Moynihan: Swiss currency decision a boon for BofA

The end of the cap on the Swiss franc is leading to major losses for some banks — but it's been a good thing for Charlotte-based Bank of America, its CEO told CNBC Tuesday.

New York-based Citigroup, Germany-based Deutsche Bank AG and England-based Barclays Plc are said to have suffered $400 million in cumulative losses following the Swiss central bank’s decision to abandon the cap on the franc's value against the euro, Bloomberg reported Monday. Those losses may be followed by others in coming days, according to the news agency.

But Bank of America CEO Brian Moynihan told CNBC that his bank has benefited from the Swiss currency shock that rocked markets and companies last week.

"We made money in the last few days and we helped our customers," Moynihan said in the CNBC interview in Davos, Switzerland, where he's attending the World Economic Forum, the annual gathering of financial and political elites from across the world. "It hasn't been a big impact on us but it caught everybody by surprise."

Here are more excerpts from CNBC's story on the interview:

Moynihan said that his bank made money in the currency markets and trading in the wake of Thursday's announcement that the Swiss franc would no longer be pegged to the euro. 

He said the Swiss National Bank decision was good even though it caused some "dislocation in the system." 

"The volatility helps activity, and if you keep your exposures low, any activity actually helps generate revenue," he said. "We were fine, and we look forward to letting the economy adjust."

Why bankers will be watching the State of the Union

My prediction of the day: More bankers than normal will be tuned in to tonight's State of the Union address.

Here's why:

During the address, President Barack Obama is expected to propose a fee — some people are referring to it as a "bank tax" — on the largest U.S. financial institutions, a group that includes Bank of America and Wells Fargo.

Specifically, the proposal calls for a 0.07 percent fee on the liabilities of the roughly 100 U.S. financial institutions that have assets of more than $50 billion each.

According to a fact sheet released by the Obama administration over the weekend, the fee is designed to make it more costly for the institutions to finance their activities by borrowing heavily. That, in turn, would reduce the probability of major defaults that can ripple through the economy, the administration says.

If the idea sounds familiar, it's because Obama proposed a similar tax in 2010, when the financial crisis was fresher on the minds of many Americans than it is today. That proposal, designed to recover taxpayer funds used to bail out big banks, went nowhere.

To be sure, the odds of this new proposal going anywhere are long. I mean, there's that whole Republican-controlled-Congress variable you've got to factor in to the equation.

And you can bet that the banks, which already lament post-financial crisis regulations as being too costly, will lobby hard against the proposal if it seems to start gaining any traction.

In a Forbes column, Tim Worstall writes that the tax is founded on a good idea. But, he writes, its chances of passing would be improved if it were presented as an premium charged to banks in exchange for an insurance backstop from the federal government.

"It’s not a tax: it’s an insurance premium and if the banks don’t want to pay it they can not have these liabilities and thus not need the insurance," he writes.

"Put that way Obama’s proposal might actually have a chance. ... Call it a change to the FDIC’s insurance premiums and attain the same goal that way."

For another view, here's what investment bank Keefe, Bruyette & Woods said about the fee in a report Monday:

We view this as political posturing and not a serious policy proposal. In our view, chances of this proposal passing are low. 

Instead we think it is part of the administration's effort to draw contrasts with congressional Republicans and make it look like the White House is against Wall Street, while Republicans are defenders of the industry. We view this to energize the President's political base.

And here's what the Financial Services Forum, a Washington, D.C.-based group whose members are the CEOs of 18 large financial services institutions that do business in the U.S., has to say about the proposal. The statement below is from forum President Rob Nichols:

We urge policymakers to reject this tax targeting a small group of companies and instead focus on achieving broad-based, pro-growth tax reform that ensures our economic recovery continues.

As the largest financial institutions continue to simplify, reduce risk and leverage, build capital, provide the credit to keep the economy growing, and make the necessary investments to protect customers from cyber threats, it would be counterproductive to layer on one more way to make it more difficult to achieve those public goals.

McHenry moves up on banking panel, Pittenger reappointed

Rep. Patrick McHenry, of Lincoln County, has been named vice chairman of the House Financial Services Committee, while Rep. Robert Pittenger, of Charlotte, has been reappointed to the committee.

The appointment is a move up on the committee for McHenry, who has served on it since his first term in 2005.

In addition to the vice chairman position, McHenry will be a member of the Capital Markets and Government Sponsored Enterprises Subcommittee and the Oversight and Investigations Subcommittee.

Pittenger was named to the committee in 2012, the year he was elected to his first term. He was sworn in for his second term earlier this month.

Pittenger is also on the Financial Institutions and Consumer Credit Subcommittee and the Monetary Policy and Trade Subcommittee.

The two Republicans are among three Charlotte-area lawmakers on the committee. Mick Mulvaney, a Republican from Indian Land, is the third.

BofA: 800,000 customers signed up for Apple Pay

Bank of America says about 800,000 of its customers have enrolled in Apple Pay, nearly three months after the Charlotte-based bank began making the service available.

The disclosure was tucked inside last week's press release for Bank of America's fourth-quarter earnings. To put that number in some perspective, Bank of America says it has approximately 17 million mobile users, of which 800,000 is only about 5 percent.

Apple's new mobile payments system allows shoppers to use their iPhones to make purchases at participating stores. The system, whose adoption is being closely watched by the payments industry, debuted in October.

Since then, some banks have scrambled to give their customers access to the service, at a time when consumers are expecting to do more and more on their mobile phones. Wells Fargo has even been promoting Apple Pay in advertisements in Charlotte.

(You can see which banks are participating in Apple Pay at this page on Apple's website. The list has only 39 banks, a number that took me by surprise as I was expecting perhaps more by now.)

According to a post earlier this month on appleinsider.com, major credit unions have been slow to sign on with Apple Pay. Of the top 10 banks in the U.S., only two — Bank of New York Mellon and HSBC — haven't joined Apple Pay, according to appleinsider.com.

Bank of America's roll-out of the service hasn't been snag-free.

The same week Apple Pay launched, Bank of America disclosed that some of its customers were double-billed for purchases they made with the service.

Richmond Fed announces appointments to Charlotte branch

The Federal Reserve Bank of Richmond this week announced five appointments to the Charlotte branch's seven-member board of directors. All of the appointments are effective as of the start of this year.

A NEW CHAIR: The branch's board of directors elected Elizabeth Fleming, president of Converse College in Spartanburg, chair of the board. She has served as a director since 2013.

Fleming replaces David Zimmerman, president of Charlotte-based Southern Shows, whose term on the board ended.

NEW DIRECTORS: The Board of Governors of the Federal Reserve and the board of directors of the Federal Reserve Bank of Richmond have also appointed four directors to the Charlotte branch's board. They are:

• Michael Crapps, CEO of Lexington, S.C.-based First Community Bank, for a term of two years.
• Claude Demby, vice president of business development for Durham-based Cree, was re-appointed for a term of three years.
• Paul Szurek, chief financial officer of Asheville-based Biltmore Farms, was re-appointed for a term of three years.
• Mark Williamson, CEO of High Point Bank and Trust, for a term of one year.

DEPARTING DIRECTORS: Two directors are leaving the Charlotte branch's board. They are:

• Robert Hill, CEO of Columbia, S.C.-based South State Corp. and South State Bank. Hill served on the Charlotte branch board since 2011. He's now going to serve a three-year term on the Federal Reserve Bank of Richmond's board. That appointment took effect Jan. 1.
• John Kreighbaum, former CEO of Ballantyne-based Carolina Premier Bank Kreighbaum served on the Charlotte branch's board since 2009. (Kreighbaum announced his resignation from Carolina Premier Bank in August.)

The Charlotte's branch's territory covers North and South Carolina.

BofA moves compliance team after regulator pressure, Reuters reports

Bank of America, under pressure from its U.S. regulator, has shifted its compliance group from its legal department to its risk-oversight group, news agency Reuters reported late Wednesday, citing a source familiar with the matter.

According to Reuters, the move comes as federal regulators have warned big banks to adopt more ethical internal cultures or face being broken up so they are easier to manage.

Officials with the Office of the Comptroller of the Currency, which in September finalized "heightened expectations" guidelines for how big banks manage their risks, discussed the matter with Bank of America last month, according to Reuters.

Not long after that meeting, Bank of America decided to shift its compliance group to its risk-control area, Reuters reported.

Here's an excerpt from the story: 

The OCC pressed for the move out of a belief that the legal group was focused on minimizing the application of rules, the source said.

Bank of America spokesman Dan Frahm said that it had combined compliance and risk to align all risk management oversight under the bank's Chief Risk Officer Geoffrey Greener.

He said it was part of the bank's efforts to simplify how it operates after largely resolving legacy issues related to the financial crisis.

Reuters said its source spoke on condition of anonymity and cited a lack of authorization to speak publicly on the matter.

In April, Bank of America announced it had named Greener, who had been responsible for making sure the Charlotte-based bank met regulatory capital requirements, its new chief risk officer. Greener replaced Chief Risk Officer Terry Laughlin, who was named to a new post, strategic initiatives president.

At the time, the bank said Laughlin, in the new role, will oversee an initiative called Simplify and Improve, which is designed to further simplify the company.

NewDominion hires exec to help it grow in Gaston County

NewDominion Bank has hired its first-ever market executive for Gaston County, as the Charlotte-based lender pushes ahead with its strategy to become a dominant community bank in the metropolitan area.

NewDominion said this week it has hired longtime banker Dan Boyd for the market executive role. Boyd is expected to initially focus on small-business and affluent clients in Gaston County, then later oversee branches when those are added.

The move gives NewDominion, founded in 2005, a presence in a new market at a time when the bank’s growth remains constrained by a consent order state and federal regulators imposed in 2010 after the real estate bubble burst.

NewDominion has been working to satisfy the consent order, which it was placed under after large losses on development loans.

Last year, the bank raised more than $10 million to help meet the order’s requirement that it boost capital levels. NewDominion has said it needs about $10 million in additional capital to fully satisfy the order, which puts certain restrictions on the bank, such as how much loan growth it can have.

Before hiring Boyd, NewDominion did not have immediate plans for a market executive in Gaston County. The bank created the position because it didn’t want to pass up the opportunity to hire a banker of Boyd’s talent and experience, said NewDominion President Marc Bogan.

Boyd has more than 31 years of experience in banking, according to NewDominion. He most recently worked for Charlotte-based community lender Park Sterling Bank as its regional market president for Gaston, Lincoln and Cleveland counties. He also was chief operating officer for Gastonia-based Citizens South Bank, which Park Sterling acquired in 2012.

Being in Gaston County gives NewDominion more balance and diversification in the Charlotte metro area and fits with the bank’s strategy to expand its presence in the region, Bogan said.

Boyd, who also will serve as NewDominion’s commercial relationship manager for Gaston County, will work from NewDominion’s headquarters in midtown Charlotte until the bank opens a loan production office in Gaston County in the second half of this year, Bogan said.

NewDominion is planning to expand to about 10 branches in the metro area, but has said it will need to raise more capital to fulfill those plans. It currently has two branches: one at its headquarters, the other in Iredell County.

Bogan said the bank’s goal is to have 1 percent to 2 percent market share in the Charlotte metro area, which would make it a $2 billion-asset bank.

The privately held bank currently has about $285 million in assets. Its market share in the metro area is 0.12percent, according to the latest federal data from June.