Business Briefs: Fed nominees slam Wells Fargo abuses

Business Briefs: Fed nominees slam Wells Fargo abuses

May 16th, 2018 by Staff and Wire Reports in Business Around the Region

Fed nominees slam Wells Fargo abuses

Two Federal Reserve nominees on Tuesday slammed Wells Fargo & Co., for its consumer abuses and indicated that they would have to see significant improvements before voting to lift a cap on the bank's growth.

"Just based upon the news accounts, which of course is all I have to go on, the activities of Wells Fargo in this domain are egregious and unacceptable and I was as shocked as anyone to read about it in the newspaper," said economist Richard Clarida, the nominee to be vice chairman of the Fed, at a Senate Banking Committee hearing.

"If I am confirmed and this matter came before me, as it looks like it would, I would certainly individually want to be absolutely convinced that appropriate steps had been taken and could be verified," he said in response to questioning from Sen. Jon Tester, D-Mont.

The other of President Trump's Fed nominees at the confirmation hearing, Kansas banking regulator Michelle Bowman, said she concurred with Clarida's answer.

"The actions of Wells Fargo were absolutely inappropriate and I would certainly want to make sure that any concerns are addressed by the bank prior to any discussion," she said.

In February, the Fed board voted unanimously to order Wells Fargo to cap its growth at the $1.95 trillion in assets reached at the end of last year and to improve its corporate governance in response to the creation of millions of unauthorized customer accounts and other consumer abuses. The consent order required Wells Fargo's board of directors to submit written plans to improve its oversight and risk management, which they did last month. An independent review by a third-party firm must be completed by Sept. 30 to determine how Wells Fargo is implementing the plans.


Clumpies among best ice cream shops

Clumpies in Chattanooga was named one of the nation's 31 best ice cream shops in America by Thrillist Food.

Thrillist said that Clumpies "still works in small batches, keeping things simple — mostly — with rich and creamy flavors, like chocolate chocolate chunk and butter pecan." Also, Thrillist said, Clumpies has the "not-so-simple with tongue-tingling, Pop Rock-infused Tutti Frutti ice cream."

On Friday, Clumpies will open its new Southside location at 1401 Market St. with an event from 4-9 p.m. Live music begins at 4 p.m. with performances from local artists Tryezz, The Party Truck, Superbody and others. The new shop doors open at 4:30 p.m., and everyone who attends the event receives a free ice cream cone or cup, with limited edition gifts for the first 50 guests in line, according to Clumpies.


Trump reforms IT administration

President Donald Trump is signing an executive order to try to reform the federal government's confounding information technology structure.

The White House says Trump will order agencies to strengthen the roles of their chief information officers, requiring that they report directly to the agency heads.

The order being signed Tuesday was developed by the Office of American Innovation, which is led by Jared Kushner. It is being cast by the White House as an effort to bring private-sector management principles to government. The White House says it is hoping to attract private-sector talent to the empowered roles and to give technical experts oversight of technical decisions.

The White House says the federal government spends roughly $90 billion annually on infrastructure technology, most of which goes to support antiquated systems.


EU gives subsidies to Airbus, WTO says

A World Trade Organization panel ruled Tuesday that the European Union continues to provide illegal subsidies to plane maker Airbus, the latest in a string of tussles between the European manufacturer and U.S. rival Boeing.

The decision by the WTO's appellate body comes as the Trump administration has exerted intense pressure on the Geneva-based organization over what the president alleges is its "unfair" treatment of the U.S.

The appellate body maintained an earlier WTO ruling that EU "launch aid" provided to Airbus had resulted in lost sales for Boeing in the twin-aisle and very-large aircraft markets. The ruling, which rejected some U.S. claims, was a relative U.S. victory on the question of EU aid for two aircraft: Airbus' 350XWB — a rival of Boeing's 787 — and the double-decker A380, which has eclipsed the Boeing 747 as the world's largest commercial passenger plane.

The WTO panel found that Airbus hasn't been in compliance with some of the trade body's rules since 2011. The decision means the U.S. can now ask an arbitrator to determine how much it can retaliate against the European bloc for failing to comply — raising a new question about how much Washington may recover from the EU through retaliatory tariffs.

Boeing alleges the EU has doled out more than $22 billion in illegal subsidies to Airbus, saying in a statement that the stage is now set for "the largest-ever WTO authorization of retaliatory tariffs" as early as next year. The Chicago-based plane maker didn't immediately indicate how it came up with that estimate.

The Trump administration appeared ready to call on the arbitrator to step in.

"This report confirms once and for all that the EU has long ignored WTO rules, and even worse, EU aircraft subsidies have cost American aerospace companies tens of billions of dollars in lost revenue," U.S. Trade Representative Robert Lighthizer said.