed attempt to raise capital. While the investor group's investment will strengthen the bank's balance sheet, it will only partially address the bank's capital shortfall. [Extracted from the article]

Regional banks such as KeyCorp, Citizens, and Truist have reported significant profit declines in the third quarter. In response, these banks have announced plans to downsize and become smaller, simpler companies. The Federal Reserve's rapid interest rate increases have made it more expensive for banks to obtain and retain deposits, leading to higher interest expenses. Smaller banks are also facing potential trouble due to consumer strain, high costs, and concentrations of commercial real estate. Some banks have already begun merging, and there is concern about the overall health of regional banks. [Extracted from the article]

Investors are after yields of over 6% on newly originated mortgage-backed securities, compared with around 4.5% a year ago and less than 2% two years ago, according to Mark Tecotzky, vice chairman and head of credit strategies at Connecticut-based Ellington Management Group. Keywords: wsjfinance; wsjfinance-ws; Banking; Mortgage Banks/Real Estate Credit; Banking/Credit; Financial Services; Corporate Funding; Corporate Debt Instruments; Corporate Actions; Corporate/Industrial News EN wsjfinance wsjfinance-ws Banking Mortgage Banks/Real Estate Credit Banking/Credit Financial Services Corporate Funding Corporate Debt Instruments Corporate Actions Corporate/Industrial News N.PAG N.PAG 1 08/28/23 20230825 NES 230825 Borrowing costs have risen more than the benchmark Treasury yields they track, pushing up interest rates for buyers Mortgage rates pushed to a fresh two-decade high this week, making it tougher for the housing market to emerge from its stark slowdown. [Extracted from the article]

The article reports on the fatal stabbing of Lieutenant Alison Russo-Elling, a veteran paramedic of the New York City Emergency Medical Service, by 34-year old Peter Zisopoulos in Astoria neighborhood in Queens, New York City. It describes the attack on Russo-Elling based on a surveillance video obtained from the site of the crime scene.

Photo illustration: Madeline Marshall In the first quarter, community banks lost about $60 billion in deposits that were over the deposit insurance limit, the FDIC said. First-quarter profit at OceanFirst fell by nearly half from the previous quarter, in part because the bank paid more in interest on customer deposits and loans largely from the FHLB. When the Fed started raising interest rates to fight inflation, the conventional wisdom was that it would be a boon for Main Street banks. [Extracted from the article]