Pittenger on financial services committee's 2015 priorities

U.S. Rep. Robert Pittenger of Charlotte says examining Dodd-Frank regulations that he argues are hurting the banking industry and U.S. economy will be on the to-do list this year for the House Financial Services Committee.

In a recent interview, the Republican shared with me other top issues he said the committee, on which he sits, will focus on in 2015. The committee oversees various financial industry regulators, including the Federal Reserve, the Federal Deposit Insurance Corp. and the Securities and Exchange Commission. It is chaired by Jeb Hensarling, a Texas Republican who is an outspoken advocate for limited government and who has criticized rules created under the 2010 Dodd-Frank Act, which was designed to prevent another financial crisis.

Pittenger, who is serving his second term in Congress, was reappointed to the committee last month by House Speaker John Boehner.

Pittenger

Here are three things that Pittenger said will be priorities for the committee this year:

1. LOOK TO EASE REGS ON COMMUNITY BANKS
Pittenger said Dodd-Frank regulations are hurting banks of all sizes but community banks are feeling it the worst. He said the committee will seek to find ways to ease the regulatory burden on community banks.

“There is consensus in our committee that we need to give relief to community banks," said Pittenger, who served as board director for Charlotte-based Park Meridian Bank, which was acquired by Regions Financial Corp. in 2001.

Today's "hyper-regulatory environment" is affecting banks large and small, he said, and putting "enormous brakes on our economy" by making it tough for some businesses to get loans. "It’s very hard for a start-up company to find capital."

2. TAKE ANOTHER STAB AT THE PATH ACT
In 2013, the committee approved the Path Act, legislation that would wind down mortgage giants Fannie Mae and Freddie Mac, which the U.S. government seized during the mortgage crisis in 2008. But the act, whose acronym stands for Protecting American Taxpayers and Homeowners, never made it out of Congress.

Pittenger said the committee will review the act. A supporter of the act, Pittenger said he is concerned about the large footprint that Fannie and Freddie now have in the mortgage market, a footprint that he said is restricting private mortgage lending.

"Ninety-eight percent of all the (mortgage) loans today are government," he said. "That means the American taxpayer is behind them all. That’s $6 trillion. There’s another ($1) trillion in (Federal Housing Administration) guarantees. What we’ve done is squeezed the private market out. ... We have ... gotten duped into thinking the government's role is the best way. ...

"The solution is for the government to step back. Make room for the private equity to come in, for private capital. There is no room for the private capital now.”

Pittenger said that he wants the federal government to play a smaller role in the housing market, not withdraw completely. And he said he supports government-backed loans to help first-time homebuyers and low-income families.

3. DETERMINE WHAT TO DO ABOUT THE EXPORT-IMPORT BANK
Pittenger said the committee will take a look at what to do about the Export-Import Bank of the United States, a federal agency that lately has become a hotly debated topic in business and political circles.

The bank's charter is set to expire in June. It is unclear whether Congress will re-authorize it as it has in the past.

Some conservatives have pushed for an end to the bank, which, among other things, provides U.S. companies with loans to fulfill export orders. Pittenger is among conservatives who refer to the bank as a form of "corporate welfare."

Through the bank, the government is “picking and choosing winners and losers," he said.

“You help one company, but then you hurt another one. Boeing gets helped, but it hurts Delta. You’re playing favorites."

Pittenger points out that the bank's services are a taxpayer-funded perk that affects only a small amount of U.S. exports. He said the bank's services aid only 1 percent of U.S. exports but puts taxpayers at risk of a bailout if the loans default.

Just as scrutiny is sometimes placed on the high costs of welfare programs for Americans, scrutiny also should be placed on the "corporate welfare" provided by the Export-Import Bank, he said.

Advocates say the bank is particularly an important resource for small companies and that it is an important tool for expanding sales of U.S. goods and services abroad. In North Carolina, the bank has supported about 190 companies over the past seven years, more than half of them smaller businesses, including textiles and other manufacturers.

Pittenger is not the only member of the committee from the Charlotte area. The others are Rep. Patrick McHenry, of Lincoln County, and Mick Mulvaney, a Republican from Indian Land.

McHenry is the committee's vice chairman.

5 things to know about Ally Financial's new CEO

Detroit-based Ally Financial this week promoted Charlotte executive Jeffrey Brown, 41, to the CEO post to replace Michael Carpenter, who is retiring as chief executive and from the lender's board. Brown's promotion became effective immediately when it was announced this past Monday. He will be tasked with steering the lender nearly a year after it went public and two months after it exited the U.S. Treasury Department's Troubled Asset Relief Program, also known as the federal bailout. This morning, Brown will address investors for the first time as CEO. Here are five things to know about Brown.

1 HE WILL BE BASED IN CHARLOTTE
Even though Ally is headquartered in Detroit, the lender says Brown will call Charlotte home base, although his work-travel schedule will probably take him outside the Queen City frequently. At the time of his promotion, Brown was already based in Charlotte, where he headed Ally's auto finance and insurance business. He will be the company's second chief executive based in Charlotte, after Al de Molina, a former chief financial officer for Bank of America. De Molina resigned from GMAC Financial Services, the name Ally used to go by, in 2009.

Jeffrey Brown

2 HE WAS BANK OF AMERICA'S TREASURER
Brown joined Ally in 2009 as corporate treasurer. Before that, he served as Bank of America's treasurer for a year, during the period when the Charlotte-based bank was buying Merrill Lynch. According to court documents, Brown told Bank of America's chief financial officer at the time that Merrill Lynch's mounting losses should be disclosed to shareholders before they voted on the purchase of the company. Those undisclosed losses have since been the subject of costly settlements for Bank of America.

3 HE CHAIRS A BOARD AT QUEENS UNIVERSITY
Brown chairs the board of advisers for the McColl School of Business at Queens University of Charlotte, the business school named after retired Bank of America CEO Hugh McColl Jr. Brown is also a graduate of the McColl school, from which he earned an executive master's degree in business.

4 HE THINKS NEW LEADERS SHOULD HAVE AN OPEN MIND
In a video interview Queens University published on YouTube in October, Brown said he would advise new leaders to have an open mind, among other things. "Come into the situation with a very open mind," he said. "You've got to be open, willing to understand challenges, opportunities." He also said it's important for leaders to have work-life balance. "Family is very important, and you've got to be willing to balance both the personal demands along with the professional demands."

5 HIS DREAM CAR IS A PORSCHE
That's what he told me in an interview last spring.

Bank of America cuts 202 mortgage jobs in Virginia

Bank of America continues to eliminate jobs in its mortgage division that works with troubled borrowers.

In its latest round of cuts, the Charlotte-based lender confirmed this week it is eliminating 202 jobs in Virginia. No Charlotte-area jobs will be affected by the cuts in Norfolk, a Bank of America spokesperson told me.

The Virginia layoffs are in the bank's Legacy Assets and Servicing operation, which was created in 2011 and handles mortgages that borrowers are struggling to pay. Many of the mortgages that LAS has serviced were acquired by Bank of America in its 2008 purchase of Countrywide Financial Corp.

CEO Brian Moynihan said mortgage staffing was cut last year.

As the economy has improved and people have done a better job of paying their mortgages, Bank of America has been cutting its LAS staffing.

"The number of delinquent mortgage loans we service has decreased to one-seventh of their peak levels," the bank told me in an emailed response. "Due to the dramatically lower demand for these specialized services, we are reducing the size of the operations."

Affected employees are eligible for open positions at the bank, the emailed response says.

In the fourth quarter, the bank reduced its LAS headcount by roughly 1,000 from the third quarter, CEO Brian Moynihan said last month.

The cuts to LAS jobs have also come as Bank of America looks to slash the still-high costs in that operation. Those expenses have been a drag on the bank's earnings.

Last month, the bank's chief financial officer, Bruce Thompson, said the bank is seeking to lower its quarterly LAS costs, excluding litigation expenses, to $800 million by the end of this year, from $1.1 billion in the fourth quarter of 2014.

Past LAS job cuts have impacted the Charlotte area, although the bank will not disclose how many LAS cuts there have been in Charlotte.

Wells Fargo lets customers cash out rewards at ATMs

In an era when banks are investing heavily to enhance their mobile apps, they aren't neglecting a far older piece of technology: the automated teller machine.

Case in point: Wells Fargo announced today that its credit card customers can now use the lender's automated teller machines to redeem the points they earn in the form of cash. San Francisco-based Wells Fargo says it is the first major U.S. financial services provider to give customers that option.

Wells Fargo also announced today that its credit card holders who have accumulated rewards can use the lender's ATMs to apply those rewards to lower their Wells Fargo credit card balances or their balances on Wells Fargo loans, such as home-equity loans.

Photo courtesy of Wells Fargo

So why is Wells Fargo investing in putting more functions in its ATMs in the year 2015?

Because they remain popular with the lender's customers, Wells Fargo spokesman Kristopher Dahl told me.

Wells Fargo has roughly 12,500 ATMs, and customers are using them more and more, he said.

“We’ve seen growth in ATM usage year over year for, I think, five or six years if not longer. That’s both in number of transactions and the average transaction. We don’t think the popularity of ATMs is fading at all.”

Interesting fact: All of Wells Fargo's ATMs are in the U.S., with the exception of a handful in Antarctica, Dahl says.

But that's a story for another day.

Carolina Premier Bank names new CEO

Ballantyne-based Carolina Premier Bank said Tuesday it has named a replacement for its CEO whose sudden resignation last summer surprised its board.

David Barksdale, who most recently served as chief strategy officer for Greensboro-based NewBridge Bank, will officially become Carolina Premier's CEO on Wednesday. Barksdale will also hold the title of president at the community bank.

Carolina Premier's chairman, Charles Davis, said Barksdale will help the bank expand its client base of small and midsize businesses in south Charlotte and elsewhere.

"David's broad range of experience in banking, including mergers and acquisitions, makes him the perfect leader to develop strategy for our next phase of growth," Davis said.

David Barksdale

While at NewBridge, Barksdale helped spearhead NewBridge's acquisition of Security Savings Bank, CapStone Bank and Premier Commercial Bank, according to a press release from NewBridge.

Barksdale's hiring comes after John Kreighbaum's announcement in August that he was stepping down as head of the lender he helped launch in 2007. In an interview at the time, Davis said the resignation surprised the board.

Carolina Premier Bank has assets of $250 million.

The bank has branches in North and South Carolina. Its Premara Bank division has a branch in Washington, D.C.

Carolina Premier Bank also owns the Bank of the Urban League of the Central Carolinas, whose only branch is in Charlotte.

Carolina Premier Bank is a subsidiary of Premara Financial, a bank holding company with headquarters in Washington, D.C.

Paragon Bank wins OK to sell shares over the counter

The parent company of Raleigh-based Paragon Bank said it has won approvals for its shares to be traded over the counter, a move the lender said will make it easier for investors to trade the shares.

Paragon Commercial Corp. announced last week that the Depository Trust Company and Financial Industry Regulatory Authority gave it approval for the shares to trade over the counter under the symbol PBNC.

The decision follows Paragon's 125-for-1 stock split in July. Paragon said the split lowered the share price to a level thought to be more attractive to investors.

“This is an exciting time for Paragon,” CEO Robert Hatley said in a statement. “We can now provide a way for our shareholders to buy and sell Paragon stock in an established market.”

Paragon Bank's Charlotte office at 6337 Morrison Blvd.  

Hatley said shifting to over-the-counter trading will enable anyone to buy shares through a broker, thereby providing the bank’s existing 600 shareholders with greater liquidity and hopefully a better price for their shares when they choose to sell, according to story last July by The (Raleigh) News & Observer.

Here's more from that story:

Paragon’s share price hasn’t recovered as much as it should have since the recession ended, Hatley said, because the shares are so thinly traded and buying and selling shares isn’t easy. Many sellers end up going to the bank to get a list of potential buyers. 

“Now that we’re doing well as a bank and we have climbed out of the recession, we have to pay particular attention to our shareholders,” Hatley said.

Investment firm Raymond James & Associates will become a market maker in the stock. A market maker is a firm that stands ready to buy and sell a certain stock on a regular basis.

Also last week, Paragon recorded fourth-quarter profit of $2.7 million, about double the $1.4 million in profit from the same quarter a year earlier, as it grew deposits and loans.

Paragon has one branch in the Charlotte metropolitan area. That branch is at 6337 Morrison Blvd., where Paragon relocated offices from Piedmont Town Center last year.

Paragon is a private bank focused on businesses and individuals. Recently, the lender has been trying to draw more attention to its private-banking services. As part of that effort, in 2013 it changed the name of its bank from Paragon Commercial Bank to Paragon Bank.

BB&T: Regulators OK branch purchases from Citibank

BB&T Corp. said Monday it has won approval from regulators to buy 41 branches in Texas from Citibank.

The Winston-Salem lender first announced plans to buy the branches in the Dallas, Houston, Midland and Odessa markets in September. Through the deal, BB&T will acquire $2.3 billion in deposits and $87 million in loans.

On Monday, BB&T said the Federal Deposit Insurance Corp. and the North Carolina Office of the Commissioner of Banks have approved the purchase.

The deal boosts BB&T's branches in Texas to 123 and its deposits in the state to $5.3 billion. BB&T also said the deal makes it the 12th-largest bank in Texas.

The purchase is the latest example of BB&T's push into Texas. In a separate deal completed in June, BB&T acquired 21 Citibank branches in the state.