The shaky global economic recovery and the threat of extreme market volatility leave the world's central banks with little or no margin for error, Bank of England Governor Mark Carney said at a joint meeting of the International Monetary Fund and the World Bank in Lima, Peru. "This is a pretty unforgiving environment" and "not a type of economy in which one can make mistakes," he said. IMF Managing Director Christine Lagarde said the world is faced with "massive" challenges.
Bond investor Bill Gross says in a lawsuit filed in California that he was forced out of his job as head of Pacific Investment Management because a "cabal" of executives wanted the multimillion-dollar bonus he was on track to receive for 2014 for themselves. His complaint asks for $200 million from PIMCO and parent company Allianz.
Treasury Secretary Jack Lew says it's time for Congress to deal with International Monetary Fund reforms and US government debt limits. "Congress needs to act or we could be faced with a crisis," Lew said. "We have the capacity, but do we have the will?"
The Consumer Financial Protection Bureau reportedly is investigating student-loan servicing at Wells Fargo. Such probes typically focus on payment processing and repayment issues.
The city of Los Angeles has agreed to drop its lawsuit against Citigroup for alleged discriminatory mortgage lending. No reason was given for the dismissal of the case. Citigroup is glad to see the matter closed, said Mark Rodgers, a bank spokesman. The city has similar suits pending against Bank of America and Wells Fargo.
The Consumer Financial Protection Bureau’s proposal for regulation of prepaid accounts is too burdensome and would prevent providers from "meeting the growing and diverse consumer demand for innovative prepaid products," 43 House and Senate members said in a letter. The lawmakers who signed the letter, all but one Republicans, included senior members of the House Financial Services Committee.
Hillary Clinton has suggested that if she is elected to the White House, she will support the Labor Department's proposed fiduciary rule. Her proposal for reform of the financial system mentions the rule favorably, although it doesn't go into detail.
Marketplace lenders have grown rapidly, but banks are making moves to compete for borrowers, writes John Carney. The competition may heat up as lending margins narrow, and banks could disrupt online lenders rather than vice versa.
The Consumer Financial Protection Bureau on Thursday released a bulletin warning mortgage lenders to avoid using marketing services agreements that could be construed as payments for referrals.
Kevin Stiroh will be the next Federal Reserve Bank of New York supervisory chief, replacing Sarah Dahlgren. Stiroh has spent the past 15 years at the New York Fed and has no Wall Street ties, a factor that was key in the regulator's search.
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