Latest banking news

September 2, 2022 4:03 PM

Scroll through to see what you might have missed this week in banking, payments, credit unions and more.

Fiserv teams up with Rutgers for fintech research

The bank technology provider Fiserv is collaborating with Rutgers University-Newark in New Jersey to create a financial technology innovation center to drive inclusive participation and help prepare students for internships and jobs. Fiserv-RU-N, operating on Rutgers' Newark campus, will drive collaboration between faculty, students and local business owners and provide scholarships over a five-year span while encouraging research in financial technology, cybersecurity and legal and ethical topics. —Kate Fitzgerald

Block's P2P Cash App enables e-commerce payments

Tiffany Hagler-Geard/Bloomberg

Block (formerly Square) is working with major merchants to enable its peer-to-peer payments app to be accepted for e-commerce purchases. The apparel and footwear marketers American Eagle, Aerie, Tommy Hilfiger, Finish Line and JD Sports now accept Cash App for online checkout, marking the first time Block's P2P app can be used for making payments outside of Square's merchant network, according to TechCrunch. Block is offering users a 10% discount for their first purchase with participating merchants using the QR code-base Cash App Pay, which Block introduced last year. — Kate Fitzgerald

Research quantifies need for deposit rate hikes during severe stress

Bart Sadowski/bartsadowski - Fotolia

Banks looking to avoid a run on deposits may need to pay depositors significantly more during times of severe financial stress, according to a new working paper published by the National Bureau of Economic Research. The paper, which examined depositor behavior at a large Greek bank during 2014 and 2015, found withdrawals quadrupled during a shock that increasingly had investors betting that the country would default on its debt obligations. To stem such outflows, banks may need to bump up their deposit rates by at an annual rate of at least 50%, the paper found. The researchers also studied credit default swaps prices for Washington Mutual, which experienced bank runs in 2008 and later filed for bankruptcy. The prices of Washington Mutual's credit default swaps nearly doubled before its first bank run. A similar doubling of CDS prices at another bank elsewhere could lead to 6% of its deposits heading out the door, the researchers wrote. — Polo Rocha

Crypto.com mistakenly transfers $7 million to woman owed $70 refund

Matt Damon.

Chris Ratcliffe/Bloomberg

Crypto.com, the digital currency app that was fronted by Matt Damon in a Super Bowl TV ad, is seeking the return of about A$10.5 million ($7.2 million) it accidentally transferred to a woman in Melbourne.
But some of it has already been spent, including on a A$1.35 million five-bedroom property in suburban Melbourne. The firm discovered during an audit in December that it had made an error in processing a A$100 refund seven months earlier, according to court documents first reported by Channel 7. An account number had been accidentally entered into the payment amount field, according to the court. The state of Victoria's Supreme Court has ordered the home, which was bought by the woman's sister, be sold and the money returned to the company. The case is expected to return to court in October.
Crypto.com didn't immediately comment when contacted by email. — Adam Haigh, Bloomberg News

Scotiabank wants more workers to spend time in office this fall

Ben Nelms/Bloomberg

Bank of Nova Scotia expects more of its employees to return to the office in the months ahead, making it Canada's second major lender to publicly say it's aiming to reduce remote work for its staff. "Scotiabank will be increasing its focus as of September on coming together for certain types of work where there are clear benefits to being there in-person," the bank said in an emailed statement. "This includes collaborating with colleagues, meeting with clients, or work that must meet specific regulatory requirements." The bank said it will continue to provide "choice and flexibility" for work that can be done remotely and that "the number and type of in-person activities employees will participate in will depend on the needs of their business line, functional area, and role." Royal Bank of Canada CEO Dave McKay last month asked employees to come to the office more often, saying that working remotely "can't replicate the energy, spontaneity, big ideas, true sense of belonging and fun" of being together in person. A similar tone is being struck by U.S. financial companies, including Jefferies Financial Group, which is asking staff to come back more often, and Goldman Sachs and Morgan Stanley, which have eased COVID rules to get more workers back into the office. — Kevin Orland, Bloomberg News

Trustmark in Mississippi names audit chief

BillionPhotos.com - stock.adobe.com

Trustmark Corp. in Jackson, Mississippi, is upgrading its internal audit function, naming Bradly Rebel to the newly created position of chief audit executive. The internal audit team at the $17 billion-asset Trustmark had previously been led by a director, internal audit, CEO Duane Dewey said Tuesday in a statement provided to American Banker. "We continuously evaluate the needs within our organization, the ever-changing environment in which financial institutions operate, and the trends within the industry to make changes that position Trustmark for the future," Dewey said. "The adjustment in the title … is in response to such evaluations and our understanding of the importance of the third line of defense in the eyes of the board, management and the regulators." Rebel joins Trustmark from USAA, where he was a vice president and oversaw internal audit programs for many of the San Antonio company's operating units. — John Reosti

FirstBank in Tennessee scores stadium naming rights

FirstBank in Nashville, Tennessee, has signed a 10-year agreement with Vanderbilt University for stadium naming rights. The university's 100-year-old football venue, formerly known as Vanderbilt Stadium, has been renamed FirstBank Stadium starting this season. Under the naming-rights deal, FirstBank has also become the official bank of Vanderbilt Athletics and the Vanderbilt Alumni Association. Financial terms were not disclosed. "Partnering with Vanderbilt reinforces our shared commitment to the idea that world-class excellence can have local roots," FirstBank President and CEO Chris Holmes said Monday in a press release. FirstBank, a $12.6 billion-asset subsidiary of FB Financial, has 81 branches in Tennessee, Kentucky, Alabama and Georgia, as well as a national mortgage business with offices in the Southeast. Vanderbilt opens its home football schedule Saturday with a game against Elon. — Kevin Wack

Ascentra Credit Union hires CFO

Ascentra Credit Union in Bettendorf, Iowa, named Beth Grabin as its next chief financial officer. Grabin, who according to her LinkedIn profile was most recently CFO of BankOrion in Orion, Illinois, succeeded Linda Andry, who had been CFO for the last 15 years and took on the additional titles of president and CEO of the $531 million-asset Ascentra after the death of Dale Owens in 2020. — Frank Gargano

Nebraska bank allows merchants to customize credit cards

A stack of credit cards viewed from the side.

First National Bank of Omaha in Nebraska announced a service enabling merchants to issue customized digital credit cards through embedded links. The credit card-as-a-service model, called Bend FNBO, targets digital-first companies that may design and manage card products and features through a dashboard, using FNBO for underwriting and program management and Marqeta's APIs to embed credit card checkout options within applications. — Kate Fitzgerald

SchoolsFirst Federal Credit Union names financial chief

Michael Faulwell.

Tom Zasadzinski

SchoolsFirst Federal Credit Union in Tustin, California, named a longtime employee, Michael Faulwell, chief financial officer. The $28.1 billion-asset SchoolsFirst said Faulwell, who has been with the credit union since joining in 1993 as division assistant for the finance area, took on the role of CFO Aug. 2. —Frank Gargano