Banking

Chopra, Gensler nominations move forward; Goldman’s $10B investment in Black women

Wall Street Journal

Taking the pledge

Goldman Sachs said it plans to “invest $10 billion over the next decade in businesses and organizations that benefit Black women. The commitment is meant to channel capital and resources toward a group that has historically faced challenges accessing them. The bank also will commit $100 million to philanthropy.”

The bank “plans to invest in housing, healthcare and other programs with the ultimate goal of narrowing the wealth gap between Black women and others. Investments could include, for example, a company that reskills home-care workers, an industry that employs many Black women; a community-development financial institution in the Deep South; and a health center in a predominantly Black community of New Orleans.”

Moving forward

Rohit Chopra’s nomination to head the Consumer Financial Protection Bureau moved forward to a full Senate vote following a 12-12 tie in the Senate Banking Committee. “A tie vote can advance to the Senate floor via a motion by the majority leader.” Gary Gensler, President Biden’s nominee to head the Securities and Exchange Commission, passed the committee by a 14-10 vote.

“Based on Commissioner Chopra’s record, I’m deeply concerned that he’d return the CFPB to the hyperactive, lawbreaking, antibusiness, unaccountable agency it was under the Obama administration,” said Sen. Pat Toomey of Pennsylvania, the senior Republican on the committee, who led all Republicans in voting against Chopra.

“The CFPB has been a flashpoint between Republicans and Democrats on Capitol Hill. Set up during the Obama administration in response to lending practices that contributed to the 2008 financial crisis, the bureau has been accused by Republicans and some in the financial-services industry of regulatory overreach.”

Committee Chairman Sherrod Brown, D-Ohio, praised Chopra and Gensler for their commitment to help workers and families while Sen. Toomey opposed both nominations, American Banker reported.

Refi madness

Lenders “churned out more mortgages than ever in 2020, fueled by about $2.8 trillion in refis.” American homeowners “cashed out $152.7 billion in home equity last year, a 42% increase from 2019 and the most since 2007,” according to Freddie Mac.

Financial Times

Stepping down

Austrian financier Alexander Schütz, “who came under pressure earlier this year over communications with the boss of disgraced payments company Wirecard, is leaving Deutsche Bank’s supervisory board. The bank earlier this year publicly rebuked Schütz for an email he sent to Wirecard chief executive Markus Braun in February 2019” in which he urged Braun “to do [the Financial Times] in!!” for its reporting on Wirecard. Deutsche called Schütz’s comments “unacceptable,” after which Schütz apologized.

Climate commitment

HSBC “has fended off a shareholder revolt ahead of its annual meeting” after it “pledged to overhaul its financing of coal and committing to set targets to reduce its exposure to carbon-intensive assets. Under the HSBC board-backed resolution, the bank will commit to setting short and medium-term science-based targets to align its financing of companies with the Paris Agreement, which seeks to limit global warming. This will start with oil, gas, power and utilities companies in 2021, before being expanded to other sectors in 2022.”

Washington Post

Confirmed

The Senate voted 66-34 to confirm Rep. Marcia L. Fudge, D-Ohio, as secretary of housing and urban development, “making her the first Black woman to lead the agency in more than four decades.”

“Fudge, 68, had said during her January confirmation hearing that her priorities include ending discriminatory housing practices as part of Biden’s focus on dismantling systemic racial injustice and boosting Black homeownership. As HUD secretary, Fudge is expected to reinstate a 2013 rule aimed at barring the housing industry from enacting policies that, although seemingly race-neutral, have an adverse effect on Black and Latino Americans. The agency also is expected to reinstate another Obama-era regulation requiring communities to identify and address barriers to racial integration and disparities in access to transportation, jobs and good schools — or risk losing federal funding.”

SLR debate

“As the March 31 end of the waiver to the supplementary leverage ratio (SLR) approaches, many banks are arguing that the waiver should be extended, while bank critics, including Senator Elizabeth Warren, question why the break should be left in place while banks are managing to return tens of billions to shareholders through buybacks and dividends.” A Bloomberg analysis explores the debate.

Elsewhere

Targeting zero

Bank of Montreal said Wednesday “it is targeting net zero emissions in its lending portfolio by 2050 and will double its sustainable financing commitment to C$300 billion ($237 billion) by 2025,” Reuters reported. “BMO’s Global Asset Management unit will also aim to have only net zero assets under advisement by 2050. The bank also said it is creating a climate institute to find solutions to climate change.”

“The move follows similar commitments by rivals Royal Bank of Canada and Toronto-Dominion Bank.”

Quotable

“We’re going to create a new model about what inclusive growth looks like. The work we do here, we think will drive progress for everyone.” — Margaret Anadu, global head of sustainability and impact in the asset management unit of Goldman Sachs, which is investing $10 billion over the next decade in businesses and organizations that benefit Black women.



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