Banking Dive

During Truist's third-quarter earnings call Friday morning, TD Cowen analyst Steven Alexopoulos referred to non-depository financial institution lending concerns as the “topic du jour” for quarterly bank earnings calls. “Generalists listening to this conversation are dumping out of regional banks on fears that that portfolio is loaded with cockroaches," he told Truist executives, invoking JPMorganChase CEO Jamie Dimon's "cockroach" comment. A number of banks have recently noted exposure to bankrupt subprime auto lender Tricolor or auto parts maker First Brands. And this week, Zions Bancorporation and Western Alliance Bank this week disclosed bad loans linked to allegations of fraud. Truist and Fifth Third Bank executives were among the bank leaders this week seeking to soothe concerns around credit contagion and emphasize their vigilance in underwriting and maintaining diverse lending portfolios. https://lnkd.in/eh9i_Qep

To date, Citi has “has fulfilled certain obligations” under the consent order, including paying a $24.5 million civil money penalty, making redress payments and taking steps to “implement injunctive relief to prevent future violations,” according to the Consumer Financial Protection Bureau. https://lnkd.in/e2zhg7Ch

Maybe the reason the Consumer Financial Protection Bureau seemingly didn’t get much RIF attention last week is that Acting Director Russ Vought already considers it dead. “We don’t have anyone working there except our Republican appointees and a few career [employees] that are doing statutory responsibilities while we close down the agency,” Vought said Wednesday on The Charlie Kirk Show. “We want to put it out – and we will be successful probably within the next two, three months.” https://lnkd.in/etpF63qh

Citi, Wells Fargo, JPMorganChase and Goldman Sachs led an industrywide AI push that has seeped into back-office operations, in dark corners containing legacy systems and as part of client-facing experiences. https://lnkd.in/e7sJpmkp

The branches BMO is selling to First Citizens Bank are in North Dakota, South Dakota, Wyoming, Nebraska, Kansas, Missouri, Oklahoma and Idaho, as well as some in western Minnesota, one in eastern Oregon, and one in southern Illinois. Under the terms of the deal, First Citizens will assume about $5.7 billion in deposits and purchase about $1.1 billion in loans for a net deposit premium of approximately 5% paid on closing. https://lnkd.in/eY8UCy_4

Bank of America and BNY are facing class-action lawsuits, filed this week by an alleged victim of disgraced financier and late convicted sex offender Jeffrey Epstein. The anonymous plaintiff, Jane Doe, seeks unspecified damages and alleges Epstein’s trafficking operation wouldn’t have existed without banks providing special treatment to him and co-conspirators. https://lnkd.in/eBYp65ss

The urgent need for tailoring in bank regulation and supervision was a consistent theme Thursday during the community bank-focused Federal Reserve Board conference that featured appearances by Treasury Secretary Scott Bessent, Blackstone CEO Stephen Schwarzman and others. It’s also been a frequent talking point of Michelle Bowman, the Fed’s vice chair for supervision, as Trump-appointed regulators have pledged to bring relief to smaller banks in particular. Tailoring “is not new, but it has simply been ignored in recent years,” Bowman asserted in her closing remarks at Thursday’s conference.  https://lnkd.in/eszPymSV

Citi on Thursday rejected mining and transportation conglomerate Grupo México’s offer to buy Banamex for roughly $9.3 billion. https://lnkd.in/e352ycNX

As the financial sector harnesses generative AI’s capacity to speed and simplify processes, Bank of America has leaned on sustained research and technology investments to rapidly scale multiple use cases. https://lnkd.in/eA2jb_RV

Banks are spending billions on fraud detection and mitigation, and tracking down fraudsters can be difficult — but if lenders can do it, customer retention is their reward. That’s one of the major takeaways from recent research co-authored by Vamsi Kanuri, marketing professor at the University of Notre Dame’s Mendoza College of Business. https://lnkd.in/eZ7rgDfw