Latest news with #deregulation
ABC News
8 hours ago
- Business
- ABC News
Ai Group boss says the industrial relations conversation is far from over as the government tries to lift productivity
Ai Group chief executive Innes Willox says the government's IR policies are inhibiting productivity. He also wants energy to cost less, and broad agreement on how to achieve de-regulation.
Japan Times
11 hours ago
- Automotive
- Japan Times
Scandals put Japanese nonlife insurers' business model at a crossroads
The nonlife insurance industry stands at a crossroads as it confronts the need to overhaul its long-standing business model. For nearly three decades, since the revision of the insurance business law in 1996, the sector has undergone steady deregulation. A series of recent scandals, however, has brought to light deeply entrenched and problematic business practices within the industry. As Japan moves toward an era of fairer competition, nonlife insurers now face pressure to reform their business structures and adapt to new market expectations. Before the law was revised, insurance premiums for major products, such as fire and automobile insurance, were set uniformly for all companies under government regulation. The system was intended to prevent excessive competition and potential bankruptcies. As a result, nonlife insurers were unable to differentiate their services through pricing. In this environment, companies instead focused on building stronger relationships with customers, sales agents and other business partners to remain competitive. Even after legal reforms allowed greater flexibility in product design and premium setting, restrictive business practices persisted in various forms, continuing to distort healthy competition. In June 2023, it was discovered that four major nonlife insurers had colluded to prearrange premiums when bidding for joint insurance contracts, in which a company secures coverage from multiple nonlife insurers. The scandal exposed a widespread industry practice in which the number of shares held in a corporate client played a key role in securing and retaining insurance contracts. It also revealed that insurers frequently provided excessive services, such as purchasing products from their clients, in an effort to win or maintain business. The following month, former Bigmotor, a major used automobile dealer and repair service provider, was found to have engaged in fraudulent insurance claims. In exchange for being assigned auto insurance contracts with buyers of secondhand vehicles sold at Bigmotor, nonlife insurers provided the company with excessive favors. They included referring vehicles involved in accidents to Bigmotor for repairs, purchasing vehicles with their employees' own money and assisting at Bigmotor's sales events. "Since insurance products lack patent protection and can easily be replicated, a unique and inefficient competitive structure has developed in the industry, making it difficult to eliminate the detrimental practices of competing in areas beyond core insurance offerings," said Satoru Komiya, chairman of Tokio Marine Holdings, during his term as president. In the wake of recent scandals, Japan's Financial Services Agency has repeatedly imposed administrative penalties on major nonlife insurance companies. These measures are intended to push them away from a relationship-dependent business model, which has become fertile ground for misconduct. In response to shifting market conditions, MS&AD Insurance Group Holdings is considering the dissolution of its dual-company structure for nonlife insurance operations. The holding company is discussing plans to merge its two key subsidiaries — Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance — which have operated separately since the 2010 business integration that formed MS&AD. Commenting on the proposed realignment, an industry observer noted that with competition intensifying, "the scale of business will become increasingly important in various respects." Japan's insurance market is contracting, driven largely by the declining national population. Furthermore, increasingly severe natural disasters and more complex risk factors are placing additional pressure on insurers. To remain competitive in this challenging environment, MS&AD President Shinichiro Funabiki stresses the importance of "strengthening capital so that a single company can take on large risks." Major nonlife insurers are seeking to differentiate themselves in their core businesses. They are developing innovative products that leverage artificial intelligence and big data, capitalizing on their economies of scale to gain an edge in the market. To strengthen the price competitiveness of their products, expand overseas operations and invest in new fields, companies will need significant capital, a reallocation of human resources and enhanced business efficiency. Tokio Marine aims to "strengthen its ability to provide solutions in areas such as disaster preparedness and mitigation that other nonlife insurers cannot easily replicate," Komiya said. More than a quarter century after the insurance industry was liberalized through legislative reforms, Japanese nonlife insurance companies are finally taking meaningful steps toward genuine competition.
Yahoo
a day ago
- Business
- Yahoo
Why so many companies are trying to become banks
Several companies, including General Motors (GM), Stellantis (STLA), and Circle (CRCL), are starting to apply for US banking charters, a move that actual banks are not happy about. Yahoo Finance Senior Reporter David Hollerith joins Market Catalysts with Julie Hyman to report the details. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. Several companies that are not in the banking business are suddenly applying for new US banking charters, including General Motors, the Lantis and Circle. They aren't looking to become full service banks though. Joining me now to explain, banking reporter David Haller. So what's going on? Why are these companies doing this? Yeah, well, so, uh, the most obvious answer is with the Trump administration, which has signaled and begun begun making kind of a broader deregulatory push in financial services. Um, there have been a lot more, uh, charter applications. And the interesting thing is that, uh, non-bank companies wanting to get bank charters isn't exactly a new thing, but, you know, all these new charters kind of signals that they see a higher chance of getting approval, um, with the Trump administration now in power. And the other side of this too is we just had this stable coin bill that passed. And so a lot of the crypto firms, um, that issue stable coins will now be regulated by, uh, the OCC, a federal bank regulator. So they are kind of seeing this as also like a way to get credibility, check the box with the bill. And also too banks will now begin to, um, issue stable coins. We are imagining. That's what some banks have have signaled. We'll kind of see how that plays out. And if these firms want to compete against them, there's sort of a credibility edge that they kind of need to with institutional clients to have a bank charter. So, um, kind of two separate, uh, themes here with like commercial companies trying to do it. It's interesting to see to see the all of those melding of the lines between the the organizations. But okay, so what what does a bank charter do for a company? For example, like a General Motors, what would it be able to do with a bank charter? Yeah, so that's the other thing is that we're mainly seeing these new companies apply for two kind of, I guess you would call them novel bank charters. They're not looking to become full-service banks. So what they want to do is they want to either go for the FDIC's Industrial Loan Charter, which is kind of what these automakers are looking at. And then also all the stable coin companies are looking at the National Trust Bank Charter. So they're not trying to do, um, effectively the same level regulation that, um, bigger banks have to do. And so a lot of the banking industry is actually kind of upset about this. Interesting. Why are they upset about this? Just more competition? Yeah, it's more competition and in some ways they feel like, uh, this is an attempt by, you know, non-bank companies to sort of, uh, do a little bit of regulatory arbitrage. Um, and so we kind of have to see how that plays out. And obviously just by having these, uh, more novel charters, it's not really a bad thing in itself, at least, um, they've argued. Um, but, you know, we have to see if whether or not they can still kind of do the same things as other banks. And so that's kind of been the whole trend here. And it's kind of around more competition in general, which could be good for consumers obviously. And we'll see if the regulators successfully regulate this stuff too, I guess, is another part of the question. Anyway, really interesting story, Dave. Thank you so much for bringing it to us. Appreciate it. Related Videos Mag 7 earnings: Why Alphabet is the 'bigger story' — not Tesla Travel stock earnings: What to watch for Markets are 'getting close' to being priced to perfection Navitas skyrockets, Dollar Tree upgraded, Sarepta & FDA Sign in to access your portfolio
Forbes
a day ago
- Business
- Forbes
Why JPMorgan Is Hitting Fintechs With Stunning New Fees For Data Access
Under CEO Jamie Dimon, the bank's aggressive new fees are a big escalation in the ongoing battle between financial services incumbents and challenger fintechs. Getty Images J PMorgan Chase, the biggest bank in America, has been angry for years about being forced to hand over customer data to fintech companies for free. Now its billionaire CEO Jamie Dimon seems to be capitalizing on a moment of deregulation to slap fintechs with new fees, and the coming negotiations will determine how much damage the behemoth inflicts on their businesses. The bank's aggressive move is a big escalation in the ongoing battle between financial services incumbents and challenger fintechs. Since the start of the fintech industry, upstarts have needed access to consumers' bank data to perform basic functions like transferring money and making budgeting recommendations. Data aggregators like Plaid and MX emerged over a decade ago to fill that need. They make software that bridges bank-to-fintech connections and charge the fintechs for the service. Big banks, including JPMorgan Chase, have long given aggregators access to consumer data for free, complying with a Consumer Financial Protection Bureau (CFPB) rule that prohibited banks from charging for it. But in May, amid the Trump administration's crusade to vastly reduce regulation, the CFPB said it plans to repeal the rule. Now JPMorgan Chase is essentially telling aggregators: You've built a nice business off of our data–now give us our cut. The scary thing for fintechs is the size of the fees. Chase first sent pricing sheets to aggregators earlier this month. While details remain hazy, the prices are steepest for payments-related data transfers and would require leading aggregator Plaid to pay an estimated $300 million a year in new fees, according to a person briefed on the pricing sheet. That's more than 75% of Plaid's 2024 revenue. Bloomberg first reported the news of the coming fees. Have a story tip? Contact Jeff Kauflin at jkauflin@ or on Signal at jeff.273. Plaid's head of corporate affairs Freya Petersen and JPMorgan Chase spokesperson Drew Pusateri declined to comment on the size of the fees. Two fintech executives we spoke with for this article believe it's fair for JPMorgan Chase to charge something for data access. The data feed has cost the bank 'a lot of money' to set up and maintain securely, Jamie Dimon said last week. But the bank's real costs to create and operate the data connections remain a mystery, as does its method for coming up with the fees' eye-watering prices. If the fees don't come down, they could make popular features uneconomical for fintechs to offer and leave consumers worse off, fintech executives believe. Miranda Margowsky, a spokesperson for the fintech trade organization the Financial Technology Association, says Chase designed the fees 'to crush competition, levy a tax on fintech innovation, and cement their power in the marketplace.' JPMorgan Chase spokesperson Pusateri told us in a statement that the fees are a way to reign in the excessive number of times fintechs are pulling JPMorgan Chase's customers' data. 'We receive nearly two billion monthly requests for customer data from middlemen, and more than 90 percent of those are unrelated to a consumer using fintech services.' He added that the new fees 'will ensure that data is provided only when customers request it.' He also said Chase 'explicitly reserves the right to charge for data access in its current agreements with data aggregators.' Petersen said Plaid has invested heavily to build its data connections, and it provides data 'only at the behest of consumers.' She added that the data belongs to consumers, not banks. Sima Gandhi, a former fintech entrepreneur and early Plaid employee who's currently a senior advisor at regulatory consulting firm FS Vector, believes that Chase should instead develop a new data strategy that benefits consumers and passes fees on to them. For instance, Chase could create a premium feature and charge people, say, $1 a month for unlimited data sharing, in the same way that Apple charges for data storage. Chase has no plans to do that, Pusateri says. What will other big banks do if Chase's new charges take effect? They'll likely copy Dimon and tack on fees too, rather than sit back and watch their biggest competitor exert more control and create a new revenue line. PNC Bank CEO Bill Demchak has already said he's considering levying data-access fees as well. Now aggregators are praying that they can negotiate the fees down. It's possible that Chase is taking a President Trump-style approach to negotiating, starting high but being willing to go much lower. Allison Beer, the bank's CEO of Card Services and Connected Commerce, is leading the charge on the negotiations, according to a person familiar with the matter.
Yahoo
2 days ago
- Health
- Yahoo
Some States Are Seeking to Deregulate Child Care. Advocates Are Fighting Back
Content warning: This story includes details of an infant's death. After Democrats passed the American Rescue Plan in 2021, states were flush with federal funding to help prop the child care sector up. But that money is now all gone, and as Republicans in Congress threaten to pass spending cuts that could further shrink state budgets, lawmakers are trying to find solutions to the child care crisis that don't cost money. Many have proposed changing the mandated ratios that require a certain number of early educators to care for young kids. Nearly a dozen states have considered rolling back child care regulations, including those governing staff-to-child ratios. But while these deregulatory bills are common, it's not a foregone conclusion that they will pass. Advocates in three states have been able to beat back these efforts in the legislative sessions that just wrapped up by mobilizing a wide variety of people to speak up against these proposals and deploying research-backed arguments about child safety and child care supply. Eliminating Ratios Entirely Idaho advocates faced down the most extreme bill. In its original form, HB243 would have eliminated all requirements that limit the number of young children an early educator can care for, leaving it up to individual providers. It would have been the first state in the country to take such a step. Advocates had very little time to fight back. The bill got fast tracked; there was less than 24 hours' notice before the first public hearing on it in the House. 'You can't get child care providers and parents there in that amount of time,' said Christine Tiddens, executive director of Idaho Voices for Children, a nonprofit that advocates for child-focused policies, noting that it requires moving work schedules and getting people to cover shifts. The bill sailed through the House. Eventually, Tiddens said, they were able to put parents and providers in front of lawmakers to warn of the negative consequences. One of those parents was Idaho resident Kelly Emry. On June 10, 2024, she got a panicked call from the home-based child care provider where she had just started sending her 11-week-old son Logan. She dashed to the provider's home and was told he was dead. The coroner's report later confirmed he died from asphyxiation. According to Emry, the coroner said the provider put him down for a nap between a rolled up blanket and a pillow and left him there for hours. The provider was caring for 11 kids by herself that day, putting her out of compliance with state regulations that, at the time, required at least two staff members. 'It was completely preventable, and that's what's so hard for me to come to terms with,' Emry said in a podcast interview in January. Emry wasn't the only one who spoke up. Once the bill got to the Senate, advocates packed the hearing and overflow rooms with several hundred people. Among the 40 people who signed up to testify, 38 opposed the bill. Baby Logan's uncle spoke, as did pediatricians, fire marshals, nurses, the state police, child welfare experts, child care providers and parents. Lawmakers were flooded with thousands of calls and emails from the opposition. Tiddens made sure every senator was sent the podcast interview with Emry. The bill passed the Senate committee by a single vote. Advocates decided to try to stop the worst elements, knowing that the bill was likely to pass in some form. They asked a senator who opposed it to 'throw a Hail Mary,' Tiddens said. When the bill came to the Senate floor, he asked for unanimous support to pull it and move it into the amending process. He got it. The original elimination of staff-to-child ratios was stripped out; instead, the bill preserved ratios, albeit higher ones than before. Under previous law, Idaho ranked at No. 41 among all states for how high its ratios were; now it has dropped even further to No. 45. The victory is 'bittersweet,' Tiddens said. She attributes it almost solely to one thing: putting parents, not just businesses and child care providers, in front of lawmakers, which led to the moving account of Logan's family, still in the midst of raw grief. 'How could you listen and not have your heart changed?' Tiddens asked. Related Doubling Family Child Care Ratios Advocates in Maryland have fought back against legislation to loosen staff-to-child ratios twice now. Last year, lawmakers introduced a bill to raise the ratios in family child care settings, but it died thanks to 'a lot of advocacy,' said Beth Morrow, director of public policy at the Maryland Family Network, a nonprofit focused on child care. As in Idaho, the American Academy of Pediatrics and fire marshals warned about what would happen in the case of emergencies. Children under 2 years old are 'not capable of self-preservation,' Morrow pointed out; they might hide when a fire alarm goes off and can't evacuate on their own. 'If there is an emergency you have to be able to get these kids out,' she said. The idea returned this year in House Bill 477, this time coupled with looser ratios for center-based care. Family providers are currently allowed to care for eight children but no more than two under the age of 2; the legislation would have doubled that, allowing providers to watch as many as four children under the age of 1. That was a 'nonstarter,' Morrow said. It would also have been the first time that these rules were dictated by lawmakers rather than by the Maryland State Department of Education, which would have been barred from changing them in the future. So advocates marshalled research, with the help of national groups including the National Association for the Education of Young Children and Center for Law and Social Policy. They highlighted that there has been no evidence that stricter child care regulations lead to reduced supply. Lawmakers seemed moved by the argument that lower ratios support better health and safety for children. During the markup session, the chief sponsor amended the bill by striking the language about higher ratios; instead, the version that passed requires the Department of Education to study child care regulations with an eye toward alleviating barriers for providers. Ratio Increases by Another Name In Minnesota, lawmakers took a different approach to proposing changes to the number of staff required to care for young children this session. Their legislation avoided mentioning the term 'ratios' at all. Instead, the issue was presented as an exemption for in-home child care providers caring for their own children as well. The legislation originally would have exempted as many as three of the providers' own children from the number they are licensed to watch. 'That's a direct ratio increase, no way around that,' said Clare Sanford, vice president of government and community relations at New Horizon Academy, a child care and preschool provider. 'You still have the same number of adults but you're increasing the number of children that adult is responsible for.' In later drafts, the number of children who could be exempted kept being reduced. In the end the legislation didn't get a standalone vote and the language was left out of the final state budget. The argument that Sanford thinks worked the best was that increasing ratios wouldn't actually increase child care supply. That's because, as a brief by NAEYC argues, they will lead to more burnout among providers, which will push them to leave and, in the end, reduce available child care spots. The fight is far from over. Advocates in all three states expect lawmakers to try to loosen staff-to-child ratios again next session. Tiddens fears that, although Idaho didn't eliminate ratios, the idea could spread. 'Idaho has often been a frontrunner for harmful legislation,' she said. On the whole, more of these laws have been signed than stopped, said Diane Girouard, state policy senior analyst at ChildCare Aware of America. Ratio deregulation bills pop up 'in some states every single year,' she said. 'This isn't just unique to red, conservative states. It has happened in blue states, it has happened in purple states.' Advocates who oppose raising these ratios are formulating responses to the child care crisis that preserve safety standards without requiring state funding. In Maryland, for example, Morrow's organization helped pass a bill that removes legal barriers to opening and operating family child care programs. The hope is that with more solutions on the table to increase child care supply, states won't look to options that erode safety standards, such as increasing ratios. Tiddens has vowed to fight back. 'We're not going away, and we're going to show up next session with our own proposal,' she said. Her coalition plans to formulate a bill for next year that 'prioritizes child safety at the same time as dealing with the child care shortage,' she said. Solve the daily Crossword
