Good morning. Fifth Third Bank was ordered to pay $20 million in fines by the Consumer Financial Protection Bureau, which said the bank forced auto insurance onto customers who were already covered and opened fake accounts in customers’ names.

• The enforcement action: The CFPB ordered the Cincinnati-based bank to pay $5 million for what it described as more than 37,000 illegal car insurance charges, which the agency said resulted in nearly 1,000 families having their vehicles repossessed. The agency also filed a court order requiring the bank to pay a $15 million penalty for the use of “cross-selling” strategies to sell additional products to existing customers.
   
• The allegations: The CFPB said the auto insurance enforcement action covers more than $12.7 million in alleged illegal fees paid between July 2011 and December 2020. More than half were allegedly charged to customers who had either always maintained coverage or obtained new coverage within a month of their previous policy lapsing.
   
• Part of the settlement: Fifth Third also will be required to repay 35,000 customers and will be banned from implementing the employee sales practices that the agency said incentivized the fake account openings.
   
• Bank's response: Susan Zaunbrecher, chief legal officer of Fifth Third, said the bank had “already taken significant action to address these legacy matters, including identifying issues and taking the initiative to set things right.”

Big pharmacy-benefit managers increase drug costs, FTC says.

Firms that manage drug benefits, which promise to keep a lid on high drug costs, instead steer patients away from less expensive medicines and overcharge for cancer therapies, Federal Trade Commission investigators found.

The FTC, in a report released Tuesday, detailed a number of actions that it said large pharmacy-benefit managers use to boost their profits and increase the spending of the health plans and employers that hired them to control costs. The actions can also lead to higher outlays for patients at the pharmacy counter, the agency said.

The findings follow a two-year investigation into the firms and calls from some lawmakers to rein in the firms’ business practices.

• How Drug Middlemen Keep Beating the System

U.S. to give more scrutiny to aluminum, seafood under new anti-forced-labor strategy.

U.S. anti-forced-labor enforcers will give extra scrutiny to aluminum, PVC and seafood, the Department of Homeland Security said, announcing revisions to its strategy for enforcing the Uyghur Forced Labor Prevention Act.

The three sectors were added Tuesday to a list of high-priority enforcement areas, DHS said. Apparel, cotton, silica-based products and tomatoes had previously been designated high-priority areas and will retain that status.

The UFLPA largely bans the import of any goods with ties to Xinjiang, a region in China that is the home of the Uyghur people and other minority groups, but U.S. enforcement strategy has put extra scrutiny on certain sectors.

• A federal watchdog appointed to monitor the United Auto Workers’ internal operations is probing new allegations against President Shawn Fain, including that he made demands to benefit his domestic partner and her sister, according to a court filing Monday.
   
• Banking regulators have made "quite a bit of progress" revising big-bank capital rules and are "very close" to agreeing to the substance of those changes, Fed Chair Jerome Powell said Tuesday.
   
• Microsoft has relinquished its seat as an observer on the board of ChatGPT maker OpenAI, as regulators on both sides of the Atlantic scrutinize the partnership between the tech giant and the artificial-intelligence startup.
   
• Two members of FTX founder Sam Bankman-Fried's inner circle, who cooperated with the government and testified against their former boss, are slated to be sentenced this fall, court filings show.
   
• Lucid Group and Fisker each recalled thousands of recently manufactured electric vehicles over issues that could cause a loss of power.
   
• The Biden administration is seeking to waive a requirement on certain mortgage refinancings.
   
• Hawaii is banning deep-sea mining, as rifts along party lines begin to show in the U.S. over the practice following calls to extract rare minerals from the ocean floor for defense applications.

High-tech U.S. weapons work against Russia—until they don’t. 

The Excalibur artillery round performed wonders when it was introduced into the Ukrainian battlefield in the summer of 2022. Guided by GPS, the shells hit Russian tanks and artillery with surgical precision, as drones overhead filmed the resulting fireballs.

That didn’t last.

Within weeks, the Russian army started to adapt, using its formidable electronic warfare capabilities. It managed to interfere with the GPS guidance and fuzes, so that the shells would either go astray, fail to detonate, or both. By the middle of last year, the M982 Excalibur munitions, developed by RTX and BAE Systems, became essentially useless and are no longer employed, Ukrainian commanders say.

Several other weapons that showcased the West’s technological superiority have encountered a similar fate.

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• Brands and retailers of everything from toys to T-shirts are cutting back shoppers’ choices, reasoning that less means more for the bottom line.
   
• Edmundo González, a little-known 74-year-old retiree is challenging Venezuela’s strongman, President Nicolás Maduro, and leading big in polls. 
   
• In the space of four days, France and the U.K. have defied the theory that European politics is shifting decisively toward the anti-immigration right. Instead, the results of recent elections confirm that the bigger trend is fragmentation.
   
• An airstrike that Israel said targeted a Hamas militant in Gaza killed at least 25 people in a school building sheltering the displaced, Palestinian health officials said, highlighting the war’s relentless toll on civilians in the enclave even as Israeli forces shift focus to the country's border with Lebanon.

U.S., allies issue rare warning on Chinese hacking group.

Australia, the U.S. and six other allies warned that a Chinese state-sponsored hacking group poses a threat to their networks, in an unusual coordinated move by Western governments to call out a global hacking operation they say is directed by Beijing’s intelligence services.

Tuesday’s advisory was a rare instance of Washington’s major allies in the Pacific and elsewhere joining to sound the alarm on China’s cyber activity. Australia led and published the advisory. It was joined by the U.S., U.K., Canada and New Zealand, which along with Australia are part of an intelligence-sharing group of countries known as the Five Eyes. Germany, Japan and South Korea also signed on.

• An effort by some Democrats to seek an alternative to President Biden as the party’s nominee appeared to flag on Tuesday, with lawmakers finding no clear path forward after the president said he was dead set against stepping aside.
   
• The Russian government has launched a “whole-of-government” effort to influence the outcome of the U.S. presidential election and favors Republican candidate Donald Trump in the race, senior U.S. intelligence officials said Tuesday.
   
• A Russian court issued an arrest warrant for Yulia Navalnaya, the widow of fierce Kremlin critic and opposition politician Alexei Navalny who died earlier this year, as the country’s authorities move to silence any whisper of political dissent.
   
• Years of pro-Palestinian campaigning for a global boycott against Israel once found limited support. But in the months since the war in Gaza began, support for the isolation of Israel has grown and widened well beyond Israel’s war effort.

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

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