Industry News
Banking
Top stories summarized by our editors
7/30/2021

Robinhood Markets took the unusual step of reserving 35% of its initial public offering shares for retail investors, but only around 20% to 25% have reportedly been allocated, while several posts on the Reddit group that triggered the retail investor frenzy earlier this year actively advised against buying. Shares closed their first day of trading down 8.4%.

Modern Money Murmurs: In these democratized markets, the people have spoken.

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Bloomberg, CNBC, Reuters
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Robinhood, Robinhood Markets
7/30/2021

Across Wall Street and beyond, major banks are raising pay for junior bankers, with at least 12 now starting first-year analysts and associates around $100,000 per year. The firms' hiring minds say the higher baseline is needed to compete against Big Tech in the talent market, and to combat burnout among a cohort beginning their careers in an unprecedentedly challenging time for the industry. Meanwhile, senior executives have not held back from calling out what they see as a harmful break from the pay-for-performance precedent.

eFinancialCareers has put together a handy chart estimating salary levels for a dozen Wall Street investment banks following their recent pay-raise announcements.

7/30/2021

Net investment in US exchange-traded funds has reached $505 billion since the start of January, already exceeding the total for the whole of 2020 by around $1 billion, according to CFRA data. ETFs tracking US-listed and international equities are proving especially popular.

7/30/2021

Fintechs are increasingly turning to celebrity investors, online influencers and outside experts with experience in fashion, luxury and lifestyle campaigns to transform them from unknown finance firms to attractive consumer brands. "When Nike drops a new sneaker or when Spotify launches a new product that's interesting, but when we add an alternative payment method that is not interesting to consumers .... If we can partner with strong influencers we can grasp the attention of audiences whose attention is very hard to grasp," says Klarna marketing chief David Sandstrom.

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Reuters
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Spotify
7/30/2021

The leveraged loan market could end its reliance on Libor as soon as September now that a term version of the Secured Overnight Financing Rate has been endorsed by the Alternative Rates Reference Committee, says Meredith Coffey, executive vice president of research and public policy at the Loan Syndications and Trading Association. The market has been relatively slow in its move away from Libor, but Coffey notes, "Both the borrowers and lenders are very interested in having a rate that is known in advance of the interest period."

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Bloomberg
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Coffey
7/30/2021

A proposed 36% cap on all loan interest rates would leave banks "unable to adequately price for risk in order to viably offer affordable short-term credit," said David Pommerehn, senior vice president and general counsel at the Consumer Bankers Association, in testimony to the Senate banking committee. The cap would also affect reward cards and leave issues hesitant to offer them, Pommerehn testified.

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American Banker
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Senate Banking Committee
7/30/2021

Rep. Blaine Luetkemeyer, R-Mo., has reintroduced a bill that would change the leadership structure at the Consumer Financial Protection Bureau from a single-director to a five-member, bipartisan commission saying the CFPB is "being used as a political football." "Allowing one person to wield such unchecked authority over our economy is irresponsible and verges on negligence, which is precisely why many financial regulators are governed by a commission," Luetkemeyer said.

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ACA International
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CFPB commission, Luetkemeyer
7/30/2021

Sen. Pat Toomey, R-Pa., wants to know more about allegations that the Biden administration forced some Consumer Financial Protection Bureau employees out and replaced them with Biden loyalists. The actions, if verified, "may violate employment and other laws," Toomey said in a letter to Leandra English, chief of staff of the National Economic Council, who is also a former CFPB employee.

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Fox Business
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Sen. Pat Toomey, Toomey
7/30/2021

The Small Business Administration is opening an online portal on Aug. 4 that allows smaller Paycheck Protection Program borrowers to apply directly to the SBA for loan forgiveness. "The creation of a new PPP forgiveness platform from the SBA will allow more small businesses to focus their time and resources on successfully reopening, while also providing lenders the choice to retain oversight of their customer relationships," said Richard Hunt, president and CEO of the Consumer Bankers Association.

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SBA, Richard Hunt
7/30/2021

The New York State Department of Financial Services is asking banks for data regarding the diversity of their senior management and board members. The data would be published in the first quarter of 2022.

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American Banker