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The Morning Risk Report: U.S. Signals Friendly Stance Toward Fintech Start-ups |
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An advertisement for SoFi, a fintech personal finance startup, in New York promotes refinancing student loans, is seen on Jan. 20, 2017. PHOTO: Richard B. Levine/Zuma Press
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The Trump administration embraced an emerging corner of the financial sector on Tuesday, telling companies that offer new ways to bank and invest that the federal government wants to help them grow, WSJ's Ryan Tracy reports.
The Treasury Department in a report recommended industry-friendly policy changes for the sector be adopted by regulators that oversee the financial industry.
Among the recommendations: a “sandbox” giving regulatory financial relief to startups; a national bank charter for fintech firms; rescinding the payday-lending rule; and taking a fresh look at rules governing fintech investments by banks.
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Fintech firms should be able to have a “single process” to get permits for experimenting without violating U.S. rules—a so-called sandbox, the report said. Federal and state regulators, and possibly Congress, would have to work together to make this happen.
The Office of the Comptroller of the Currency, which oversees nationally chartered banks, should “move forward with prudent and carefully considered applications” from fintech companies that want a federal charter that would allow them to operate across state lines, the report said.
The Obama administration was moving toward taking such applications from start-up payments companies, lenders and others but that work stalled while Trump-appointed officials reviewed the initiative.
The Treasury report is the last in a four-part series setting out the Trump administration’s financial regulatory agenda, following reports on banks and credit unions, capital markets, and asset management and insurance.
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| Exclusive from Risk & Compliance Journal |
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U.S. puts sanctions on alleged Pakistani terrorists. The U.S. on Tuesday imposed sanctions on three Pakistani men who allegedly facilitated fundraising for, or are members of, a terror group.
Abdul Rehman al-Dakhil is a longtime member of the U.S.-blacklisted group Lashkar y-Tayyiba, and is currently a senior commander of the group, the U.S. State Department said. His work for the group dates back to the 1990s, according to the U.S.
Lashkar y-Tayyiba was blacklisted by the U.S. in 2001, and was added to a United Nations sanctions list in 2005.
Also Tuesday, the Treasury Department announced sanctions on two financial facilitators for Lashkar y-Tayyiba, saying the two men collected, transported and distributed funds to the group's members, including by paying salaries. -- Samuel Rubenfeld
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As Washington and Beijing struggle to break a trade impasse, some administration advisers are urging President Trump to raise the stakes with a sharp increase in the level of tariffs proposed for $200 billion in Chinese imports targeted for punitive measures, WSJ reports. Global shares declined on the news. Beijing threatened to retaliate over what it called blackmail.
China appointed a new director for its powerful internet regulator, elevating an official seen as an associate of President Xi Jinping to a post with censorship responsibilities and huge sway over tech companies, WSJ reports. Zhuang Rongwen was named to head the Cyberspace Administration of China on Tuesday, the regulator said in a brief statement Wednesday. He had been a deputy director since 2015.
Navient Corp., one of the largest servicers of student loans, is preparing for a new accounting rule that requires lenders to project losses on bad loans quicker than current norms allow, according to the company’s finance chief. The new rule, known as the credit expected credit loss standard, or CECL, is slated to go into effect in 2020 for publicly traded banks and 2021 for privately held ones, CFO Journal reports.
South Korean authorities launched a probe into a cryptocurrency start-up that allegedly raised tens of millions of dollars on claims it discovered sunken Russian treasures, FT reports.
An EU national is challenging HM Revenue & Customs over new rules that require tax authorities around the world to automatically exchange information on millions of their citizens who live abroad, FT reports. The EU citizen alleges that the reporting standard made her information vulnerable to a cyberattack or an accidental leak.
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Facebook Inc. said it discovered a new group of accounts that engaged in coordinated political agitation and misinformation efforts ahead of November’s midterm elections, WSJ reports, in an echo of Russian activities on the platform during the 2016 U.S. presidential campaign. The revelation shows how Facebook continues to struggle with preventing misuse of its platform despite waves of criticism and the company’s repeated pledges to address the problem.
Volkswagen AG took another big earnings hit Wednesday from its diesel-emissions crisis and warned that new testing standards pose a further risk for the world’s largest car maker. The German car making giant said it incurred €1.6 billion ($1.87 billion) in higher second-quarter costs from fines and legal fees linked to the emissions-cheating scandal, which already has led to more than $32 billion in penalties, fines and compensation for customers.
Multinational companies say billions of dollars in revenue and profit are at risk from recent currency fluctuations triggered by escalating tensions between the U.S. and its trading partners, WSJ reports.
A federal judge in Washington state issued a temporary restraining order Tuesday to block blueprints for 3-D-printed guns from being distributed online, WSJ reports. The ruling came in response to legal action Monday by eight states seeking to block a pro-gun group, Defense Distributed, from posting the files.
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Cody Wilson, the founder of Defense Distributed, shows a plastic handgun made on a 3D-printer at his home in Austin, Texas, in this May 10, 2013, file photo. PHOTO: JAY JANNER/AUSTIN AMERICAN-STATESMAN
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A leadership fight has broken out over one of the world’s most secretive and profitable high-frequency trading firms, WSJ reports, pitting a beret-wearing mathematician against a former business partner and a Ukrainian physicist. The dispute in recent weeks has spilled into lawsuits that, for the first time, shed light on the inner workings of Quantlab Financial LLC, a Houston-based high-frequency-trading firm. The colorful personalities that have run Quantlab for two decades are now sparring over control of it.
CBS Corp. alleged that its vice chairman, Shari Redstone, pushed to remove a board member earlier this year after he recorded a meeting with her father, CBS Chairman Emeritus Sumner Redstone, to document his medical condition. The claim came in a court filing Tuesday as part of CBS’s legal battle for control of the broadcaster with the Redstone family’s National Amusements Inc., a holding company that has a nearly 80% voting stake, WSJ reports.
A short seller who made a splash earlier this year for attacking luggage maker Samsonite International SA has a new target on his radar, WSJ reports. Soren Aandahl, who runs Texas activist investment fund Blue Orca Capital LLC, said he is shorting, or betting against, GDS Holdings Ltd. a provider of data-center infrastructure and services in China.
Growing pressure to improve returns and corporate governance is straining the decades-old ownership ties that bind many public companies together in Japan, the world’s third-largest economy, WSJ reports. As Japan’s population dwindles, its companies are being forced to change how they attract job seekers from an ever-shrinking labor pool, Reuters reports.
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Corporate America’s love affair with all things blockchain may be cooling, Bloomberg reports.
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Follow the WSJ Risk & Compliance Team on Twitter: @WSJRisk, @srubenfeld, @BenDiPietro1 and @LikelyMara.
Send complaints, comments and kudos to Ben DiPietro at ben.dipietro@wsj.com.
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